SNYDER OIL CORPORATION
Notice of Annual Meeting of Stockholders
and Proxy Statement
April 16, 1998
IMPORTANT: IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, THE ACCOMPANYING
FORM OF PROXY SHOULD BE COMPLETED, SIGNED AND RETURNED AT YOUR EARLIEST
CONVENIENCE IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
Snyder Oil Corporation
April 16, 1998
Dear Stockholder:
On behalf of the Board of Directors, it is our pleasure to invite you
to attend your 1998 Annual Meeting of Stockholders, which will be held in Fort
Worth, Texas, on Wednesday, May 20, 1998 at 9:00 a.m. Central Standard Time.
Details of the meeting are given in the enclosed Notice of the Annual
Meeting and Proxy Statement. During the meeting, we plan to review the business
and affairs of the Company and our plans for the coming year.
Your representation and vote are important. We urge you to vote your
shares whether or not you plan to come to the Annual Meeting. Please consider,
complete, date, sign and return the enclosed proxy card promptly to eliminate a
costly follow-up mailing. You may revoke your proxy prior to or at the meeting
and still vote in person if you so desire.
Sincerely,
/s/ John C. Snyder
John C. Snyder
Chairman
777 Main Street Fort Worth, Texas 76102 817/338-4043
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 20, 1998
To the Stockholders of Snyder Oil Corporation:
The Annual Meeting of Stockholders of Snyder Oil Corporation (the
"Company") will be held at the Petroleum Club, 39th floor of the Continental
Plaza Building, 777 Main Street, Fort Worth, Texas, on Wednesday, May 20, 1998,
at 9:00 a.m. local time. The list of stockholders entitled to vote at the
meeting will be open to the examination of any stockholder during ordinary
business hours for a period of ten days prior to the Annual Meeting at the
Company's headquarters, 777 Main Street, Fort Worth, Texas. Such list will also
be produced at the time and place of the meeting and be kept open during the
meeting for the inspection by any stockholder who may be present. The purposes
for which the meeting is to be held are as follows:
1. To elect a board of nine directors to serve for the ensuing year.
2. To transact any other business which properly may be brought before
the Annual Meeting or any adjournment(s) thereof.
Subject to the provisions of the By-laws of the Company, registered
stockholders as of April 3, 1998 (i) who are individuals may attend and vote at
the Annual Meeting in person or by proxy or (ii) which are corporations may
attend and vote at the Annual Meeting by proxy or by a duly authorized
representative.
Whether or not you plan to attend the Annual Meeting, please date and
sign the enclosed proxy and return it in the envelope provided. Any person
giving a proxy has the power to revoke it at any time prior to its exercise and,
if present at the Annual Meeting, may withdraw it and vote in person. Attendance
at the Annual Meeting is limited to stockholders, their proxies and invited
guests of the Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter E. Lorenzen
Peter E. Lorenzen
Secretary
April 16, 1998
Fort Worth, Texas
SNYDER OIL CORPORATION
777 Main Street
Suite 2500
Fort Worth, Texas 76102
----------------
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 20, 1998
----------------
Introduction
The Board of Directors of Snyder Oil Corporation (the "Company") is
soliciting proxies to be voted at the Annual Meeting of Stockholders to be held
in Fort Worth, Texas on May 20, 1998 at 9:00 a.m., and at any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. This Proxy Statement and the enclosed proxy are first being
mailed to stockholders on or about April 16, 1998.
Voting of Proxies
This proxy solicitation is intended to afford stockholders the
opportunity to vote on the election of directors and in respect of such other
matters, if any, as may be properly brought before the Annual Meeting. The proxy
permits stockholders to withhold voting for any or all nominees for election as
directors and to vote against or abstain from voting on any other matter if the
stockholder so chooses.
At the close of business on April 3, 1998, the record date for
determining stockholders entitled to notice of and to vote at the Annual
Meeting, the Company had outstanding 33,425,903 shares of common stock, $.01 par
value (the "Common Stock"). Each such share of Common Stock is entitled to one
vote at the Annual Meeting. A majority of the outstanding shares of Common Stock
is necessary to provide a quorum at the Annual Meeting.
Any proxy given may be revoked either by a written notice duly signed
and delivered to the Secretary of the Company prior to the exercise of the
proxy, by execution of a subsequent proxy or by voting in person at the Annual
Meeting. Where a stockholder's proxy specifies a choice with respect to a voting
matter, the shares will be voted accordingly. If no such specification is made,
the shares will be voted for the nominees for director and proposals identified
herein.
Election of Directors
The By-laws of the Company (the "By-laws") and Delaware Law provide
that the directors be elected annually by a plurality of the votes of the Common
Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of Directors. A stockholder's abstention from
voting will be counted in determining whether such a plurality vote was cast
only if such stockholder is represented in person or by proxy at the Annual
Meeting. Abstentions by or on behalf of shareholders not so represented and
broker non-votes will be disregarded. The Board of Directors has, by resolution,
fixed the number of directors at nine. Each nominee is presently serving as a
director and has served as a director of the Company or its predecessor for the
period indicated in his biography. The term of each director presently serving
will terminate at the Annual Meeting when the respective successor of each is
elected and qualified. Each nominee has consented to being named in this Proxy
Statement and to serve if elected. If any nominee should for any reason become
unavailable for election, proxies may be voted with discretionary authority by
the persons named therein for any substitute designated by the Board.
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
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The Board of Directors recommends that the stockholders vote FOR the
nominees listed below.
Nominees for Election at Annual Meeting:
Roger W. Brittain (60), director since 1983, is a director of Guinness
Mahon Corporate Finance and, since March 1990, he has been Managing Director of
Guinness Mahon Energy Services Limited, a subsidiary of Guinness Mahon & Co.
