<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
McMoRan Oil & Gas Co.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[Logo of McMoRan Oil & Gas appears here]
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 8, 1997
------------------
March 26, 1997
The Annual Meeting of Stockholders of McMoRan Oil & Gas Co. will be held at
the office of the corporation, 1615 Poydras Street, New Orleans, Louisiana, on
Thursday, May 8, 1997, at 9:00 a.m., for the following purposes:
(1) To elect two of the ten directors to hold office for three years and
until their successors are respectively elected and qualified;
(2) To ratify the appointment of Arthur Andersen LLP as the independent
auditors to audit the financial statements of the corporation and its
subsidiaries for the year 1997; and
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 14, 1997 as
the record date for the determination of stockholders entitled to notice of
and to vote at the meeting.
Your vote is important. Whether or not you plan to attend the meeting,
please complete, sign and date the enclosed proxy card and return it promptly
in the enclosed envelope. Your cooperation will be appreciated.
By Order of the Board of
Directors.
Michael C. Kilanowski, Jr.
Secretary
<PAGE>
MCMORAN OIL & GAS CO.
1615 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70112
The Annual Report to Stockholders for the year 1996, including financial
statements, is being mailed to stockholders together with these proxy
materials on or about March 26, 1997.
PROXY STATEMENT
This proxy statement is furnished in connection with a solicitation of
proxies by the Board of Directors (the "Board of Directors" or the "Board") of
McMoRan Oil & Gas Co. (the "Company") for use at its Annual Meeting of
Stockholders to be held on May 8, 1997, and at any adjournments thereof (the
"Meeting").
VOTING PROCEDURE
Stockholders of record at the close of business on March 14, 1997 (the
"Record Date") will be entitled to vote at the Meeting. On the Record Date,
there were 14,025,390 shares of common stock (the "Common Stock") outstanding.
The Company's by-laws (the "By-Laws") provide that the holders of a majority
of the shares of Common Stock issued and outstanding and entitled to vote at
the Meeting, present in person or represented by proxy, will constitute a
quorum at the Meeting. The persons appointed by the Company to act as
inspectors of election will treat shares of Common Stock represented by a
properly executed and returned proxy as present at the Meeting for purposes of
determining a quorum. The shares of Common Stock present at the Meeting that
are abstained from voting or that are the subject of broker non-votes will be
counted as present for purposes of determining a quorum.
The By-Laws provide that the Company's directors will be elected by a
plurality vote and that, except as otherwise provided by statute, the
Company's Certificate of Incorporation or the By-Laws, all other matters
coming before the Meeting will be decided by the vote of a majority of the
number of shares of Common Stock present in person or represented by proxy and
entitled to vote at the Meeting. Each share of Common Stock will entitle the
holder to cast one vote at the meeting and votes cast will be counted by the
inspectors of election. Because directors will be elected by a plurality vote,
abstentions and broker non-votes as to the election of directors will have no
effect upon the election of directors. All other matters to come before the
Meeting require the approval of a majority of the shares of Common Stock
present and entitled to vote at the Meeting with respect to such matters;
therefore, abstentions as to particular proposals will have the same effect as
votes against such proposals. Broker non-votes as to particular proposals will
not be deemed to be a part of the voting power present with respect to such
proposals, will not count as votes for or against
<PAGE>
such proposals and will not be included in calculating the number of votes
necessary for approval of such proposals.
Proxies in the enclosed form are solicited by the Board of Directors to
provide an opportunity to every stockholder to vote on all matters scheduled
to come before the Meeting, whether or not he or she attends in person. If
proxies in the enclosed form are properly executed and returned, the shares
represented thereby will be voted as specified. If no specifications are made,
the proxies will be voted in favor of the proposed nominees and for the
ratification of the appointment of auditors. Any stockholder executing a proxy
may revoke that proxy or submit a revised one at any time before it is voted.
A stockholder may also attend the Meeting in person and vote by ballot,
thereby canceling any proxy previously given. Management expects no matters to
be presented for action at the Meeting other than the election of directors
and the ratification of the appointment of auditors. If, however, any other
matters properly come before the Meeting, the persons named as proxies in the
enclosed form of proxy intend to vote in accordance with their judgment on the
matters presented.
