<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
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(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
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
JANUARY 27, 1998
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 27, 1998, at 10:00
a.m., MST, for the purpose of taking action on:
1. The election of 5 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 1998; 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,
1997, 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 2, 1998. 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 23, 1997
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 27, 1998, ("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 2, 1998, 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, 1997, 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 13,119,605 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 1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of December 1, 1997, 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
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Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percentage of Class
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Texland Oil, Inc.(1)
33 West Monroe Street 3,117,514 (2) 23.8%
Chicago, Illinois 60603
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SDK Incorporated (1)
33 West Monroe Street 4,898,920 (3) 37.3%
Chicago, Illinois 60603
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Slough Parks, Inc.(1)
33 West Monroe Street 4,898,920 (4) 37.3%
Chicago, Illinois 60603
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Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza Two 1,124,600 8.6%
Saddle Brook, New Jersey 07663
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The Acorn Fund
227 West Monroe Street, 1,031,000 7.9%
Suite 3000
Chicago, Illinois 60606
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Heartland Advisors, Inc.
790 North Milwaukee 1,512,300 11.5%
Milwaukee, Wisconsin 53202
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(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.
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(2) Texland is the record owner of the indicated shares.
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(3) Of the 4,898,920 shares noted, SDK 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.
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(4) Indirectly owned through its 80% ownership of the voting securities of
SDK.
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<PAGE>
Page 4 Tipperary Corporation
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 1, 1997, 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.
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Name of Amount and Nature of Percentage
Title of Class Beneficial Owner Beneficial Ownership of Class(1)
- -------------------------------------------------------------------------------
Common Stock David L. Bradshaw 331,771 (2) 2.5%
Kenneth L. Ancell 16,667 (3) *
Eugene I. Davis 50,000 (4) *
Douglas Kramer 0
Marshall D. Lees 0
Jeff T. Obourn 70,001 (5) *
Paul C. Slevin 25,000 (6) *
Roger C. Wiggin 100 *
Larry G. Sugano 26,000 (7) *
Wayne W. Kahmeyer 15,000 (8) *
Executive officers and
directors as a group,
10 in number 534,539 3.9%
*less than 1%
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(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.
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(2) Includes 327,917 shares issuable pursuant to options and warrants which are
currently exercisable or exercisable within 60 days of December 1, 1997.
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(3) Represents 16,667 shares issuable pursuant to a warrant which is currently
exercisable or exercisable within 60 days of December 1, 1997.
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(4) Represents 50,000 shares issuable pursuant to a warrant which is currently
exercisable or exercisable within 60 days of December 1, 1997.
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(5) Represents 70,001 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1997.
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(6) Includes 20,000 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1997, and 5,000
shares of Common Stock owned by Mr. Slevin's wife, to which he disclaims
beneficial ownership.
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(7) Includes 25,000 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1997.
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(8) Represents 15,000 shares issuable pursuant to options which are currently
exercisable or exercisable within 60 days of December 1, 1997.
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COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors was aided by four standing committees during the fiscal
year ended September 30, 1997. 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, 1997, Messrs. Davis (Chairman) and Ancell
served on the Audit Committee. Messrs. Kramer, Lees and Davis served on the
Compensation Committee and all Board members serve on the Executive Committee.
The Nominating Committee is composed of Messrs. Bradshaw and Lees.
Based solely upon a review of Forms 3 and 4 furnished to the Company during the
fiscal year ended September 30, 1997, 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.
<PAGE>
Page 5 Tipperary Corporation
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DIRECTORS MEETINGS AND ATTENDANCE
During the fiscal year ended September 30, 1997, there were eight regular,
special and telephonic meetings of the Company's Board of Directors. All
directors attended at least 75% of the meetings except Mr. Kramer who was unable
to attend three 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, 1997, 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. On
August 26, 1997, directors were granted warrants to purchase Common Stock at an
exercise price of $4.25 per share vesting equally over a three-year period. Mr.
Bradshaw was granted a warrant to acquire 50,000 shares; Mr. Lees was granted a
warrant to acquire 25,000 shares; and Messrs. Ancell and Davis were each granted
a warrant to acquire 15,000 shares. 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 1997, the Company paid Mr.
Ancell approximately $11,200 in consulting fees.
