SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TRITON ENERGY LIMITED
(Name of Registrant as specified in Its Charter)
Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
TRITON ENERGY LIMITED
CALEDONIAN HOUSE, MARY STREET
P. O. BOX 1043
GEORGE TOWN
GRAND CAYMAN, CAYMAN ISLANDS
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Triton
Energy Limited (the "Company") will be held at 10:00 a.m., Dallas time, on
Tuesday, May 11, 1999, at the Royal Oaks Country Club, 7915 Greenville Avenue,
Dallas, Texas 75231. The purposes of the meeting are:
(1) To elect four directors to serve until the Annual Meeting of
Shareholders in 2002, or until their respective successors shall have been duly
elected and qualified;
(2) To consider and vote upon a proposal to amend the Company's Amended and
Restated Restricted Stock Plan to increase by 200,000 shares the number of the
Company's Ordinary Shares available for issuance pursuant to the plan; and
(3) To consider and act upon such other matters as may properly come before
the meeting.
Only holders of record of Ordinary Shares and 8% Convertible Preference
Shares at the close of business on March 26, 1999, are entitled to receive
notice of and to vote at the meeting, or any adjournment or adjournments
thereof. The meeting may be adjourned from time to time without notice other
than announcement at the meeting.
Information concerning the matters to be acted upon at the meeting is set
forth in the accompanying Proxy Statement.
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN AS PROMPTLY AS POSSIBLE THE ENCLOSED PROXY CARD
IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors
Robert B. Holland, III
Secretary
April 2, 1999
TRITON ENERGY LIMITED
CALEDONIAN HOUSE, MARY STREET
P. O. BOX 1043
GEORGE TOWN
GRAND CAYMAN, CAYMAN ISLANDS
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
_____________________
SOLICITATION AND REVOCABILITY OF PROXIES
Triton Energy Limited (the "Company") is furnishing this Proxy Statement to
shareholders in connection with the Company's solicitation, by order of its
Board of Directors, of proxies to be voted at the 1999 Annual Meeting of
Shareholders of the Company (together with any and all adjournments, the
"Meeting"). The Meeting will be held at the Royal Oaks Country Club, 7915
Greenville Avenue, Dallas, Texas, on Tuesday, May 11, 1999, commencing at 10:00
a.m., Dallas time. This Proxy Statement, the Notice of Annual Meeting and the
accompanying proxy card are first being mailed on or about April 2, 1999.
At the Meeting, the Company is asking its shareholders to consider and act
upon (i) the election of four directors to serve until the Annual Meeting of
Shareholders in 2002, or until their successors have been duly elected and
qualified; (ii) a proposal to amend the Company's Amended and Restated
Restricted Stock Plan (the "Stock Plan") to increase by 200,000 shares the
number of the Company's Ordinary Shares available for issuance pursuant to the
plan; and (iii) such other matters as may properly come before the Meeting or
any adjournment thereof.
If you specify in your proxy how your shares are to be voted, the persons
named in the enclosed proxy will vote your shares accordingly. You may revoke
your proxy at any time before it is voted by duly executing and delivering a
later dated proxy relating to your shares or by attending the Meeting and voting
by ballot in person (attending the Meeting without executing a ballot will not
constitute revocation of a proxy). If you execute and return the enclosed proxy,
but do not specify how your shares are to be voted, the persons named in the
enclosed proxy will vote your shares (i) FOR the election of the four
individuals nominated by the Board of Directors; (ii) FOR approval of the
proposal to amend the Stock Plan; and (iii) at their discretion with regard to
any other matters that may properly come before the Meeting.
Management of the Company does not know of any other matters that are
likely to be brought before the Meeting. However, if any other matters do
properly come before the Meeting, the persons named in the enclosed proxy will
vote the proxy in accordance with their best judgment.
RECORD DATE AND VOTING
The close of business on March 26, 1999, is the record date (the "Record
Date") for determining the shareholders entitled to vote at the Meeting. The
Company's Ordinary Shares and 8% Convertible Preference Shares ("8% Preference
Shares") are the only voting securities entitled to be voted at the Meeting.
Each Ordinary Share is entitled to one vote on any matter to come before the
Meeting and each 8% Preference Share is entitled to four votes on any matter to
come before the Meeting. As of the Record Date, there were outstanding
36,664,476 Ordinary Shares and 5,000,000 8% Preference Shares.
The presence at the Meeting, in person or by proxy, of the holders of at
least a majority of the Ordinary Shares and 8% Preference Shares entitled to
vote as of the Record Date, taken together, is necessary to constitute a quorum.
Each Ordinary Share and 8% Preference Share represented at the Meeting, in
person or by proxy, will be counted toward a quorum. If a quorum is not present,
the Meeting may be adjourned from time to time until a quorum is obtained.
Approval of the proposal to elect the four nominees to serve as directors
requires the affirmative vote of the holders of a plurality of the Ordinary
Shares and 8% Preference Shares, voting together as a single class, represented
and voting at the Meeting. On the enclosed proxy, you may vote your shares in
favor of the Board's nominees or withhold your votes as to one or more nominees.
Votes that are withheld will be excluded entirely from the vote and will have no
effect. Approval of the proposal to amend the Stock Plan requires a favorable
majority vote of the holders of the Ordinary Shares and 8% Preference Shares
present, or represented, and entitled to vote at the Meeting. On the enclosed
proxy, you may vote your shares for or against the proposal, or you may abstain
from voting on the proposal. An abstention will have the same effect as a vote
against such proposal. Broker non-votes will have no effect on the outcome of
such proposal. Shareholders have no appraisal or similar rights with respect to
any matter scheduled to be voted on at the Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Articles of Association provide for a board of directors
divided into three classes, with the term of office of one class expiring each
year at the Company's Annual Meeting of Shareholders. Each class of directors is
elected for a term of three years except in the case of elections to fill
vacancies. The following is certain information concerning each of the nominees
for election as a director, as well as information concerning those directors of
the Company whose terms continue following the Meeting. The Company does not
know of any family relationships between the directors and the officers of the
Company.
NOMINEES FOR DIRECTOR - TERM EXPIRING 2002
The Board of Directors has nominated each of Jack D. Furst, Michael E.
McMahon, C. Richard Vermillion, Jr., and J. Otis Winters for election at the
Meeting to serve as directors for a term expiring at the Annual Meeting of
Shareholders in 2002, or until his successor has been duly elected and
qualified. Each of the nominees has indicated that he is willing to continue to
serve as a member of the Board if elected. If any nominee becomes unavailable
for election for any reason, the proxy holders will have discretionary authority
to vote for a substitute nominee. Messrs. Furst, Vermillion and Winters were
designated for nomination by HM4 Triton, L.P. ("HM4 Triton"), a partnership
affiliated with Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse"), pursuant
to a Shareholders Agreement between HM4 Triton and the Company. See "Management
Compensation - Certain Transactions."
The following is a summary of the background of each of the nominees for
election at the Meeting:
Jack D. Furst (age 40). Mr. Furst has served as a director of the Company
since October 1998. Mr. Furst is a Partner of Hicks Muse, a private investment
firm located in Dallas, New York, St. Louis, Mexico City and London,
specializing in strategic investments, leveraged acquisitions and
recapitalizations, and has held such position since 1989. From 1987 to May 1989,
Mr. Furst was a vice president and subsequently a partner of Hicks & Haas
Incorporated. Mr. Furst also serves as a director of Home Interiors & Gifts,
Inc., International Wire Holding Company, American Tower Corporation,
Cooperative Computing, Inc. and Viasystems, Group, Inc.
Michael E. McMahon (age 51). Mr. McMahon has served as a director of the
Company since 1993. Mr. McMahon has served as a partner in RockPort Partners
LLC, an investment company, since June 1998. From July 1997 to June 1998, Mr.
McMahon was a Managing Director of Chase Securities, Inc., and from October 1994
until July 1997, Mr. McMahon was a Managing Director of Lehman Brothers. Prior
to joining Lehman Brothers, Mr. McMahon had been a partner in Aeneas Group,
Inc., a subsidiary of Harvard Management Company, Inc., since January 1993.
Harvard Management Company, Inc. is a private investment company responsible for
managing the endowment fund of Harvard University. Mr. McMahon was primarily
responsible for the fund's energy and commodities investments.
C. Richard Vermillion, Jr. (age 53). Mr. Vermillion has served as a
director of the Company since October 1998. Mr. Vermillion has served as
Chairman of Gammaloy Holdings L.P., an oilfield service firm, since February
1996, and as a principal of MV Partners, a private investment firm, since June
1995. From October 1993 to June 1995, Mr. Vermillion was a Managing Director of
Donaldson Lufkin & Jenrette, an investment banking firm.
J. Otis Winters (age 66). Mr. Winters has served as a director of the
Company since October 1998. Mr. Winters also served as a director of the Company
from September 1993 to May 1996. Mr. Winters was co-founder of Pate, Winters &
Stone, Inc., a consulting firm, in 1989. Since 1989 he has served as Chairman of
that company. Mr. Winters also serves as a director of Dynegy, Inc., AMX
Corporation, Walden Residential Properties, Inc., and Chancellor Media
Corporation.