Limited ("GM&Co.") formed to provide investment banking and consultant services
to the oil and gas industry. He was a director of GM&Co., a London merchant bank
from 1994 to July 1997. From 1980 through October 1989, Mr. Brittain was
Managing Director and from mid-1987 an Executive Director of TR Energy, an
investment company making oil and gas investments principally in the United
States. From 1977 to 1980, Mr. Brittain was a director of Shaw Wallace & Co.
Ltd., Calcutta, India. From 1967 to 1977, he was associated with Hill Samuel &
Co. Ltd., William Brandts & Sons Ltd. and Edward Bates and Sons Ltd., merchant
banks in London. Prior to that time, Mr. Brittain was with Her Majesty's
Diplomatic Service. Mr. Brittain serves on the Audit and Compensation
Committees. Mr. Brittain also serves as a director of SOCO International plc, an
international oil and gas company traded on the London Stock Exchange and as a
director of Sen Hong Resources, an oil and gas company listed on the Hong Kong
Stock Exchange.
William G. Hargett (48), President, Chief Operating Officer and a
director of the Company, has been with the Company since April 1997. Prior to
joining the Company, Mr. Hargett served as President of Greenhill Petroleum
Corporation, the U.S. oil and gas subsidiary of Australian based Western Mining
Corporation, from 1994 to 1997, Amax Oil & Gas Inc., a subsidiary of Amax Energy
Inc., from 1993 to 1994 and North Central Oil Corporation, a private exploration
and production company with both U.S. and international operations, from 1988 to
1993. Mr. Hargett was employed in various exploration capacities by Tenneco Oil
Corporation from 1974 to 1978 and Amoco Production Company from 1973 to 1974.
Mr. Hargett earned Bachelor of Science and Master of Science degrees from the
University of Alabama.
John A. Hill (55), director since 1981, is a Managing Director of First
Reserve Corporation, an oil and gas investment management company. Prior to
joining First Reserve, Mr. Hill was President, Chief Executive Officer and
Director of Marsh & McLennan Asset Management Company, the money management
subsidiary of Marsh & McLennan Companies, Inc. From 1979 to 1980, Mr. Hill
served as President and Chief Executive Officer of Eberstadt Asset Management
Company, the asset management division of F. Eberstadt & Co., Inc. Prior to
1976, Mr. Hill held several senior positions in the Federal Government including
Deputy Administrator of the Federal Energy Administration from 1975 to 1976 and
Deputy Associate Director of the Office of Management and Budget from 1973 to
1974. Mr. Hill received his Bachelors Degree in Economics from Southern
Methodist University and pursued graduate studies there as a Woodrow Wilson
Fellow. Mr. Hill is a trustee of the Putnam Funds in Boston and a director of
Maverick Tube Corporation, a supplier of tubular goods, and Weatherford-Enterra
Corporation, an oilfield services company. Mr. Hill serves as Chairman of the
Compensation and Governance Committees and as a member of the Executive
Committee.
William J. Johnson (62), director since 1994, is a private consultant
for the oil and gas industry and is President and a director of JonLoc Inc., an
oil and gas company of which he and his family are the sole shareholders. From
1991 to 1994, Mr. Johnson was President, Chief Operating Officer and a director
of Apache Corporation. Previously, he was a director, President and Chief
Executive Officer of Tex/Con Oil and Gas, where he served from 1989 to 1991.
Prior thereto, Mr. Johnson served in various capacities with major oil
companies, including director and President USA of BP Exploration Company,
President of Standard Oil Production Company and Senior Vice President of The
Standard Oil Company. Mr. Johnson received a Bachelor of Science degree in
Petroleum Geology from Mississippi State University and completed the Advanced
Management Course at the University of Houston. Mr. Johnson serves as a director
of Tesoro Petroleum Corporation, an integrated petroleum company, Camco
International, an oilfield manufacturing company, and J. Ray McDermott, S.A., a
marine construction company. Mr. Johnson also serves on the advisory board of
Texas Commerce Bank, Houston. Mr. Johnson serves on the Audit, Compensation and
Governance Committees.
2
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
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B.J. Kellenberger (72), director since 1989, is the founder and owner
of Kelloil, Inc., which is engaged in exploration and production of oil and
natural gas and secondary recovery of oil. In 1965, he founded Shenandoah Oil
Corporation and served as President, Chief Executive Officer and Chairman of the
Board until its voluntary liquidation in 1979. Mr. Kellenberger serves on the
Audit and Executive Committees.
Harold R. Logan, Jr. (53), a director since 1997, is Executive Vice
President/Finance and a director of TransMontaigne Oil Company, a holding
company engaged in providing distribution and marketing services to the
President/Finance and a director of Associated Natural Gas Corporation. Prior to
joining Associated Natural Gas Corporation, Mr. Logan was with Dillon, Read &
Co. Inc. and Rothschild, Inc. Mr. Logan also serves as a director of Suburban
Propane Partners, L.P. Mr. Logan serves as Chairman of the Audit Committee.
James E. McCormick (70), director since 1992, served as President,
Chief Operating Officer and a director of Oryx Energy Company from its inception
in November 1988 until his retirement in March 1992. Prior to his service with
Oryx, Mr. McCormick served from 1953 in a number of positions with the Sun
organization, most recently serving as President, Chief Executive Officer and a
director of Sun Exploration and Production Company. Mr. McCormick serves as a
director of Lone Star Technologies, B. J. Services, Inc., an oilfield service
company, TESCO Corporation, a manufacturer of oil field drilling systems, and
Dallas National Bank. Mr. McCormick serves on the Compensation and Governance
Committees.
