<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
Tipperary Corporation
- - --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
------------------------------------------------------------------------
<PAGE>
TIPPERARY CORPORATION
633 SEVENTEENTH STREET
SUITE 1550
DENVER, COLORADO 80202
- - ------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
JANUARY 24, 1996
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Tipperary Corporation (the "Company"), a Texas corporation, will be
held in the Management Briefing Center on the fourth floor of First Interstate
Bank of Denver, 633 Seventeenth Street, Denver, Colorado, on Wednesday, January
24, 1996, at 10:00 a.m., MST, for the purpose of taking action on:
1. The election of 6 directors to serve until the next Annual Meeting of
Shareholders or until their successors shall be duly elected and qualified;
2. The ratification of the reappointment of Price Waterhouse LLP ("Price
Waterhouse") as the Company's independent accountants for fiscal 1996; and
3. The transaction of such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The Company's Board of Directors has fixed the close of business on December 1,
1995, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting and any adjournment thereof. These
materials were first mailed to shareholders on or about December 22, 1995. Both
the principal executive office and mailing address of the Company is 633
Seventeenth Street, Suite 1550, Denver, Colorado 80202.
Information concerning the matters to be acted upon at the Annual Meeting is set
forth in the accompanying Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Elaine R. Treece
Corporate Secretary
Date: December 22, 1995
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. PLEASE
COMPLETE AND PROMPTLY RETURN YOUR SIGNED PROXY IN THE POSTAGE-PAID ENVELOPE.
THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE. IF YOU ATTEND THE MEETING
YOU CAN REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>
Page 2 Tipperary Corporation
- - -------------------------------------------------------------------------------
TIPPERARY CORPORATION
PROXY STATEMENT
SOLICITATION OF PROXY
The accompanying proxy is solicited on behalf of the Board of Directors of
Tipperary Corporation in connection with the Annual Meeting of Shareholders on
Wednesday, January 24, 1996, ("Annual Meeting") to be held in the Management
Briefing Center on the fourth floor of First Interstate Bank of Denver, 633
Seventeenth Street, Denver, Colorado, at 10:00 a.m., MST.
The cost of preparing, assembling and mailing the Notice of Annual Meeting of
Shareholders, Proxy Statement and form of proxy, which were first mailed to the
shareholders on or about December 22, 1995, will be borne by the Company. It is
contemplated that solicitation of proxies will be primarily by mail, but may be
supplemented by personal solicitation by the Company's officers, directors and
other regular employees to whom no additional compensation will be paid.
REVOCATION OF PROXY
Any shareholder giving a proxy may revoke it at any time prior to its use by
notifying the Company either in person or by written notice of the revocation.
Each notice must specifically revoke the power to use and vote the proxy.
Shareholder attendance at the Annual Meeting may revoke any proxy given by such
shareholder. If no specification is made on the proxy, the shares will be voted
in accordance with the recommendation of the Board of Directors, as stated
herein, or at the discretion of the named proxies with regard to any other
matter that may properly come before the Annual Meeting.
VOTING AT THE ANNUAL MEETING
The close of business on December 1, 1995, has been fixed by the Company's Board
of Directors as the record date for the determination of shareholders entitled
to vote at the Annual Meeting. As of that date, the Company had issued and
outstanding 11,209,604 shares of Common Stock, par value $.02 per share.
The Company's Articles of Incorporation do not permit cumulative voting by
shareholders. The Common Stock is the Company's only class of voting
securities. Accordingly, each holder of Common Stock as of the record date
shall be entitled to cast one vote for each share of Common Stock held by him.
Of the votes cast at the Annual Meeting, a vote of the holders of a majority of
the Common Stock present, either in person or by proxy, is required to elect
each director nominee and to ratify the reappointment of Price Waterhouse as the
Company's independent accountants for fiscal 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of December 1, 1995, regarding the
beneficial ownership of the voting securities of the Company by persons and
entities known by the Company to beneficially own more than 5% of the
outstanding Common Stock of the Company, its only outstanding class of voting
securities. Except as otherwise indicated, to the knowledge of the Company,
each person or entity whose name appears below has sole voting and investment
power over its respective shares of Common Stock.
<PAGE>
Page 3 Tipperary Corporation
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------
Amount and Nature
Name and Address of of Beneficial Percentage of
Beneficial Owner Ownership Class (1)
- - -------------------------------------------------------------------------------
<S> <C> <C>
Texland Oil, Inc.
33 West Monroe Street 3,117,514 (1) 27.8%
Chicago, Illinois 60603
- - -------------------------------------------------------------------------------
SDK Incorporated
33 West Monroe Street 4,898,920 (1) 43.7%
Chicago, Illinois 60603
- - -------------------------------------------------------------------------------
Slough Parks, Inc.