CONTINUING DIRECTORS - TERM EXPIRING 2000
The current Class II directors of the Company, who are not standing for
re-election at the Meeting and whose terms will expire at the Company's Annual
Meeting of Shareholders in 2000, are as follows:
Sheldon R. Erikson (age 57). Mr. Erikson has served as a director of the
Company since 1995. Mr. Erikson has served as Chairman, President and Chief
Executive Officer of Cooper Cameron Corporation, a petroleum and industrial
equipment company, since January 1995 and has served as a director of such
corporation since March 1995. Mr. Erikson was the Chairman of the Board from
1988 and President and Chief Executive Officer from 1987 to 1995 of The Western
Company of North America, an oil and gas service company. Mr. Erikson is also a
director of Layne Christensen Company.
Thomas O. Hicks (age 53). Mr. Hicks has served as Chairman of the Board of
Directors of the Company since October 1998. Mr. Hicks is Chairman of the Board
and Chief Executive Officer of Hicks Muse. From 1984 to May 1989, Mr. Hicks was
Co-Chairman of the Board and Co-Chief Executive Officer of Hicks & Haas
Incorporated, a Dallas-based private investment firm. Mr. Hicks also serves as a
director of Capstar Broadcasting Corporation, Chancellor Media Corporation,
CorpGroup Limited, Group MVS, S.A. de C.V., Home Interiors & Gifts, Inc.,
International Home Foods, Inc., LIN Television Corporation, Olympus Real Estate
Corporation, Regal Cinemas, Inc., Sybron International Corporation, Cooperative
Computing, Inc. and Viasystems Group, Inc.
John R. Huff (age 53). Mr. Huff has served as a director of the Company
since 1995. Mr. Huff has served as President and Chief Executive Officer of
Oceaneering International, Inc., a company providing engineering and
intervention services primarily for underwater operations, since August 1986,
and as Chairman of Oceaneering International, Inc. since 1990. Mr. Huff is also
a director of BJ Services Company and Suncor Corp.
CONTINUING DIRECTORS - TERM EXPIRING 2001
The current Class III directors of the Company, who are not standing for
re-election at the Meeting and whose terms will expire at the Company's Annual
Meeting of Shareholders in 2001, are as follows:
Fitzgerald S. Hudson (age 74). Mr. Hudson has served as a director of the
Company since 1992. Mr. Hudson's principal occupation since 1991 has been his
position as general partner of Hudson Group Partners, a family investment
partnership. From 1990 to 1991 Mr. Hudson was Chairman of the construction
division of Willis Corroon, an insurance brokerage firm.
James C. Musselman (age 51). Mr. Musselman was elected director of the
Company in May 1998, and was elected Chief Executive Officer in October 1998.
Mr. Musselman has served as Chairman, President and Chief Executive Officer of
Avia Energy Development, LLC, a private company engaged in gas fractioning and
drilling, since September 1994. From June 1991 to September 1994, Mr. Musselman
was the President and Chief Executive Officer of Lone Star Jockey Club, LLC, a
company formed to organize a horse racetrack facility in Texas.
C. Lamar Norsworthy (age 52). Mr. Norsworthy has served as a director of
the Company since 1998. Mr. Norsworthy has served as Chairman of the Board and
Chief Executive Officer of Holly Corporation, an independent refiner of
petroleum and petroleum derivatives, since 1979 and also served as President of
that corporation from 1988 to 1995.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During 1998, the Board of Directors met or acted by written consent 13
times and each current director attended at least 75% of all Board and
applicable committee meetings.
The Board of Directors has an Executive Committee, which has the authority,
subject to restrictions imposed by Cayman Islands law and the Company's Articles
of Association, to act for the Board of Directors. Messrs. Musselman (Chairman),
Erikson, Furst and Hicks currently are members of the Executive Committee. The
Executive Committee did not meet during 1998.
The Board of Directors has an Audit Committee, whose functions include the
selection of the independent auditors, along with the review in conjunction with
the independent auditors of the plans and scope of the audit engagement. The
committee also reviews with the independent auditors the results of their
examination, approves the fee charged by the independent auditors and reviews
the Company's internal controls. Messrs. Winters (Chairman), Hudson, Norsworthy
and Vermillion currently are members of the Audit Committee. The Audit Committee
held four meetings during 1998.
The Board of Directors has a Compensation Committee, which reviews and
recommends the compensation to be paid to management and reviews, and interprets
and helps administer the various existing compensation plans of the Company.
Messrs. Hicks (Chairman), Furst, Huff, McMahon and Winters currently are members
of the Compensation Committee. The Compensation Committee held five meetings
during 1998.
The Board of Directors has a Nominating Committee, which is authorized by
the Board of Directors to recommend nominees for election to the Board of
Directors and nominees to fill additional directorships that may be created and
to fill vacancies that may exist on the Board of Directors. Messrs. Hicks
(Chairman), Furst, McMahon and Vermillion currently are members of the
Nominating Committee. The Nominating Committee held five meetings during 1998.
The Nominating Committee will consider nominees recommended by shareholders. See
"Shareholder Proposals."
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO THE STOCK PLAN
THE PLAN
The Company adopted the Stock Plan in August 1984 and the Company's
shareholders approved the amendment and restatement of the Stock Plan at the
Company's Annual Meeting of Shareholders in 1993. The Stock Plan offers two
distinct types of compensation - the purchase of Ordinary Shares through payroll
deductions (the "Share Purchase feature") and the grant of Ordinary Shares
subject to certain restrictions on transfer (the "Restricted Share feature"). At
March 25,1999, approximately 145 persons were eligible to participate in the
Stock Plan.
Share Purchase. Under the Share Purchase feature of the Stock Plan, the
Company makes semi-annual offerings (each an "Offering") to eligible employees
to purchase Ordinary Shares. The offering periods are from January 1 to June 30
and from July 1 to December 31 of each year (each an "Offering Period"). The
Share Purchase feature of the Stock Plan is intended to qualify as an "employee
stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Company expects that substantially all of the
additional shares would be issuable through the Share Purchase feature of the
Stock Plan.
Generally, any person who has been an employee of the Company for a
specified period of time prior to the commencement date of an Offering is
eligible to participate in the Share Purchase feature during that Offering
Period. No employee may be granted an option under the Share Purchase feature
which permits the employee's rights to purchase shares under all employee share
purchase plans (within the meaning of Section 423 of the Code) of the Company to
accrue at a rate that exceeds $25,000 of fair market value of the shares
(determined as of the grant date) for each calendar year. No employee may be
granted an option under the Share Purchase feature if the employee would own,
immediately after the grant of the option, shares possessing 5% or more of the
total combined voting power or value of all classes of shares of the Company.
Under the Share Purchase feature, participating employees purchase Ordinary
Shares through payroll deductions of up to 15% of their compensation (as defined
in the Stock Plan). The purchase price for the Ordinary Shares is 85% of the
market value of the shares on the first or last day of the Offering Period,
whichever is less. The "market value" is the closing price of the Ordinary
Shares as reported on the New York Stock Exchange. The closing price of the
Ordinary Shares on March 25, 1999, was $7 1/16 per share.
Restricted Shares. Under the Restricted Share feature of the Stock Plan,
the Company may grant to employees Ordinary Shares that are restricted with
respect to the sale or other disposition for a period of four years from the
date of grant ("Restricted Shares"). The Stock Plan is administered by the
Compensation Committee. Restrictions would lapse with respect to one-third of
the shares annually, beginning on the second anniversary of the date of grant.
If a participating employee dies or retires, the restrictions lapse. If a
participating employee is terminated, the Committee may, in its sole discretion,
waive the restrictions on the stock for any or all of the Restricted Shares.
Amendment. The Board of Directors of the Company has unanimously approved
the adoption of an amendment to the Stock Plan to increase the number of
Ordinary Shares issuable under the Stock Plan by 200,000 shares to a total of
300,000 shares and recommends that the shareholders vote for approval of the
amendment. The Company expects that substantially all of such shares would be
issuable through the Share Purchase feature of the Stock Plan.
SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE STOCK PLAN
Purchases of Ordinary Shares Pursuant to Share Purchase Feature. For
federal income tax purposes, an employee's right to participate in an Offering
is considered an option to purchase Ordinary Shares. As provided in Section 423
of the Code, a participant will not recognize taxable income on the grant of the
options or the purchase of shares, even though the shares are purchased at less
than fair market value. If a participant sells or otherwise disposes of the
shares within two years after the date of grant or within one year after the
date the shares were transferred to him under the Stock Plan, the disposition
will be a disqualifying disposition and the participant generally must recognize
ordinary compensation income equal to the excess of the fair market value of the
shares on the date of purchase over the actual purchase price. The Company is
entitled to a compensation deduction for this amount in the case of a
disqualifying disposition. If a participant sells or otherwise disposes of the
shares more than two years after the date of grant and more than one year after
the date the shares were transferred to him under the Stock Plan, the
participant must recognize ordinary income equal to the lesser of (i) the
amount, if any, by which the fair market value of the shares on the date of
grant exceeds the participant's actual purchase price or (ii) the excess, if
any, of the fair market value of the shares on the date of disposition over the
participant's actual purchase price. The Company is not entitled to a
compensation deduction for this amount.
The basis of any shares purchased pursuant to the Share Purchase feature of
the Stock Plan is the actual purchase price of the shares increased by the
amount of ordinary compensation income recognized by the participant. Any
further gain or loss from a disposition of the shares will be recognized by the
participant as long-term or short-term capital gain or loss depending upon the
holding period of the shares. For shares held for more than one year, the
participant will recognize long-term capital gain or loss upon the disposition.