John C. Snyder (56), Chairman and a director, founded a predecessor of
the Company in 1978. From 1973 to 1977, Mr. Snyder was an independent oil
operator in Texas and Oklahoma. Previously, he was a director and the Executive
Vice President of May Petroleum Inc. where he served from 1971 to 1973. From
1969 to 1971, Mr. Snyder was with Canadian-American Resources Fund, Inc., which
he founded. From 1964 to 1966, Mr. Snyder was employed by Humble Oil and
Refining Company (currently Exxon Co., USA) as a petroleum engineer. He received
his Bachelor of Science Degree in Petroleum Engineering from the University of
Oklahoma and his Masters Degree in Business Administration from the Harvard
University Graduate School of Business Administration. In 1995, Mr. Snyder was
named Wildcatter of the Year by the Independent Petroleum Association of
Mountain States. Mr. Snyder is a director of SOCO International plc, an
international oil and gas company listed on the London Stock Exchange, and is a
member of the National Petroleum Council. Mr. Snyder serves on the Executive
Committee.
Edward T. Story (54), director since 1996, is Chief Executive Officer
of SOCO International plc, an independent international oil and gas company
traded on the London Stock Exchange. From 1991 until the formation of SOCO
International plc in 1997 through the consolidation to international interests
of the Company and various third parties, Mr. Story was Vice President --
International of the Company and President of SOCO International, Inc. From 1990
to 1991, Mr. Story was Chairman of the Board of a jointly-owned Thai/US company,
Thaitex Petroleum Company. Mr. Story was co-founder, Vice Chairman of the Board
and Chief Financial Officer of Conquest Exploration Company from 1981 to 1990.
He served as Vice President, Finance and Chief Financial Officer of Superior Oil
Company from 1979 to 1981. Mr. Story held the positions of Exploration and
Production Controller and Refining Controller with Exxon USA from 1975 to 1979.
He held various positions in Esso Standard's international companies from 1966
to 1975. Mr. Story serves as a director of Cairn Energy plc, an independent
international oil and gas company traded on the London Stock Exchange, First
BanksAmerica, Inc., a bank holding company listed on the New York Stock
Exchange, Hallwood Realty Corporation, the general partner of Hallwood Realty
Partners, L.P., an American Stock Exchange-listed real estate limited
partnership, and Sen Hong Resources, an oil and gas company listed on the Hong
Kong Stock Exchange.
3
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
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Board and Committee Meetings; Committees of the Board
The Board held four regular and ten special meetings in 1997. All
directors nominated for reelection attended at least 75% of the aggregate number
of meetings of the Board of Directors and committees on which they served.
The Board has established four committees to assist in the discharge of
its responsibilities. The committee membership of each director is included with
his biography.
Executive Committee. The Executive Committee may exercise many of the
powers of the Board in the management of the business and affairs of the Company
in the intervals between meetings of the Board. Although the Committee has very
broad powers, in practice it meets only when it would be impractical to call a
meeting of the Board. The Executive Committee did not meet during 1997.
Audit Committee. The Audit Committee reviews the professional services
provided by the Company's independent public accountants and the independence of
such accountants from management of the Company. This Committee also reviews the
scope of the audit coverage, the annual financial statements of the Company and
such other matters with respect to the accounting, auditing and financial
reporting practices and procedures of the Company as it may find appropriate or
as have been brought to its attention. The Audit Committee met twice during
1997.
Compensation Committee. The Compensation Committee reviews and approves
executive salaries and administers bonus, incentive compensation and stock
option plans of the Company. This Committee advises and consults with management
regarding other benefits and significant compensation policies and practices of
the Company. This Committee also considers nominations of candidates for
corporate officer positions. The Compensation Committee met nine times during
1997.
Governance Committee. The Governance Committee was established to make
recommendations to the Board of Directors regarding policies on the composition
of the Board and committees of the Board, criteria for selection of nominees for
election to the Board and committees thereof, the roles and functions of
committees of the Board, nominees for membership on the Board and removal of
members of the Board. The Governance Committee met once during 1997.
Director Compensation
Non-employee directors of the Company receive an annual retainer,
payable quarterly, of 2,000 shares of the Company's common stock. In addition,
non-employee directors receive $2,000 for attendance at each Board of Directors
meeting and $750 for attendance at each meeting of a committee of the Board of
Directors. Non-employee directors also receive $750 for each telephone meeting
in which they participate. Non-employee directors are reimbursed for expenses
incurred in attending Board of Directors and committee meetings, including those
for travel, food and lodging. Directors and members of committees of the Board
of Directors who are employees of the Company or its affiliates are not
compensated for their Board of Directors and committee activities. From time to
time in the discretion of the Board, the Board may grant additional compensation
to one or more non-employee directors. During 1997, the Board granted additional
compensation of $10,000 to each of Messrs. Hill, Johnson and McCormick for their
services on the executive search committee charged with locating and employing a
president and chief operating officer for the Company, and to Mr. Brittain for
his services on the Board committee that advised upon and reviewed the
transaction in which the Company's international investments were sold to SOCO
International plc.
The Directors Stock Plan also provides that the Company will
automatically grant to each non-employee director, on the date of his
appointment, election, reappointment or reelection as a member of the Board of
Directors, a stock option for 2,500 shares of common stock. The exercise price
for all Director Options is the fair market value on the date of grant. The
duration of each option is five years from the date of award, and each option
vests as to 30% of the shares covered after one year, an additional 30% of the
shares after two years, and all remaining shares three years after the date of
grant.