PROXY SOLICITATION
The Company will pay all expenses of soliciting proxies for the Meeting. In
addition to solicitations by mail, arrangements have been made for brokers and
nominees to send proxy materials to their principals, and the Company will
reimburse them for their reasonable expenses in doing so. The Company has
retained Georgeson & Co. Inc., Wall Street Plaza, New York, New York to assist
with the solicitation of proxies from brokers and nominees. It is estimated
that the fees for such firm's services will be $6,500 plus its reasonable out-
of-pocket expenses. Certain representatives of the Company, who will receive
no compensation for their services, may also solicit proxies by telephone,
telegram, telex, telecopy or personal interview.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's 1998 proxy
materials, stockholder proposals must be received by the Company no later than
November 25, 1997.
CORPORATE GOVERNANCE
The Board of Directors, which held five meetings during 1996, has primary
responsibility for directing the management of the business and affairs of the
Company. The Board currently consists of ten directors. To provide for
effective direction and management of the Company's business, the Board of
Directors has established two committees, the Audit Committee and the
Corporate Personnel Committee. The Board has no standing nominating committee.
The Audit Committee reviews the Company's financial statements and exercises
general oversight with respect to the activities of the Company's independent
auditors and principal
2
<PAGE>
accounting officer and related matters. The Audit Committee currently consists
of Mr. Day as Chairman, and Messrs. Bruce, Harrison, Lackey and Rankin and Ms.
McDonald, none of whom is an officer or employee of the Company or any of its
subsidiaries. The Audit Committee met three times during 1996.
The Corporate Personnel Committee, which is described further below,
currently consists of Mr. Bruce as Chairman, and Messrs. Harrison, Putnam and
Wharton. The Corporate Personnel Committee met three times during 1996.
ELECTION OF DIRECTORS
At the Meeting, two directors are to be elected to a three-year term, each
to hold office until his successor is elected and qualified. The Board of
Directors consists of three classes, each having a three-year term of office,
with one class being elected each year. The persons named in the enclosed form
of proxy intend to vote such proxy, unless otherwise directed, for the
election of Messrs. Harrison and Wharton as members of the class to serve
until the 2000 Annual Meeting of Stockholders. Messrs. Moffett, Putnam and
Rankin and Ms. McDonald are members of the class to serve until the 1998
Annual Meeting of Stockholders, and Messrs. Adkerson, Bruce, Day and Lackey
are members of the class to serve until the 1999 Annual Meeting of
Stockholders. If, contrary to present expectation, any of the nominees to be
elected at the Meeting should become unavailable for any reason, the Board of
Directors may reduce the size of the Board or votes may be cast pursuant to
the accompanying form of proxy for a substitute nominee designated by the
Board.
3
<PAGE>
INFORMATION ABOUT NOMINEES AND DIRECTORS
The following table provides certain information as of December 31, 1996,
with respect to each nominee and each other director whose term will continue
after the Meeting. Each nominee and director has been a director since 1994.
Unless otherwise indicated, each person has been engaged in the principal
occupation shown for the past five years.
<TABLE>
<CAPTION>
NAME OF NOMINEE PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS
OR DIRECTOR AGE AND POSITIONS WITH THE COMPANY
--------------- --- ----------------------------------------------------
<S> <C> <C>
Richard C. Adkerson 50 Co-Chairman of the Board and Chief Executive Officer
of the Company. Vice Chairman of the Board of
Freeport-McMoRan Inc. ("FTX"), a global
agricultural resource company. Senior Vice
President and Chief Financial Officer of FTX until
1995. Vice President of FTX until 1992. Executive
Vice President of Freeport-McMoRan Copper & Gold
Inc. ("FCX"), mining. Chairman of the Board and
Chief Executive Officer of FM Properties Inc., real
estate. Director of Hi-Lo Automotive, Inc.
Robert W. Bruce III 52 President, The Robert Bruce Management Co., Inc.,
investment managers. Managing Partner, Steamboat
Group, until 1992. Director of FTX and FCX.
Robert A. Day 53 Chairman of the Board of Trust Company of the West,
an investment management company. Chairman and
President of W.M. Keck Foundation. Director of
Fisher Scientific International Inc., FTX and FCX.
