SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Remington Oil and Gas Corporation
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REMINGTON OIL AND GAS
CORPORATION
Proxy Statement and
Notice of Annual Meeting
Meeting Date May 21, 2002
LETTER TO OUR STOCKHOLDERS
To Our Stockholders:
I cordially invite all of our Stockholders to The Crescent Club at 9:00
a.m. on May 21, 2002 for our Annual Meeting. This proxy statement and proxy card
are sent to you in connection with the Annual Meeting. Also enclosed is a copy
of our annual report.
Please vote as soon as possible. We look forward to seeing you at the
Annual Meeting.
Sincerely,
/s/ David H. Hawk
David H. Hawk
Chairman of the Board
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS-
MAY 21, 2002
TIME
9:00 a.m. CDT, on Tuesday, May 21, 2002
PLACE
The Crescent Club
200 Crescent Ct.
Dallas, Texas
BUSINESS
(1) Elect 9 members of the Board of Directors, and
(2) Transact all other business that may properly come before the meeting.
DOCUMENTS
The Proxy Statement, proxy card, and Remington Oil and Gas Corporation's 2001
Annual Report are included in this mailing.
RECORD DATE
Stockholders owning common stock of the company at the close of business on
April 16, 2002, are entitled to vote at the Annual Meeting.
VOTING
Even if you plan to attend the meeting in person, please provide us your voting
instructions by marking, signing and dating the proxy card and returning it in
the enclosed postage-paid envelope.
BY ORDER OF THE
BOARD OF DIRECTORS -- April 4, 2002
/s/ J. Burke Asher
J. Burke Asher
Secretary
TABLE OF CONTENTS
Questions and Answers....................................... 1
Proposal.................................................... 3
Corporate Governance -- Our Directors and Officers.......... 4
Corporate Governance -- Board Compensation and Committees... 10
Audit Committee Report...................................... 11
Executive Compensation...................................... 12
Stock Option Plans.......................................... 13
Pension Plans............................................... 15
Change in Control Arrangements and Employment Contracts..... 17
Board Compensation Committee Report on Executive
Compensation.............................................. 19
Performance Graph........................................... 21
Security Ownership of Certain Beneficial Owners and
Management -- Ownership of Certain Beneficial Owners...... 22
Security Ownership of Certain Beneficial Owners and
Management -- Ownership of Management..................... 22
Certain Relationships and Related Transactions.............. 23
(i)
QUESTIONS AND ANSWERS
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND CARD?
A: The Board of Directors of Remington Oil and Gas Corporation is soliciting
your proxy for the 2002 Annual Meeting of Stockholders and any adjournments or
postponements thereof. The meeting will be held at 9:00 a.m. CDT on Tuesday May
21, 2002, at The Crescent Club, Dallas, Texas. This Proxy Statement and card are
initially being provided to stockholders on or about April 19, 2002.
Q: WHAT AM I VOTING ON?
A: Re-election of the Board of Directors.
Q. WHO IS ENTITLED TO VOTE?
A: Stockholders as of the close of business on April 16, 2002. Each share of
common stock is entitled to one vote. As of April 16, 2002, there were
25,927,093 shares of Remington common stock outstanding.
Q: HOW DO I GIVE VOTING INSTRUCTIONS?
A: You may attend the meeting and vote and give instructions in person or by
mail. Instructions are on the proxy card. The persons named on the proxy card
will vote all properly executed proxies that are delivered pursuant to this
solicitation and not subsequently revoked in accordance with the instructions
given by you.
Q: MAY I CHANGE MY VOTE?
A: Yes, you may revoke your proxy by submitting a subsequent proxy or by written
request received by the company's secretary before the meeting. The company's
executive offices are located at 8201 Preston Road, Suite 600, Dallas, Texas
75225-6211. The telephone number is (214) 210-2650.
Q: HOW DO I VOTE IF I HOLD MY STOCK THROUGH A BROKER, BANK OR OTHER NOMINEE?
