<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/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 26, 1999
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 Wells Fargo
Bank, 633 Seventeenth Street, Denver, Colorado, on Tuesday, January 26, 1999,
at 10:00 a.m., MST, for the purpose of taking action on:
1. The election of five 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 PricewaterhouseCoopers LLP
("PricewaterhouseCoopers") as the Company's independent accountants for
fiscal 1999; 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, 1998, 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 January 5,
1999. 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 30, 1998
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
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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 Tuesday, January 26, 1999, ("Annual Meeting") to be held in the Management
Briefing Center on the fourth floor of Wells Fargo Bank, 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 January 5, 1999, will be borne by the Company.
It is contemplated that solicitation of proxies will be primarily by mail,
but may be supplemented with 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 proxy 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, 1998, 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 13,133,955 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.
A quorum for the annual meeting will consist of attendance, either in person
or by proxy, of a majority of outstanding shares of Common Stock. 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 PricewaterhouseCoopers as
the Company's independent accountants for fiscal 1999.
<PAGE>
PAGE 3 TIPPERARY CORPORATION
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of December 1, 1998, 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.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percentage of Class
- ----------------------------- ---------------------- -------------------
<S> <C> <C>
Texland Oil, Inc.(1)
33 West Monroe Street 3,117,514 (2) 23.7%
Chicago, Illinois 60603
Slough Estates USA Inc. (1)
33 West Monroe Street 4,898,920 (3) 37.3%
Chicago, Illinois 60603
Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza Two 1,110,000 8.5%
Saddle Brook, New Jersey 07663
Heartland Advisors, Inc.
790 North Milwaukee 1,500,000 11.4%
Milwaukee, Wisconsin 53202
The Acorn Fund
227 West Monroe Street, Suite 3000 1,031,000 (4) 7.9%
Chicago, Illinois 60606
Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000 1,170,000 (5) 8.9%
Chicago, Illinois 60606
</TABLE>
(1) Slough Estates USA Inc. ("Slough"), a Delaware corporation, owns 100%
of the Common Stock of Texland Oil, Inc. ("Texland"). Slough is a
wholly-owned, U.S. subsidiary of Slough Estates plc ("SEL"). 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.
SEL is a publicly held limited liability company, whose principal office
is located at 234 Bath Road, Trading Estate, Slough SL1 4EE, England.
(2) Texland is the record owner of the indicated shares.
(3) Of the 4,898,920 shares noted, Slough is the record owner of 1,564,835
of the shares, is the indirect owner of 3,117,514 of the shares through
its wholly-owned subsidiary Texland, and holds 216,571 shares as
collateral for a loan to a former director of the Company. In addition
to the 4,898,920 shares noted, in late December Slough purchased
2,000,000 shares of Common Stock from the Company for $4,000,000. See
"Certain Relationships and Related Transactions."
(4) The Acorn Fund is the record owner of the indicated shares.
(5) Of the 1,170,000 shares noted, Wanger Asset Management, L.P. is the
beneficial owner of 1,031,000 shares held by The Acorn Fund and 139,000
shares held by the Wanger U.S. Small Cap Advisor Fund.
<PAGE>
PAGE 4 TIPPERARY CORPORATION
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 1, 1998, regarding
shares of the Company's Common Stock beneficially owned by each 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 or her respective shares of Common Stock.
<TABLE>
<CAPTION>
Title of Class Name of Beneficial Amount and Nature of
Owner Beneficial Ownership Percentage of Class(1)
- --------------- ------------------ -------------------- ----------------------
<S> <C> <C> <C>
Common Stock David L. Bradshaw 373,438 (2) 2.8%
Kenneth L. Ancell 38,334 (3) *
Eugene I. Davis 55,000 (4) *
Douglas Kramer 0
Marshall D. Lees 8,334 (5) *
Jeff T. Obourn 121,667 (6) *
Larry G. Sugano 46,001 (7) *
Roger C. Wiggin 16,767 (8) *
Lisa S. Wilson 28,733 (9) *
Executive officers and
directors as a group,
9 in number 688,274 5.0%
</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) Includes 365,234 shares issuable pursuant to options and warrants which
are currently exercisable or exercisable within 60 days of December 1,
1998.