Certain special rules apply if a participant dies while owning shares acquired
under the Stock Plan.
Grants of Restricted Shares. Unless a participant elects otherwise with
respect to the receipt of Restricted Shares under the Stock Plan, he must
recognize ordinary compensation income equal to the difference between the fair
market value of the shares and the amount paid, if any, for the shares, as of
the first date the participant's interest in the shares is no longer subject to
a substantial risk of forfeiture or such shares become transferable. A
participant's rights in Restricted Shares are subject to a substantial risk of
forfeiture if the rights to full enjoyment of the shares are conditioned,
directly or indirectly, upon the future performance of substantial services by
the participant. Where Restricted Shares are subject to a substantial risk of
forfeiture, the participant may elect to recognize ordinary compensation income
equal to the difference between the fair market value of the shares on the date
of receipt and the amount paid, if any, for the shares in the year of receipt.
To be effective, the election must be filed with the Internal Revenue Service
within 30 days after the date the shares are transferred to the participant.
Upon a participant's disposition of Restricted Shares acquired pursuant to the
Stock Plan, the participant will recognize gain or loss equal to the difference
between (i) the amount realized on the disposition and (ii) the sum of the
amount paid, if any, for the stock and the amount of ordinary compensation
income recognized by the participant. The gain or loss will be long-term or
short-term capital gain or loss depending upon the holding period of the shares.
For shares held for more than one year, the participant will recognize long-term
capital gain or loss upon the disposition.
ISSUANCES UNDER THE STOCK PLAN
Share Purchase. The following table sets forth certain information
regarding purchases of Ordinary Shares under the Stock Plan by the persons or
groups indicated since the plan's inception through January 1, 1999.
NAME OR GROUP (1) NUMBER OF SHARES PURCHASED
- ----------------- --------------------------
James C. Musselman --
A. E. Turner, III 2,462
Robert B. Holland, III 3,589
Peter Rugg 3,570
Thomas G. Finck 3,590
Nick G. De'Ath --
All current executive officers
as a group 9,621
All employees, including current
officers and executive officers,
as a group 139,563
(1) Non-employee directors are not eligible to purchase shares under the Share
Purchase feature of the Stock Plan.
Restricted Stock. Since the Restricted Stock Plan's inception, no grants of
Restricted Stock have been made to any director or executive officer of the
Company.
RECOMMENDATION. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED RESTRICTED STOCK PLAN.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS
The following table lists, as of March 1, 1999 (except as noted below), the
beneficial ownership of the Company's shares by (i) each person known to the
Company to own 5% or more of the outstanding Ordinary Shares and 8% Preference
Shares, (ii) each director of the Company, (iii) the Company's Chief Executive
Officer and each of the Company's three other most highly compensated executive
officers for 1998, (iv) Thomas G. Finck, the Company's former Chief Executive
Officer, and Nick De'Ath, the Company's former Senior Vice President,
Exploration, who resigned as executive officers of the Company during 1998, and
(v) the current directors and executive officers of the Company as a group. The
persons named in the table have sole voting and investment power with respect to
all capital shares owned by them, unless otherwise noted.
SHARES BENEFICIALLY OWNED
------------------------------------------------------------------------
ORDINARY SHARES 8% PREFERENCE SHARES
------------------------------------------------ ----------------------
PERCENT OF
NUMBER OF PERCENT OF NUMBER OF PERCENT OF TOTAL VOTING
BENEFICIAL OWNER SHARES (1) CLASS SHARES CLASS POWER
- ---------------- -------------------------- -------------------- ---------- ---------- ------------
<FN>
5% SHAREHOLDERS:
HM4 Triton 21,212,452 (2) 37.6% 4,937,363 98.7% 37.4%
c/o Hicks, Muse,
Tate & Furst
Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Barrow, Hanley, Mewhinney 4,929,430 (3) 13.4 --- --- 8.7
& Strauss, Inc.
One McKinney Plaza
3232 McKinney Avenue
15th Floor
Dallas, Texas 75204
DIRECTORS, EXECUTIVE OFFICERS
AND FORMER EXECUTIVE OFFICERS:
Thomas O. Hicks (4) 21,212,452 37.6 4,937,363 98.7 37.4
Sheldon R. Erikson 148,000 * --- --- *
Jack D. Furst --- --- --- --- ---
Fitzgerald S. Hudson 233,330 (5) * --- --- *
John R. Huff 104,000 (6) * 1,000 * *
Michael E. McMahon 106,000 * --- --- *
C. Lamar Norsw 65,000 * --- --- *
C. Richard Vermillion, Jr. 31,000 * --- --- *
J. Otis Winters 30,000 * --- --- *
James C. Musselman 28,300 * --- --- *
Robert B. Holland, III 430,426 1.2 --- --- *
Peter Rugg 314,564 * --- --- *
A. E. Turner, III 135,330 * --- --- *
Thomas G. Finck 5,554 (7) * --- --- *
Nick G. De'Ath 200,620 * --- --- *
All directors and executive
officers as a group (13
persons) 22,838,402 (8) 39.5 4,938,363 98.8 40.3
- --------------------------
* less than 1%
(1) Includes shares held for the account of the executive officers pursuant
to the Company's 401(k) savings plan, shares held by or for the benefit of wives
and minor children of directors and executive officers and entities in which
directors or executive officers hold a controlling interest, and includes the
number of shares indicated as follows that are issuable upon exercise of stock
options that are exercisable or exercisable within 60 days from March 26, 1999:
Mr. Erikson, 145,000 shares; Mr. Hudson, 115,000 shares; Mr. Huff, 85,000
shares; Mr. McMahon, 100,000 shares; Mr. Musselman, 15,000 shares; Mr.
Norsworthy, 30,000 shares; Messrs. Vermillion and Winters, 30,000 shares; Mr.
Holland, 417,500 shares; Mr. Rugg, 305,000 shares; Mr. Turner, 133,000 shares;
Mr. De'Ath, 200,000 shares; and all current directors and executive officers as
a group, 1,405,500 shares. Includes shares issuable upon exercise of options
owned by trusts and family partnerships established for the benefit of the
family members of certain directors and executive officers as to which such
directors and executive officers disclaim beneficial ownership.
(2) Includes an aggregate of 19,749,452 Ordinary Shares into which the
4,937,363 8% Preference Shares held by HM4 Triton could be converted.
(3) Based on a Schedule 13G filed with the Securities and Exchange
Commission dated February 12, 1999.
(4) Share ownership includes all of the shares beneficially owned by HM4
Triton. Mr. Hicks is a controlling person of the general partner of HM4 Triton
and as such, may be deemed to be the beneficial owner of the shares owned by HM4
Triton.
(5) Includes 65,740 shares held by partnerships in which Mr. Hudson owns a
1% interest and for which Mr. Hudson serves as general partner.
(6) The number of Ordinary Shares beneficially owned includes the 4,000
Ordinary Shares Mr. Huff could acquire by converting the 8% Preference Shares he
owns.
(7) As of December 31, 1998.
(8) Includes Ordinary Shares issuable upon conversion of 8% Preference
Shares. Excludes shares owned by Messrs. Finck and De'Ath.
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid or accrued for services rendered during 1998, 1997, and 1996 to the
Company's Chief Executive Officer and each of the Company's three other most
highly compensated executive officers who were executive officers at the end of
1998, based on salary and bonus earned during 1998. The table also includes
compensation information for Thomas G. Finck, the Company's former Chief
Executive Officer, and Nick De'Ath, the Company's former Senior Vice President,
Exploration, who resigned as executive officers of the Company during 1998.
LONG-TERM COMPENSATION
---------------------------------
AWARDS PAYOUTS
--------------------- ----------
ANNUAL COMPENSATION UNDERLYING
----------------------------------------- RESTRICTED OPTIONS/ ALL OTHER
NAME AND FISCAL OTHER ANNUAL STOCK SARS LTIP COMPENSATION
PRINCIAL POSITION YEAR SALARY($) BONUS($) COMPENSATION (1) AWARDS(S) (#)(2) PAYOUTS ($)
- ----------------- ------ ---------- ----------- ---------------- --------- ----------- ---------- ------------
James C. Musselman (3) 1998 132,000 ---- ---- ---- 315,000 ---- ----
Chief Executive Officer 1997 ---- ---- ---- ---- ---- ---- ----
1996 ---- ---- ---- ---- ---- ---- ----
A. E. Turner, III 1998 350,000 200,000 ---- ---- 203,000 ---- 16,337 (4)
Chief Operating Officer 1997 300,000 100,000 ---- ---- 75,000 ---- 14,547
1996 277,083 41,250 ---- ---- 75,000 ---- 13,620
Robert B. Holland, III 1998 370,976 200,000 ---- ---- 342,500 ---- 3,246,754 (5)
Executive Vice President, 1997 382,500 ---- ---- ---- 75,000 ---- 14,419
General Counsel and 1996 375,000 56,250 ---- ---- 99,750 ---- 13,692
Secretary
Peter Rugg 1998 357,000 226,775 ---- ---- 205,000 ---- 19,749 (6)
Senior Vice President and 1997 357,000 ---- ---- ---- 75,000 ---- 18,530
Chief Financial Officer 1998 350,000 52,500 ---- ---- 92,500 ---- 16,619
Thomas G. Finck 1998 413,117 ---- ---- ---- ---- ---- 317,047 (7)
Former Chairman of the 1997 647,700 ---- ---- ---- 125,000 ---- 24,132
Board and Chief Executive 1998 635,000 158,750 ---- ---- 162,500 ---- 22,771
Officer
Nick G. De'Ath 1998 165,750 ---- ---- ---- ---- ---- 156,398 (8)
Former Senior Vice 1997 306,000 ---- ---- ---- 75,000 ---- 15,104
President, Exploration 1996 302,083 45,000 ---- ---- 75,000 ---- 14,134
- --------------------------- ---- ------- ------- ---- ---- ------- ---- -------
- -----------------------------
(1) Excludes perquisites and other personal benefits if in total they do not
exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for the named executive officer.