A: Only stockholders of record as of April 16, 2002, are entitled to vote. If
you hold your shares through a broker, bank, or other nominee, you hold your
shares in "street name." You most likely will receive a request for voting
instructions from the record holder through whom you hold your shares. Follow
the instructions in such a request in order for the record holder to follow your
voting wishes.
Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
A: You will receive a proxy card for each account that you have. Please vote
proxies for all accounts to ensure that all your shares are voted.
Q: WHAT CONSTITUTES A QUORUM?
A: A majority of the outstanding shares of the company must be represented at
the meeting, whether in person or by proxy, for there to be a quorum for the
meeting. For purposes of determining the existence of a quorum so that business
may be conducted at the meeting, abstentions are counted as are properly
executed proxies which withhold voting authority on any matter. Abstentions for
purposes of tabulating the vote have the same effect as a vote against the
proposal as does a proxy withholding voting authority.
Q: WHO PAYS THE EXPENSE OF SOLICITING PROXIES?
A: The company pays the cost of soliciting proxies. The officers or other
employees of the company may solicit proxies to have a larger representation at
the meeting.
Q: ARE THERE ANY OTHER MATTERS WHICH MAY BE BROUGHT BEFORE THE MEETING?
A: The Board of Directors knows of no matters to be brought before the meeting
other than the election of Directors discussed in this Proxy Statement.
Q: HOW MANY INDEPENDENT DIRECTORS ARE THERE ON REMINGTON'S BOARD OF DIRECTORS?
A: At present our Board consists of nine members. Seven of these members are
independent, and the other two members are officers of the company.
Q: HOW IS THE COMPANY'S SLATE OF NOMINEES FOR DIRECTOR DETERMINED?
A: The entire Board of Directors, consisting of seven independent members and
two company officers, select the nominees after receiving the recommendations of
the Nominations Committee. The company's By-Laws specify that the Nominations
Committee consists of the Chairman of the Board, the President, and such other
members as may be provided by resolution of the Board.
1
QUESTIONS AND ANSWERS-CONTINUED
Q: WHAT BOARD COMMITTEES ARE THERE AND HOW ARE THEIR MEMBERS AND CHAIRMEN
SELECTED?
A: There are currently four standing committees of the Board: Audit,
Compensation, Executive and Nominations. The members of the Executive Committee
and the members and chairmen of the Audit and Compensation Committees are
selected by a vote of the Board. The company's By-Laws specify the composition
of the Nominations Committee. (See previous question.). All members of the Audit
and Compensation committees must be independent directors. A majority of the
executive committee members are independent.
2
PROPOSAL
- PROPOSAL NO. 1 RE-ELECTION OF DIRECTORS
- After receiving the recommendations of the Nominations Committee, the entire
Board of Directors, consisting of seven independent members and two company
officers, unanimously nominated the following for election as directors:
- Don D. Box (age 51, director since 1991)
- John E. Goble, Jr. (age 55, director since 1997)
- William E. Greenwood (age 63, director since 1997)
- David H. Hawk (age 57, director since 1997)
- James Arthur Lyle (age 57, director since 1997)
- David E. Preng (age 55, director since 1997)
- Thomas W. Rollins (age 71, director since 1996)
- Alan C. Shapiro (age 56, director since 1994)
- James A. Watt (age 52, director since 1997)
- The nominees constitute the current Board of Directors, and each has consented
to serve until the Annual Meeting in the year 2003.
- If any director is unable to stand for re-election, the Board may provide for
a lesser number of directors or the Nominations Committee may designate a
substitute. In the latter event, shares represented by proxies may be voted
for a substitute director.
- The affirmative vote of a plurality of shares present and entitled to vote is
required for the election of directors.
- The Board of Directors recommends a vote "For" the nominees listed in Proposal
No. 1.
3
CORPORATE GOVERNANCE-
OUR DIRECTORS AND OFFICERS
The following information relates to the members of our Board of Directors or
executive officers during 2001. Each director holds office until his successor
is elected and qualified or until his resignation or removal. Executive officers
hold their respective offices at the pleasure of the Board of Directors.