William B. Harrison, Jr. 53 Vice Chairman of The Chase Manhattan Corporation and
its subsidiary, The Chase Manhattan Bank. Director
of Dillard Department Stores, Inc., FTX and FCX.
Bobby Lee Lackey 59 President and Chief Executive Officer of J.S.
McManus Produce Company, Inc., grower of vegetables
and shipper of fruits and vegetables. Director of
FTX and FCX.
Gabrielle K. McDonald 54 Judge, International Criminal Tribunal for the
Former Yugoslavia. Distinguished Visiting Professor
of Law, Texas Southern University, Thurgood
Marshall School of Law, until 1995. Visiting
Professor of Law, St. Mary's University School of
Law, and of counsel, Walker & Satterthwaite, law
firm, until 1993. Director of FTX and FCX.
James R. Moffett 58 Co-Chairman of the Board of the Company. Chairman of
the Board and Chief Executive Officer of FCX.
Chairman of the Board of FTX. President
Commissioner of P.T. Freeport Indonesia Company, an
operating subsidiary of FCX.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME OF NOMINEE PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS
OR DIRECTOR AGE AND POSITIONS WITH THE COMPANY
--------------- --- ----------------------------------------------------
<S> <C> <C>
George Putnam 70 Chairman of The Putnam Investment Management
Company, Inc. and of each of the members of the
Putnam group of mutual funds. Director of The
Boston Company, Inc., Boston Safe Deposit and Trust
Company, Houghton-Mifflin Company, Marsh-McLennan
Companies Inc., Rockefeller Group, Inc., FTX and
FCX.
B.M. Rankin, Jr. 66 Private investor. Director of FTX and FCX.
J. Taylor Wharton 58 Chairman of the Department of Gynecology at the
University of Texas M.D. Anderson Cancer Center.
Director of FTX and FCX.
</TABLE>
The directors of the Company who also serve as directors of FTX and FCX
constitute a majority of the directors of each of those corporations.
DIRECTOR COMPENSATION
Each director who is not an officer or employee of the Company or its
subsidiaries receives an annual fee of $3,000.
Each current director who is not an officer or employee of the Company or
its subsidiaries is also eligible for the grant of options under the 1994
Stock Option Plan for Non-Employee Directors (the "1994 Plan"). On June 1 of
each year through 2003, each eligible director will be granted a non-qualified
option to purchase 1,656 shares of Common Stock at 100% of the fair market
value of such shares on the date of grant. Each option granted under the 1994
Plan expires ten years after the date of grant. In accordance with the 1994
Plan, on June 1, 1996, each non-employee director was granted an option to
purchase 1,656 shares of Common Stock at an exercise price of $2.9375. In
1996, none of the current directors exercised options granted under the 1994
Plan.
5
<PAGE>
COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding the ownership of the
Company's Common Stock by (i) each director and nominee of the Company, (ii)
each executive officer for whom compensation information is disclosed under
the heading "Executive Officer Compensation" and (iii) all directors and
executive officers of the Company as a group, determined in accordance with
Rule 13d-3 of the Securities and Exchange Commission ("SEC") based on
information furnished by such persons. Unless otherwise indicated, all
information is presented as of December 31, 1996 and all shares shown are held
with sole voting and investment power.
<TABLE>
<CAPTION>
NUMBER OF
SHARES BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)(2)
------------------------ -------------------
<S> <C>
Richard C. Adkerson 120,741
Robert W. Bruce III 369,317(3)
Robert A. Day 21,332(4)
William B. Harrison, Jr. 3,727(5)
Glenn A. Kleinert 18,835
Bobby Lee Lackey 15,422(6)
James H. Lee 15,000
Gabrielle K. McDonald 2,068
James R. Moffett 500,971(7)
C. Howard Murrish 150,351(8)
George Putnam 13,330(9)
B.M. Rankin, Jr. 101,713(10)
J. Taylor Wharton 6,504(11)
All directors and executive officers
as a group (14 persons) 1,563,798(12)
</TABLE>
- ---------
(1) With the exception of Mr. Bruce (who beneficially owns 2.6% of the
outstanding shares of Common Stock), Mr. Moffett (who beneficially owns
3.5% of the outstanding shares of Common Stock) and Mr. Murrish (who
beneficially owns 1.1% of the outstanding shares of Common Stock), each
of the individuals referred to holds less than 1% of the outstanding
shares of Common Stock.