(2) Options to acquire Ordinary Shares.
(3) Mr. Musselman was elected a director of the Company in May 1998 and
became Chief Executive Officer in October 1998. Compensation includes directors
fees aggregating $7,000 paid to Mr. Musselman while he was a non-employee
director (through October 1998).
(4) Consists of $9,600 in Company contributions to the Company's 401(k)
savings plan and $6,737 in respect of life insurance premiums for Mr. Turner's
benefit.
(5) Consists of (i) a $3,231,421 lump sum payment to Mr. Holland pursuant to
his employment agreement with the Company, which amount became payable upon the
appointment of Mr. Musselman as Chief Executive Officer of the Company and (ii)
$9,580 in Company contributions to the Company's 401(k) savings plan and $5,753
in respect of life insurance premiums for Mr. Holland's benefit. See " -
Employment Agreements" below.
(6) Consists of $9,600 in Company contributions to the Company's 401(k)
savings plan and $10,149 in respect of life insurance premiums for Mr. Rugg's
benefit.
(7) Consists of $296,868 paid in connection with Mr. Finck's resignation,
$9,600 in Company contributions to the Company's 401(k) savings plan and $10,579
in respect of life insurance premiums for Mr. Finck's benefit.
(8) Consists of $140,250 paid in connection with Mr. De'Ath's resignation,
$9,600.00 in Company contributions to the Company's 401(k) savings plan and
$6,548 in respect of life insurance premiums for Mr. De'Ath's benefit.
OPTION GRANTS IN 1998
The following table provides information regarding options granted to the
named executive officers and former executive officers in 1998 (excluding
options granted in January 1998 relating to performance during 1997).
INDIVIDUAL GRANTS
------------------------------------------------------------
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS/ ANNUAL RATES OF STOCK
SECURITIES SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN BASE PRICE -----------------------
GRANTED (#) FISCAL YEAR(2) ($/SH)(3) EXPIRATION DATE 0% 5%($) 10%($)
------------- -------------- ------------ --------------- ----- ------- ---------
James C. Musselman (4) 15,000 .7 42.50 5/12/2008 --- 400,920 1,016,011
300,000 13.3 14.50 12/2/2003 --- --- 88,968
A. E. Turner, III (5) 125,000 5.5 16.81 8/4/2003 --- 580,623 1,283,025
28,000 1.2 25.13 5/15/2005 --- --- 178,117
50,000 2.2 14.50 12/2/2003 --- --- 14,828
Robert B. Holland, III (6) 150,000 6.6 16.81 8/4/2003 --- 696,748 1,539,630
80,000 3.5 25.13 5/15/2005 --- --- 491,887
112,500 5.0 14.50 12/2/2003 --- --- 33,363
Peter Rugg (7) 125,000 5.5 16.81 8/4/2003 --- 580,623 1,283,025
80,000 3.5 25.13 5/15/2005 --- --- 491,887
Thomas G. Finck --- --- --- --- --- --- ---
Nick G. De'Ath --- --- --- --- --- --- ---
- ------------------------
(1) Under the rules of the Securities and Exchange Commission, the
"potential realizable value" of a stock option is calculated by assuming that
the market price of the underlying Ordinary Shares on the date the stock option
was granted appreciates at an annual compounded rate of 5% and 10%,
respectively, over the terms of the options, irrespective of the current price
of the Ordinary Shares. These numbers do not take into account provisions of
certain options providing for termination of the option following termination of
employment.
(2) Options are calculated as a percentage of the sum of all options granted
to employees in 1998 (excluding non-employee directors and options granted in
January 1998 to executive officers relating to 1997 compensation as reported in
the proxy statement for the 1998 Annual Meeting).
(3) The officer may pay an option's exercise price by delivering to the
Company Ordinary Shares he owns, by paying cash, or in any other form of valid
consideration or a combination of any of the foregoing, as determined by the
Compensation Committee. In the event of a change of control of the Company, any
unexercisable portions of options become immediately exercisable.
(4) The options granted to Mr. Musselman with an exercise price of $42.50
were granted upon his election to the Board as a non-employee director in May
1998 in accordance with the terms of the Company's stock option plan. These
options were immediately exercisable on the date of grant. The options granted
to Mr. Musselman with an exercise price of $14.50 have a term of five years and
vest one-third per year; provided that, if another individual is appointed
President or Chief Executive Officer of the Company, or if Mr. Musselman's
employment is terminated without cause, the options will become immediately
exercisable.
(5) The options granted to Mr. Turner with an exercise price of $16.81
provide for vesting in one-third increments. The options with an exercise price
of $25.13 were immediately exercisable on the date of grant and expire as to
12,000 shares on April 14, 2004 and as to the remaining shares on May 15, 2005.
Of the 50,000 options with an exercise price of $14.50, 10,000 were immediately
exercisable on the date of grant and the remaining options vest one-third per
year.
(6) The options granted to Mr. Holland with an exercise price of $16.81
provided for vesting in one-third increments. The options granted to Mr. Holland
with an exercise price of $25.13 were immediately exercisable on the date of
grant and were to expire as to 40,000 shares on April 14, 2004 and as to the
remaining shares on May 15, 2005. The options granted to Mr. Holland with an
exercise price of $14.50 were immediately exercisable on the date of grant.
Pursuant to Mr. Holland's employment agreement, upon the change of Mr. Holland's
title from Chief Executive Officer to Chief Operating Officer, the options with
an exercise price of $16.81 became immediately vested, and all options are to
remain exercisable for one year after the termination of Mr. Holland's
employment, provided that Mr. Holland's options will be exercisable for five
years after the termination of his employment if he remains with the Company
through June 1999. See " - Employment Agreements" below.
(7) The options granted to Mr. Rugg with an exercise price of $16.81 provide
for vesting in one-third increments. The options granted to Mr. Rugg with an
exercise price of $25.13 were immediately exercisable on the date of grant and
expire as to 40,000 shares on April 14, 2004 and as to the remaining shares on
May 15, 2005.
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
The following table provides information related to the number and value of
options held by the named executive officers and former executive officers at
December 31, 1998. No executive officers exercised options during 1998.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES AT FY-END (#) AT FY-END ($)(1)
ACQUIRED ON VALUE --------------------------- --------------------------
EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ ----------- ------------ ------------- ----------- -------------
James C. Musselman ---- ---- 15,000 300,000 $ ---- $ ----
A. E. Turner, III ---- ---- 133,000 165,000 ---- ----
Robert B. Holland, III ---- ---- 417,500 ---- ---- ----
Peter Rugg ---- ---- 305,000 125,000 ---- ----
Thomas G. Finck ---- ---- ---- ---- ---- ----
Nick G. De'Ath ---- ---- 200,000 ---- ---- ----
(1) Value at fiscal year end is calculated based on the difference between
the option exercise price and the closing market price of the Ordinary Shares at
December 31, 1998, multiplied by the number of shares to which the option
relates. On December 31, 1998, the closing price was $7 15/16.
PENSION PLAN TABLE
The following table lists estimated annual benefits payable upon retirement
under the Company's Retirement Income Plan ("Retirement Plan"), including
amounts attributable to the Company's Supplemental Executive Retirement Plan
("SERP"), to participants with varying average earnings levels and years of
service.
YEARS OF CREDITED SERVICE
------------------------------------------------
REMUNERATION 10 15 20 25 30
- ------------- -------- -------- -------- -------- --------
350,000 $158,896 $159,911 $160,926 $161,941 $162,956
450,000 208,896 209,911 210,926 211,941 212,956
500,000 233,896 234,911 235,926 236,941 237,956
550,000 258,896 259,911 260,926 261,941 262,956
600,000 283,896 284,911 285,926 286,941 287,956
650,000 308,896 309,911 310,926 311,941 312,956
700,000 333,896 334,911 335,926 336,941 337,956
750,000 358,896 359,911 360,926 361,941 362,956
800,000 383,896 384,911 385,926 386,941 387,956
Payments made under the Retirement Plan and SERP are based on years of
service and annual earnings. Salary and wages are included in the calculation of
average earnings, but bonuses, overtime, severance pay and fringe benefits are
excluded. The SERP generally provides that a participant may elect to receive
benefits under the SERP in equal monthly installments over a period of 20 years.
The Company has purchased life insurance to fund a portion of its obligations
under the SERP.
Under the Retirement Plan, the benefit a participant is entitled to receive
at his normal retirement date (age 65) is equal to .8% of his average monthly
compensation multiplied by his years of service, not to exceed 30 years, plus
.65% of his excess average monthly compensation multiplied by his years of
service, not to exceed 30 years. The Retirement Plan also provides an optional
early retirement benefit under which a participant may qualify for a reduced
pension after reaching age 55 and the completion of five years of service.