DON D. BOX Age: 51
Positions with us:
- Director since March 1991
- Executive Vice President since October 1997
- Chairman of the Board January 1994-October 1997
- Chief Executive Officer August 1996-October 1997
- President August 1996-March 1997
Positions with our affiliates:
- CKB Petroleum, Inc.
-- Vice President since September 1997
-- Director August 1982-September 1997
-- President August 1982-September 1997
- CKB & Associates, Inc.
-- Vice President since May 1981
-- Director May 1981-September 1997
- S-Sixteen Holding Company
-- Director December 1981-September 1997
-- President December 1981-February 1996, April 1997-September 1997
-- Vice President February 1996-April 1997, September 1997-December 1998
Outside directorships
- Authoriszer, Inc.
Education
- Bachelor of Arts-University of Pennsylvania
- Bachelor of Science in Economics-The Wharton School of the University of
Pennsylvania
- Masters of Business Administration-Southern Methodist University
JOHN E. GOBLE, JR., CPA Age:
55
Positions with us:
- Director since April 1997
- Member-Audit Committee
Employment:
- Byrd Investments-Investment and financial advisor since 1986
Outside Directorships:
- Miracle of Pentecost Foundation
Education:
- Bachelor of Business Administration-Southern Methodist University
WILLIAM E. GREENWOOD Age: 63
Positions with us:
- Director since April 1997
- Member-Audit Committee
- Member-Compensation Committee
4
CORPORATE GOVERNANCE-
OUR DIRECTORS AND OFFICERS - CONTINUED
Employment:
- Consultant since 1995
- Director and Chief Operating Officer-Burlington Northern Railroad Corporation
from 1990 until 1994
Outside Directorships:
- Iowa-Pacific Corp.
- Transport Dynamics, Inc.
- President-Mendota Museum and Historical Society
Education:
- Bachelor of Science-Marquette University
DAVID H. HAWK Age: 57
Positions with us:
- Director since September 1997
- Chairman of the Board since October 1997
- Member-Executive Committee
Employment:
- J.R. Simplot Company-Director, Energy Natural Resources since 1984
- Previously employed with Atlantic Richfield Company and Tenneco Inc. as an
Exploration Geologist
- Prior executive positions with IGC Production Company, Sundance Oil Company
and Horn Resources Corporation
Education:
- Bachelor of Science in Geology and Distinguished Graduate Medalist-University
of Idaho
- Master of Science in Geology-University of Oklahoma
JAMES ARTHUR LYLE, CCIM Age:
57
Current positions with us:
- Director since September 1997
- Member-Compensation Committee
Employment:
- Owner-James Arthur Lyle & Associates, Inc., a commercial, industrial and
investment real estate firm, since 1976
Outside directorships:
- Director, Chief Operating Officer and President since 1984-Hueco Mountain
Estates, Inc., a 10,500 acre multi-use real estate development located in El
Paso County, Texas
Education:
- Bachelor of Science in Industrial Management-Georgia Institute of Technology
DAVID E. PRENG Age: 55
Position with us:
- Director since April 1997
- Chairman-Compensation Committee
Employment:
- Chief Executive Officer and President since 1980-Preng and Associates, Inc.,
an international executive search firm specializing in the energy industry
5
CORPORATE GOVERNANCE-
OUR DIRECTORS AND OFFICERS - CONTINUED
Outside directorships:
- Director-Community National Bank
- Fellow-Institute of Directors
Education:
- Bachelor of Science in Business Administration-Marquette University
- Master of Business Administration-DePaul University
THOMAS W. ROLLINS Age: 71
Positions with us:
- Director since July 1996
- Member-Executive Committee
Employment:
- Chief Executive Officer since 1985-Rollins Resources, a natural gas and oil
consulting firm
- Previously held executive positions and/or directorships with Shell Oil
Company, Pennzoil Company, Florida Gas Transmission Company, Pogo Producing
Company, Magma Copper Company and Felmont Oil Corporation.