(3) Represents 38,334 shares issuable pursuant to a warrant which is
currently exercisable or exercisable within 60 days of December 1, 1998.
(4) Represents 55,000 shares issuable pursuant to a warrant which is
currently exercisable or exercisable within 60 days of December 1, 1998.
(5) Represents 8,334 shares issuable pursuant to a warrant which is
currently exercisable or exercisable within 60 days of December 1, 1998.
(6) Represents 121,667 shares issuable pursuant to options which are
currently exercisable or exercisable within 60 days of December 1, 1998.
(7) Includes 45,001 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1998.
(8) Includes 16,667 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1998.
(9) Includes 27,733 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1998.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors was aided by four standing committees during the
fiscal year ended September 30, 1998. 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; the Nominating Committee is responsible for
consideration of nominations to the Board of Directors from shareholders of
the Company; 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,
1998, Messrs. Davis (Chairman) and Ancell served on the Audit Committee. The
Nominating Committee was composed of Messrs. Bradshaw and Lees. Messrs.
Kramer, Lees and Davis served on the Compensation Committee and all Board
members served on the Executive Committee.
<PAGE>
PAGE 5 TIPPERARY CORPORATION
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Based solely upon a review of Forms 3 and 4 furnished to the Company during
the fiscal year ended September 30, 1998, 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, 1998, there were seven meetings of
the Company's Board of Directors. All directors attended at least 75% of the
meetings. The Audit Committee and the Compensation Committee each met twice.
COMPENSATION OF DIRECTORS
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, 1998, the Company compensated its nonemployee, outside
directors 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. From time to time, Mr. Ancell provides consulting services related
to the Company's coalbed methane project in Australia at his standard rates.
During fiscal 1998, the Company paid Mr. Ancell approximately $12,400 in
consulting fees. Mr. Davis began providing consulting services to the
Company during fiscal 1998, for which he was compensated $45,000 as of
September 30, 1998. These services related to the Company's public relations
and equity financing efforts.
EXECUTIVE COMPENSATION
The table below presents the compensation awarded to, earned by, or paid to
the Company's President and Chief Executive Officer and its Senior Vice
President -Operations for the fiscal years ended September 30, as indicated.
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
-------------------------- -------
Other Annual Restricted All Other
Name and Principal Fiscal Compen Stock Warrants/ LTIP Compen-
Position Year Salary Bonus -sation (1) Awards Options (2) Payouts sation (3)
- -------------------- ------ -------- ------- ------------ ---------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David L. Bradshaw, 1998 $181,731 $50,000 -- -- -- -- $4,809
President & Chief 1997 $157,521 $20,000 -- -- 75,000 -- $4,188
Executive Officer
1996 $141,250 -- -- -- 50,000 -- $2,982
Jeff T. Obourn, 1998 $119,423 $20,000 -- -- 25,000 -- $2,984
Sr. Vice President - 1997 $109,038 $15,000 -- -- 20,000 -- $1,801
Operations
</TABLE>
(1) In addition to the amounts listed, the Company furnished other various
benefits, the value of which are not reported in this column because the
Company has concluded that the aggregate amount of these benefits is less
than 10% of cash compensation paid.
(2) No SARs were granted to any of the named officers during the last three
years.
(3) Represents the Company's matching contribution to the Section 401(k)
Retirement Savings Plan.
