SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A Number 1
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year Ended December 31, 2000
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 0-19118
ABRAXAS PETROLEUM CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 74-2584033
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
500 N. Loop 1604 East, Suite 100
San Antonio, Texas 78232
(Address of principal executive offices)
Registrant's telephone number,
including area code (210) 490-4788
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Common Stock, par value $.01 per share
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock (which consists solely
of shares of common stock) held by non-affiliates of the registrant as of March
22, 2001, based upon the closing per share price of $4.75, was approximately
$94,551,000 on such date.
The number of shares of the issuer's common stock, par value $.01 per
share, outstanding as of March 22, 2001 was 22,593,969 shares of which
19,905,411 shares were held by non-affiliates.
Explanatory Note: This Form 10-K/A Number 1 is being filed in order to include
information required by Items 10-13 originally intended to be incorporated by
reference to the information to be included in the Company's Proxy Statement for
the 2001 Annual Meeting of Stockholders.
PART III
Item 10. Directors and Executive Officers of the Registrant
The following table sets forth certain information concerning the current
directors and executive officers of the Company:
Nameb Age Office Term Expires at
------------------------------ ---- ------------------------------------------------- -----------------
Annual Meeting in
-----------------
Robert L. G. Watson....... 50 Chairman of the Board, President and Chief 2001
Executive Officer
Chris E. Williford........ 50 Executive Vice President, Chief Financial Officer --
and Treasurer
Robert W. Carington, Jr. 39 Executive Vice President --
Craig S. Bartlett, Jr..... 67 Director 2002
Franklin A. Burke......... 67 Director 2003
Ralph F. Cox ............. 68 Director 2002
Frederick M. Pevow, Jr.... 38 Director 2002
James C. Phelps........... 78 Director 2001
Joseph A. Wagda........... 57 Director 2002
Robert L. G. Watson has served as Chairman of the Board, President,
Chief Executive Officer and a director of Abraxas since 1977. Since May 1996,
Mr. Watson has also served as Chairman of the Board and a director of Grey Wolf
Exploration Inc, Abraxas' 49%-owned subsidiary. In November 1996, Mr. Watson was
elected Chairman of the Board, President and as a director of Canadian Abraxas
Petroleum Limited, Abraxas' wholly owned Canadian subsidiary. Prior to joining
Abraxas, Mr. Watson was employed in various petroleum engineering positions with
Tesoro Petroleum Corporation, a crude oil and natural gas exploration and
production company, from 1972 through 1977, and DeGolyer and MacNaughton, an
independent petroleum engineering firm, from 1970 to 1972. Mr. Watson received a
Bachelor of Science degree in Mechanical Engineering from Southern Methodist
University in 1972 and a Master of Business Administration degree from the
University of Texas at San Antonio in 1974.
Chris E. Williford was elected Vice President, Treasurer and Chief
Financial Officer of Abraxas in January 1993, and as Executive Vice President
and a director of Abraxas in May 1993. In November 1996, Mr. Williford was
elected Vice President and Assistant Secretary of Canadian Abraxas. In December
1999, Mr. Williford resigned as a director of Abraxas. Prior to joining Abraxas,
Mr. Williford was Chief Financial Officer of American Natural Energy
Corporation, a crude oil and natural gas exploration and production company,
from July 1989 to December 1992 and President of Clark Resources Corp., a crude
oil and natural gas exploration and production company, from January 1987 to May
1989. Mr. Williford received a Bachelor of Science degree in Business
Administration from Pittsburgh State University in 1973.
2
Robert W. Carington, Jr. was elected Executive Vice President and a
director of Abraxas in July 1998. In December 1999, Mr. Carington resigned as a
director of Abraxas. Prior to joining Abraxas, Mr. Carington was a Managing
Director with Jefferies & Company, Inc. Prior to joining Jefferies & Company,
Inc. in January 1993, Mr. Carington was a Vice President at Howard, Weil,
Labouisse, Friedrichs, Inc. Prior to joining Howard, Weil, Labouisse,
Friedrichs, Inc., Mr. Carington was a petroleum engineer with Unocal Corporation
from 1983 to 1990.