(2) Includes shares that could be acquired within sixty days after December
31, 1996, upon the exercise of options granted pursuant to the Company's
stock option plans, as follows: Mr. Adkerson, 95,741 shares; Mr. Bruce,
8,317 shares; Mr. Day, 10,822 shares; Mr. Harrison, 3,307 shares; Mr.
Kleinert, 18,835 shares; Mr. Lackey, 11,657 shares; Mr. Lee, 5,000
shares; Ms. McDonald, 2,068 shares; Mr. Moffett, 365,543 shares; Mr.
Murrish, 81,250 shares; Mr. Putnam, 11,657 shares; Mr. Rankin, 11,657
shares; Mr. Wharton, 3,307 shares; all directors and executive officers
as a group, 698,149 shares.
(3) Includes 310,000 shares held by a limited partnership with respect to
which Mr. Bruce shares voting and investment power.
6
<PAGE>
(4) Includes 10,000 shares held by accounts and funds managed by affiliates
of a corporation in which Mr. Day is the chief executive officer and a
stockholder with respect to which he shares voting and investment power
but as to which he disclaims beneficial ownership.
(5) Includes 120 shares owned by Mr. Harrison's wife.
(6) Includes 3,643 shares held in a retirement trust for the benefit of Mr.
Lackey.
(7) Includes 21,464 shares held for the benefit of a trust with respect to
which Mr. Moffett and an executive officer of the Company, as co-
trustees, have sole voting and investment power but as to which each
disclaims beneficial ownership.
(8) Includes 1,810 shares held in a retirement trust for the benefit of Mr.
Murrish, 1,110 shares held in a retirement trust for the benefit of Mr.
Murrish's wife, 1,212 shares held by Mr. Murrish as custodian for one of
his sons and 1,112 shares owned by an adult son who shares the same home
as Mr. Murrish as to which he disclaims beneficial ownership.
(9) Includes 323 shares held by a charitable trust with respect to which Mr.
Putnam, as co-trustee, shares voting and investment power but as to which
he disclaims beneficial ownership.
(10) Includes 34,836 shares with respect to which Mr. Rankin has sole voting
and investment power under a power of attorney but as to which he
disclaims beneficial ownership.
(11) Includes 1,252 shares held by Mr. Wharton's wife and 677 shares held by
Mr. Wharton as custodian for his daughters.
(12) Includes (a) 13,651 shares held in a retirement trust for the benefit of
one of the executive officers, (b) 9 shares held in a retirement trust
for the benefit of the spouse of an executive officer but as to which
such executive officer disclaims beneficial ownership, (c) 7,390 shares
held by an executive officer as custodian but as to which such executive
officer disclaims beneficial ownership and (d) 38,777 shares held for the
benefit of trusts with respect to which an executive officer, as a co-
trustee, shares voting and investment power but as to which such
executive officer disclaims beneficial ownership. Total represents
approximately 10.6% of the outstanding shares of Common Stock.
------------------
COMMON STOCK OWNERSHIP OF A CERTAIN BENEFICIAL OWNER
The following table sets forth information regarding the ownership of the
Company's Common Stock by each person known to the Company to be a beneficial
owner of more than 5% of the outstanding Common Stock, determined in
accordance with Rule 13d-3 of the SEC based on information furnished by such
persons. Unless otherwise indicated, all information is presented as of
December 31, 1996, and all shares indicated as beneficially owned are held
with sole voting and investment power.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
SHARES BENEFICIALLY OF
NAME AND ADDRESS OWNED CLASS
---------------- ------------------- -------
<S> <C> <C>
Robertson, Stephens & Company Incorporated 1,892,420(1) 13.5%
555 California Street, Suite 2600
San Francisco, California 94104
</TABLE>
7
<PAGE>
- ---------
(1) Robertson, Stephens & Company Incorporated, through its affiliates, shares
voting and investment power with respect to all shares shown, based on
copies of SEC filings provided to the Company.