Outside directorships:
- Director-Pheasant Ridge Winery
- Director-The Teaching Company
- Director-Nature Conservancy of Texas
Education:
- Geological Engineering Degree and Distinguished Graduate Medalist-The Colorado
School of Mines
ALAN C. SHAPIRO Age: 56
Positions with us:
- Director since May 1994
- Chairman-Audit Committee
Employment:
- The Ivadelle and Theodore Johnson Professor of Banking and Finance in the
Department of Finance and Business Economics, Marshall School of Business,
University of Southern California, since 1992
- Previously Chairman of the Department of Finance and Business Economics,
University of Southern California, 1993-1998
- Frequent consultant and expert witness to business and government
Publications:
- Multinational Financial Management, a best selling textbook used in MBA
programs worldwide
- Numerous other books and articles
Education:
- Bachelor of Arts in Mathematics-Rice University
- Ph.D. in Economics-Carnegie Mellon University
6
CORPORATE GOVERNANCE-
OUR DIRECTORS AND OFFICERS - CONTINUED
JAMES A. WATT Age: 52
Positions with us:
- Chief Executive Officer since February 1998
- President since March 1997
- Director since September 1997
- Member-Executive Committee
Positions with our Affiliates:
- CKB Petroleum, Inc.
-- Director and President since January 1999
- CKB & Associates, Inc.
-- Director and President since January 1999
Previous employment highlights:
- Vice President/Exploration-Seagull E&P, Inc., 1993-1997
- Vice President/Exploration and Exploitation-Nerco Oil & Gas, Inc., 1991-1993
Outside Directorships:
- Director -- Suzuki Institute of Dallas
Education:
- Bachelor of Science in Physics-Rensselaer Polytechnic Institute
ROBERT P. MURPHY Age: 43
Positions with us:
- Chief Operating Officer since October 2000 and Senior Vice
President/Exploration & Production since July 1999
- Vice President/Exploration, January 1998-June 1999
Previous employment:
- Director-Cairn Energy USA, Inc., May 1996-November 1997
- Vice President-Exploration-Cairn Energy USA, March 1993-January 1998
- Exploration Geologist-Cairn Energy USA, 1990-March 1993
- Exploration Geologist-Enserch Exploration, 1984-1990
Education:
- Bachelor of Science in Geology-The University of Texas at Austin
- Master of Science in Geosciences-The University of Texas at Dallas
STEVEN J. CRAIG Age: 50
Positions with us:
- Senior Vice President/Planning and Administration since April 1997
Positions with our affiliates:
- CKB Petroleum, Inc.
-- Director and Vice President since January 1999
-- Vice President and Assistant Treasurer, March 1997-October 1997
-- Director, March 1997-August 1997
- CKB & Associates, Inc.
-- Director and Vice President since January 1999
7
CORPORATE GOVERNANCE-
OUR DIRECTORS AND OFFICERS - CONTINUED
-- Vice President and Assistant Treasurer, March 1997-October 1997
-- Director, March 1997-August 1997
- S-Sixteen Holding Company
-- Vice President and Assistant Treasurer, March 1997-October 1997
-- Director, March 1997-August 1997
Education:
- Bachelor of Arts in Economics-Southern Methodist University
- Master of Business Administration in Finance and Quantitative
Analysis-Southern Methodist University
J. BURKE ASHER Age: 61
Positions with us:
- Vice President/Finance since December 1997
- Secretary since October 1996
- Chief Accounting Officer, September 1996-December 1997
Positions with our affiliates:
- CKB Petroleum
-- Treasurer and Assistant Secretary since March 1997
-- Director, March 1997-April 1997
- CKB & Associates
-- Treasurer and Assistant Secretary since March 1997
-- Director, March 1997-August 1997
- S-Sixteen Holding Company
-- Treasurer and Assistant Secretary, March 1997-December 1998
-- Director, March 1997-August 1997
Education:
- Bachelor of Science in Economics-The Wharton School of the University of
Pennsylvania
EDWARD V. HOWARD, CPA Age: 39
Positions with us:
- Vice President/Controller since March 1992
- Assistant Secretary since October 1997
Education:
- Bachelor of Business Administration-West Texas State University
Except for Mr. Rollins' consulting practice, no director has a significant
personal interest in the exploration, development or production of oil and gas.