Craig S. Bartlett Jr., a director of Abraxas since December 1999, has
over forty years of commercial banking experience, the most recent being with
National Westminster Bank USA, rising to the position of Executive Vice
President, Senior Lending Officer and Chairman of the Credit Policy Committee.
Mr. Bartlett continues to serve on numerous boards and is active in independent
consulting roles. Mr. Bartlett is a graduate of Princeton University with an
advanced Management Degree from Pennsylvania State University.
Franklin A. Burke, a director of Abraxas since June 1992, has served as
President and Treasurer of Venture Securities Corporation since 1971, where he
is in charge of research and portfolio management. He has also been a general
partner and director of Burke, Lawton, Brewer & Burke, a securities brokerage
firm, since 1964, where he is responsible for research and portfolio management.
Mr. Burke also serves as a director of NB Instruments, Inc., an instrument
products company, Omega Institute, a job training entity, Suburban Community
Bank, and Starkey Chemical Process Co., a chemical processing company. Mr. Burke
received a Bachelor of Science degree in Finance from Kansas State University in
1955, a Master's degree in Finance from University of Colorado in 1960 and
studied at the graduate level at the London School of Economics from 1962 to
1963.
Ralph F. Cox, a director of Abraxas since December 1999, has over 45
years of oil and gas industry experience, over thirty of which was with Arco.
Mr. Cox retired from Arco in 1985 after having become Vice Chairman. Mr. Cox
then joined what is now Union Pacific Resources, retiring in 1989 as President
and Chief Operating Officer. Mr. Cox then joined Greenhill Petroleum Corporation
as President until leaving in 1994 to pursue his consulting business. Mr. Cox
has in the past and continues to serve on many boards including Arco, Fidelity
Investments, and the Kansas City Federal Reserve Board. Mr. Cox earned Petroleum
and Mechanical Engineering degrees from Texas A&M University with advanced
studies at Emory University.
Frederick M. Pevow, Jr., a director of Abraxas since December 1999, has
almost fifteen years of investment banking experience with firms such as Smith
Barney, Dillon Read, Salomon Smith Barney, and most recently CIBC World Markets
where he was Managing Director and headed the worldwide Investment Banking
practice covering the oilfield services and equipment industries. Mr. Pevow
currently pursues capital market transactions through Pevow & Associates, a
boutique investment and merchant-banking firm. Mr. Pevow holds an undergraduate
degree from the University of Texas with further studies at Rice University.
James C. Phelps, a director of Abraxas since December 1983, has been a
consultant to crude oil and natural gas exploration and production companies
such as Panhandle Producing Company and Tesoro Petroleum Corporation since April
1981. Mr. Phelps has served as a director of Grey Wolf since January 1996. From
April 1995 to May 1996, Mr. Phelps served as Chairman of the Board and Chief
Executive Officer of Grey Wolf, and from January 1996 to May 1996, he served as
President of Grey Wolf. From March 1983 to September 1984, he served as
President of Osborn Heirs Company, a privately owned crude oil exploration and
production company based in San Antonio. Mr. Phelps was President and Chief
Operating Officer of Tesoro Petroleum Corporation from 1971 to 1981 and prior to
that was Senior Vice President and Assistant to the President of Continental Oil
Company. He received a Bachelor of Science degree in Industrial Engineering and
a Master of Science degree in Industrial Engineering from Oklahoma State
University.
Joseph A. Wagda, a director of Abraxas since December 1999, has had a
varied twenty-five year career involving the financial and legal aspects of
3
private and corporate business transactions. Currently Mr. Wagda is Chairman,
Chief Executive Officer and a director of BrightStar Technology Group, Inc., and
is also an attorney and president of Altamont Capital Management, Inc. Mr.
Wagda's business expertise emphasizes special situation consulting and
investing, including involvement in distressed investments and venture capital
opportunities. Previously, Mr. Wagda was a senior managing director and
co-founder of the Price Waterhouse corporate finance practice. He also served
with the finance staff of Chevron Corporation and in the general counsel's
office at Ford Motor Company. Mr. Wagda received an undergraduate degree from
Fordham College, a Masters of Business Administration, with distinction, from
the Johnson Graduate School of Management, Cornell University, and a JD, with
honors, from Rutgers University.