33 West Monroe Street 4,898,920 (1) 43.7%
Chicago, Illinois 60603
- - -------------------------------------------------------------------------------
</TABLE>
(1) SDK Incorporated ("SDK"), a Delaware corporation, owns
100% of the Common Stock of Texland Oil, Inc.
("Texland"). According to Amendment No. 9 to its
Statement on Schedule 13D, dated July 31, 1995, the
following entities may be deemed to beneficially own the
Common Stock of Texland, through control of SDK: Slough
Parks, Inc., a Delaware corporation ("Slough Parks"), the
controlling shareholder of SDK; Slough Parks Holding,
Inc. ("SPH"), a Delaware corporation, the sole
shareholder of Slough Parks; Slough Trading Estate
Limited, a limited liability company formed under the
laws of the United Kingdom ("STEL"), the sole shareholder
of SPH; Slough Properties Limited ("SPL"), a limited
liability company formed under the laws of the United
Kingdom, the sole shareholder of STEL; Slough Estates PLC
("SEL"), a public limited liability company formed under
the laws of the United Kingdom, the sole shareholder of
SPL. The board of directors of SEL ultimately exercises
voting and dispositive power with regard to the shares of
the Company's Common Stock held by Texland. According to
the above referenced Schedule 13D, SEL is a publicly held
limited liability company, whose principal office is
located at 234 Bath Road, Trading Estate, Slough SL1 4EE,
England. Pursuant to Amendment No. 9 of Schedule 13D, to
the knowledge of SEL, no shareholder owns more than 5% of
its outstanding shares.
- - -------------------------------------------------------------------------------
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 1, 1995, regarding
shares of the Company's Common Stock beneficially owned by each director,
nominee for director and executive officers and directors as a group. Except as
otherwise indicated, to the knowledge of the Company, each person has sole
voting and investment power over his respective shares of Common Stock.
<PAGE>
Page 4 Tipperary Corporation
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------
Amount and
Name of Nature of
Beneficial Beneficial Percentage of
Title of Class Owner Ownership Class (1)
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Anthony F. Kramer 2,500 (2)(3) *
Carter G. Mathies 523,200 (4) 4.5%
David L. Bradshaw 256,770 (5) 2.2%
James A. McAuley 268,453 (6) 2.4%
Eugene I. Davis 33,333 (7) *
Marshall D. Lees 0 *
Jeff T. Obourn 16,000 (8) *
Robert T. Larson, Jr. 10,000 (9) *
Larry G. Sugano 6,000 (10) *
Wayne W. Kahmeyer 6,666 (11) *
Executive officers and 1,122,922 9.3%
directors as a group,
10 in number
</TABLE>
*less than 1%
- - -------------------------------------------------------------------------------
(1) Securities not outstanding, but included in the
beneficial ownership of each such person are deemed to be
outstanding for the purpose of computing the percentage
of outstanding securities owned by such person, but are
not deemed to be outstanding for the purpose of computing
the percentage of the class owned by any other person.
- - -------------------------------------------------------------------------------
(2) Mr. Kramer is Chairman of the Board of Texland Oil, Inc.,
which beneficially owns 3,117,514 shares (27.8%) of
Common Stock. Mr. Kramer, however, individually
disclaims beneficial ownership of any shares owned by
Texland Oil, Inc.
- - -------------------------------------------------------------------------------
(3) Excludes 2,500 shares of Common Stock owned by Mr.
Kramer's wife, to which he disclaims beneficial
ownership.
- - -------------------------------------------------------------------------------
(4) Includes 520,000 shares of Common Stock issuable pursuant
to options/warrants which either are currently
exercisable or will be exercisable within 60 days of
December 1, 1995.
- - -------------------------------------------------------------------------------
(5) Includes 252,916 shares of Common Stock issuable pursuant
to options/warrants which are currently exercisable or
will be exercisable within 60 days of December 1, 1995.
- - -------------------------------------------------------------------------------
(6) 216,571 shares of the Common Stock are held by SDK,
Incorporated as collateral for Mr. McAuley's personal
non-interest bearing note payable to SDK. Also included
are warrants to acquire 50,000 shares of the Company's
Common Stock.
- - -------------------------------------------------------------------------------
(7) Effective January 26, 1994, the Company granted to Mr.
Davis a warrant to acquire 50,000 shares of the Common
Stock at an exercise price of $2.75 per share of which
33,333 shares will be exercisable within 60 days of
December 1, 1995.