EXECUTIVE COMPENSATION
The table below presents the compensation awarded to, earned by, or paid to the
Company's President and Chief Executive Officer, Senior Vice President -
Operations and Chief Financial Officer 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>
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Summary Compensation Table
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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,(4) 1997 $157,521 $20,000 - - 75,000 - $4,188
---------------------------------------------------------------------------------------
President & Chief 1996 $141,250 - - - 50,000 - $2,982
Executive Officer ---------------------------------------------------------------------------------------
1995 $108,333 $10,000 $44,025(5) - - - $1,666
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Jeff T. Obourn,(6) 1997 $109,038 $15,000 - - 20,000 - $1,801
Sr. Vice President -
Operations
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Paul C. Slevin,(7) 1997 $100,000 $10,000 - - 10,000 - $500
Chief Financial Officer
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- ----------------------------------------------------------------------------------------------------------------
</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 3 years.
(3) Represents the Company's matching contribution to the Section 401(k)
Retirement Savings Plan.
(4) Mr. Bradshaw became President and Chief Executive Officer of the Company on
January 16, 1996. Prior to such date, Mr. Bradshaw was the Chief Operating
Officer and Chief Financial Officer of the Company.
(5) Includes amounts resulting from the exercise of warrants and options, equal
to the difference between exercise price of options or warrants and market
price of Common Stock on date of exercise.
(6) Mr. Obourn became Senior Vice President - Operations on January 16, 1996.
Prior to such date Mr. Obourn was Vice President - Land of the Company.
(7) Mr. Slevin became the Chief Financial Officer of the Company on January 29,
1996.
<PAGE>
PAGE 6 TIPPERARY CORPORATION
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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, 1997:
<TABLE>
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Warrant and Option/SAR Grants in Last Fiscal Year
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Potential Realizable Value at Assumed
Individual Grants Annual Rates of Stock Price
Appreciation for Warrant/Option Term
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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
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<S> <C> <C> <C> <C> <C> <C>
David L. Bradshaw 25,000 11.0% $3.63 (1) $57,000 $144,500
50,000 22.0% $4.25 (1) $133,000 $340,500
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Jeff T. Obourn 20,000 8.8% $3.63 10/09/06 $45,600 $115,600
- ------------------------------------------------------------------------------------------------------------------------------------
Paul C. Slevin 10,000 4.4% $3.63 10/09/06 $22,800 $57,800
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Expires 2 years after termination of employment; term assumed to be 10
years.
The following table shows information with respect to stock warrants and option
exercises during the fiscal year ended September 30, 1997, by the named
executive officers and the value of such officer's unexercised stock options and
warrants at September 30, 1997.
<TABLE>
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- ------------------------------------------------------------------------------------------------------------------------------------
Aggregated Warrants and Option/SAR Exercises In Last Fiscal Year
And Fiscal Year-End Warrants and Option/SAR Values
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Shares Number of Unexercised Warrants and Value of Unexercised
Acquired on Options/SARs held at Fiscal In-the-Money Warrants and
Name Exercise Value Realized Year End (#) Options/SARs at Fiscal Year End
- ------------------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David L. Bradshaw - - 302,917 108,333 $653,725 $34,250
- ------------------------------------------------------------------------------------------------------------------------------------
Jeff T. Obourn - - 46,666 53,334 $26,250 $17,400
- ------------------------------------------------------------------------------------------------------------------------------------
Paul C. Slevin - - 8,333 26,667 - $8,700
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- ------------------------------------------------------------------------------------------------------------------------------------
</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. 353 (Peer Group), "Oil, Natural Gas Exploration" (which includes 135
companies comparable with the Company) for the period from October 1, 1992,
through September 30, 1997. The graph assumes that the value of an investment
in the Company's Common Stock and each index was $100 at October 1, 1992.
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,
PEER GROUP INDEX AND AMEX MARKET INDEX
[Graph]
ASSUMES $100 INVESTED ON OCTOBER 1, 1992
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
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FISCAL YEARS ENDING SEPTEMBER 30
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1992 1993 1994 1995 1996 1997
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<S> <C> <C> <C> <C> <C> <C>
Tipperary 100.00 289.47 157.89 194.74 157.89 189.47
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Peer Group 100.00 123.61 122.86 124.32 159.01 216.94
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Amex Market Index 100.00 117.39 119.64 144.16 150.03 182.45
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</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, with an increase to $175,000 commencing on October 1, 1997. In October
1990, Mr. Bradshaw was granted a warrant to acquire 225,000 shares at $2.50 per
share which is fully vested, and in fiscal 1993, he exercised the warrant and
acquired 20,000 shares. In January 1994, Mr. Bradshaw was granted an option to
purchase 100,000 shares of common stock at an exercise price of $2.75 per share
which is fully vested. In fiscal 1995, he exercised this option to acquire
20,000 shares. In April 1996, he was granted a warrant to acquire 50,000 shares
at $4.63 per share, and in October 1996, he was granted an option to acquire
25,000 shares at an exercise price of $3.63 per share. Both the warrant and
option vest over a three-year period. In August 1997, he was granted a warrant
to acquire 50,000 shares at $4.25 per share, vesting over a three-year period.