Information Concerning Directors
During the fiscal year ended December 31, 2000, the Board of Directors
held twelve meetings. All directors attended each of these meetings with the
following exception: Mr. Pevow missed one meeting. During 2000, Abraxas'
directors other than Mr. Watson received compensation for service to Abraxas as
a director. See "Executive Compensation -- Compensation of Directors." Directors
also received reimbursement of travel expenses to attend meetings of the Board
of Directors.
Neither the nominees for director nor any of the continuing directors
of Abraxas has a family relationship with any of the other executive officers or
other nominees for director. Except for Craig S. Bartlett, Jr., who is a
director of NVR, Inc., Janus Hotels & Resorts, Inc., New ICO Global
Communications (Holdings) Limited and Purina Mills Inc., Ralph F. Cox, who is a
director of Waste Management, Inc., CH2M Hill Companies and a trustee of the
Fidelity Funds, and Joseph A. Wagda, who is Chairman, CEO and a director of
BrightStar Information Technology Group, Inc., neither the nominees nor any of
the continuing directors is a director of any other company which has a class of
securities registered under, or is required to file reports under, the
Securities Exchange Act of 1934 or of any company registered under the
Investment Company Act of 1940.
Abraxas believes, based solely on its review of the copies of Section
16(a) forms furnished to it and written representations from executive officers
and directors, that all Section 16(a) filing requirements have been fulfilled.
In making this disclosure, Abraxas has relied solely on written representations
of its directors and executive officers (and its ten percent stockholders) and
copies of the reports that they have filed with the Securities and Exchange
Commission.
Committees Of The Board Of Directors
The Audit Committee of the Board of Directors, which consists of
Messrs. Phelps, Bartlett, Burke and Wagda, met three times during 2000. The
functions of the Audit Committee are to recommend the appointment of Abraxas'
independent auditors, to review the arrangements for and the scope of the annual
audit and to review internal accounting controls.
The Compensation Committee of the Board of Directors, which consists of
Messrs. Phelps, Cox and Pevow, met twice during 2000. The functions of the
Compensation Committee are to review and make recommendations concerning the
compensation of Abraxas' executive and non-executive officers. The Compensation
Committee also administers Abraxas' 1984 Incentive Stock Option Plan, 1984
Nonqualified Stock Option Plan, 1993 Key Contributor Stock Option Plan, 1994
Long Term Incentive Plan and 2000 long Term Incentive Plan.
The Nominating Committee of the Board of Directors did not meet during
2000. In connection with Abraxas' exchange offer in 1999, the members of the
Nominating Committee resigned from the Board of Directors. Since that time, the
4
Board of Directors has not appointed members to the Nominating Committee. The
function of the Nominating Committee is to seek out, evaluate and recommend to
the Board qualified nominees for election as directors of the Company and to
consider other matters pertaining to the size and composition of the Board. The
Nominating Committee will give appropriate consideration to qualified persons
recommended by stockholders for nomination as directors of the Company provided
that such recommendations are accompanied by information sufficient to enable
the Nominating Committee to evaluate the qualifications of the nominee.
Item 11. Executive Compensation
Compensation Summary
The following table sets forth a summary of compensation for the fiscal
years ended December 31, 1998, 1999 and 2000 paid by Abraxas to Robert L.G.
Watson, Abraxas' Chairman of the Board, President and Chief Executive Officer,
Chris E. Williford, Abraxas' Executive Vice President, Chief Financial Officer
and Treasurer, Robert W. Carington, Jr., Abraxas' Executive Vice President, Lee
T. Billingsley, Abraxas' Vice President-Exploration, and to William H. Wallace,
Abraxas' Vice President-Operations.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
-----------------
Annual Compensation Awards
------------------------------------------------ -----------------
Options
Name and Principal /SARs
Position Year Salary ($) Bonus ($) (#)
- ------------------------------- -------- -------------------- ------------------- ----------------
Robert L. G. Watson, Chairman 1998 $253,367 $ 0 140,000(1)
of the Board and President 6,731(2)
1999 $259,615 $43,750 4,688(3)
2000 $259,615 $29,175 962,562
Chris E. Williford, 1998 $155,770 $ 0 35,000
Executive Vice President, 1999 $155,769 $26,250 0
Chief Financial Officer 2000 $155,769 $17,505 392,701
and Treasurer
Robert W. Carington, Jr., 1998 $103,846 $ 0 320,000
Executive Vice President 1999 $207,629 $35,000 0
2000 $207,629 $23,340 549,456
Lee T. Billingsley 1998 $ 31,154 $ 0 0
Vice President - Exploration 1999 $124,615 $22,500 30,000
2000 $134,077 $22,004 97,972
William H. Wallace, 1998 $ 94,404 $ 8,850 12,500
Vice President - Operations 1999 $109,440 $13,750 30,000
2000 $131,577 $ 9,425 97,972
- ------------------------------- -------- -------------------- ------------------- ----------------
5
(1) Options to purchase Abraxas common stock.