Mr. Rollins is required to abstain on matters in which there may be a conflict
of interest between us and one of his clients.
NEW EXECUTIVE OFFICER
Effective January 1, 2002, Gregory B. Cox, age 48, was appointed Vice
President/Exploration. Mr. Cox joined Remington in 1997 as Exploration Manager.
He received his Bachelor of Science in Geology in 1980 from the University of
Texas at Arlington. Prior to joining us, he was employed as a geologist and
explorationist with several oil and gas exploration and production companies
including Getty Oil Company, Enserch Exploration and Cairn Energy USA. On April
16, 2002, he owned none of our Common Stock, but held 63,666 employee stock
options exercisable within 60 days.
8
CORPORATE GOVERNANCE-
OUR DIRECTORS AND OFFICERS - CONTINUED
LITIGATION INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
We know of no reportable litigation involving the directors or executive
officers.
SECTION 16(a)BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon the company's review of Forms 3, 4, and 5 received by us for
2001, all persons required by Section 16(a) of the Securities Exchange Act of
1934 ("the Act") to file such forms complied with Section 16(a) of the Act with
the following exceptions: James A. Watt filed one late Form 4 reporting one
transaction, and J.R. Simplot filed two late Forms 4 reporting two transactions
on each.
9
CORPORATE GOVERNANCE-
BOARD COMPENSATION AND COMMITTEES
COMPENSATION OF DIRECTORS
- Only non-employee directors are compensated for board service
- Compensation includes:
-- Annual retainer of $20,000
-- $1,000 per board meeting attended (Chairman of the Board receives extra
$250 per board meeting attended)
-- Unless surrendered, eligible for stock grant (see discussion of grant on
page 14)
-- Committee meeting fee of $750 per meeting attended by committee members or
$1,000 for the committee chairman per meeting attended, if on a different
day than a full board meeting
-- Directors are entitled to reimbursement of company related out-of-pocket
expenses
-- We provide directors and officers insurance and indemnification to the full
extent allowed by law
-- All or part of a director's board compensation may be received in company
stock in accordance with the Non-Employee Director Stock Purchase Plan
- There were six board meetings in 2001
- All directors attended at least 75% of the meetings
- During 2001, we paid an entity controlled by director David E. Preng $2,000
for consulting fees.
NON-EMPLOYEE DIRECTOR STOCK PURCHASE PLAN
- This plan was adopted December 4, 1997
- Each non-employee director may, once a year, elect to receive all or part of
his board compensation in our common stock
- The number of shares received equals 150% of the cash amount of compensation
divided by the closing market price of our common stock on the day the cash
fees would be payable
- Shares received under this plan may not be transferred for one year after
issuance
- Shares may be transferred earlier than one year based on a director's death,
disability or departure from the board
- During the restricted transfer period the director may vote the stock and
receive any dividends
- The board may terminate this plan at any time
- Shares received under plan for 2001:
-- John E. Goble, 1,164 shares in lieu of $12,000
Jr................ cash
-- William E. 2,815 shares in lieu of $29,500
Greenwood......... cash
-- James Arthur 2,684 shares in lieu of $28,250
Lyle.............. cash
-- David E. Preng... 2,684 shares in lieu of $28,250
cash
-- Thomas W. 776 shares in lieu of $ 8,000
Rollins........... cash
-- Alan C. 2,808 shares in lieu of $29,750
Shapiro........... cash.
- BOARD COMMITTEES
- Audit Committee:
- Members are Mr. Goble, Mr. Greenwood, and Dr. Shapiro.
- Met 4 times in 2001
- The Audit Committee and its functions are governed by an Audit Committee
Charter adopted by our Board of Directors. The Audit Committee Charter was set
forth on pages 20 through 23 of the Proxy Statement for the 2000 Annual
Meeting. The Audit Committee Report is included on page 11 in this Proxy
Statement for the 2002 Annual Meeting.
- Compensation Committee:
- Members are Mr. Preng, Mr. Lyle, and Mr. Greenwood.
