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, 1994
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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,
1994 1993
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ASSETS
Cash $30 $ 41,842
Accounts Receivables - 415
Investments, at fair value ( Note 4)
Common stock, Plains Petroleum Company 402,125 245,207
Common Trust Funds 1,059,269 919,321
Loans to participants 66,287 24,734
Deposit with insurance company, at contract value
(Note 4) 72,880 239,540
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Total assets $1,600,591 $1,471,059
LIABILITIES
Payables - 2,230
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Net assets available for benefits $1,600,591 $1,468,829
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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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1994 1993 1992
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Additions to net assets attributed to:
Investment Income
Net appreciation/(depreciation)
in fair value of
investments (Note 4) $ 4,189 $126,545 $17,057
Interest and Dividends 15,557 39,240 29,237
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19,746 165,785 46,294
Less investment expenses -- -- --
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19,746 165,785 46,294
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Contributions
Participants 191,730 207,945 193,299
Employer 86,439 -- --
Transfers (Note 1 ) -- 96,079 (213,504)
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278,169 304,024 (20,205)
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Total additions 297,915 469,809 26,089
Deductions from net assets
attributed to:
Benefits paid to Participants 163,153 12,270 72,317
Reduction of Payables
and adjustments 3,000 -- --
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Total deductions 166,153 12,270 72,317
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Net Increase 131,762 457,529 (46,228)
Net assets available for benefits
Beginning of year 1,468,829 1,011,290 1,057,518
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End of year $1,600,591 $1,468,829 $1,011,290
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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
a 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 9
percent (10 percent prior to 1994) 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.
Commencing January 1, 1994, the Company and its subsidiaries will make
employer matching contributions for each plan year in an amount equal to 50
percent of the first 6 percent of compensation deferred by a Participant as an
elective deferral contribution.
PARTICIPANT ACCOUNTS
Each Participant's account is credited with the Participant's contribution
and employer matching contributions. 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 bank-administered investment funds
consisting of four separate funds.
With respect to investments made in the Plains Fund, 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.
Employer matching contributions are to be used by the Trustee to purchase
shares of the Company's common stock only and cannot be redirected by the
benefiting Participant to other Plan investment accounts. Earned dividends can
only be reinvested in common stock and are added to the matching account.
Voting rights are the same as those of Participant directed investments in
Company common stock.
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
residence 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. Vesting in employer matching contributions is based
on years of continuous service. A Participant is 100 percent vested after five
years of credited service. If a Participant retires or becomes disabled, or in
the event of a change in control of the Company, the employer matching
contribution account balance is 100 percent vested.
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, 1994, a total of 96 persons were Participants in or
beneficiaries of the Plan.
REPORTS TO PARTICIPATING EMPLOYEES
Account statements are sent to Participants covering the status
of the Participants' accounts under the Plan as of the end of each quarter.
PLAN ADMINISTRATION
The Plan is administered by an Advisory Committee appointed by
the Company which currently consists of three employees of the
Company or its subsidiaries who are also serving as the Trustee.
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 following 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, 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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As of December 31, 1994:
Plains Petroleum Company
Common Stock (cost of $431,714) 17,185 $402,125
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INVESTMENTS AT ESTIMATED FAIR VALUE 12/31/94 12/31/93
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Common Trust Funds:
Stable Return Fund $299,669 $316,466
Common Stock Fund - 327,009
Growth Equity 365,397 -
Moderate Balanced Fund 279,670 136,422
Intermediate US Government Bond Fund 114,533 139,424
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$1,059,269 $919,321
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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 deferral contributions. This matching contribution will be
made in Company common stock and will be subject to certain vesting requirements
(See NOTE ONE, vesting). The matching account shares cannot be redirected to
another investment account in the Plan and are not available for hardship
withdrawals or for loans. Earned dividends on these shares will be reinvested
in Company common stock that will be added to the matching account. 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.