(2) On March 23, 1998, Mr. Watson was granted options to purchase 6,731
shares of Grey Wolf Exploration Inc., Abraxas' 49% owned Canadian
subsidiary, at an exercise price of $3.90(Cdn) per share.
(3) On January 7, 1999, Mr. Watson was granted options to purchase 4,688
shares of Grey Wolf Exploration at an exercise price of $3.20(Cdn) per
share.
Grants of Stock Options and Stock Appreciation Rights During the Fiscal Year
Ended December 31, 2000
Pursuant to the Abraxas Petroleum Corporation 1984 Incentive Stock
Option Plan (the "ISO Plan"), the Abraxas Petroleum Corporation 1993 Key
Contributor Stock Option Plan (the "1993 Plan"), the Abraxas Petroleum
Corporation 1994 Long Term Incentive Plan (the "LTIP"), and the Abraxas
Petroleum Corporation 2000 Long Term Incentive Plan (the "2000 Plan"), Abraxas
grants to its employees and officers (including its directors who are also
employees) incentive stock options and non-qualified stock options. The ISO
Plan, the 1993 Plan, the LTIP and 2000 Plan are administered by the Compensation
Committee which, based upon the recommendation of the Chief Executive Officer,
determines the number of shares subject to each option.
The table below contains certain information concerning stock options
granted to Messrs. Watson, Williford, Carington, Wallace and Dr. Billingsley
during 2000:
OPTION GRANTS IN FISCAL YEAR
--------------------------------------------------------------------------------------------------------------
Potential Realizable Value
% of Total at Assumed Annual Rates of
Options Exercise Stock Price Appreciation
Options Granted to Price Per Expiration Date for Option Term
Name Granted Employees Share
(1)
5% 10%
=============== ============ ================ ============== ================= ============= ==============
Robert L.G. 842,562 37.61 $5.03 3/1/10 0 0
Watson
120,000 5.36 $1.38 5/26/10 $104,400 $264,000
Chris 352,701 15.74 $5.03 3/1/10 0 0
E. Williford
40,000 1.79 $1.38 5/26/10 $34,800 $88,000
Robert W. 509,456 22.74 $5.03 3/1/10 0 0
Carington, Jr.
40,000 1.79 $1.38 5/26/10 $34,800 $88,000
Lee T. 97,972 4.37 $5.03 3/1/10 0 0
Billingsley
William H. 97,972 4.37 $5.03 3/1/10 0 0
Wallace
(1) One-fourth of the options become exercisable on each of the first four
anniversaries of the date of grant.
6
Aggregated Option Exercises in Fiscal 2000 and Fiscal Year End Option Values
The table below contains certain information concerning exercises of
stock options during the fiscal year ended December 31, 2000, by Messrs. Watson,
Williford, Carington, Wallace and Dr. Billingsley and the fiscal year end value
of unexercised options held by Messrs. Watson, Williford, Carington, Wallace and
Dr. Billingsley.
Value of
Number of Unexercised
Unexercised Options In-the-Money
on December 31, 2000 Options on
(#) December 31,
Shares Acquired By Exercisable/ 2000 ($)
Exercise (#) Value Realized ($) Unexercisable Exercisable/
------------ -------------- -------------
Name Unexercisable
Robert L. G. Watson 0 0 370,000/ 0/0(1) (3)
1,032,562(1)
84,538/
6,881(2) 0/0(2)
Chris E. Williford 0 0 131,250/ 0/0(3)
416,451
Robert W. Carington, Jr. 0 0 160,000/ 0/0(3)
709,456
Lee T. Billingsley 0 0 36,500/ $89,555/$134,105
149,472
William H. Wallace 0 0 21,750/ $55,335/$81,325
126,722
(1) Options held by Mr. Watson to purchase shares of Abraxas common stock.