- Met 3 times in 2001
- Evaluates performance of executive officers and approves their compensation
- Approves compensation for other employees
- Administers the company's long-term incentive compensation plans
- Oversight responsibility for company's pension and 401(k) plans
- Executive Committee:
- Members are Mr. Hawk, Mr. Watt, and Mr. Rollins.
- Did not meet in 2001
- Has authority to perform powers of the Board of Directors except those
relating to amending the Certificate of Incorporation, declaring dividends,
adopting a merger agreement, recommending to the stockholders a sale or
dissolution of the company, removing or indemnifying directors, and amending
the By-Laws
- From time to time, other committees of the Board of Directors may be
established for special purposes.
10
AUDIT COMMITTEE REPORT
The Audit Committee, consisting solely of independent directors, submits the
following report:
In accordance with its written charter adopted by the Board of Directors and
included in the company's year 2000 proxy statement, the Audit Committee of the
Board ("Committee") assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. During 2001 the Committee met 4 times. The
Committee reviewed and discussed with management and the independent auditors
the quarterly unaudited financial statements.
In discharging its oversight responsibility as to the audit process, the Audit
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and the Company that might
bear on the auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees;" discussed with
the auditors any relationships that may affect their objectivity and
independence, including the compatibility of non-audit services with the
auditors' independence; and satisfied itself as to the auditors' independence.
The Committee also discussed with management and the independent auditors the
quality and adequacy of the Company's internal controls.
The Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and discussed and reviewed the results of
the independent auditors' examination of the financial statements.
The Committee reviewed the audited financial statements of the Company for the
year ended December 31, 2001, with management and the independent auditors.
Based on the above-mentioned review and discussions with management and the
independent auditors, the Committee recommended to the Board that the Company's
audited financial statements be included in its Annual Report on Form 10-K for
the year ended December 31, 2001, for filing with the Securities and Exchange
Commission.
Alan C. Shapiro, Chairman
John E. Goble, Jr.
William E. Greenwood
FEES
For the fiscal year ended December 31, 2001, we incurred the following charges
from Arthur Andersen in connection with their services:
Audit Fees -- $131,400. This amount represents the aggregate fees to Arthur
Andersen for the independent audit of our financial statements and review of our
interim financial statements for fiscal year ended December 31, 2001;
Financial Information Systems Design and Implementation Fees -- No such fees to
Arthur Andersen were incurred for fiscal year ended December 31, 2001; and
All Other Fees -- $122,350. This amount represents fees for work by Arthur
Andersen relating to corporate taxes and employee and retiree benefits
accounting.
11
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by the company during 2001,
2000, and 1999 to the company's Chief Executive Officer and its four most highly
compensated executive officers, other than the Chief Executive Officer, whose
total annual salary and bonus in 2001 exceeded $100,000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------- ------------------------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS/ SAR'S COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) (#) ($)(3)
------------------ ------ ------- ------- ------------ ---------- -------------- ------------
James A. Watt................ 2001 320,004 405,000 -- (2) 35,000 1,242
Chief Executive Officer 2000 282,501 296,000 -- -- 123,000 1,242
and President 1999 260,004 156,000 -- -- 80,000 695
Robert P. Murphy............. 2001 225,000 200,000 -- -- 25,000 480
Chief Operating Officer and 2000 187,506 140,000 -- -- 66,000 390
Senior Vice President/ 1999 168,108 52,500 -- -- 45,000 257
Exploration and Production
Steven J. Craig.............. 2001 125,808 46,000 -- -- 12,000 364
Senior Vice President/ 2000 121,008 29,000 -- -- 39,000 346
Planning and Administration 1999 114,708 27,500 -- -- 25,000 390
J. Burke Asher............... 2001 119,600 44,000 -- -- 11,500 1,505
Vice President/Finance 2000 115,008 27,600 -- -- 37,000 928
and Secretary 1999 109,200 26,200 -- -- 25,000 1,008
Edward V. Howard............. 2001 100,008 23,000 -- -- 9,000 162
Vice President/Controller 2000 93,504 22,400 -- -- 29,000 148
and Assistant Secretary 1999 88,200 14,600 -- -- 27,500 143
---------------
(1) No amount is included, as it is less than 10% of the total salary and bonus
of the individual for the year.