4
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
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Beneficial Ownership of Securities
The following table provides information as to the beneficial ownership
of common stock of the Company as of April 3, 1998, by each person who, to the
knowledge of the Company, beneficially owned 5% or more of the common stock,
each director of the Company, each executive officer named in the Summary
Compensation Table on page 6 and by all executive officers and directors of the
Company as a group. No directors or executive officers of the Company
beneficially owns any equity securities of the Company other than common stock.
Unless indicated otherwise, the business address of each individual listed below
is: c/o Snyder Oil Corporation, 777 Main Street, Fort Worth, Texas 76102.
Common Stock
-------------------------------------
Number of Percent of
Shares Class
Owned (a) (b) Outstanding
------------- -----------
John C. Snyder 1,914,317 5.7 %
Roger W. Brittain 31,285 *
William G. Hargett 61,000 *
John A. Hill 104,454 *
William P. Johnson 14,450 *
B.J. Kellenberger 25,523 *
Harold R. Logan, Jr. 2,550 *
James E. McCormick 20,950 *
Edward T. Story 580,957 1.7
Charles A. Brown 73,610 *
Steven M. Burr 77,882 *
Rodney L. Waller 142,152 *
All executive officers and
directors as a group 3,199,060 9.4
The Crabbe Huson Group, Inc. (c) 2,317,200 6.9
121 SW Morrison, Suite 1400
Portland, Oregon 97204
GEM Capital Management, Inc. (d) 1,790,640 5.4
70 East 55th Street
New York, New York 10022
- -------------------------------
<FN>
* Less than 1%.
(a) The number of shares in the table includes 492,650 shares that the named
executive officers and directors and 594,180 shares that all executive
officers and directors as a group have the right to acquire within 60 days
after April 3, 1998 including 148,920 for Mr. Snyder, 60,000 for Mr.
Hargett and 80,690 for Mr. Story.
(b) Of the shares shown, beneficial ownership of 303,760 is disclaimed by Mr.
Snyder and by all executive officers and directors as a group. To the
knowledge of the Company, each person holds sole investment and voting
power over the shares shown, except Mr. Snyder shares such powers with
respect to 3,760 shares, Mr. Brittain shares such powers with respect to
1,750 shares, Mr. Hill shares investment power with respect to 37,006
shares and all officers and directors as a group share such powers with
respect to 42,516 shares.
(c) The number of shares is based on information set forth in Amendment No. 2
to the Schedules 13G dated February 2, 1998 by The Crabbe Huson Special
Fund, Inc. and The Crabbe Huson Group, Inc. As reported therein, 70,300
shares are owned by The Crabbe Huson Special Fund, Inc., which shares
voting and dispositive power with its investment advisor, The Crabbe Huson
Group, Inc. The remaining shares are owned by clients of The Crabbe Huson
Group with whom it shares voting and dispositive power.
(d) The number of shares reported is based on information set forth in a
letter dated March 26, 1998 from Wertheimer Fredman & Siegelman, LLC,
counsel for GEM Management Capital, Inc. and GBU Inc. An aggregate of
1,030,926 of such shares are beneficially owned by managed accounts of GEM
5
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
- --------------------------------------------------------------------------------
Capital Management, Inc., and 759,714 shares are beneficially owned by in
the aggregate by two limited partnerships of which GBU Inc. is the general
partner and investment advisor. Gerald Unterman controls both Gem Capital
Management and GBU Inc.
</FN>
Executive Compensation
Shown below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1997, 1996 and 1995 of those persons who were at December 31,
1997 the chief executive officer and the other four most highly compensated
executive officers of the Company (the "Named Officers").
Summary Compensation Table (a)
Annual Compensation Long-Term Compensation
------------------- ----------------------
Stock
Option All
Name and Position Year Salary Bonus (b) Awards (c) Other (d)
- ----------------------- -------- ------------- ------------ ------------- -----------
John C. Snyder 1997 $384,984 $200,000 77,000 $42,874
Chairman and Chief 1996 381,652 400,000 48,700 41,179
Executive Officer 1995 364,992 100,000 48,600 41,543
William G. Hargett 1997 215,615 150,000 200,000 24,931
President and Chief 1996 -- -- -- --
Operating Officer 1995 -- -- -- --
Charles A. Brown 1997 183,333 85,000 17,500 42,874
Senior Vice President, 1996 174,167 30,000 13,600 41,179
Rocky Mountain Region 1995 159,917 30,000 23,000 29,877
Steven M. Burr 1997 154,375 80,000 14,500 42,115
Vice President, Planning 1996 143,333 50,000 10,800 26,136
And Engineering 1995 135,000 0 18,500 17,873
Rodney L. Waller 1997 151,250 75,000 22,000 41,693
Vice President, 1996 143,667 125,000 26,000 40,345
Treasurer 1995 137,000 80,000 18,500 39,807
<FN>
(a) Excludes the cost to the Company of other compensation that, with
respect to any Named Officer, does not exceed the lesser of $50,000 or
10% of the Named Officer's salary and bonus.
(b) Bonuses are paid in March of each year based on performance during the
preceding year. Bonus amounts are included in the year preceding the
year in which the bonus is paid.
(c) Stock options are generally granted in February of each year based in
part on performance during the preceding year.