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
Eugene I. Davis
Douglas Kramer
Marshall D. Lees
December 1, 1997
<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,
$.02 par value, of the Company.
As of December 31, 1996, there had been 478,250 options to purchase Common Stock
granted, of which 107,666 had expired and 44,934 had been exercised. There are
currently outstanding 113,400 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, 80,000 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, 61,000 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, 1997, was $5.00 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 22 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 93,500 options to purchase Common Stock granted. None
have been exercised. There are currently outstanding 56,000 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, and 17,500 options to purchase
Common Stock at an exercise price of $4.56 per share. The market value of the
Common Stock underlying the options as of December 1, 1997, was $5.00 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1997, the Company received a $2,300,000 loan from Slough Parks, Inc.,
the controlling shareholder of SDK, which beneficially owns 37.3% of the
Company's Common Stock. The original term was one year and the note bears
interest at 8.5% per year. In December 1997, the Company received an extension
of the loan due date from January 24, 1998, to October 31, 1998. The Company
paid an $80,500 commitment fee upon funding of the loan. The loan is secured by
10% ownership in the rights under the Joint Operating Agreement covering the
Comet Ridge coalbed methane project in Queensland, Australia. The funds were
used in January 1997 to acquire an additional 5% capital-bearing interest in the
project from an unaffiliated interest holder.
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.
<PAGE>
PAGE 10 TIPPERARY CORPORATION
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PROPOSAL I
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 5 members, but
reserves the right to increase the number of directors if the need arises. The
5 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 5
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, 1997, with respect to
each nominee for director:
DAVID L. BRADSHAW, 43, a certified public accountant, has been a director of the
Company since January 23, 1990, and became Vice President and Chief Financial
Officer of the Company on November 3, 1989. Mr. Bradshaw was additionally
appointed Chief Operating Officer on January 24, 1995. He held the foregoing
officer position until his election as President and Chief Executive Officer on
January 16, 1996. 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.
KENNETH L. ANCELL, 55, 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, 42, 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
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. Emerson Radio Corp. filed a petition under
Chapter 11 under federal bankruptcy laws in 1993 which was discharged on March
31, 1994. 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.
DOUGLAS KRAMER, 61, 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
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
Parks, Inc., a wholly-owned subsidiary of Slough Estates plc, which beneficially
owns 37.3% of the Company's Common Stock.
MARSHALL D. LEES, 44, 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, 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.
<PAGE>
PAGE 11 TIPPERARY CORPORATION
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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, 39, 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.
PAUL C. SLEVIN, 50, has been Chief Financial Officer of the Company since
January 29, 1996. From 1994 through 1995, Mr. Slevin was Chief Financial
Officer of the Blackfox Group, a private investment holding company. From 1992
to 1994, he was Vice President-Corporate Finance with Hanifen Imhoff, Inc., an
investment banking firm. From 1991 to 1992, he was Chief Financial Officer and
Vice President of McData Corporation, a high technology company. Prior
experience includes positions in the oil and gas industry with The Gary-Williams
Company and Forest Oil Corporation and in public accounting with Price
Waterhouse.
ROGER C. WIGGIN, 39, 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 includes a
position with Chevron, USA, in Denver.
LARRY G. SUGANO, 44, 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 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, 63, 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.
PROPOSAL 2
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, 1998. 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 1998.
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, 1997, 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.
<PAGE>
PAGE 12 TIPPERARY CORPORATION
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FORM 10-K
SHAREHOLDERS MAY OBTAIN, WITHOUT CHARGE, THE COMPANY'S ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997, 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 1999
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,
1998.
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 23, 1997
<PAGE>
TIPPERARY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 27, 1998
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 27, 1998, and the Proxy Statement in connection therewith, each dated
December 23, 1997, (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 1, 1997, 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.
<TABLE>
<S> <C>
/ / For all nominees, except those / / WITHHOLD AUTHORITY
whose name(s) is (are) written below. to vote for all nominees.
</TABLE>
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2. The ratification of the reappointment of Price Waterhouse as the Company's
independent accountants for the fiscal year ending September 30, 1998;
/ / FOR / / AGAINST / / ABSTAIN
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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: , 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.