- - -------------------------------------------------------------------------------
(8) Mr. Obourn, Vice President - Land, has been granted
options to acquire 15,000 shares of Common Stock at an
exercise price of $5.13 per share, 15,000 shares of
Common Stock at an exercise price of $2.75 per share and
10,000 shares of Common Stock at an exercise price of
$4.75 per share pursuant to the Company's 1987 Employee
Stock Option Plan of which 16,000 shares will be
exercisable within 60 days of December 1, 1995.
- - -------------------------------------------------------------------------------
(9) Mr. Larson, Vice President - Exploration & Development,
has been granted options to acquire 15,000 shares of
Common Stock at an exercise price of $2.75 per share and
10,000 shares of Common Stock at an exercise price of
$4.75 per share pursuant to the Company's 1987 Employee
Stock Option Plan of which 10,000 shares will be
exercisable within 60 days of December 1, 1995.
- - -------------------------------------------------------------------------------
(10) Mr. Sugano, Vice President - Engineering, has been
granted options to acquire 15,000 shares of Common Stock
at an exercise price of $3.69 per share and 10,000
shares of Common Stock at an exercise price of $4.75 per
share pursuant to the Company's 1987 Employee Stock
Option Plan of which 5,000 shares will be exercisable
within 60 days of December 1, 1995.
- - -------------------------------------------------------------------------------
(11) Mr. Kahmeyer, Controller and Principal Accounting
Officer, has been granted options to acquire 10,000
shares of Common Stock at an exercise price of $2.75 per
share and 5,000 shares of Common Stock at an exercise
price of $4.75 per share pursuant to the Company's 1987
Employee Stock Option Plan of which 6,666 shares will be
exercisable within 60 days of December 1, 1995.
- - -------------------------------------------------------------------------------
<PAGE>
Page 5 Tipperary Corporation
- - -------------------------------------------------------------------------------
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors was aided by 4 standing committees during the fiscal year
ended September 30, 1995. The Audit Committee assesses the Company's system of
internal control and assists in considering the recommendations and performance
of the Company's independent accountants; the Compensation Committee evaluates
the performance and compensation of the Company's officers and employees; and
the Executive Committee performs certain duties and responsibilities as
delegated by the Board concerning the day-to-day operations of corporate
business. During the fiscal year ended September 30, 1995, Messrs. Davis
(Chairman) and McAuley served on the Audit Committee. Messrs. Kramer
(Chairman), McAuley and Davis served on the Compensation Committee and all Board
members serve on the Executive Committee. The Company's Nominating Committee is
responsible for consideration of nominations to the Board of Directors from
shareholders of the Company. This committee is composed of Messrs. Mathies
(Chairman), Bradshaw and Kramer.
Based solely upon a review of Forms 3 and 4 furnished to the Company during the
fiscal year ended September 30, 1995, and Forms 5 with respect to such fiscal
year, the Company is unaware of any officer, director or beneficial owner who
failed to file any reports timely as required by Section 16 of the Securities
Exchange Act of 1934.
DIRECTORS MEETINGS AND ATTENDANCE
During the fiscal year ended September 30, 1995, there were 4 regular, special
and telephonic meetings of the Company's Board of Directors. All directors
attended each meeting. The Audit Committee and the Compensation Committee each
met once.
EXECUTIVE COMPENSATION
The table below presents the compensation awarded to, earned by, or paid to the
Company's Chief Executive Officer and Chief Operating Officer and Chief
Financial Officer, respectively, for the fiscal years ended September 30, 1995,
1994 and 1993. No other executive officer of the Company received total annual
salary and bonus for each year in excess of $100,000.
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- - ---------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------- ----------------------------------------------
AWARDS PAYOUTS
----------------------- -------
RESTRICTED ALL OTHER
NAME AND PRINCIPAL FISCAL OTHER ANNUAL STOCK WARRANTS (2) LTIP COMPEN-
POSITION YEAR SALARY BONUS COMPENSATION AWARDS /OPTIONS PAYOUTS SATION (3)
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carter G. Mathies, 1995 $150,000 - - (1) - - - $2,242
-------------------------------------------------------------------------------------
Chief Executive Officer 1994 $150,000 $50,000 - (1) - 150,000 - $2,625
-------------------------------------------------------------------------------------
1993 $150,000 - - (1) - - - $2,337
- - --------------------------------------------------------------------------------------------------------------
David L. Bradshaw, 1995 $108,333 $10,000 - (1) - - - $1,666
-------------------------------------------------------------------------------------
Chief Operating Officer & 1994 $100,000 $30,000 - (1) - 100,000 - $1,367
-------------------------------------------------------------------------------------
Chief Financial Officer 1993 $100,000 - - (1) - - - $1,588
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
__________
(1) The Company furnishes various benefits to Messrs. Mathies and Bradshaw, the
value of which are not reported in this column because the Company has
concluded that the aggregate amount of these benefits is less than 10% of
cash compensation paid.