The SERP provides supplemental retirement benefits to selected employees.
The benefit levels under the SERP upon normal (age 60) or early retirement are
based on the participant's final average compensation at retirement reduced by
the participant's accrued benefit under the Retirement Plan and further reduced
by the participant's primary Social Security benefits. The offset for Social
Security does not apply to any benefit payable before a participant reaches the
age of 62. The normal retirement benefit is 50% of average compensation less
100% of anticipated social security less the Retirement Plan benefit multiplied
by the accrual percentage. The accrual percentage is 10% for each completed year
of service up to 100%. In the event of a change in control, the participant will
become fully accrued in the SERP benefit, the benefit will be distributed as a
lump sum, and the participant will receive an additional payment as a "gross-up"
to cover tax liabilities such that the net lump sum benefit is retained by the
participant.
For 1998, the remuneration included in the computation of annual earnings
under the Retirement Plan and the SERP for each of the executive officers named
in the Summary Compensation Table was as follows: A. E. Turner, III, $350,000;
Robert B. Holland, $371,000; Peter Rugg, $357,000; Thomas G. Finck, $710,000;
and Nick G. De'Ath, $306,000. Mr. Musselman is not yet a participant in the
Retirement Plan and has not yet accrued any benefit under the SERP. The years of
credited service under the Retirement Plan and the SERP for each of those
individuals were as follows: James C. Musselman, 0; A. E. Turner, III, 5; Robert
B. Holland, 6; Peter Rugg, 5; Thomas G. Finck, 6; and Nick G. De'Ath, 5.
Pursuant to Mr. Holland's employment agreement, following the change of
Mr. Holland's title from Chief Executive Officer to Chief Operating Officer in
October 1998, the Company paid to Mr. Holland an amount equal to the lump sum
payment to which he would have been entitled under the SERP had a change in
control as defined in the SERP occurred. This payment was in lieu of any further
rights Mr. Holland might have under the SERP.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
General. The Compensation Committee of the Board of Directors of the
Company is composed of non-employee directors. The Compensation Committee, as
part of its review and consideration of executive compensation, takes into
account, among other things, the following goals:
- - Provision of incentives and rewards that will attract and retain highly
qualified and productive people;
- - Motivation of employees to high levels of performance;
- - Differentiation of individual pay based on performance;
- - Ensuring external competitiveness and internal equity; and
- - Alignment of Company, employee and shareholder interests.
The principal components of executive compensation are base pay,
discretionary bonus, and long-term incentives in the form of stock options.
Executive compensation also includes various benefit and retirement programs.
Each element has a somewhat different purpose and all of the determinations of
the Compensation Committee regarding the appropriate form and level of executive
compensation, including the compensation of the Chief Executive Officer,
historically have been negotiated with newly retained executives and thereafter
reviewed and adjusted based on the Compensation Committee's ongoing assessment
and understanding of the oil and gas business and the Company's relative
position in that business, and the Company and the Company's executive officers.
Management Compensation for 1998
Two significant changes in management occurred in 1998. In July 1998, on
the same day that the Company announced that it had entered into an agreement to
sell one-half of the shares of the subsidiary that holds the Company's interest
in Block A-18 in the Gulf of Thailand, the Company announced the resignation of
Thomas G. Finck as Chairman and Chief Executive Officer and a plan to
restructure the Company's operations, reduce overhead costs and substantially
scale back exploration-related capital expenditures. In addition, in September
1998, the Company consummated the first stage of a $350 million equity infusion
led by Hicks Muse. Both of these events led to significant changes at the Board
of Directors level and at the senior management level, which, in turn,
influenced decisions regarding the compensation of the Company's executive
officers.
Management Changes in July 1998. In July 1998, following the resignation of
Mr. Finck as Chairman and Chief Executive Officer, Mr. Erikson was named
Chairman of the Board and Mr. Holland was named interim Chief Executive Officer.
The July change in management was accompanied by the announcement of a plan
to restructure the Company's operations, reduce overhead costs and substantially
scale back exploration-related capital expenditures. The plan included staff
reductions, branch office closings and the sale of the Company's remaining
corporate aircraft. In an effort to retain the remaining members of the senior
management team, Messrs. Holland, Rugg and Turner, to see the Company through
this transition period, the Board of Directors approved several changes in their
compensation:
- - The Company paid each of the above executive officers a retention bonus of
$200,000, which bonuses were to vest in equal quarterly installments over a
one-year period. Any unvested portion of the bonus would have been required to
be repaid if the officer voluntarily terminated his employment (without good
reason), or if he was terminated for cause, but any unvested portion would
become vested if a change of control occurred, if the Company terminated his
employment without cause, or if he terminated his employment for good reason.
- - The Company amended the employment agreement with each such executive
officer to add a severance benefit in the event of a termination of employment
prior to a change in control and to reduce the level of ownership change that
would trigger a change in control from 25% to 15%.
- - The Company granted such executive officers stock options (i) at an
exercise price of $16 13/16 (150,000 to Mr. Holland and 125,000 to each of
Messrs. Rugg and Turner) with a five year term that would vest upon a
termination by the Company of his employment without cause or by the officer
with good reason and (ii) at an exercise price of $25 1/8 (80,000 to Messrs.
Holland and Rugg and 28,000 to Mr. Turner).
At this time, the Board Directors approved the establishment of a committee
to begin a search for a new Chief Executive Officer.
Management Changes in Late 1998. In August 1998, the Company and HM4 Triton
entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") that
provided for a $350 million equity investment in the Company. The investment was
effected in two stages, the first of which was consummated in September 1998 and
which resulted in the issuance of 1,822,500 shares of 8% Preference Shares to
HM4 Triton. Pursuant to a Shareholders Agreement (the "Shareholders Agreement")
entered into with HM4 Triton at the time of the first closing, the size of the
Company's Board of Directors was reduced from eleven to ten directors, five
directors resigned, and four directors designated by HM4 Triton were elected to
the Board. In addition, in October 1998, Mr. Hicks replaced Mr. Erikson as
Chairman of the Board, with Mr. Erikson remaining as a director, and Mr.
Musselman replaced Mr. Holland as Chief Executive Officer, with Mr. Holland
remaining as Chief Operating Officer. Furthermore, the composition of the
Compensation Committee changed, with Mr. Hicks replacing Mr. Huff as Chairman of
the Committee and Messrs. Furst and Winters being elected to the Committee.
As a result of the first closing in September 1998, HM4 Triton became the
beneficial owner of more than 15% of the Company's outstanding voting
securities, and a change in control was deemed to have occurred for the purposes
of the executive officers' bonus and employment agreements, resulting in the
retention bonuses becoming vested. In addition, upon the replacement of Mr.
Holland as Chief Executive Officer by Mr. Musselman, Mr. Holland became entitled
to receive certain change of control benefits under his employment agreement and
his unvested options became vested.
Upon electing Mr. Musselman Chief Executive Officer in October 1998, the
Compensation Committee established Mr. Musselman's 1998 salary at $500,000 and,
in December 1998, approved the grant to Mr. Musselman of 300,000 stock options
at an exercise price of $14.50 per share, which was greater than the share price
on the date of grant. This package was the result of negotiations with Mr.
Musselman to induce him to accept the additional responsibilities of Chief
Executive Officer and to provide a significant incentive to increase the value
of the Company.
Compensation Committee Members. This report is submitted by the members of
the Compensation Committee of the Board of Directors:
Thomas O. Hicks (Chairman)
Jack D. Furst
John R. Huff
Michael E. McMahon
J. Otis Winters
COMPENSATION COMMITTEE REPORT ON OPTION REPRICING
On December 2, 1998, the Compensation Committee approved the grant of new
stock options with an exercise price of $14.50 to substantially all of its
employees. Each participating employee was granted options in an amount equal to
one-half of any options then held by the employee with an exercise price greater
than $30.00 per share and the options with an exercise price greater than $30.00
per share expired.
The Compensation Committee continues to believe that an emphasis on equity
compensation is in the best interests of shareholders because it more closely
aligns management and shareholder interests and maximizes the availability of
cash for significant capital expenditures. The Compensation Committee further
believes that, at their original exercise prices, the disparity between the
exercise price of the stock options with an exercise price over $30.00 and the
then market price for the Ordinary Shares did not provide meaningful incentives
to the employees holding the options. However, the Compensation Committee took
into account the effect of the low market price on all shareholders, and the
fact that the Company had just offered to the public an opportunity to purchase
8% Preference Shares with a conversion price of $17.50 per ordinary share, and
established the exercise price of the new stock options at $14.50 per share,
when the closing price of the Ordinary Shares as reported on the New York Stock
Exchange Composite Tape on that date was $9 3/16 per share. The Committee
believes that the grant of the new stock options with an exercise price higher
than the market price struck an appropriate balance between the need to provide
incentives to employees to enhance the performance of the Company and the desire
to address potential shareholder concerns.