(2) Options held by Mr. Watson to purchase share of Grey Wolf common stock.
(3) On March 25, 1999 all existing options with exercise prices greater
than $2.06 were reduced to $2.06 under a plan approved by the Company's
Board of Directors. However, all options repriced for Messrs. Watson,
Williford and Carington were not exercisable until Abraxas' common
stock closed daily trading at a price greater than or equal to $4.12
per share for 10 days out of any 30 day trading period. This $4.12
threshold was not achieved by December 31, 2000 thus at that time none
of Messrs. Watson, Williford or Carington's repriced options were
exercisable. The $4.12 threshold was achieved on January 4, 2001.
Long Term Incentive Plan Awards During the Fiscal Year Ended December 31, 2000
Abraxas did not make any awards to any of Messrs. Watson, Williford,
Carington, Wallace and Dr. Billingsley under a long-term incentive plan during
the fiscal year ended December 31, 2000.
7
Employment Agreements
Abraxas has entered into employment agreements with each of Messrs.
Watson, Williford, Carington, Wallace and with Dr. Billingsley pursuant to which
each of Messrs. Watson, Williford, Carington, Wallace and Dr. Billingsley will
receive compensation as determined from time to time by the Board in its sole
discretion.
The employment agreements for Messrs. Watson, Williford, and Carington
are scheduled to terminate on December 21, 2002, and shall be automatically
extended for additional one-year terms unless Abraxas gives Messrs. Watson,
Williford, and Carington 120 days notice prior of the expiration of the original
term or any extension thereof of its intention not to renew the employment
agreement. If, during the term of Messrs. Watson's, Williford's or Carington's
employment agreements, Messrs. Watson's, Williford's or Carington's employment
is terminated other than for cause or disability, by reason of Messrs. Watson's,
Williford's or Carington's death or retirement or by Messrs. Watson, Williford
or Carington, as the case may be, other than for good reason, then Messrs.
Watson, Williford or Carington, as the case may be, will be entitled to receive
a lump sum payment equal to the greater of (a) his annual base salary for the
last full year during which he was employed by Abraxas or (b) his annual base
salary for the remainder of the term of each of their respective employment
agreements.
If a change of control occurs during the term of Messrs. Watson's,
Williford's or Carington's employment agreements, and if subsequent to such
change of control, Messrs. Watson's, Williford's, or Carington's employment is
terminated other than for cause or disability, by reason of Messrs. Watson's,
Williford's or Carington's death or retirement or by Messrs. Watson, Williford
or Carington, as the case may be, other than for good reason, then Mr. Watson
will be entitled to the following:
(1) if such termination occurs prior to the end of the first year of
the initial term of his employment agreement, a lump sum payment equal to five
(5) times his annual base salary;
(2) if such termination occurs after the end of the first year of the
initial term of his employment agreement but prior to the end of the second year
of the initial term of his employment agreement, a lump sum payment equal to
four' (4) times his annual base salary;
(3) if such termination occurs after the end of the second year of the
initial term of his employment agreement but prior to the end of the third year
of the initial term of his employment agreement, a lump sum payment equal to
three (3) times his annual base salary; and
(4) if such termination occurs after the end of the third year of the
initial term of his employment agreement a lump sum payment equal to 2.99 times
his annual base salary.
Under such circumstances, Messrs. Williford and Carington will be
entitled to the following:
(1) if such termination occurs prior to the end of the first year of
the initial term of his respective employment agreement, a lump sum payment
equal to four' (4) times his annual base salary;
(2) if such termination occurs after the end of the first year of the
initial term of his respective employment agreement but prior to the end of the
second year of the initial term of his respective employment agreement, a lump
sum payment equal to three (3) times his annual base salary; and
8
(3) if such termination occurs after the end of the second year of the
initial term of his respective employment agreement, a lump sum payment equal to
2.99 times his annual base salary. The Company has entered into employment
agreements with Mr. Wallace and Dr. Billingsley, which were scheduled to
terminate on December 31, 1998 for Dr. Billingsley and December 31, 2000 for Mr.