(2) No SARs were granted to any of the named officers during the last 3 years.
(3) Represents the Company's matching contribution to the Section 401(k)
Retirement Savings Plan.
<PAGE>
Page 6 Tipperary Corporation
- - -------------------------------------------------------------------------------
The following table shows certain information with respect to stock warrants and
options granted to the named executive officers during the fiscal year ended
September 30, 1995:
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------
WARRANT AND OPTION/SAR GRANTS IN LAST FISCAL YEAR
- - --------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
WARRANT/OPTION TERM
- - --------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES WARRANT/OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
WARRANTS/OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- - -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Carter G. Mathies -0- 0% $-0- $-0- $-0-
- - -------------------------------------------------------------------------------------------------
David L. Bradshaw -0- 0% $-0- $-0- $-0-
- - -------------------------------------------------------------------------------------------------
</TABLE>
The following table shows information with respect to stock warrants and option
exercises during the fiscal year ended September 30, 1995, by the named
executive officers and the value of such officer's unexercised stock options and
warrants at September 30, 1995.
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------
AGGREGATED WARRANTS AND OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END WARRANTS AND OPTION/SAR VALUES
- - -----------------------------------------------------------------------------------------------
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES WARRANTS AND IN-THE-MONEY WARRANTS
ACQUIRED ON VALUE OPTIONS/SARS HELD AND OPTIONS/SARS
EXERCISE REALIZED AT FISCAL YEAR END (#) AT FISCAL YEAR END
- - -----------------------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Carter G. Mathies 0 $ 0 470,000 100,000 $1,196,000 $187,000
- - -----------------------------------------------------------------------------------------------
David L. Bradshaw 20,000 $44,025 219,583 66,667 $ 565,000 $125,000
- - -----------------------------------------------------------------------------------------------
</TABLE>
The Company granted to Mr. Mathies warrants to acquire 450,000 shares of the
Common Stock of the Company at an exercise price of $2.00 per share, which
became fully vested on October 1, 1992. Mr. Mathies exercised 30,000 shares
under the warrant on July 8, 1993. The remaining warrants expire, if not
exercised prior thereto, 6 months after termination of Mr. Mathies' employment
with the Company. In 1994, Mr. Mathies was granted a nonqualified warrant to
acquire 50,000 shares of the Company's Common Stock at an exercise price of
$2.75 per share, and, pursuant to the 1987 Employee Stock Option Plan, he was
granted an Option to acquire 100,000 shares of the Company's Common Stock at an
exercise price of $2.75 per share. Both vest ratably over a three-year period.
The Company granted to Mr. Bradshaw warrants to acquire 225,000 shares of the
Common Stock of the Company at an exercise price of $2.00 per share, which
became fully vested on October 1, 1992. Mr. Bradshaw exercised 20,000 shares
under the warrant on July 8, 1993. The remaining warrants expire, if not
exercised prior thereto, 6 months after termination of Mr. Bradshaw's employment
with the Company. Pursuant to the Company's 1987 Employee Stock Option Plan,
Mr. Bradshaw was granted options to acquire (i) 1,250 shares of the Company's
Common Stock which are currently exercisable at an exercise price of $3.52; and
(ii) 100,000 shares of the Company's Common Stock at an exercise price of $2.75
per share which vest ratably over a three-year period, of which 20,000 shares
were exercised in August, 1995.
<PAGE>
Page 7 Tipperary Corporation
- - -------------------------------------------------------------------------------
Directors who are officers or employees of the Company are not compensated for
serving as directors or for attending meetings. During the fiscal year ended
September 30, 1995, the Company compensated its nonemployee, outside directors,
Messrs. Kramer, McAuley and Davis, at the rate of $8,000 annually and $1,000 for
each board meeting attended. Directors are not compensated for attendance at
Board committee meetings.
During fiscal 1994, James A. McAuley, who serves on the Company's Board of
Directors, personally acquired an interest in a Utah limited liability company
of which the Company is also a member. The limited liability company was formed
for the purpose of constructing a natural gas liquids ("NGL") fractionating
plant in Alabama. Mr. McAuley negotiated and contracted independently with
third parties, as did the Company. During fiscal 1995, Mr. McAuley was paid
$250 in consulting fees on this project.