<PAGE>
PAGE 6 TIPPERARY CORPORATION
- --------------------------------------------------------------------------------
The following table sets forth certain information with respect to stock
warrants and options granted to the named executive officers during the
fiscal year ended September 30, 1998:
<TABLE>
<CAPTION>
Warrant and Option/SAR Grants in Last Fiscal Year
- --------------------------------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Individual Grants Assumed Annual Rates of Stock
Price Appreciation for
Warrant/Option Term
- ---------------------------------------------------------------------------------------------- -----------------------------
Number of Percent of Total Exercise or Expiration
Securities Warrant/Options Base Price Date
Underlying Granted to ($/share)
Warrants/Options Employees in Fiscal 5% 10%
Name Granted Year
- ------------------ ---------------- ------------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David L. Bradshaw -- -- -- -- -- --
Jeff T. Obourn 25,000 31% $4.38 10/01/07 $68,750 $174,500
</TABLE>
The following table sets forth information with respect to stock warrants and
option exercises during the fiscal year ended September 30, 1998, by the
named executive officers and the value of such officer's unexercised stock
options and warrants at September 30, 1998.
<TABLE>
<CAPTION>
Aggregated Warrants and Option/SAR Exercises In Last Fiscal Year
And Fiscal Year-End Warrants and Option/SAR Values
- ------------------------------------------------------------------------------------------------------------------------------
Shares Number of Unexercised Warrants Value of Unexercised in-the-
Acquired on and Options/SARs held at Fiscal Money Warrants and Options/SARs
Name Exercise Value Realized Year End (#) at Fiscal Year End
- ------------------ ----------- -------------- ------------------------------- --------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ----------- -------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
David L. Bradshaw 4,350 $1,480 340,234 66,666 -- --
Jeff T. Obourn -- -- 70,001 54,999 -- --
</TABLE>
<PAGE>
PAGE 7 TIPPERARY CORPORATION
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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. 121 (Peer Group), "Independent Oil & Gas" (which includes 172
companies comparable with the Company) for the period from October 1, 1993,
through September 30, 1998. The graph assumes that the value of an
investment in the Company's Common Stock and each index was $100 on October 1,
1993. Numerical comparisons are presented following the graph.
COMPARISON OF TOTAL RETURN
AMONG TIPPERARY CORPORATION,
PEER GROUP INDEX AND AMEX MARKET VALUE INDEX
[GRAPH]
ASSUMES $100 INVESTED ON OCTOBER 1, 1993
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Fiscal Years Ending September 30
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Tipperary 100.00 54.55 67.27 54.55 65.45 29.09
Peer Group 100.00 105.58 106.23 127.42 152.45 96.80
Amex Market 100.00 101.92 122.80 127.81 155.42 135.76
Value Index
</TABLE>
<PAGE>
PAGE 8 TIPPERARY CORPORATION
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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 exploration projects; and overall financial management.
The Company also utilizes stock warrants and 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.
David L. Bradshaw was elected Chief Executive Officer on January 16, 1996.
Mr. Bradshaw is currently employed by the Company on an "at-will" basis. On
May 1, 1995, Mr. Bradshaw's salary was set at $120,000 when he became Chief
Operating Officer. Upon his election as President and Chief Executive
Officer on January 16, 1996, his salary was increased to $150,000 and to
$157,500 on October 1, 1996. During the year ended September 30, 1998, Mr.
Bradshaw's compensation of $181,731 included a base salary of $175,000 and
other compensation of $6,731. Additionally, Mr. Bradshaw was paid bonuses of
$50,000 and $20,000 in fiscal 1998 and 1997, respectively. The Compensation
Committee reviewed industry salary surveys and determined that Mr. Bradshaw's
total cash compensation was comparable to similar positions with industry
competitors and reasonable in view of his performance. In evaluating his
performance during the last two fiscal years and using the above criteria,
the Committee considered the significant increase in total proved reserves,
the commencement of gas sales in Australia and a successful domestic
exploration program. The Committee believes that the combination of stock and
cash compensation paid to the chief executive officer is designed to closely
align his interests with those of the shareholders, and that his compensation
is related directly to his performance as a person with considerable
experience and ability in the oil and gas business.