Wallace, but were automatically extended for one year and will terminate on
December 31, 2001, and may be automatically extended for an additional year if
by December 1 of the prior year neither the Company nor Mr. Wallace or Dr.
Billingsley, as the case may be, has given notice that he or it, as the case may
be, does not wish to extend the term. Except in the event of a change in
control, at all times during the term of the employment agreements, each of Mr.
Wallace's and Dr. Billingsley's employment is at will and may be terminated by
the Company for any reason without notice or cause. If a change in control
occurs during the term of the employment agreement or any extension thereof, the
expiration date of Mr. Wallace's and Dr. Billingsley's employment agreement is
automatically extended to a date no earlier than three years following the
effective date of such change in control. If, following a change in control, Mr.
Wallace's or Dr. Billingsley's employment is terminated other than for cause (as
defined in each of the employment agreements) or disability (as defined in each
of the employment agreements), by reason of Mr. Wallace's or Dr. Billingsley's
death or retirement or by Mr. Wallace or Dr. Billingsley, as the case may be,
other than for good reason (as defined in each of the employment agreements),
then Mr. Wallace and Dr. Billingsley will each be entitled to receive a lump sum
payment equal to three times his annual base salary.
If any lump sum payment to Messrs. Watson, Williford, Carington,
Wallace or Dr. Billingsley would individually or together with any other amounts
paid or payable constitute an "excess parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended, and applicable
regulations there under, the amounts to be paid will be increased so that
Messrs. Watson, Williford, Carington, Wallace or Dr. Billingsley, as the case
may be, will be entitled to receive the amount of compensation provided in his
contract after payment of the tax imposed by Section 280G.
Compensation Committee Interlocks and Insider Participation
In January 1996, the Company invested $3.0 million in Grey Wolf
Exploration Ltd. ("Ltd"), a privately held Canadian corporation, which, in turn,
invested these proceeds in newly-issued shares of Cascade Oil & Gas, Ltd.
("Cascade"), an Alberta-based corporation whose common shares were traded on The
Alberta Stock Exchange. In November 1997, Ltd. merged with Cascade, which later
changed its name to Grey Wolf Exploration Inc. The Company owns approximately
49% of the outstanding capital stock of Grey Wolf. The shares of Grey Wolf are
traded on the Toronto Stock Exchange under the symbol "GWX." Grey Wolf manages
the operations of Canadian Abraxas pursuant to a management agreement between
Canadian Abraxas and Grey Wolf. See "Certain Relationships and Related
Transactions." Under the management agreement, Canadian Abraxas reimburses Grey
Wolf for reasonable costs or expenses attributable to Canadian Abraxas and for
administrative expenses based upon the percentage that Canadian Abraxas' gross
revenue bears to the total gross revenue of Canadian Abraxas and Grey Wolf.
Mr. Phelps, a member of the Compensation Committee of the Abraxas Board
of Directors during 2000, served as a director of Grey Wolf during 2000. Mr.
Phelps served as Chief Executive Officer of Ltd from April 1995 to May 1996 and
as President of Cascade from January 1996 to May 1996. Mr. Phelps also served as
9
a director of Ltd until 1997 when Ltd was merged into Cascade. Mr. Phelps has
served as a director of Grey Wolf and its predecessor, Cascade, since 1997.
Mr. Watson, the Company's President, Chief Executive Officer and
Chairman of the Board, served as Chairman of the Board, Chief Executive Officer
and a director of Grey Wolf during 2000.
Compensation of Directors
Non-Qualified Stock Option Plan. Messrs. Burke and Phelps have
previously been granted options to purchase 8,900 shares of Common Stock under
Abraxas' 1984 Non-Qualified Stock Option Plan (the "Non-Qualified Plan"). There
are currently outstanding options to purchase 8,900 shares of Common Stock under
the Non-Qualified Plan. Mr. Burke holds an option to purchase 8,900 shares of
Common Stock at an exercise price of $2.06 per share.