(d) Includes amounts accrued for the fiscal year for the Named Officers
under the Company's Profit Sharing and Savings Plan and as matching
contributions under the Company's Deferred Compensation Plan for Select
Employees as follows:
</FN>
Profit Sharing Plan Deferred Compensation Plan
-------------------------- ----------------------------
1995 1996 1997 1995 1996 1997
---- ---- ---- ---- ---- ----
John C. Snyder $16,543 $16,179 $17,874 $25,000 $25,000 $25,000
William G. Hargett -- -- -- -- -- 24,931
Charles A. Brown 16,543 16,179 17,874 13,334 25,000 25,000
Steven M. Burr 14,540 15,300 17,115 3,333 10,836 25,000
Rodney L. Waller 14,807 15,345 16,693 25,000 25,000 25,000
6
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
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Stock Options
The Company's stock option plan, which is administered by the
Compensation Committee, provides for the granting of options to purchase shares
of common stock to key employees of the Company and its affiliates and certain
other persons who are not employees of the Company or its affiliates, but who
from time to time provide substantial advice or other assistance or services to
the Company or its affiliates. The plan permits options to acquire up to three
million shares of common stock to be outstanding at any one time. During 1997,
options to purchase 997,700 shares of common stock were granted to 91 employees
at an average exercise price of $16.82 per share. The exercise price of all such
options was equal to the fair market value of the common stock on the date of
grant. All options granted during 1997 were granted for a term of five years,
with 30% of the options becoming exercisable after one year, an additional 30%
becoming exercisable after two years and the remaining options becoming
exercisable after the three years.
Shown below is information with respect to (a) options granted during
1997 to the Named Officers and (b) options to purchase common stock granted in
1997 and prior years under the Company's stock option plans to the Named
Officers and either exercised by them during 1997 or held by them at December
31, 1997.
Stock Option Grants
Percentage Potential Realizable Value
of Total at Assumed Annual Rates of
Options Grants in Exercise Expiration Stock Price Appreciation (a)
Name Granted Year Price Date 5% 10%
- ----------------- --------- ----------- ------------ ------------- -------------- -----------
John C. Snyder 77,000 7.18% $16.125 2/18/02 $343,038 $ 758,024
William G. Hargett 200,000 20.05% $16.250 5/02/02 $897,915 $ 1,984,157
Charles A. Brown 17,500 1.75% $16.125 2/18/02 $ 77,963 $ 172,278
Steven M. Burr 14,500 1.45% $16.125 2/18/02 $ 64,598 $ 142,745
Rodney L. Waller 22,000 2.20% $16.125 2/18/02 $ 98,011 $ 216,578
<FN>
(a) The assumed annual rates of stock price appreciation used in showing the
potential realizable value of stock option grants are prescribed by
rules of the Securities and Exchange Commission (the "SEC"). The actual
realized value of the options may be significantly greater or less than
the amounts shown. For options granted during 1997 at an exercise price
of $16.125, the values shown for 5% and 10% appreciation equate to a
stock price of $20.58 and $25.97, respectively, at the expiration date
of the options.
</FN>
Stock Option Exercises and Year End Values
Value of
Number of Unexercised Unexercised In-the-Money
Shares Acquired Value Options at Year End 1997 Options at Year End 1997
--------------------------- ------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------- --------------- ---------- ----------- ------------- ------------- -------------
John C. Snyder 0 $ 0 137,770 130,530 $497,449 $546,364
William G. Hargett 0 0 0 200,000 $ 0 $400,000
Charles A. Brown 14,600 141,811 30,080 56,220 $ 94,660 $239,627
Steven M. Burr 10,000 118,750 34,740 29,460 $128,342 $128,432
Rodney L. Waller 10,000 96,250 37,700 49,400 $152,525 $253,237
7
Snyder Oil Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
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Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The Compensation Committee of the Board of Directors, which is composed
of independent members of the Board, establishes the general compensation
policies of the Company, establishes the compensation plans and compensation
levels for officers and certain other key employees and administers the
Company's stock option plan and deferred compensation plan. In establishing
compensation levels, the Committee establishes the specific compensation of
Messrs. Snyder and Hargett. The Committee establishes salary and bonus ranges
for other officers and key employees, and generally approves specific amounts
within those ranges on the recommendation of management.
In establishing compensation policies, the Committee believes that the
cash compensation of executive officers, as well as other key employees, should
be competitive with other companies while, within the Company, being fair and
discriminating on the basis of personal performance. Annual awards of stock
options are intended both to retain executives and to motivate them to improve
long-term stock market performance.
In establishing total cash compensation (base salary plus "expected
bonus") for its executives during 1997, the Company targeted the median cash
compensation for competitors of executives having similar responsibilities.
Adjustments, in large part subjective, were made to account for cases in which
the responsibilities of Company executives differed from the responsibilities of
executives of the companies surveyed. Base salaries have historically been set
below the median, so that bonuses, which, except for the most senior officers,
were primarily determined by individual performance, would constitute a larger
portion of cash compensation. The Committee was advised by independent
consultants as to compensation levels of competitors, based on detailed data
relating to approximately 30 companies believed to be most comparable to the
Company as well as the results of more general surveys. The companies surveyed
by the independent consultants were selected by the consultants in consultation
with the Committee and were intended to be most representative of the companies
with which the Company competed for its personnel requirements. Guided by this
survey, compensation ranges were established, and individual executive
compensation within these ranges was determined based upon the individual's
responsibilities and performance.
Mr. Snyder's base salary was increased $20,000, or approximately 5%,
effective March 1, 1997. Generally, changes in Mr. Snyder's compensation are not
based on any particular measure of performance, but are determined subjectively
by the Committee based on corporate performance, salaries of chief executive
officers of comparable companies and other factors considered applicable by the
Committee.