PERFORMANCE GRAPH
The following graph compares the annual percentage change in the Company's
cumulative total shareholder return (stock price appreciation plus reinvested
dividends) on Common Stock with the cumulative total return of the American
Stock Exchange (AMEX) Market Value Index and the Media General Industry Group
Index No. 353, "Oil, Natural Gas Exploration" (which includes 140 companies
comparable with the Company) for the period from October 1, 1990, through
September 30, 1995. The graph assumes that the value of an investment in the
Company's Common Stock and each index was $100 at October 1, 1990. Regulation
S-K, Item 402(k), requires the disclosure of such information for a five-year
period. Numerical comparisons are presented following the graph.
COMPARISON OF TOTAL RETURN
AMONG TIPPERARY CORPORATION,
AMEX MARKET INDEX AND PEER GROUP INDEX
[Performance Chart]
ASSUMES $100 INVESTED ON OCTOBER 1, 1990
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING SEPTEMBER 30, 1995
<PAGE>
Page 8 Tipperary Corporation
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------
FISCAL YEARS ENDING SEPTEMBER 30
- - ----------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- - ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tipperary 100.00 121.95 92.68 268.29 146.34 180.49
Peer Group 100.00 82.73 70.25 86.83 86.31 87.33
Broad Market 100.00 119.92 125.15 146.91 149.73 180.41
- - ----------------------------------------------------------------------
</TABLE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee, which is composed of three nonemployee directors,
makes recommendations to the Board concerning the compensation of the Company's
executive officers. In order to make such recommendations, at the end of each
year, the Committee evaluates the Company's performance relative to its business
plan and its peer group performance. Additionally, each executive officer's
contribution to the Company's achievements during the year is evaluated.
The goal of the Compensation Committee is to ensure that the Company employs
qualified, experienced executive officers whose financial interest is aligned
with that of the shareholders. The Committee considers general industry
practice, tax effects and other factors in structuring executive compensation
awards. The following is a discussion of forms of compensation currently being
utilized.
Base salaries for each of the Company's executive officers are determined by
taking into consideration performance, length of tenure with the Company,
compensation by industry competitors for comparable positions and career
achievements. Salaries paid within the industry are weighted more heavily in
setting base salary levels. In order to determine comparable salary levels paid
within the industry, the Committee reviews various industry surveys and publicly
filed information of its competitors.
In addition to their base salaries, the Company's executive officers may be
awarded an annual bonus, depending on Company performance relative to its
business plan and the Committee's assessment of the executive officer's personal
contribution to such performance. Such performance may be measured by several
criteria that are considered important to the Company's success. These criteria
are not specifically weighted in the determination of whether to award an annual
bonus to an executive officer, since the relative importance of such criteria
may change from year to year and the relative responsibilities of each executive
officer in the achievement of each of the objectives may differ. Examples of
criteria considered are: quantity of oil and gas reserves added; finding cost
of oil and gas reserves; control of lifting costs; efficiency of general and
administrative expenses; management of drilling budget; and overall financial
management.
The Company also utilizes stock warrants/options ("Options") as an incentive for
executive officers. The size of Option grants is dependent on individual
performance, level of responsibility and base salary and the number of shares
covered by all outstanding Options in relation to the total number of
outstanding shares of Common Stock and Common Stock equivalents. Options are
used in order to align the benefits received by the executive officers with the
amount of appreciation realized by the stockholders. Options granted to current
officers and directors have been at exercise prices not less than the fair
market value of the stock on the date of the grant.
The Company's Chief Executive Officer, Carter G. Mathies, assumed the additional
responsibilities of Chairman of the Board of Directors effective September 2,
1992. Mr. Mathies and the Company entered into an initial three-year employment
agreement on October 1, 1990. This contract was extended for an additional two
years and expired September 30, 1995. Thus, Mr. Mathies is currently employed
by the Company on an "at-will" basis. Since October 1, 1990, Mr. Mathies' base
salary has been increased from $125,000 per year to $150,000 per year. In
October, 1990, Mr. Mathies was granted warrants to acquire 450,000 shares of
Common Stock at $2.00 per share, vesting over a two-year period. Of this total,
30,000 were exercised during fiscal 1993. In 1994, Mr. Mathies was granted
Incentive Stock Options pursuant to the Company's 1987 Employee Stock Option
Plan, to acquire 100,000 shares of the Company's Common Stock at an exercise
price of $2.75 per share. These options vest over a three-year period.
Additionally, Mr. Mathies was granted a warrant to acquire 50,000 shares of the
Company's Common Stock at an exercise price of $2.75 per share, which warrant
also vests over a three-year period.