The following table sets forth certain information concerning the repricing
of stock options held by the named executive officers and former executive
officers in December 1998:
TEN-YEAR OPTION REPRICINGS
NUMBER OF LENGTH OF
SECURITIES MARKET ORIGINAL
UNDERLYING PRICE OF EXERCISE OPTION TERM
NUMBER OF STOCK AT PRICE AT REMAINING AT
OPTIONS TIME OF TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
NAME DATE (1) (#) ($) ($) ($) (IN MONTHS)
- ---------------------- -------- ------------ ------------- ------------- --------- -------------
James C. Musselman --- --- --- --- --- ---
A. E. Turner, III 12/2/98 20,000 9.19 33.25 14.50 70
Robert B. Holland, III 12/2/98 100,000 9.19 32.25 14.50 58
75,000 9.19 32.50 14.50 49
50,000 9.19 33.25 14.50 70
Peter Rugg --- --- --- --- --- ---
Thomas G. Finck --- --- --- --- --- ---
Nick G. De'Ath --- --- --- --- --- ---
- ---------------------
(1) Does not include the grant of options in August 1998 to each of Messrs.
Turner, Holland and Rugg to purchase Ordinary Shares at an exercise price of
$16.81, the closing price of the Ordinary Shares on that date. In July 1998,
each of Messrs. Turner, Holland and Rugg executed amended and restated
employment agreements pursuant to which, among other things, any options held by
such officers with an exercise price greater than $39.00 were amended so as to
expire on December 1, 1998. Pursuant to the amended and restated employment
agreements, on December 1, 1998, 115,000 options held by Mr. Turner, 159,750
options held by Mr. Holland and 202,500 options held by Mr. Rugg expired.
Compensation Committee Members. This report is submitted by the members of
the Compensation Committee of the Board of Directors:
Thomas O. Hicks, Chairman
Jack D. Furst
John R. Huff
Michael E. McMahon
J. Otis Winters
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's Ordinary Shares during the five years
ended December 31, 1998 with (i) the cumulative total return on the S&P 500
Index and (ii) a peer group of certain oil and gas exploration and development
companies selected by the Company. The peer group selected by the Company
consists of Anadarko Petroleum Corporation, Apache Corporation, Burlington
Resources Inc., Enron Oil & Gas Company, Mesa Inc. (through August 7, 1997),
Oryx Energy Company, Pioneer Natural Resources Company (beginning August 8,
1997), Santa Fe Energy Resources, Inc., Seagull Energy Corporation and Union
Texas Petroleum Holdings, Inc. (through June 29, 1998). The comparison assumes
$100 was invested on December 31, 1993 in the Company's Ordinary Shares and in
each of the foregoing indices and assumes reinvestment of dividends.
The returns of each issuer in the foregoing group have been weighted
according to the respective issuer's stock market capitalization as of the
beginning of each period.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Based on reinvestment of $100 beginning December 31, 1993
CUMULATIVE TOTAL RETURN
Triton Energy Ltd. S&P 500-Registerd Trademark Custom Composite Index
Dec-93 $ 100 $ 100 $ 100
Dec-94 113 101 88
Dec-95 190 139 104
Dec-96 161 171 130
Dec-97 97 229 122
Dec-98 26 294 90
EMPLOYMENT AGREEMENTS
In connection with the July 1998 change in management, the Company entered
into amended and restated Employment Agreements with Messrs. Turner, Holland and
Rugg. Mr. Turner currently is the only executive officer whose employment
agreement remains in effect. Among other provisions, the agreement provides that
the executive officer would be entitled, subject to certain conditions, to
receive certain benefits in the event of the termination of his employment. If,
following a change of control, the executive officer is terminated for a reason
other than (a) his death, disability or retirement, (b) for cause, or (c) his
voluntary termination other than for good reason, the executive officer would be
entitled to receive a lump sum severance payment equal to the sum of the
following amounts: (i) three times the sum of (x) the highest annual base salary
in any of the three preceding years, (y) the highest of the aggregate bonuses in
any of the preceding three years and (z) the highest of the contributions made
by the Company on the executive officer's behalf in respect of the Company's
401(k) plans in any of the three preceding years; (ii) an amount equal to the
lump sum payment to which the executive officer would be entitled under the SERP
in the event of a change in control as defined in the SERP (in lieu of further
payments under the SERP); (iii) certain relocation and indemnity payments; (iii)
the present value of the difference in retirement benefit to which such officer
would have been entitled if he would have accumulated three additional years of
service after the date of termination; and (iv) in the event the executive
officer is subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, as a result of the change of control, an
additional "gross-up" amount such that, after payment of such excise tax, and
any other taxes on such additional amount, the officer would be entitled to a
net amount equal to the amounts set forth in the agreement. In addition, in the
event of a change of control, the executive officer's options would be fully
vested and would remain outstanding for one year from the date of termination
and the executive officer would be entitled to the lump sum payment under the
SERP in the event of a change in control as defined in that plan. The new
agreements also added a severance benefit in the event the officer was
terminated without cause, or for good reason, prior to a change in control. In
the event of such a termination prior to a change in control, the officer would
be entitled to the following benefits: (a) salary for eighteen months following
the date of termination and (b) any stock options would become fully vested and
remain exercisable for one year.
As a result of the sale of the 1,822,500 8% Preference Shares to HM4
Triton, a change in control was deemed to have occurred for the purposes of
these amended and restated agreements. Upon the change of Mr. Holland's title
from Chief Executive Officer to Chief Operating Officer in October 1998, Mr.
Holland became entitled to the benefits provided in the event of a change in
control. In December 1998, the Company and Mr. Holland entered into an agreement
pursuant to which he was paid the amounts called for under his Employment
Agreement described in clauses (i) and (ii) in the preceding paragraph. In
addition, under this agreement, the Company agreed that if Mr. Holland remains
with the Company for six months (for no base salary), his stock options will
remain exercisable for five years from the date of termination of his
employment.
In December 1998, the Company and Mr. Rugg entered into an agreement that
replaced his employment agreement. Under this revised agreement, if Mr. Rugg's
employment is terminated any time, for any reason other than for cause, the
Company will pay him $1 million as severance, and a lump sum equal to the net
present value of his benefits under the SERP that are vested by years of
service. In addition, if, upon termination, Mr. Rugg agrees to enter into a six
month consulting agreement and an agreement not to compete, the Company will pay
him an additional amount that when added to the amounts provided in the
preceding sentence would equal $2 million. As additional compensation for the
consulting services and agreement not to compete, all options held by Mr. Rugg
at the time of termination will become exercisable and remain outstanding for
three years after termination.
Effective July 1998, Mr. Finck resigned as Chairman and Chief Executive
Officer of the Company. The Company and Mr. Finck entered into a severance
agreement pursuant to which the Company agreed to pay him his annual base salary
for one year. In addition, effective July 1998, Mr. De'Ath resigned as Senior
Vice President, Exploration of the Company. The Company and Mr. De'Ath entered
into an agreement pursuant to which the Company agreed to pay Mr. De'Ath's
salary and maintain his employment benefits until December 31, 1999, and to
provide certain other benefits thereafter until December 31, 2001.
DIRECTORS' COMPENSATION
Stock and Cash Remuneration. Directors of the Company are not entitled to
receive an annual cash stipend, but instead each non-employee director may elect
to receive either (i) 1,000 Ordinary Shares (which shares could not be
transferred for twelve months) and nonqualified stock options to purchase 10,000
Ordinary Shares or (ii) nonqualified stock options to purchase 15,000 Ordinary
Shares. The stock options issuable pursuant to this election have an exercise
price equal to the closing price of the Ordinary Shares on the date of grant,
are fully exercisable upon issuance and have a ten-year term. In accordance with
the plan, in January 1999, each of Messrs. Erikson, Hudson, Huff, McMahon,
Norsworthy, Vermillion and Winters elected to receive nonqualified stock options
to purchase 15,000 Ordinary Shares, which had an exercise price of $6 15/16. In
addition, in accordance with the plan, each of Messrs. Vermillion and Winters
was granted a nonqualified stock option to purchase 15,000 Ordinary Shares,
which had an exercise price of $6 15/16, in connection with his initial election
to the Board. Each non-employee director is also entitled to receive $1,000 (or,
$2,000 in the case of the committee chairmen) for each board or committee
meeting attended. Members of the Board of Directors are also reimbursed for
travel expenses to meetings of the Board of Directors and its committees.
Pursuant to the Shareholders Agreement between HM4 Triton and the Company
entered into at the time of HM4 Triton's initial investment in the Company,
Messrs. Hicks and Furst are not entitled to compensation as directors of the
Company.
In connection with their resignation from the Board in September 1998, the
Board extended the expiration date of the stock options and stock appreciation
rights held by each of Messrs. Ernest E. Cook, Jesse E. Hendricks, Thomas P.
Kellogg, Jr., John P. Lewis and Edwin D. Williamson from one year to five years.
Retirement Plan for Directors. The Company has a retirement plan for
non-employee directors. In order to be eligible, a director must have served as
an outside director for at least five years or, if a director has served less
than five years, (i) have had his service on the board as an outside director
terminated due to death or disability or (ii) have a change of control of the
Company occur while he was a director. The annual benefit under the retirement
plan is $25,000, payable quarterly and commencing at the beginning of the
Company's fiscal quarter next following the later of the date on which a
director (i) attains age 65 or (ii) retires from the Board of Directors. If a
director retires from the board due to his death or disability, the payments to
the director or his estate will commence at the beginning of the Company's next
fiscal quarter. The payment of benefits continue for a period equal to the
number of years, rounded upwards to the nearest six months, during which such
director served as an outside director, but not more than ten years. The Company
may elect in its discretion to pay a retired director, with the consent of such
director or his estate, a lump sum.