Mr. Snyder's bonus is based primarily on Company performance. The
Committee has not established any particular formula or singled out particular
factors as more important than others. The Committee considers various factors,
including growth in reserves, net income and cash flow, as well as performance
of the Company's common stock. The Committee also considers other matters, such
as the extent to which these factors were influenced by management decisions
during the year and steps taken by management to position the Company for future
growth. Based on these and other considerations, the Committee awarded Mr.
Snyder a bonus of $200,000 for 1997. In arriving at this amount, the Committee
considered, among other things, that nearly all aspects of Company performance
during 1997 showed significant improvement. The Committee also considered
actions taken during 1997, including the transition to a new President and Chief
Operating Officer, improvements in the Company's organization and steps taken to
simplify the Company's financial structure and to permit redeployment of capital
into more productive uses, that were directed toward enhancing the Company's
financial condition and improving future performance. Bonuses for other officers
and key employees are influenced by Company performance, but are determined
primarily based on senior management's assessment of performance of the
executive's duties and success in attaining specific performance goals which are
directed toward improving operating unit and Company performance. In the
aggregate, bonuses awarded to executive officers for 1997 were higher than in
prior years, reflecting the Committee's view that Company performance had
continued to improve in nearly all areas.
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Stock options are granted annually to Mr. Snyder and other executives
and key employees to retain and motivate the grantees and to improve long-term
stock market performance. Options are granted only at the prevailing market
price and will have value only if the price of the Company's common stock
increases. Generally, options have a term of five years and vest 30% after one
year, an additional 30% after two years and are fully vested after three years;
an employee must be employed by the Company at the time of vesting in order to
exercise the options.
The Committee generally determines the number of options granted to Mr.
Snyder and to other executives and key employees based on a formula under which
the number of options granted is equal to a percentage, which varies with the
degree to which an individual's responsibilities might affect the long-term
price of the Company's stock, of the individual's base salary. The Committee
occasionally grants additional options when the Committee believes additional
incentives are appropriate.
The Committee maintains a Deferred Compensation Plan for Select
Employees as a means to provide additional incentives for key employees to
remain in the employ of the Company. Under the Plan, key employees selected by
the Committee are permitted the defer a portion of their compensation for
periods determined by them or until their employment by the Company ceases. The
Committee also determines annually the matching contribution to be made by the
Company and may, in addition, authorize additional Company contributions to be
made on behalf of designated individuals. Company matching contributions vest
over three years through December 31, 1996 and four years thereafter, and
additional Company contributions vest over the period determined by the
Committee. The Committee designated 25 key employees, including all executive
officers, as eligible to participate during 1997 and determined that Company
contributions would equal each participant's contribution up to 10% of the
participant's salary and would equal one-third of the participant's
contributions in excess of such amount, subject to a maximum Company
contribution of $25,000 for any participant.
COMPENSATION COMMITTEE
James E. McCormick, Chairman
Roger W. Brittain
John A. Hill
William J. Johnson
Shareholder Return Performance Presentation
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's common stock against the
total return of the Dow Jones Equity Market Index and the Dow Jones Secondary
Oils Index for the calendar years 1993 through 1997. None of the companies on
the Dow Jones Secondary Oils Index is included in the companies surveyed as to
compensation levels by the independent consultants advising the Compensation
Committee of the Board of Directors. The Index is composed of thirteen
companies, all of which are significantly larger than the Company, selected by
Dow Jones & Company, Inc. to represent non-major oil producers that generally do
the bulk of their business domestically. The graph assumes that the value of the
investment in the Company's common stock and each index was $100 on January 1,
1993 and that all dividends were reinvested. The closing sales prices of the
Company's common stock on the last trading days of 1992 and 1997 were $10 and
$18 1/4, respectively.
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Line graph showing the Company, Dow Jones Equity Market Index, and Dow Jones
Secondary Oils Index for December 31, 1992-1997, including the following data
points (rounded to the nearest whole dollar):
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
Company $100 $180 $153 $126 $187 $199
DJ Equity 100 110 111 152 188 251
DJ Secondary Oils 100 111 107 124 153 163
Employment Agreements and Change in Control Arrangements
In 1997, the Company and Mr. Hargett executed an employment agreement
(the AEmployment Agreement") pursuant to which Mr. Hargett will serve as
President and Chief Operating Officer of the Company, effective May 2, 1997. The
Employment Agreement provides for (a) a minimum annual base salary of $325,000,
(b) a minimum bonus for 1997 in the amount of $90,278, (c) a $50,000 payment to
cover Mr. Hargett's expenses for relocating to Fort Worth and (d) an initial
grant of a five-year option (vesting over three years) to purchase 200,000
shares of Common Stock at a price per share equal to $16.25, the fair market
value of a share of Common Stock on the day Mr. Hargett's employment commenced.
The Employment Agreement has an initial four-year term, and unless either party
terminates the Employment Agreement or provides notice that the term should not
be extended, the term will be extended automatically for an additional one year
period as of May 2 of each year (beginning on May 2, 1999). As a result, the
Employment Agreement will generally have a remaining term of at least two years.
If Mr. Hargett's employment is terminated by the Company without
"cause" (as defined) or by Mr. Hargett because of a material breach of the
Employment Agreement by the Company, a material reduction in his duties and
responsibilities or the assignment to him of duties that are materially
inconsistent with his positions with the Company, then (a) the Company will pay
Mr. Hargett a lump sum equal to the aggregate base salary for the remaining term
and (b) all stock options awarded to Mr. Hargett will become fully exercisable
for a limited period of time. Mr. Hargett will also receive these termination
benefits if he terminates his employment (i) for any reason whatsoever on or
within 12 months after a "change in control" (as defined) or (ii) during the
60-day period commencing on May 2, 1999 because, in his judgment, and subject to
the concurrence of the Compensation Committee, the scope of his authority within
the Company is not appropriate. In addition, if any payment or distribution to
Mr. Hargett, whether or not pursuant to the Employment Agreement, is subject to
federal excise tax on "excess parachute payments," the Company is required to
pay an additional amount so that Mr. Hargett receives, net of taxes, an amount
sufficient to pay all such excise taxes.