------------------
EXECUTIVE OFFICER COMPENSATION
Throughout 1996, James R. Moffett, Co-Chairman of the Board, Richard C.
Adkerson, Co-Chairman of the Board and Chief Executive Officer, and James H.
Lee, Senior Vice President, were employed by FTX, FCX or FM Services Company
("FMS"), a corporation 50% owned by each of FTX and FCX, and performed their
duties in accordance with a Services Agreement between the Company and FMS. In
1996, Messrs. Moffett and Adkerson were compensated by FTX and FCX and Mr. Lee
was compensated by FMS. The Company paid FMS $1 million in 1996 for all
services under the Services Agreement, which included executive, technical,
administrative, accounting, financial, tax and other services.
C. Howard Murrish and Glenn A. Kleinert were the only executive officers
employed by the Company who earned in excess of $100,000 for services provided
to the Company in 1996. The following table shows compensation that the
Company paid to Messrs. Murrish and Kleinert (collectively with Messrs.
Moffett, Adkerson and Lee, the "Named Executive Officers") for all services
rendered to the Company and its subsidiaries in 1996, 1995 and 1994, the year
in which the Company was incorporated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- ------------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS COMPENSATION(2)
------------------ ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
C. Howard Murrish, 1996 $233,250 $125,000 $6,829 -- $9,658
President and Chief 1995 225,000 125,000 4,827 75,000 9,311
Operating Officer 1994 65,625 32,000 789 125,000 2,656
Glenn A. Kleinert, 1996 154,700 50,000 -- -- 7,497
Senior Vice President 1995 148,842 50,000 -- 20,000 7,442
1994 72,450 40,000 -- 24,498 3,019
</TABLE>
- ---------
(1) Comprised of the Company's payments of taxes in connection with certain
benefits that the Company provided to Mr. Murrish.
(2) Comprised of (a) contributions under the Company's defined contribution
plans for Mr. Murrish in the amounts of $7,500, $7,500 and $1,979, and for
Mr. Kleinert in the amounts of $7,497, $7,442 and $3,019 for 1996, 1995
and 1994, respectively, and (b) with respect to Mr. Murrish, the Company's
payments for life insurance premiums in the amounts of $2,158, $1,811 and
$677 for 1996, 1995 and 1994, respectively.
------------------
8
<PAGE>
The following table sets forth information with respect to all outstanding
Company stock options and SARs held by each of the Named Executive Officers as
of December 31, 1996. None of such persons exercised any Company stock options
and SARs during 1996.
OPTION/SAR VALUES AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
OPTIONS/SARS AT THE-MONEY OPTIONS/SARS AT
DECEMBER 31, 1996 DECEMBER 31, 1996
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
James R. Moffett 365,543/112,500 $-- /$--
Richard C. Adkerson 95,741/120,245 -- / --
C. Howard Murrish 81,250/118,750 -- / --
Glenn A. Kleinert 18,835/25,663 -- / --
James H. Lee 5,358/15,153 -- / --
</TABLE>
CORPORATE PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Corporate Personnel Committee is composed of four independent directors,
none of whom is an officer or employee of the Company or any of its
subsidiaries. The Committee met three times in 1996. The Committee determines
the compensation of certain executive officers of the Company and administers
the performance incentive awards program and certain stock option plans of the
Company.
James R. Moffett and Richard C. Adkerson are each Co-Chairman of the Board
of the Company, and Mr. Adkerson is also the Chief Executive Officer of the
Company. In addition, James H. Lee is a Senior Vice President of the Company.
Throughout 1996, Messrs. Moffett, Adkerson and Lee provided services to the
Company pursuant to a Services Agreement between the Company and FMS. Except
for their participation in the Company's stock option plan and adjusted stock
award plan (under which plans no awards were granted to executive officers in
1996), Messrs. Moffett, Adkerson and Lee receive no benefits, salary or other
compensation from the Company.
Base salaries of the executive officers, other than Messrs. Moffett,
Adkerson and Lee, are established by the Committee at appropriate levels after
consideration of each executive officer's responsibilities and market salaries
for similarly situated executives in other organizations. The Committee
granted base salary increases to certain executive officers in 1996 under the
Company's regular merit increase program.