(2) At December 31, 2001, Mr. Watt held 3,000 restricted shares of common stock
with a value of $51,900. The total number of restricted shares awarded
effective March 17, 1997, was 15,000, which vest 20% per year from the
effective date. If any dividends are paid to holders of common stock, Mr.
Watt's restricted shares will be entitled to receive dividends.
(3) These amounts are for group term life insurance premiums paid by the
company.
See "Change in Control Arrangements and Employment Contracts" on pages 17 and
18.
12
STOCK OPTION PLANS
We have stock option plans for our employees and directors because we believe
these options act as both an incentive and a reward for the long-term growth of
our company. The core of our stock option program is the 1997 stock option plan.
Both directors and employees are eligible for options under this plan.
Significant attributes of the 1997 plan include the following:
- Administered by the Compensation Committee of our board of directors.
- Subject to adjustments, up to 3,750,000 shares of our common stock may be
issued under the plan.
- Up to 25% of issuable shares may be issued to any single individual.
- Both qualified incentive and non-qualified options may be issued.
- The plan terminates December 4, 2007.
The importance of whether an option is granted as a qualified incentive option
or a non-qualified option is mainly tax driven. If an option is an incentive
option, the exercise price can be no less than the fair market value on the date
of grant. Additional details concerning the 1997 stock option plan are contained
in the plan itself. For a copy of the plan, call Investor Relations at (214)
210-2650.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME GRANTED FISCAL YEAR $/SHARE DATE $(1)
---- ---------- ------------ -------- ---------- -------------
James A. Watt........................ 35,000 11% 15.32 12/11/11 404,600
Robert P. Murphy..................... 25,000 8% 15.32 12/11/11 289,000
Steven J. Craig...................... 12,000 4% 15.32 12/11/11 138,720
J. Burke Asher....................... 11,500 4% 15.32 12/11/11 132,940
Edward V. Howard..................... 9,000 3% 15.32 12/11/11 104,040
---------------
(1) We determined these values using the Black-Scholes option pricing model with
the following assumptions: stock price volatility of 62.68%; interest rate
based on the yield to maturity of a 10-year Treasury security; exercise in
the tenth year; and a dividend rate of zero. We made no adjustments for
nontransferability or risk of forfeiture. Our use of this model does not
constitute an endorsement or an acknowledgment that such model can
accurately determine the value of options. No assurance can be given that
the actual value, if any, realized by an executive upon the exercise of
these options will approximate the estimated values calculated by using the
Black-Scholes model.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES VALUE OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END($)(1)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
James A. Watt................. 27,749 235,867 296,585 143,666 3,704,338 1,528,391
Robert P. Murphy.............. 9,004 121,779 122,996 84,000 1,586,845 841,450
Steven J. Craig............... 35,001 391,448 54,666 46,333 671,141 484,806
J. Burke Asher................ 20,850 236,584 61,151 44,499 754,351 465,740
Edward V. Howard.............. 39,600 400,347 26,735 37,499 311,291 392,211
---------------
(1) Computed as the number of securities multiplied by the difference between
the option exercise prices and the closing price of our common stock on
December 31, 2001.
13
STOCK OPTION PLANS - CONTINUED
CONDITIONAL STOCK GRANTS
In 1999, the directors approved awards of stock to employees and directors
totaling 679,937 shares of our common stock. The number of shares awarded to
each employee and director was based on the employee's annual base salary as of
June 17,1999, or, in the case of non employee directors, $100,000, divided by
$4.19, which was the closing stock price on June 17, 1999. In order for the
grant to be effective, our stock had to close above a trigger price of $10.42
for 20 consecutive trading days. This trigger was achieved on January 24, 2001.