<PAGE>
Page 9 Tipperary Corporation
- - -------------------------------------------------------------------------------
COMPENSATION COMMITTEE
Anthony F. Kramer, Chairman
James A. McAuley
Eugene I. Davis
December 1, 1995
1987 EMPLOYEE STOCK OPTION PLAN
In 1987, the Company adopted the 1987 Employee Stock Option Plan ("the Plan")
for the purpose of promoting the growth and general prosperity of the Company by
attracting and retaining the best available personnel and by providing such
employees with additional incentive to contribute to the success of the Company.
The Plan currently allows the grant of a maximum of 383,000 incentive stock
options and nonstatutory stock options (together, the "Options") to employees,
including officers and directors who are also employees, of the Company or any
parent or subsidiary corporation of the Company, to purchase shares of the
Common Stock, $.02 par value, of the Company. The Company currently has 20
employees, all of which may be granted Options under the Plan, including all
executive officers who are also employees.
To date, there have been 327,250 Options to purchase Common Stock granted, of
which 21,600 have been exercised. There are currently outstanding 228,400
options to purchase Common Stock at an exercise price of $2.75 per share, 1,250
options to purchase Common Stock at an exercise price of $3.52 per share, 15,000
options to purchase Common Stock at an exercise price of $5.13 per share, 15,000
options to purchase Common Stock at an exercise price of $3.69 per share and
46,000 options to purchase Common Stock at an exercise price of $4.75 per share.
The market value of the Common Stock underlying the Options as of December 1,
1995 was $4.50.
Mr. Mathies has been granted an option under the Plan for 100,000 shares of
Common Stock at an exercise price of $2.75 of which 33,333 shares are vested as
of December 1, 1995. Mr. Bradshaw has a presently exercisable option to
acquire 1,250 shares under the Plan at an exercise price of $3.52. Mr.
Bradshaw also has an option to acquire 100,000 shares under the Plan at an
exercise price of $2.75. He exercised 20,000 shares during the fiscal year and
13,333 unexercised shares are vested as of December 1, 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than as set forth above and under "Executive Compensation," the Company is
not aware of any transaction, or series of similar transactions to which the
Company or any of its subsidiaries is or will be a party, in which nominees for
election as a director, any principal security holder or any member of the
immediate family of any of the foregoing persons has a direct or indirect
material interest.
ELECTION OF DIRECTORS
The Company's By-Laws authorize the Board of Directors to be comprised of not
less than 3 nor more than 15 members. The Company's Board of Directors has
presently determined that the Board shall be comprised of 6 members, but
reserves the right to increase the number of directors if the need arises. The
6 nominees listed below have been recommended by the Nominating Committee and
approved by the full Board of Directors. Upon election, they shall constitute
at that date the Company's entire Board of Directors.
It is intended that the enclosed proxy will be voted FOR the election of the 6
nominees named below to the Company's Board of Directors, unless authority to so
vote is withheld on the proxy. In the event any nominee is unable to serve as a
director for any reason not currently known or contemplated, the person named as
Proxy will have discretionary authority in that instance to vote the proxy for
any substitute nominee that the Board of Directors may designate. Each nominee
elected to serve as director will hold office until the next Annual Meeting or
until his successor is elected and qualified.
The following sets forth information as of December 1, 1995 with respect to each
nominee for director:
<PAGE>
Page 10 Tipperary Corporation
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CARTER G. MATHIES, 39, was named President and Chief Executive Officer of the
Company on November 3, 1989. Mr. Mathies was appointed to the Board of
Directors on November 17, 1989 and appointed Chairman of the Board on September
2, 1992. From March, 1985 through October, 1989, Mr. Mathies was employed by
BWAB Incorporated, an independent oil and gas company located in Denver,
Colorado, as Manager of Land and Special Projects. Prior to his employment with
BWAB, Mr. Mathies was Vice President and co-owner of Monarch Energy Corporation,
a Denver-based oil and gas acquisition company.
EUGENE I. DAVIS, 40, was elected to the Board of Directors on September 2, 1992.
Mr. Davis had served as outside legal counsel to the Company since 1984. He is
currently President and Director of Emerson Radio Corp., a company with a class
of equity securities registered under the Securities Exchange Act of 1934.
Emerson Radio Corp. filed a petition under Chapter 11 under federal bankruptcy
laws in 1993 which was discharged on March 31, 1994. He practiced law with
Holmes, Millard and Duncan, Dallas, Texas, from June, 1989 to September, 1992.
From February, 1988 to May, 1989, he was a partner in the law firm of Arter,
Hadden and Witts of Dallas, Texas. Prior to that time, Mr. Davis was with the
Dallas, Texas office of the law firm Akin, Gump, Strauss, Hauer & Feld.
