SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________________to_______________________
Commission file number________________________________________________________
PLAINS PETROLEUM COMPANY
401 (k) PLAN AND TRUST
(Full title of the Plan)
PLAINS PETROLEUM COMPANY
(Name of issuer of the securities held pursuant to the Plan)
12596 W BAYAUD AVE., SUITE #400
LAKEWOOD, COLORADO 80228
(Address of principal executive offices)
PLAINS PETROLEUM COMPANY
401 (k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
(UNAUDITED)
December 31,
1993 1992
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ASSETS
Cash $ 41,842 $25,295
Accounts Receivables 415 -
Investments, at fair value ( Note 4)
Common stock, Plains Petroleum Company 245,207 181,530
Common Trust Funds 919,321 417,296
Loans to Participants 24,734 -
Deposit with insurance company, at
contract value (Note 4) 239,540 387,169
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Total assets $1,471,059 $1,011,290
LIABILITIES
Payables 2,230 -
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Net assets available for benefits $1,468,829 $1,011,290
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The accompanying notes are an integral part of these financial statements.
PLAINS PETROLEUM COMPANY
401 (k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(UNAUDITED)
Yearend December 31,
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1993 1992 1991
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Additions to net assets attributed to:
Investment Income
Net appreciation/(depreciation) in
fair value of investments
(Note 4) $126,545 $17,057 $(64,314)
Interest and dividends 39,240 29,237 25,144
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165,785 46,294 (39,170)
Less investment expenses -- -- --
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165,785 46,294 (39,170)
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Contributions
Participants 207,945 193,299 147,655
Transfers (Note 1 ) 96,079 (213,504) --
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304,024 (20,205) 147,655
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Total additions 469,809 26,089 108,485
Deductions from net assets attributed
to:
Benefits paid to Participants 12,270 72,317 18,490
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Net Increase 457,529 (46,228) 89,995
Net assets available for benefits
Beginning of year 1,011,290 1,057,518 967,523
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End of year $1,468,829 $1,011,290 $1,057,518
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The accompany notes are an integral part of these financial statements.
PLAINS PETROLEUM COMPANY
401 (k) PLAN
Notes to Financial Statements
NOTE ONE DESCRIPTION OF PLAN
By Resolution of the Board of Directors of Plains Petroleum Company
(the "Company"), the Plains Petroleum Company 401(k) Plan & Trust (the "Plan")
was established effective July 1, 1990 for the benefit of eligible employees of
the Company. Through June 30, 1990, employees of the Company were permitted to
make elective deferral contributions to the Company's Profit Sharing Plan under
Section 401 (k) of the Internal Revenue Service Code (the "Code"). These
elective deferrals under the Profit Sharing Plan were transferred to the Plan
effective July 1, 1990. (See Transfers made in 1990 and 1992.) Effective
December 31, 1993, the Company's PAYSOP Plan and Trust was merged into the
Plan. The assets and liabilities of the Company's PAYSOP Plan and Trust were
transferred into this Plan as of that date. (See Transfers made in 1993.) The
employees of the Company's subsidiaries, Plains Petroleum Operating Company and
Plains Petroleum Gathering Company, are eligible to participate in the Plan.
The following description of the Plan provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering employees who had an
elective deferral contribution under the Profit Sharing Plan on June 30, 1990 or
an deferral balance in the PAYSOP Plan on December 31, 1993, and any other
employees who thereafter elect to participate in the Plan and have executed an
elective deferral agreement.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS
Participants may elect through payroll deduction to contribute up to
10 percent of their annual wages including overtime but before bonuses,
commissions and other benefits, as defined. Contributions for any calendar year
are limited pursuant to requirements of the Code.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution. Allocations of Plan earnings are based on participant's account
balances. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's account.
INVESTMENT OPTIONS
Participants may direct, as defined by the Plan, investment of their
contributions and accumulated earnings to Plains Petroleum Company common
stock (the "Plains Fund") and/or to various investment options offered by a
Company designated bank-administered investment trust consisting of four
separate funds and by an insurance company with which the Company has contracted
with for separate pooled accounts.
With respect to investments made in Plains Petroleum Company
common stock, dividends on shares held by the Trust are re-invested in Plains
Petroleum common stock and allocated to participants' accounts. Further,
participants are entitled to exercise voting rights attributable to their shares
allocated to their account by instructing the Trustee of their voting
preference. The Trustee shall follow the directions of those Participants who
provide timely instructions to the Trustee. For voting rights attributed to
shares for which no instructions are provided at least ten days prior to time
that such shares are entitled to be voted, the Trustee will vote the
uninstructed shares in direct proportion to the voting instructions received
from responding participants.