COMPENSATION COMMITTEE
as of December 1, 1998
Eugene I. Davis
Douglas Kramer
Marshall D. Lees
<PAGE>
PAGE 9 TIPPERARY CORPORATION
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1987 EMPLOYEE STOCK OPTION PLAN
In 1987, the Company adopted the 1987 Employee Stock Option Plan ("the 1987
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 1987 Plan expired on December 31, 1996; options
issued under the plan remain in effect pursuant to their terms.
The Plan allowed 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 were also employees, of the Company or
any parent or subsidiary corporation of the Company, to purchase shares of
the Common Stock of the Company.
As of December 1, 1998, there were outstanding options to acquire 269,400
shares under the 1997 Plan, including 103,400 options to purchase Common
Stock at an exercise price of $2.75 per share, 65,000 options to purchase
Common Stock at an exercise price of $3.63 per share, 15,000 options to
purchase Common Stock at an exercise price of $3.69 per share, 40,000 options
to purchase Common Stock at an exercise price of $4.63 per share, 31,000
options to purchase Common Stock at an exercise price of $4.75 per share and
15,000 options to purchase Common Stock at an exercise price of $5.13 per
share. The market value of the Common Stock underlying the options as of
December 1, 1998, was $1.88 per share.
1997 LONG-TERM INCENTIVE PLAN
Pursuant to a shareholder vote in January 1997, the 1997 Long-Term Incentive
Plan (the "1997 Plan") was adopted to replace the expired 1987 Plan. The
1997 Plan reserves 250,000 shares of Common Stock for issuance for a period
of ten years. Any shares that are the subject of an award which has lapsed
or expired unexercised or unissued will automatically become available for
reissue under the 1997 Plan. The 1997 Plan provides that participants may be
granted awards in the form of incentive stock options, non-qualified options
as defined in the Internal Revenue Code of 1986, as amended, stock
appreciation rights ("SARs"), performance awards related to the Company's
operations, or restricted stock upon payment of consideration not less than
the par value of the restricted stock issued. The Company currently has 20
employees, all of whom may be granted options under the 1997 Plan, including
all executive officers who are also employees.
To date, there have been 217,500 options to purchase Common Stock granted of
which 17,000 have expired. None have been exercised. There are currently
outstanding 44,000 options to purchase Common Stock at an exercise price of
$4.38 per share, 20,000 options to purchase Common Stock at an exercise price
of $4.44, 12,500 options to purchase Common Stock at an exercise price of
$4.56 per share, 25,000 options to purchase Common Stock at an exercise price
of $4.00 and 99,000 options to purchase Common Stock at an exercise price of
$2.50. The market value of the Common Stock underlying the options as of
December 1, 1998, was $1.88 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1998, the Company received debt and equity financing of
$11,700,000 from Slough Estates USA Inc. ("Slough"), the Company's largest
shareholder. This financing is comprised of a loan in the amount of
$6,000,000 to be used for development of the Comet Ridge project in
Queensland, Australia; $4,000,000 from the issuance of 2,000,000 shares of
Common Stock and an additional loan in the amount of $1,700,000.
The commitment for the $6,000,000 loan was made to the Company's Australian
subsidiary and the proceeds from this loan will be used to fund the drilling
of eight wells and to expand the gathering system on the Comet Ridge project.
The loan is evidenced by a five-year note bearing interest at the rate of 10%
per annum. The terms of the note also provide that Slough will receive
additional payments based upon a royalty of 7% of gross revenues from both
the existing and eight proposed wells until the loan is paid in full, after
which it will be on the eight new wells for the life of those wells. The
Company's share of estimated costs for this development project is
approximately $3,300,000. The balance of the proceeds will be available for
the Company to extend loans to the remaining working interest owners in the
project for their proportionate share of the capital costs of this drilling
program. In addition to the promissory note for $6,000,000, the Company will
transfer to Slough ten percent of the Common Stock of the Australian
subsidiary.