The Company has entered into Change of Control Severance Agreements
with each of its officers (other than Mr. Hargett). Pursuant to these
agreements, if within two years following a change of control (as defined) an
officer's employment is terminated by the Company without "cause" (as defined)
or by the officer because of a reduction in his compensation or entitlements to
benefits or a significant reduction in his duties and responsibilities, then (a)
the Company will pay to the officer a lump sum equal to two years' aggregate
base salary and (b) all stock options awarded to the officer will become fully
exercisable for a limited period of time. In addition, if any payment or
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distribution to the officer, whether or not pursuant to the agreement, is
subject to federal excise tax on "excess parachute payments," the Company is
required to pay an additional amount so that the officer receives, net of taxes,
an amount sufficient to pay all such excise taxes.
Certain Transactions and Relationships
In 1991, SOCO International, Inc. ("SOCO International") was formed as
a corporation 90% owned by the Company and 10% owned by Edward T. Story, who
also became President of SOCO International. Mr. Story also held an option to
increase his interest in SOCO International to 30%. During 1993, the Company
purchased from Mr. Story the 10% of SOCO International held by him and canceled
Mr. Story's option to purchase an additional 20% of the company. The purchase
price, approximately $28,000, was equal to the cost of Mr. Story's investment in
the Company. In connection with the purchase, the Company granted Mr. Story an
option to purchase 10% of the shares of SOCO International, which had been
financed primarily by Company loans, through April 1998 for $590,500. Mr. Story
was appointed Vice President B International of the Company and became a
director in February 1996.
In December 1996, following the sale of SOCO International's interest
in Command Petroleum Limited to Cairn Energy plc ("Cairn") and in contemplation
of a possible public offering of the Company's international operations during
1997, the Company reorganized SOCO International by transferring its assets to
two subsidiaries. One subsidiary, SOCO International Holdings, Inc. ("Holdings")
received 16.2 million shares of Cairn (having a market value exceeding $100
million at the time). The other subsidiary, SOCO International Operations, Inc.
("Operations"), received all of SOCO International's other investments. In
connection with the reorganization, Mr. Story assigned his option to acquire 10%
of SOCO International and delivered notes (the "Story Notes") totaling $590,500
(equal to the exercise price of the option) to Holdings and Operations and was
issued 10% of the shares of each company. The Story Notes were initially
unsecured, bore interest at the rate of 1% per month and mature on April 10,
1998 (the expiration date of the option). As described below, the Story Notes
were paid in March 1998.
In May 1997, SOCO International transferred its 90% interest in
Operations to SOCO International plc ("SOCO plc"), a recently formed United
Kingdom company, in exchange for approximately 7.8 million shares (15.9%) of
SOCO plc stock. SOCO plc also acquired the interests of a number of minority
interests investors in Operation's ventures and assets in Yemen, Tunisia and
onshore England from Cairn and completed a public offering of newly issued
shares that raised approximately $75 million. SOCO plc also acquired Mr. Story's
shares in Operations in exchange for approximately 900,000 shares of SOCO plc on
the same terms as SOCO plc acquired the Company's shares. The terms of these
transactions were negotiated between the Company, SOCO plc, Cairn, the minority
investors in Operation's ventures and SOCO plc's underwriters. Mr. Story is a
director and the Chief Executive Officer of SOCO plc and received options to
purchase approximately 1.9 million shares of SOCO plc at the initial public
offering price upon completion of the transactions described above. At the
closing of the transactions, Mr. Story resigned as an officer of the Company,
but continues to serve as a director of the Company.
In July 1997, in order to simplify its ownership of Holdings, and
indirectly the 16.2 million shares of Cairn, the Company issued 530,000 shares
of common stock to Mr. Story in exchange for his 10% interest in Holdings. The
terms of the transaction, which was negotiated between Mr. Snyder and Mr. Story,
were based on the market values of the Company's common stock and the Cairn
shares at the time the agreement was made. In connection with this exchange, the
Company retained 50,000 shares as security for the Story Notes and agreed to
reduce the rate of interest on the Story Notes to the rate paid by the Company
on its bank borrowings plus 2% per annum. Mr. Story paid the Story Notes in full
on March 25, 1998 by delivering to the Company 31,433 shares of common stock
which, based on the last sales price of the common stock on the New York Stock
Exchange at the time of delivery, had a fair market value equal to the principal
and accrued interest on the Story Notes.
Thomas J. Edelman resigned as a director and President of the Company
in February 1997. In connection with Mr. Edelman's resignation the Company has
agreed (a) to make severance payments at the rate of $30,000 per month through
May 2000 and (b) that the 292,600 stock options previously granted to Mr.
Edelman, at exercise prices ranging from $6 to $18c per share, would remain
exercisable through March 1, 2002. The Company and Mr. Edelman also entered into
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a consulting agreement, which will terminate May 1, 1998, under which Mr.
Edelman agreed, subject to his reasonable availability, to provide consulting
and advisory services as may be requested by the Board of Directors or Chief
Executive Officer of the Company, and the Company agreed to pay Mr. Edelman a
monthly fee of $10,000.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors and persons who beneficially own more than ten percent of
the Company's stock to file initial reports of ownership and reports of changes
of ownership with the SEC and the New York Stock Exchange. Copies of such
reports are required to be furnished to the Company.