PARTICIPANT LOAN POLICY
Effective July 1, 1993, the Plan established a Loan Policy within the
Internal Revenue Service guidelines for active Participant employees. This
Policy enables Participants to borrow up to the lesser of 50 percent of their
vested account or $50,000, but not less than $1,000. Loans are collateralized
by up to 50 percent of the Participant's vested account and supported by a
collateral promissory note for a maximum term of 5 years except for personal
resident loans which may not exceed 15 years. Interest rates will be fixed by
the Plan Administrator in accordance to the Policy. Payments must be made by
payroll deduction. Loan balances are due in full upon termination of employment
for any reason.
VESTING
Participants are fully vested in their voluntary contributions plus
actual earnings thereon.
PAYMENTS OF BENEFITS
The Trustee of the Plan may make distributions to the Participants
subject to the following circumstances as defined by the Code: 1) termination
of service, 2) termination of the Plan, 3) sale of substantially all of the
Company's assets, 4) sale of the Company's interest in its subsidiary, 5)
Participant financial hardship, or 6) Participant attains age 59-1/2.
Distributions are made in cash, common stock or a combination as provided by the
Plan and may be made in the form of an annuity, lump-sum, installment or a
combination subject to the provisions of the Plan.
PARTICIPATING EMPLOYEES
As of December 31, 1993, a total of 99 persons were participants in
or beneficiaries of the Plan.
REPORTS TO PARTICIPATING EMPLOYEES
Annual statements are sent to participants covering the status of the
participants' accounts
under the Plan.
PLAN ADMINISTRATION
The Plan is administered by an Advisory Committee of Trustees
comprised of three employees of the Company or its subsidiaries. The Committee
members receive no compensation for their services. Any Trustee may be removed,
and a new Trustee appointed, by the Company upon 30 days' notice to the
Trustee. Administrative expenses of the Plan are paid from the Trust to the
extent they are not paid by the Company.
NOTE TWO SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Quoted market prices are used to value the Company's common stock
investments at December 31. The contract value of investments with the
insurance company is provided by the insurance company.
Dividend income is accrued on the ex-dividend date. Purchases and
sales of securities are recorded on a trade-date basis. Realized gains and
losses from security transactions are reported on the average cost method.
NOTE THREE TAX STATUS
The Plan operates as a qualified plan under Sections 401(a) and 401(k)
of the Code. Qualification of the Plan means that a Participant will not be
subject to federal income taxes on Elective Deferral Contributions, or on
earnings or appreciation on all account balances held in the Plan, until such
amounts either are withdrawn by or distributed to the Participant, or are
distributed to the Participant's spouse or beneficiary in the event of the
Participant's death. Participant elective deferral contributions are not taxed
for purposes of federal income tax except for social security taxes.
Distributions of contributions and all accumulated earnings thereon to
Participants will be subject to federal income tax as defined by the Code.
The Plan has obtained a favorable tax determination letter from the
Internal Revenue Service and the Company believes that the Plan continues to
qualify and to operate as designed.
NOTE FOUR INVESTMENTS
The fair value of the Plan's investments held in a trust by the
Trustee, at December 31, are presented in the followin table. Investments that
represent 5 percent or more of the Plan's net assets are separately identified.
Number of Shares Fair Value
INVESTMENTS AT FAIR VALUE AS DETERMINED BY
QUOTED MARKET PRICE
As of December 31, 1991:
Plains Petroleum Company
Common Stock (cost of $242,895) 6,266 $178,581
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As of December 31, 1992:
Plains Petroleum Company
Common Stock (cost of $213,784) 7,277 $181,530
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As of December 31, 1993:
Plains Petroleum Company
Common Stock (cost of $292,634) 10,431 $245,207
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INVESTMENTS AT ESTIMATED FAIR VALUE 12/31/93 12/31/92
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Common Trust Funds:
Stable Return Fund $316,466 $244,838
Common Stock Fund 327,009 172,458
Moderate Balanced Fund 136,422 --
Intermediate US Government Bond Fund 139,424 --
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$919,321 $417,296
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DEPOSIT WITH INSURANCE COMPANY
In 1990, the Plan entered into a deposit contract with the United of Omaha
Life Insurance Co. (United). United maintains the contributions in a pooled
account. The account is credited with actual earnings on the underlying
investments. The contract is included in the financial statements at the
December 31st contract value as reported to the Plan by United.
NOTE FIVE PLAN AMENDMENT OR TERMINATION
Effective January 1, 1994, the Plan was amended to provide for employer
matching contributions of up to 50 percent of the first 6 percent of employee-
Participant elective deferred contributions. This matching contribution will be
made in Company common stock and will be subject to certain vesting
requirements. The amendment also included a reduction of the maximum
Participant elective deferral contribution from 10 percent to 9 percent.
The Plan has no specified duration. The Company has no current plans to
terminate the Plan, but reserves the right to amend, suspend, or terminate it at
any time. Rights or benefits previously acquired by or allocated for
Participants will not be adversely affected by any such action unless the
officers of the Company, on advice of legal counsel, determine such action to be
necessary or advisable to conform the Plan to the requirements of Sections 401
and 501 of the Code or other federal law. All account balances will be fully
vested in the event of a termination.