JAMES A. MCAULEY, 65, a petroleum engineer, has been a director of the Company
since February 24, 1987. Mr. McAuley was formerly President of Milmac, Inc., a
Dallas-based firm which originally was a 49% partner in Double-Double Partners
II. Double-Double Partners II, prior to July 31, 1995, owned 15.9% of the
Company's Common Stock. Upon the liquidation of Milmac, Inc. in March, 1988,
Mr. McAuley was distributed a 12.25% partnership interest in Double-Double
Partners II. Double-Double Partners II was liquidated on July 31, 1995,
whereupon Mr. McAuley was distributed 218,453 shares of the Company's Common
Stock. He is currently President and Chief Executive Officer of Milmac
Operating Company, a Lubbock, Texas oil and gas operating company and D&M
Engineering, Inc., a Texas corporation involved in gas processing for the
recovery of sulphur and the reduction of sulphur dioxide emissions.
ANTHONY F. KRAMER, 55, has been a director of the Company since 1986. On
October 31, 1989, Mr. Kramer was named Chairman of the Board of Tipperary
Corporation and served as such until his resignation on September 2, 1992.
Since 1967, Mr. Kramer has been associated with Draper and Kramer Incorporated,
a Chicago-based real estate investment firm. Mr. Kramer has served as Senior
Vice President and a director of Draper and Kramer Incorporated since December
16, 1974. He was elected Treasurer of Draper and Kramer Incorporated in 1977
and continues to hold such position. Mr. Kramer was promoted to Executive Vice
President of Draper and Kramer Incorporated on July 17, 1991. Mr. Kramer is
also Executive Vice President and a Director of SDK Incorporated and Chairman of
the Board of Directors of Texland Oil, Inc., its wholly-owned subsidiary, which
owns approximately 28% of the Company's Common Stock. Draper and Kramer
Incorporated is also a 20% shareholder of SDK Incorporated.
DAVID L. BRADSHAW, 41, a certified public accountant, has been Vice President
and Chief Financial Officer of the Company since November 3, 1989 and a director
since January 23, 1990. Mr. Bradshaw was additionally appointed Chief Operating
Officer on January 24, 1995. He served as Treasurer of the Company from January
1, 1987 through November 2, 1989. Mr. Bradshaw joined the Company as tax
manager in January, 1986. Prior to joining the Company, Mr. Bradshaw was an
officer and owner in a privately held oil and gas company. From 1977 to 1983,
Mr. Bradshaw was employed in public accounting, most recently as tax manager in
the Midland, Texas office of Price Waterhouse.
MARSHALL D. LEES, 42, was elected to the Board of Directors on September 30,
1995. Mr. Lees joined Slough Estates in 1987 and is the President of SDK
Incorporated, Slough Parks, Inc. and Slough Estates Canada. Prior to 1987, Mr.
Lees held various management positions with Imperial Group plc and BAT (UK &
Export) Ltd., in the United Kingdom.
EXECUTIVE OFFICERS
In addition to Messrs. Mathies and Bradshaw above, the following sets forth
information with respect to the remainder of the Company's executive officers:
ROBERT T. LARSON, JR., 49, was Manager - Oil & Gas Operations from January 15,
1992, until October 9, 1994, at which time he became Manager of Exploration and
Development. He held that position until his election as Vice President -
Exploration and Development on January 24, 1995. Prior to joining the Company,
Mr. Larson was Vice President/Exploration Manager of Q2 Exploration, Inc./Quest
Energy Corporation an oil and gas company located in Denver, Colorado.
<PAGE>
Page 11 Tipperary Corporation
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JEFF T. OBOURN, 37, became employed as the Company's Vice President - Land on
February 1, 1993. From 1987 to 1993, Mr. Obourn was President of Obourn
Brothers, Inc., of Englewood, Colorado, an oil and gas land brokerage business.
LARRY G. SUGANO, 42, a petroleum engineer, was employed by the Company as its
Engineering Manager on October 10, 1994. Mr. Sugano held that position until
his election as Vice President - Engineering on January 24, 1995. During 1994
until his employment with the Company, he was a consultant for several oil and
gas companies. Mr. Sugano was employed by Graham Royalty, Ltd., Denver,
Colorado, from 1984 to 1991 as Senior Petroleum Engineer and from 1991 to 1993
as District Manager.
WAYNE W. KAHMEYER, 61, was employed by the Company as its Controller on June 1,
1993. In addition to that position, Mr. Kahmeyer was elected as Principal
Accounting Officer on January 24, 1995. From 1982 until his employment with the
Company, Mr. Kahmeyer was Vice President, Finance of Coors Energy Company,
Golden, Colorado.