Based solely on a review of such forms furnished to the Company and
certain written representations from the executive officers and directors, the
Company believes that all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial owners were
complied with on a timely basis, except for one late filing with respect to a
sale of common stock by H. Richard Pate, Vice President - Rocky Mountain Region
Operations and Engineering.
Other Business
The Board does not know of any business to be presented for
consideration at the Annual Meeting other than as stated in the Notice. It is
intended, however, that the persons authorized under the accompanying proxy
will, in the absence of instructions to the contrary, vote or act in accordance
with their judgment with respect to any other proposal properly presented for
action at such meeting.
Submission of Proposals by Stockholders
Stockholders may propose matters to be presented at stockholders'
meetings and may also nominate persons to be directors. Formal procedures have
been established for those proposals and nominations.
Proposals For 1999 Annual Meeting. Pursuant to various rules
promulgated by the SEC, any proposals of stockholders of the Company intended to
be presented to the Annual Meeting of Stockholders to be held in 1999 must be
received by the Company, at 777 Main Street, Fort Worth, Texas 76102, Attention
of Corporate Secretary, no later than December 17, 1998, to be included in the
Company's proxy statement and form of proxy relating to that meeting.
In addition to the SEC rules described in the preceding paragraph, the
Company's bylaws provide that for business to be properly brought before the
Annual Meeting of Stockholders, it must be either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise brought before the meeting by or at the direction of
the Board of Directors or (c) otherwise properly brought before the meeting by a
stockholder of the Company who is a stockholder of record at the time of giving
of notice hereinafter provided for, who shall be entitled to vote at such
meeting and who complies with the following notice procedures. In addition to
any other applicable requirements, for business to be brought before an annual
meeting by a stockholder of the Company, the stockholder must have given timely
notice in writing of the business to be brought before an Annual Meeting of
Stockholders of the Company to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
Company's principal executive offices, 777 Main Street, Fort Worth, Texas 76102,
on or before December 17, 1998.
A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the Company's books, of the stockholder proposing
such business, (iii) the acquisition date, the class and the number of shares of
stock of the Company which are owned beneficially by the stockholder, (iv) any
material interest of the stockholder in such business and (v) a representation
that the stockholder intends to appear in person or by proxy at the meeting to
bring the proposed business before the meeting. Notwithstanding the foregoing
bylaw provisions, a stockholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder with
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respect to the matters set forth in the foregoing bylaw provisions.
Notwithstanding anything in the Company's bylaws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures outlined above.
Nominations For 1999 Annual Meeting And For Any Special Meetings. Only persons
who are nominated in accordance with the following procedures shall be eligible
for election as directors. Nominations of persons for election to the Company's
Board of Directors may be made at a meeting of stockholders (a) by or at the
direction of the Board of Directors or (b) by any stockholder of the Company who
is a stockholder of record at the time of giving of notice hereinafter provided
for, who shall be entitled to vote for the election of directors at the meeting
and who complies with the following notice procedures. Such nominations, other
than those made by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the Secretary of the Company. To be
timely, a stockholder's notice shall be delivered to or mailed and received at
the Company's principal executive offices, 777 Main Street, Fort Worth, Texas
76102, (i) with respect to an election to be held at the 1999 Annual Meeting of
Stockholders of the Company, or before January 16, 1999, and (ii) with respect
to an election to be held at a special meeting of stockholders of the Company
for the election of Directors, not later than the close of business on the 10th
day following the date on which notice of the date of the meeting was mailed or
public disclosure of the date of the meeting was made, whichever first occurs.
Such stockholder's notice to the Secretary shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election as a
director, all information relating to the person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, pursuant to Regulation 14A under the Exchange Act (including the
written consent of such person to be named in the proxy statement as a nominee
and to serve as a director if elected); and (b) as to the stockholder giving the
notice, (i) the name and address, as they appear on the Company's books, of such
stockholder, and (ii) the class and number of shares of capital stock of the
Company which are beneficially owned by the stockholder. In the event a person
is validly designated as nominee to the Board and shall thereafter become unable
or unwilling to stand for election to the Board of Directors, the Board of
Directors or the stockholder who proposed such nominee, as the case may be, may
designate a substitute nominee. Notwithstanding the foregoing bylaw provisions,
a stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in the foregoing bylaw provisions.
Relationship with Independent Auditors
Arthur Andersen LLP is the principal accountant selected by the
Company. Representatives of such firm are expected to be present at the Annual
Meeting, with the opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions.
Annual Report and Form 10-K
The 1997 Annual Report of the Company for the fiscal year ended
December 31, 1997, including audited financial statements, is being forwarded to
each stockholder of record as of April 3, 1998, together with this Proxy
Statement.
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A copy of the Company's annual report on Form 10-K for 1997, as filed
with the SEC, will be furnished without charge to stockholders on request to:
Snyder Oil Corporation
777 Main Street
Fort Worth, Texas 76102
Attention: Investor Relations
Other Matters
The accompanying form of proxy has been prepared at the direction of
the Company, of which you are a stockholder, and is sent to you at the request
of the Board of Directors. The proxies named therein have been designated by
your Board of Directors.
The Board of Directors of the Company urges you, even if you presently
plan to attend the meeting in person, to execute the enclosed proxy and mail it
as indicated immediately. You may revoke your proxy and vote in person if you
are in fact able to attend.
SNYDER OIL CORPORATION
By Order of the Board of Directors
/s/ Peter E. Lorenzen
Peter E. Lorenzen
Secretary
Fort Worth, Texas
April 16, 1998
14