<PAGE>
PAGE 10 TIPPERARY CORPORATION
- --------------------------------------------------------------------------------
The loan of $1,700,000, together with the $2,700,000 note payable as of
September 30, 1998, and an additional $1,100,000 borrowed subsequent to
September 30, 1998, are due under the terms of a three-year note for
$5,500,000 bearing interest at the London Interbank Offered Rate ("LIBOR")
plus 3.5%. The $1,700,000 proceeds from this loan and the $4,000,000
proceeds from the issuance of Common Stock were used to reduce bank debt by
$4,700,000, which brings the current loan balance due the bank to the new
borrowing base level of $11,800,000. The remaining $1,000,000 of the
proceeds will be used by the Company for working capital. In connection with
this debt and equity financing, the Company also issued to Slough warrants to
purchase 500,000 shares of the Company's Common Stock at $3.00 per share,
exercisable during a five-year period beginning in December 2000 and ending
in December 2005.
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.
PROPOSAL I
ELECTION OF DIRECTORS
The Company's By-Laws authorize the Board of Directors to be comprised of not
less than three nor more than 15 members. The Company's Board of Directors
has presently determined that the Board shall be comprised of five members,
but reserves the right to increase the number of directors if the need
arises. The five 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
five 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, 1998, with respect to
each nominee for director:
DAVID L. BRADSHAW, 44, has been a director of the Company since January 23,
1990, and became President and Chief Executive Officer of the Company on
January 16, 1996. Mr. Bradshaw, a certified public accountant, began his
employment with the Company in January 1986 as tax manager, and has held
various positions with the Company, including Chief Financial Officer and
Chief Operating Officer, prior to his current position. 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. His last position in public accounting was tax manager, serving
oil and gas clients, in the Midland, Texas office of Price Waterhouse.
KENNETH L. ANCELL, 56, was elected to the Board of Directors on July 11,
1996. Mr. Ancell is a petroleum engineer and a principal in the Houston-based
consulting engineering firm of Fairchild, Ancell and Wells. Prior to forming
this consulting firm, Mr. Ancell was employed as a petroleum engineer by
various energy companies researching coalbed methane development. He
presently serves as a senior project advisor for the United Nations' coalbed
methane project in China, and was a Distinguished Lecturer on coalbed methane
reserves for the Society of Petroleum Engineers. Mr. Ancell has expertise in
oil and gas recovery processes and 20 years of coalbed methane expertise.
EUGENE I. DAVIS, 43, was elected to the Board of Directors on September 2,
1992. Mr. Davis had served as independent legal counsel to the Company since
1984. He currently acts as Chief Operating Officer of TotalTel USA
Communications, Inc., a NASDAQ listed company. He is currently Vice Chairman
and Director of Emerson Radio Corp., an American Stock Exchange company with
a class of equity securities registered under the Securities Exchange Act of
1934. Mr. Davis is also Vice Chairman and Director of Sports Supply Group
Inc., a New York Stock Exchange company. He practiced law with Holmes,
Millard and Duncan, Dallas, Texas, from June 1989 to August 1992. From
February 1988 to May 1989, he was a partner in the law firm of Arter & Hadden
of Dallas, Texas. Prior to that time, Mr. Davis was employed by Exxon
Corporation and Amoco Corporation and then the Dallas, Texas, office of the
law firm Akin, Gump, Strauss, Hauer & Feld.
<PAGE>
PAGE 11 TIPPERARY CORPORATION
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DOUGLAS KRAMER, 62, was elected to the Board of Directors on August 19, 1996.
Mr. Kramer is Chairman and Director of Draper and Kramer, Inc., a real estate
and mortgage banking company headquartered in Chicago. He is also Director
of Slough Estates plc, a London-based property company. He is also Chairman
and Director of Slough Estates USA Inc., a wholly-owned subsidiary of Slough
Estates plc, which beneficially owned approximately 37.3% of the Company's
Common Stock as of December 1, 1998.