There are no family relationships between or among the executive officers and
nominees to the Board of Directors of the Company. There are no arrangements or
understandings between any of the directors or nominees or any other person
pursuant to which any person was or is to be elected as a director or nominee.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, subject to ratification by the shareholders at the
Annual Meeting, has reappointed Price Waterhouse as independent accountants of
the Company for the fiscal year ending September 30, 1996. Price Waterhouse has
been the Company's independent accounting firm since 1971. The Company has been
advised that neither Price Waterhouse nor any member thereof has any direct
financial interest or any material indirect interest in the Company.
Shareholders are requested to vote FOR the ratification of the reappointment of
Price Waterhouse as the Company's independent accountants for fiscal 1996.
Representatives of Price Waterhouse are expected to be present at the Annual
Meeting and will be afforded an opportunity to make a statement, if they desire
to do so. It is expected that such representatives will be available to respond
to appropriate shareholder questions.
ANNUAL REPORT
An Annual Report containing the Company's certified Consolidated Financial
Statements as of September 30, 1995, accompanies this Proxy Statement. No part
of such Annual Report is incorporated herein by reference and no part thereof is
to be considered proxy soliciting material.
FORM 10-K
SHAREHOLDERS MAY OBTAIN, WITHOUT CHARGE, THE COMPANY'S ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION BY WRITING TO THE SECRETARY OF THE COMPANY AT 633
SEVENTEENTH STREET, SUITE 1550, DENVER, COLORADO 80202.
SHAREHOLDER PROPOSALS
Shareholders desiring to submit proposals for action at the Company's 1997
Annual Meeting of Shareholders, including nominations of the Board of Directors
to be considered by the Company's Nominating Committee, must submit such
proposals to the Company at its principal offices not later than October 15,
1996.
<PAGE>
Page 12 Tipperary Corporation
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DISCRETIONARY AUTHORITY
The Company's Board of Directors does not know of any other business to be
presented at the Annual Meeting. If any other matter properly comes before the
Annual Meeting, however, it is intended that the persons named in the enclosed
proxy will vote said proxy in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Elaine R. Treece
Corporate Secretary
Date: December 22, 1995
<PAGE>
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 24, 1996
The undersigned hereby (a) acknowledges receipt of the Notice of Annual Meeting
of Shareholders ("Notice") of Tipperary Corporation (the "Company") to be held
on January 24, 1996, and the Proxy Statement in connection therewith, each dated
December 22, 1995; (b) appoints Carter G. Mathies and David L. Bradshaw, each
with the power to act alone or to appoint his substitute, as attorneys and
proxies to represent and vote, as designated below, all the shares of Common
Stock, par value $0.02 per share, of the Company held of record by the
undersigned on December 1, 1995, at such Annual Meeting and at any
adjournment(s) thereof; and (c) revokes any proxies heretofore given.
<TABLE>
<S> <C> <C>
1. The election of six (6) directors to serve until the next Annual Meeting of Shareholders or until their
successors shall be duly elected and qualified
Nominees:
Carter G. Mathies, David L. Bradshaw, Anthony F. Kramer, Eugene I. Davis, Marshall D. Lees, James A. McAuley
/ / For all nominees, except those whose name(s) / / WITHHOLD AUTHORITY
is (are) written below. to vote for all nominees.
- - ------------------------------------------------------------------------------------------------------------------------
2. The ratification of the reappointment of Price Waterhouse as the Company's independent accountants for the
fiscal year ending September 30, 1996;
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxy is authorized to vote upon such other business as may properly come before the
Annual Meeting or any adjournment(s) thereof.
</TABLE>
(Continued, and to be signed, on page 2)
<PAGE>
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS INDICATED, THIS
PROXY WILL BE VOTED FOR THE ELECTION TO THE BOARD OF DIRECTORS OF THE NOMINEES
LISTED ON THIS PROXY, FOR PROPOSAL NO. 2 AND IN THE DISCRETION OF THE PROXY ON
ANY OTHER BUSINESS.
If your shares are registered in the name of a brokerage firm or bank, only your
bank or broker can vote your stock and only after receiving your specific
instruction.
This proxy revokes all prior proxies.
Dated: ------------------------ , 19 --- Signature(s):
----------------------------------
----------------------------------
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Important: please date this proxy
and sign exactly as your name
appears to the left. When signing
as attorney, administrator,
trustee or guardian, please give
your full title as such. When
stock is in the name of more than
one person, each such person
should sign the proxy.