Under the Company's performance incentive awards program, the Committee
determines the amount of annual cash incentives or bonuses for certain key
executives of the Company. Each
9
<PAGE>
executive employed by the Company is assigned a guideline amount, expressed as
a percentage of base salary, which generally will be paid if Company
performance for the year meets expectations set for that year.
To determine the amount of incentive awards for 1996, the Committee
considered the strategic accomplishments of the Company including its
exploration and development activities during the year. After reviewing the
Company's performance for 1996, the Committee approved performance awards for
the executive officers participating in the Company's performance incentive
awards program averaging approximately 112% of their target awards.
The Company grants long-term incentives to executive officers in the form of
stock options. The stock option awards are intended to reinforce the
importance of shareholder value creation. Stock option award guidelines are
established by the Committee based upon the position of each participating
executive officer and the Committee's subjective assessment of each
participant's individual performance. No stock option awards were granted by
the Committee to executive officers during 1996, with the last grant having
been made in 1995.
Under section 162(m) ("Section 162(m)") of the Internal Revenue Code of
1986, as amended, no deduction by a publicly held corporation is allowed for
compensation paid by the corporation to its most highly compensated executive
officers to the extent that the amount of such compensation for the taxable
year for any such individual exceeds $1 million. Section 162(m) excludes
certain compensation from the deduction limitation. The Committee believes
that the stock options granted to executive officers, as discussed above,
qualify for the exclusion from the deduction limitation under Section 162(m).
The Committee anticipates that the components of individual executive
compensation for each highly compensated executive officer that do not qualify
for any exclusion from the deduction limitation of Section 162(m) should not
exceed $1 million in any given year and should therefore qualify for
deductibility.
Robert W. Bruce III, Chairman George Putnam
William B. Harrison, Jr. J. Taylor Wharton
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Corporate Personnel Committee are
Messrs. Bruce, Harrison, Putnam and Wharton. No executive officer of the
Company served in 1996 as a director or member of the compensation committee
of another entity, one of whose executive officers served as a director of the
Company or on the Company's Corporate Personnel Committee.
10
<PAGE>
PERFORMANCE GRAPH
The following graph compares the change in the cumulative total stockholder
return on the Common Stock with the cumulative total return of the Nasdaq
Composite Market Index and the cumulative total return of the Media General
Oil & Natural Gas Exploration Industry Group during 1996, 1995 and the portion
of 1994 that the Common Stock was registered under Section 12 of the
Securities Exchange Act of 1934.
COMPARISON OF CUMULATIVE TOTAL RETURN*
MCMORAN OIL & GAS CO., NASDAQ COMPOSITE MARKET INDEX &
MEDIA GENERAL OIL & NATURAL GAS EXPLORATION INDUSTRY GROUP
LOGO
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
DECEMBER 31,
MAY 20, --------------------
1994 1994 1995 1996
------- ------ ------ ------
<S> <C> <C> <C> <C>
McMoRan Oil & Gas Co.............................. $100.00 $68.06 $76.39 $48.61
Nasdaq Composite Market Index..................... 100.00 101.30 131.40 163.29
Media General Oil & Natural Gas Exploration
Industry Group................................... 100.00 93.99 109.95 150.08
</TABLE>
ASSUMES $100 INVESTMENT ON MAY 20,
1994 IN McMoRan OIL & GAS CO. COMMON MCMORAN OIL & GAS CO.
STOCK, NASDAQ COMPOSITE MARKET INDEX .
& MEDIA GENERAL OIL & NATURAL GAS NASDAQ COMPOSITE MARKET
EXPLORATION INDUSTRY GROUP INDEX
^^
* TOTAL RETURN ASSUMES REINVESTMENT
OF DIVIDENDS
^^ MEDIA GENERAL OIL &
NATURAL GAS EXPLORATION
INDUSTRY GROUP
11
<PAGE>
CERTAIN TRANSACTIONS
During 1996, Mr. Day participated directly or indirectly through various
entities, on substantially the same basis as other parties, in exploration and
development operations on certain properties owned or operated by the Company.