MARSHALL D. LEES, 45, was elected to the Board of Directors on September 30,
1995. Mr. Lees joined Slough Estates plc in 1987 and is the Chief Executive
Officer of Slough Estates North America, which includes Slough Estates USA
Inc., and Slough Estates Canada Limited. He became an Executive Director of
Slough Estates plc in 1998. 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 Mr. Bradshaw shown above, the following sets forth information
with respect to the remainder of the Company's executive officers:
JEFF T. OBOURN, 40, became employed as the Company's Vice President - Land on
February 1, 1993, and was appointed Senior Vice President - Operations on
January 16, 1996. From 1987 to 1993, Mr. Obourn was President of Obourn
Brothers, Inc., of Englewood, Colorado, an oil and gas land brokerage
business.
LISA S. WILSON, 39, has been Chief Financial Officer of the Company since
March 1, 1998. Ms. Wilson joined the Company as tax manager in 1991. From
1985 to 1990, Ms. Wilson, a certified public accountant, was employed in
public accounting, most recently as tax manager in the Dallas, Texas, office
of Price Waterhouse.
ROGER C. WIGGIN, 40, became employed as the Company's Vice President
- -Exploration and Development on April 1, 1997. From 1983 until joining the
Company in 1997, Mr. Wiggin was employed by Mitchell Energy and Development
Corporation, The Woodlands, Texas, as a geologist. Prior experience also
includes a position with Chevron, USA, in Denver.
LARRY G. SUGANO, 45, a petroleum engineer, was employed by the Company as its
Engineering Manager on October 10, 1994. Mr. Sugano held that position until
he became Vice President - Engineering on January 24, 1995. During 1994
until his employment with the Company, he served as a consultant to 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.
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.
PROPOSAL 2
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, subject to ratification by the shareholders at the
Annual Meeting, has reappointed PricewaterhouseCoopers as independent
accountants of the Company for the fiscal year ending September 30, 1999.
PricewaterhouseCoopers has been the Company's independent accounting firm
since 1971. The Company has been advised that neither PricewaterhouseCoopers
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 PricewaterhouseCoopers as the Company's independent accountants for fiscal
1999.
Representatives of PricewaterhouseCoopers 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.
<PAGE>
PAGE 12 TIPPERARY CORPORATION
- --------------------------------------------------------------------------------
ANNUAL REPORT
An Annual Report containing the Company's certified Consolidated Financial
Statements as of September 30, 1998, 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, 1998, 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 2000
Annual Meeting of Shareholders, including nominations for 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, 1999.
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 person named in the
enclosed proxy will vote said proxy in accordance with his best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Elaine R. Treece
Corporate Secretary
Date: December 30, 1998
<PAGE>
TIPPERARY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 26, 1999
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 26, 1999, and the Proxy Statement in connection
therewith, each dated December 30, 1998, (b) appoints David L. Bradshaw, with
the power to act alone or to appoint his substitute, as attorney and proxy 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 30, 1998, at such Annual Meeting and at any adjournment(s) thereof;
and (c) revokes any proxy heretofore given.
1. The election of five (5) directors to serve until the next Annual Meeting
of Shareholders or until their successors shall be duly elected and
qualified -
Nominees: David L. Bradshaw, Kenneth L. Ancell, Eugene I. Davis, Douglas
Kramer, and Marshall D. Lees.
/ / For all nominees, except those / / WITHHOLD AUTHORITY
whose name(s) is (are) written below. to vote for all
nominees.
2. The ratification of the reappointment of PricewaterhouseCoopers as the
Company's independent accountants for the fiscal year ending September 30,
1999;
/ / FOR / / AGAINST / / ABSTAIN
3. In his discretion, the Proxy is authorized to vote upon such other business
as may properly come before the Annual Meeting or any adjournment(s)
thereof.
(Continued, and to be signed, on page 2)
<PAGE>
(Continued from other side)
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: , 1999. 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.