Stock Appreciation Rights Plan. The Company has a stock appreciation rights
plan (the "SAR Plan"). Under the SAR Plan, Stock Appreciation Rights ("SARs")
equivalent to 200,000 Ordinary Shares may be granted from time to time to
non-employee directors of the Company. The Board of Directors has no current
intention to grant any additional SARs under the SAR Plan.
A holder of an SAR, upon exercise, will receive in cash the difference
between the SAR's Price and the fair market value of the Ordinary Shares on the
date of exercise. The "SAR's Price" is established by the Board of Directors at
the time the SARs are granted, at a price not less than the fair market value of
the Ordinary Shares on the date of grant. SARs generally become exercisable over
two years. The form of SAR Agreement also provides that in the event of a change
of control all SARs would automatically be accelerated and exercisable in full.
The period during which an SAR may be exercised is specified in the Stock
Appreciation Rights Agreement (the "SAR Agreement"). In any event, such period
shall terminate at the earliest of (i) the expiration of 10 years from the date
of grant, (ii) the expiration of three months from the date on which the holder
terminates his membership on the Board of Directors except by reason of death or
disability, or (iii) the expiration of 12 months after the holder's membership
on the Board of Directors is terminated by reason of his death or disability.
During 1998, none of the Company's current directors exercised SARs.
CERTAIN TRANSACTIONS
Transactions with HM4 Triton and its Affiliates
In August 1998, the Company and HM4 Triton entered into the Stock Purchase
Agreement which provided for a $350 million equity investment in the Company.
The investment was effected in two stages. At the closing of the first stage in
September 1998 (the "First Closing"), the Company issued to HM4 Triton 1,822,500
8% Preference Shares for $70 per share (or an aggregate purchase price of
$127,575,000). Pursuant to the Stock Purchase Agreement, the second stage was
effected through a rights offering for 3,177,500 shares of 8% Preference Shares
at $70 per share, with HM4 Triton being obligated to purchase any shares not
subscribed for. At the closing of the second stage, which occurred in January
1999 (the "Second Closing"), the Company issued to HM4 Triton an additional
3,114,863 8% Preference Shares. Prior to the Second Closing, the Company
declared and paid a dividend accrued in respect of the 8% Preference Shares
outstanding immediately prior to the Second Closing, which amounted to
approximately $2.7 million.
At the First Closing, the Company entered into the Shareholders Agreement
with HM4 Triton and a Financial Advisory Agreement (the "Financial Advisory
Agreement") and a Monitoring and Oversight Agreement (the "Monitoring
Agreement") with Hicks, Muse & Co. Partners, L.P. ("Hicks Muse Partners").
Messrs. Hicks and Furst are owners of the general partner of Hicks Muse
Partners.
The Shareholders Agreement provides that, subject to the following
paragraph, so long as the entire Board of Directors of the Company consists of
ten members, HM4 Triton (and its designated transferees, collectively) may
designate four nominees for election to the Board and the Company is obligated
to cause HM4 Triton's designees to be nominated for election. Immediately prior
to the First Closing, Messrs. Cook, Hendricks, Kellogg, Lewis and Williamson
resigned from the Board. Following the First Closing, the Board reduced the
number of directors from eleven to ten and HM4 Triton designated, and the Board
elected, Messrs. Hicks, Furst, Vermillion and Winters to the Board to fill the
four vacancies. Pursuant to the Shareholders Agreement, HM4 Triton has
designated Messrs. Furst, Vermillion and Winters for nomination for election at
the Meeting.
The right of HM4 Triton (and its designated transferees) to designate
nominees for election to the Board will be reduced if the number of Ordinary
Shares (assuming conversion of any 8% Preference Shares into Ordinary Shares)
held by HM4 Triton and its affiliates is reduced as set forth below:
Ownership of Ordinary Shares
(including 8% Preference Number of directors
Shares on an as entitled to be designated
converted basis)(approx.) for nomination
- ------------------------------- -------------------------
> 14.8 million 4
- -
< 14.8 million, but > 9.9 million 3
-
< 9.9 million, but > 4.9 million 2
-
< 4.9 million, but > 197,500 1
_
< 197,500 0
So long as HM4 Triton is entitled to designate one nominee for director,
the Company is required to cause at least one HM4 Triton director to be a member
of each committee of the Board.
The Shareholders Agreement also provides that so long as HM4 Triton and its
affiliates continue to hold at least approximately 9.9 million Ordinary Shares
(assuming conversion of any 8% Preference Shares held by HM4 Triton and its
affiliates into Ordinary Shares), or shares representing in the aggregate at
least 10% of the outstanding Ordinary Shares (assuming the conversion or
exchange of all outstanding convertible or exchangeable securities of the
Company), the Company may not take certain actions without the consent of HM4
Triton, including the following: (i) amend its Articles of Association or the
terms of the 8% Preference Shares with respect to the voting powers, rights or
preferences of the holders of 8% Preference Shares, (ii) merge or enter into a
similar business combination transaction or effect any reorganization,
recapitalization or other transaction pursuant to which a majority of the
outstanding Ordinary Shares or any 8% Preference Shares are exchanged for
securities, cash or other property, (iii) authorize, create or modify the terms
of any series of securities ranking prior to or pari passu with the 8%
Preference Shares and certain series of securities ranking junior to the 8%
Preference Shares, (iv) sell, lease or otherwise dispose of assets comprising in
excess of 50% of the market value of the Company and its subsidiaries or
dissolve, liquidate or terminate the Company, (v) pay dividends on Ordinary
Shares or other shares ranking junior to the 8% Preference Shares, other than
regular dividends on the Company's 5% Preference Shares, (vi) incur, assume,
guarantee or otherwise become liable for additional indebtedness, or issue any
preferred stock, unless the Company's leverage ratio is less than 2.5 to 1,
subject to certain exceptions, (vii) issue additional shares of 8% Preference
Shares, other than in payment of accumulated dividends on the outstanding 8%
Preference Shares, (viii) issue any shares of a class ranking equal or senior to
the 8% Preference Shares, (ix) commence any tender offer or exchange offer for
all or any portion of the Ordinary Shares or (x) decrease the number of shares
designated as 8% Preference Shares.
In the Shareholders Agreement, the Company has granted to HM4 Triton and
persons to whom it transfers it shares certain rights to require the Company to
file a registration statement with the Securities and Exchange Commission to
permit them to freely sell the 8% Preference Shares and Ordinary Shares they
then own (together, the "Registrable Shares"). The Shareholders Agreement
provides that, beginning September 30, 1999, one or more holders of Registrable
Shares may (subject to customary "black-out" periods) require the Company to
effect up to five registrations under the Securities Act of 1933, as amended
(the "Securities Act"), if the Registrable Shares proposed to be sold represent
more than 20% of the then outstanding Registrable Shares. The Shareholders
Agreement also provides certain "piggyback" registration rights to the holders
of Registrable Shares whenever the Company proposes to register an offering of
any of its capital stock under the Securities Act (including on behalf of any
shareholder of the Company other than a holder of Registrable Shares), subject
to certain exceptions. In addition, the Shareholders Agreement contains
customary provisions regarding the payment of holders' expenses relating to
offerings by the Company in connection with the exercise of registration rights
and regarding indemnification of the Company and the holders of Registrable
Shares for certain securities law violations.
Pursuant to the Financial Advisory Agreement, the Company paid Hicks Muse
Partners transaction fees aggregating approximately $13.9 million for services
as financial advisor to the Company in connection with the transactions
contemplated by the Stock Purchase Agreement. The Financial Advisory Agreement
designates Hicks Muse Partners as the Company's exclusive financial advisor in
connection with any Sale Transaction (defined below) unless Hicks Muse Partners
and the Company agree to retain an additional financial advisor in connection
with any particular Sale Transaction. The Financial Advisory Agreement requires
the Company to pay a fee to Hicks Muse Partners in connection with any Sale
Transaction (unless the Chief Executive Officer of the Company elects not to
retain a financial advisor) in an amount equal to the lesser of (i) the fees
then charged by first-tier investment banking firms for similar advisory
services rendered in similar transactions or (ii) 1.5% of the Transaction Value
(as defined in the Financial Advisory Agreement); provided that the fee will be
divided equally between Hicks Muse Partners and any additional financial advisor
that the Company and Hicks Muse Partners agree will be retained by the Company
with respect to any such transaction. A "Sale Transaction" is defined as any
merger, sale of securities representing a majority of the combined voting power
of the Company, sale of assets of the Company representing more than 50% of the
total market value of the assets of the Company and its subsidiaries or other
similar transaction. The Company is also required to reimburse Hicks Muse
Partners for reasonable disbursements and out-of-pocket expenses Hicks Muse
Partners incurs in connection with its advisory services.
Pursuant to the Monitoring Agreement, Hicks Muse Partners will provide
financial oversight and monitoring services as requested by the Company and the
Company will pay to Hicks Muse Partners an annual fee of $500,000, payable in
quarterly installments. In addition, the Company will reimburse Hicks Muse
Partners for reasonable disbursements and out-of-pocket expenses incurred by
Hicks Muse Partners or its affiliates for the account of the Company or in
connection with the performance of its services.