Mr. Day and such entities have ownership interests in such properties ranging
generally from 5% to 12%. Mr. Day's and such entities' share of expenditures
for exploration and development operations during 1996 amounted to
approximately $200,000.
In June 1996, Freeport-McMoRan Resource Partners, Limited Partnership
("FRP"), a limited partnership in which FTX is the administrative managing
general partner and owns an approximate 51.6% interest, acquired a 25%
leasehold in interest in an oil and gas venture to explore a project area in
Terrebonne Parish, Louisiana. In connection with the acquisition of this
interest, FRP reimbursed the Company $2.1 million for certain costs previously
incurred in the project area. FRP acquired its interest on the same
proportionate basis as Phillip Petroleum Company, which owns a 50% interest
and is the operator of the joint venture.
In February 1997, FRP agreed to acquire an interest in leases acquired by
the Company at the federal offshore lease sale held in March 1997. At the
lease sale, the Company was high bidder on seven offshore Gulf of Mexico
tracts, with bids totaling $5.5 million. FRP will acquire a 50% working
interest in the leases awarded and will bear 60% of the acquisition and
exploration costs associated with these leases. Award of the leases is subject
to review and approval by the U.S. Minerals Management Service.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and beneficial owners of more than 10% of the
Common Stock to file certain beneficial ownership reports with the SEC.
Robertson, Stephens & Company Incorporated, Sanford R. Robertson, Paul H.
Stephens, Kenneth R. Fitzsimmons, G. Randy Hecht and Michael G. McCaffery,
beneficial owners of more than 10% of the Common Stock, each failed to file
timely a statement of changes in beneficial ownership on Form 4 reporting two
transactions in 1996.
RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors seeks ratification by the stockholders of the Board's
appointment of Arthur Andersen LLP to act as the independent auditors of the
financial statements of the Company and its subsidiaries for the year 1997.
The Board has not determined what, if any, action would be taken should the
appointment of Arthur Andersen LLP not be ratified. One or more
representatives of the firm will be available at the Meeting to respond to
appropriate questions, and those representatives will also have an opportunity
to make a statement.
12
<PAGE>
MCMORAN OIL & GAS CO.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
STOCKHOLDERS, MAY 8, 1997
The undersigned hereby appoints James R. Moffett, Richard C. Adkerson, and C.
Howard Murrish as proxies, with full power of substitution, to vote the shares
of the undersigned in McMoRan Oil & Gas Co. at the Annual Meeting of
Stockholders to be held on Thursday, May 8, 1997, at 9:00 a.m., and at any
adjournment thereof, on all matters coming before the meeting. THE PROXIES WILL
VOTE: (1) AS YOU SPECIFY ON THE BACK OF THIS CARD, (2) AS THE BOARD OF
DIRECTORS RECOMMENDS WHERE YOU DO NOT SPECIFY YOUR VOTE ON A MATTER LISTED ON
THE BACK OF THIS CARD, AND (3) AS THE PROXIES DECIDE ON ANY OTHER MATTER.
If you wish to vote on all matters as the Board of Directors recommends,
please sign, date and return this card. If you wish to vote on items
individually, please also mark the appropriate boxes on the back of this card.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
(continued on reverse side)
. FOLD AND DETACH HERE .
<PAGE>
Please mark your
votes as indicated [X]
in this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
<TABLE>
<S> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
ITEM 1--Election of the [ ] [ ] ITEM 2--Ratification of appointment [ ] [ ] [ ]
nominees for directors. of Arthur Andersen LLP as
Nominees for directors of independent auditors.
McMoRan Oil & Gas Co.
William B. Harrison, Jr.
J. Taylor Wharton
[ ] FOR, EXCEPT WITHHELD FROM:
- -------------------------------------
(Write nominee name(s) in the space
provided above to withhold authority.)
SIGNATURE(S) DATED: 1997
---------------------------------------------------------------------------------------------- --------
YOU MAY SPECIFY YOUR VOTES BY MARKING THE APPROPRIATE BOXES ON THIS SIDE.
YOU NEED NOT MARK ANY BOXES, HOWEVER, IF YOU WISH TO VOTE ALL ITEMS IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION. IF YOUR VOTES ARE
NOT SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS AND FOR PROPOSAL 2.
</TABLE>