Other Compensation. During 2000, each director who was not an employee
of the Company or its affiliates, received an annual fee of $8,000 plus $1,000
for each Board meeting attended and $500 for each committee meeting attended.
Total fees earned in 2000 were $127,500. Except for the foregoing, the directors
of Abraxas received no other compensation for services as directors, except for
reimbursement of travel expenses to attend Board meetings.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Based upon information received from the persons concerned, each person
known to Abraxas to be the beneficial owner of more than five percent of the
outstanding shares of Abraxas' Common Stock, each director, each of the named
executive officers and all of Abraxas' directors and officers as a group, owned
beneficially as of March 31, 2001, the number and percentage of outstanding
shares of Abraxas' Common Stock indicated in the following table:
Name and Address of
Beneficial Owner Number of Shares (1) Percentage
- ---------------------------------------------------- ---------------------- ------------
Franklin Resources, Inc. 1,461,476(2) 6.46%
777 Mariners Island Blvd., 6th Floor
San Mateo, CA 94404
Robert L. G. Watson 918,514(3) 3.96%
Franklin A. Burke 610,084(4) 2.70
James C. Phelps 193,961(5) *
Chris E. Williford 252,428(6) *
Lee T. Billingsley 113,268(7) *
Robert W. Carington, Jr. 348,882(8) *
William H. Wallace 51,893(9) *
10
Craig S. Bartlett, Jr. 26,750(10) *
Ralph F. Cox 118,750(10) *
Frederick M. Pevow, Jr. 18,750(10) *
Joseph A. Wagda 18,750(10) *
All Officers and Directors as a 2,676,030 11.16%
Group (11 persons)
- ---------
* Less than 1%
(1) Unless otherwise indicated, all shares are held directly with sole voting
and investment power.
(2) Owned by one or more open or closed-end investment companies or other
managed accounts which are advised by direct and indirect investment advisory
subsidiaries (the "Adviser Subsidiaries") of Franklin Resources, Inc. ("FRI").
Such advisory contracts grant to such Adviser Subsidiaries all investment and/or
voting power over the securities owned by such advisory clients.
The voting and investment powers held by Franklin Mutual Advisers, LLC ("FMA"),
formerly Franklin Mutual Advisers, Inc., an indirect wholly owned investment
advisory subsidiary of FRI, are exercised independently from FRI and from all
other investment advisor subsidiaries of FRI (FRI, its affiliates and investment
advisor subsidiaries other than FMA are collectively referred to herein as "FRI
affiliates"). Furthermore, FMA and FRI internal policies and procedures
establish informational barriers that prevent the flow between FMA and the FRI
affiliates of information that relates to the voting and investment powers over
the securities owned by their respective advisory clients.
Charles B. Johnson and Rupert H. Johnson, Jr. (the "Principal Shareholders")
each own in excess of 10% of the outstanding Common Stock of FRI and are the
principal shareholders of FRI. FRI and the Principal Shareholders may be deemed
to be, for purposes of Rule 13d-3 under the Securities and Exchange Act of 1934,
the beneficial owner of securities held by persons and entities advised by FRI
subsidiaries. FRI, the Principal Shareholders and each of the Adviser
Subsidiaries disclaim any economic interest of beneficial ownership in any of
the securities covered by this statement.
FRI, the Principal Shareholders, and each of the Adviser Subsidiaries are of the
view that they are not acting as a "group" for purposes of Section 13(d) under
the 1934 Act and that they are not otherwise required to attribute to each other
the "beneficial ownership" of securities held by any of them or by any persons
or entities advised by FRI subsidiaries.
(3) Includes 34,209 shares issuable upon exercise of options granted pursuant to
the 1993 Plan, 360,791 shares issuable upon exercise of options granted pursuant
to the LTIP, and 210,640 shares issuable upon exercise of options granted
pursuant to the 2000 Plan. Does not include a total of 75,880 shares owned by
the Robert L. G. Watson, Jr. Trust and the Carey B. Watson Trust, the trustees
of which are Mr. Watson's Brothers and the beneficiaries of which are Mr.
Watson's children. Mr. Watson disclaims beneficial ownership of the shares owned
by these trusts.