The Financial Advisory and Monitoring Agreements will remain in effect
until the earlier of (i) September 30, 2008 or (ii) the date on which HM4 Triton
and its affiliates cease to beneficially own at least 5% of the Company's
outstanding Ordinary Shares (determined after giving effect to the conversion of
all 8% Preference Shares held by HM4 Triton and its affiliates). The Company has
agreed to indemnify Hicks Muse Partners with respect to liabilities incurred as
a result of Hicks Muse Partners' performance of services for the Company
pursuant to the Financial Advisory Agreement and the Monitoring Agreement.
As required by the Stock Purchase Agreement, the Company caused its
directors' and officers' liability insurance policies to provide coverage for
HM4 Triton and its affiliates with respect to any claims brought against HM4
Triton and its affiliates relating to any act or omission of any director of the
Company in his or her capacity as a director of the Company. The Company is
required to maintain this coverage for so long as HM4 Triton is entitled to
nominate any members of the Board of Directors of the Company.
The Company is a party to a lease that provides it with the use of a
hunting facility in Texas for business purposes. From time to time, the Company
permits Hicks Muse to use the facility, and Hicks Muse reimburses the Company
for the pro rata part of the related costs. For the period from November 1998
through February 1999, Hicks Muse's pro rata part of these costs amounted to
approximately $97,000.
Exchange of Convertible Debentures
Under the Company's Amended and Restated Convertible Debenture Plan,
executive officers of the Company have from time to time purchased from the
Company debentures convertible into Ordinary Shares at a conversion price equal
to the market value of the Ordinary Shares at the date of purchase. The
consideration for the convertible debentures given by each executive officer was
a personal promissory note payable to the Company in a principal amount equal to
the principal amount of the convertible debentures purchased. In August 1998,
the Company agreed with each of its executive officers to exchange the Company's
interest in the officer's note for the officer's interest in the convertible
debentures. As a result, all such debentures were cancelled. In connection with
his severance from the Company, the Company redeemed the convertible debentures
held by Mr. Finck in accordance with their terms. Prior to the exchange of the
convertible debentures for the notes, the Company and the executive officers
were each indebted to the other in the amounts set forth below, which equal the
greatest amount of such indebtedness outstanding during 1998.
PRINCIPAL
AMOUNT OF
NAME INDEBTEDNESS
- ---- -------------
A. E. Turner, III $ 985,500
Robert B. Holland, III 2,715,000
Peter Rugg 2,715,000
Thomas G. Finck 3,217,500
Nick G. De'Ath 2,463,750
INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as
independent auditors to examine the Company's accounts for the year ending
December 31, 1999. Representatives of PricewaterhouseCoopers LLP are expected to
be present at the Meeting with the opportunity to make a statement if they
desire to do so and to be available to respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission and the New York Stock Exchange. Such persons are required
by Securities and Exchange Commission regulation to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to the year ended December 31, 1998, or written representations from
certain reporting persons, the Company believes that all filing requirements
applicable to its directors, officers and persons who own more than 10% of a
registered class of the Company's equity securities have been complied with.
SHAREHOLDER PROPOSALS
A shareholder who desires to present proposals to the Company's Annual
Meeting of Shareholders in 2000 and to have such proposals set forth in the
Company's proxy statement for that meeting must submit such proposals to the
Company no later than December 6, 1999. Any shareholder may submit any such
proposal to Triton Energy, Attention: Corporate Secretary, 6688 North Central
Expressway, Suite 1400, Dallas, Texas 75206. All shareholder proposals must
comply with Rule 14a-8 promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
Pursuant to the Company's Articles of Association, if a shareholder desires
to nominate persons for election as directors at an Annual Meeting, the
shareholder must deliver to the Secretary of the Company written notice no later
than 90 days in advance of such Annual Meeting. The notice must state (i) the
name and address, as it appears on the books of the Company, of the shareholder
who intends to make the nomination and of the person or persons to be nominated;
(ii) a representation that the shareholder is a record holder of shares of the
Company entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified; (iii) the
number of Ordinary Shares beneficially owned by the shareholder; (iv) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (v) such other information regarding each nominee proposed by the
shareholder as would be required to be included in a proxy statement filed
pursuant to the Securities Exchange Act of 1934; and (vi) the consent of each
nominee to serve as a director of the Company, if so elected.
If a shareholder desires to present proposals to the Company's Annual
Meeting of Shareholders in 2000 but does not have the proposals included in the
Company's Proxy Statement for that meeting, and does not notify the Company of
the proposals by February 17, 2000, the persons named in the proxies solicited
by the Company in connection with the 2000 Annual Meeting will vote their
proxies in their discretion with respect to such proposals.
OTHER MATTERS
The Annual Report to Shareholders for the year ended December 31, 1998, is
enclosed. The Annual Report does not form a part of this Proxy Statement or the
materials for the solicitation of proxies to be voted at the Meeting.
A COPY OF THE ANNUAL REPORT ON FORM 10-K OF TRITON ENERGY LIMITED, AS
AMENDED, FOR THE PERIOD ENDED DECEMBER 31, 1998, INCLUDING FINANCIAL STATEMENTS
AND SCHEDULES BUT NOT INCLUDING EXHIBITS, WILL BE FURNISHED AT NO CHARGE TO EACH
PERSON TO WHOM A PROXY STATEMENT IS DELIVERED UPON RECEIPT OF A WRITTEN OR ORAL
REQUEST OF SUCH PERSON ADDRESSED TO TRITON ENERGY, ATTN: INVESTOR RELATIONS,
6688 NORTH CENTRAL EXPRESSWAY, SUITE 1400, DALLAS, TEXAS 75206 (TELEPHONE (214)
691-5200). THE COMPANY WILL ALSO FURNISH SUCH ANNUAL REPORT ON FORM 10-K TO ANY
"BENEFICIAL OWNER" OF SUCH SECURITIES AT NO CHARGE UPON RECEIPT OF A WRITTEN
REQUEST, ADDRESSED TO INVESTOR RELATIONS, AND CONTAINING A GOOD FAITH
REPRESENTATION THAT, AT THE RECORD DATE, SUCH PERSON WAS A BENEFICIAL OWNER OF
SECURITIES OF THE COMPANY ENTITLED TO VOTE AT THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1999. COPIES OF ANY EXHIBIT TO THE FORM 10-K WILL BE
FURNISHED UPON THE PAYMENT OF A $.15 PER PAGE FEE.
The accompanying proxy is being solicited on behalf of the Board of
Directors of the Company. The expenses of preparing, printing and mailing the
proxy and the materials used in the solicitation will be borne by the Company.
The Company has retained Georgeson & Co., Inc. to aid in the solicitation
of proxies, for a fee of $10,000 and the reimbursement of out-of-pocket
expenses. Directors, officers and employees of the Company may also solicit
proxies, for no additional compensation from the Company. Arrangements also may
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of Ordinary
Shares held by such persons, and the Company will reimburse them for their
reasonable expenses.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE ADDRESSED TO THE COMPANY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES. A PROMPT RETURN OF YOUR PROXY CARD
WILL BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
TRITON ENERGY LIMITED
By Order of the Board of Directors
Robert B. Holland, III
Secretary
April 2, 1999
TRITON ENERGY LIMITED
PROXY - ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints James C. Musselman, A. E. Turner, III, and
Robert B. Holland, III, each with power to act without the other and with full
power of substitution, as Proxies to represent and vote, as designated on the
reverse side, all shares of Triton Energy Limited owned by the undersigned, at
the Annual Meeting of Shareholders to be held at the Royal Oaks Country Club,
7915 Greenville Avenue, Dallas, Texas 75231 on Tuesday, May 11, 1999, 10:00
a.m., local time, upon such business as may properly come before the meeting or
any adjournment including the following set forth on the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFIC DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED (I) FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR, (II) FOR
APPROVAL OF THE AMENDMENT TO THE TRITON ENERGY LIMITED AMENDED AND RESTATED
RESTRICTED STOCK PLAN TO INCREASE BY 200,000 SHARES THE NUMBER OF SHARES
AVAILABLE FOR ISSUANCE PURSUANT TO THE PLAN AND (III) AT THE DISCRETION OF THE
PROXY HOLDERS WITH REGARD TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
(CONTINUED, AND TO BE SIGNED AND DATED, ON THE REVERSE SIDE)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE MARK
YOUR VOTES AS X
IN THIS EXAMPLE
1. Election as Directors of the nominees listed below.
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to the to vote for all
contrary below) Nominees
____ ____
Nominees: Jack D. Furst, Michael E. McMahon, C. Richard Vermillion, Jr.,
and J. Otis Winters
______________________________________
2. Approval of the amendment to the Triton Energy Limited Amended and
Restated Restricted Stock Plan to increase by 200,000 shares the number of
shares available for issuance pursuant to the plan.
FOR AGAINST ABSTAIN
____ ____ ____
3. In their discretion on any other matter that may properly come before the
meeting or any adjournment thereof.
Please date, sign exactly as shown hereon and mail promptly this proxy in the
enclosed envelope. When there is more than one owner, each should sign. When
signing as an attorney, administrator, executor, guardian or trustee, please add
your title as such. If executed by a corporation, the proxy should be signed by
a duly authorized officer. If executed by a partnership, please sign in the
partnership name as an authorized person.
Date:__________________________
_______________________________
(Signature)
Date:__________________________
_______________________________
(Signature)
THIS PROXY MAY BE REVOKED PRIOR TO THE EXERCISE OF THE POWERS CONFERRED BY THE
PROXY.