11
(4) Includes 8,900 shares issuable upon exercise of options granted pursuant to
the Non-Qualified Plan and 15,750 shares issuable upon exercise of options
granted pursuant to the Amended and Restated Director Stock Option Plan (the
"Director Option Plan").
(5) Includes 150,000 shares owned by Marie Phelps, Mr. Phelps' wife, 15,750
shares issuable upon exercise of options granted pursuant to the Director Option
Plan and 1,500 shares issuable upon exercise of options granted pursuant to an
option agreement.
(6) Includes 1,786 shares issuable upon exercise of options pursuant to the ISO
Plan, 18,214 shares issuable upon exercise of options granted pursuant to the
1993 Plan, 121,250 shares issuable upon exercise of options granted pursuant to
the LTIP and 88,175 shares issuable upon exercise of options granted pursuant to
the 2000 Plan.
(7) Includes 36,500 shares issuable upon exercise of options granted pursuant to
the LTIP, 1,000 shares in a retirement account and 24,493 shares issuable upon
exercise of options granted pursuant to the 2000 Plan.
(8) Includes 160,000 shares issuable upon exercise of options granted pursuant
to the LTIP and 127,364 shares issuable upon exercise of options granted
pursuant to the 2000 Plan.
(9) Includes 10,750 shares issuable upon exercise of options granted pursuant to
the LTIP.
(10) Includes 18,750 shares issuable upon exercise of certain option agreements.
Item 13. Certain Relationships and Related Transactions
Wind River Resources Corporation ("Wind River"), all of the capital
stock of which is owned by Mr. Watson, owns a twin-engine airplane. The airplane
is available for business use by employees of Abraxas from time to time at Wind
River's cost. Abraxas paid Wind River a total of $336,000 for use of the plane
during 2000.
Grey Wolf Exploration Inc., Abraxas' 49%-owned subsidiary, owns a 10%
interest in certain producing properties owned by Canadian Abraxas' wholly-owned
subsidiary Canadian Abraxas Petroleum Limited and in Canadian Abraxas' natural
gas processing plants and manages the operations of Canadian Abraxas pursuant to
a management agreement between Canadian Abraxas and Grey Wolf. Under the
management agreement, Canadian Abraxas reimburses Grey Wolf for reasonable costs
or expenses attributable to Canadian Abraxas and for administrative expenses
based upon the percentage that Canadian Abraxas' gross revenue bears to the
total gross revenue of Canadian Abraxas and Grey Wolf. In 2000, Canadian Abraxas
paid CDN $3,456,023 to Grey Wolf pursuant to the management agreement.
Abraxas has adopted a policy that transactions, including loans,
between Abraxas and its officers, directors, principal stockholders, or
affiliates of any of them, will be on terms no less favorable to Abraxas than
can be obtained on an arm's length basis in transactions with third parties and
must be approved by the vote of at least a majority of the disinterested
directors.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ABRAXAS PETROLEUM CORPORATION
By: /s/ Robert L.G. Watson By: /s/ Chris Williford
-------------------------------- ---------------------------
President and Principal Exec. Vice President and
Executive Officer Principal Financial and
Accounting Officer
DATED: April 25, 2001
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Name and Title Date
- ---------------------------- ----------------------------- ---------------
/s/ Robert L.G. Watson Chairman of the Board, April 25, 2001
- ---------------------------- President (Principal Executive
Robert L.G. Watson Officer) and Director
/s/ Chris Williford Exec. Vice President and April 25, 2001
- ----------------------------- Treasurer (Principal Financial
Chris Williford and Accounting Officer)
/s/Craig S. Bartlett, Jr. Director April 25, 2001
- -----------------------------
Craig S. Bartlett, Jr.
/s/ Franklin A. Burke Director April 25, 2001
- -----------------------------
Franklin Burke
/s/ Ralph F. Cox Director April 25, 2001
- -----------------------------
Ralph F. Cox
/s/ Fredrick M. Pevow, Jr. Director April 25, 2001
- ---------------------------
Fredrick M. Pevow, Jr.
/s/ James C. Phelps Director April 25, 2001
- ---------------------------
James C. Phelps
/s/ Joseph A. Wagda Director April 25, 2001
- -----------------------------
Joseph A. Wagda
13