Recipients of the grant must remain an employee or a director during the vesting
schedules in order to receive the shares. Employees and directors individually
elected one of two vesting periods. The first vesting schedule has 50% percent
of the grant vesting on June 17, 2002, with an additional 25% vesting on June
17, 2003, and the final 25% vesting on June 17, 2004. 267,502 shares are subject
to the this vesting schedule. The second vesting option has 20% of the grant
vesting on January 17, 2002, with an additional 20% vesting on each successive
January 17 through 2006. 395,080 shares are subject to the second vesting
schedule. While 679,937 shares of restricted stock were granted in 1999, as of
March 12, 2001, 662,592 shares were subject to the grant because a director
voluntarily surrendered 23,880 shares, and a new employee was granted 6,535
shares. The number of shares subject to the grant may decrease to the degree
that participants fail to remain with us during the vesting period. In the event
of a participant's death while employed or serving as a director with us, or
reaching the retirement age of 65 or receiving long term disability benefits
while employed with us, the grant becomes 100% vested. In addition, the grants
can become 100% vested upon a change of control.
14
PENSION PLANS
Our defined benefit pension plans provide retirement and other benefits to
eligible employees upon reaching the "normal retirement age," which is age 65 or
after 3 years of service (5 years if employment terminated prior to January 1,
2001), if later. Directors who are not also employees of the company are not
eligible to participate in the plans. Employees are eligible to participate on
January 1 following the completion of six months of service or the attainment of
age 20 1/2, if later. Additional provisions are made for early or late
retirement, disability retirement and benefits to surviving spouses. At normal
retirement age, an eligible employee will receive a monthly retirement income
equal to 35% of his or her average monthly compensation during the three
consecutive calendar years in the prior 10 years which provide the highest
average compensation, plus 0.65% of such average compensation in excess of the
amount shown in the Social Security Covered Compensation Table (as published
annually by the Internal Revenue Service) multiplied by his or her years of
service, limited to 35 years. If an employee terminates employment (other than
by death or disability) before completion of three years of service (five years
if employment terminated prior to January 1, 2001), no benefits are payable. If
an employee terminates employment after three years of service (five years if
employment terminated prior to January 1, 2001), the employee is entitled to all
accrued benefits. The following table illustrates the annual pension for plan
participants that retire at "normal retirement age" in 2001:
PENSION PLAN TABLE
YEARS OF SERVICE(1)(3)(4)
AVERAGE ------------------------------------------
COMPENSATION(1)(2) 15 20 25 30 35
------------------ ------ ------ ------ ------ ------
($) ($) ($) ($) ($) ($)
125,000................................... 52,311 55,164 58,018 61,871 63,725
150,000................................... 63,498 67,164 70,830 74,496 78,162
170,000................................... 72,448 76,764 81,080 85,396 89,712
175,000................................... 72,448 76,764 81,080 85,396 89,712
200,000................................... 72,448 76,764 81,080 85,396 89,712
225,000................................... 72,448 76,764 81,080 85,396 89,712
250,000................................... 72,448 76,764 81,080 85,396 89,712
300,000................................... 72,448 76,764 81,080 85,396 89,712
400,000................................... 72,448 76,764 81,080 85,396 89,712
450,000................................... 72,448 76,764 81,080 85,396 89,712
500,000................................... 72,448 76,764 81,080 85,396 89,712
---------------
(1) As of December 31, 2001, the Internal Revenue Code does not allow qualified
plan compensation to exceed $170,000 or the benefit payable annually to
exceed $140,000. The Internal Revenue Service will adjust these limitations
for inflation in future years. When the limitations are raised, the
compensation considered and the benefits payable under the pension plans
will increase to the level of the new limitations or the amount otherwise
payable under the pension plans, whichever amount is lower.
(2) Subject to the above limitations, compensation in this table is generally
equal to all of a participant's cash compensation paid in a fiscal year (the
total of Salary, Bonus, and Other Annual Compensation in the Summary
Compensation Table). Average compensation in this table is the average of a
plan participant's compensation during the highest three consecutive years
out of the prior 10 years.
(3) The estimated credited service at December 31, 2001, for the executive
officers shown in the Summary Compensation Table on page 12 is as follows:
James A. Watt (5 years), Robert P. Murphy (4 years), Steven J. Craig (7
years), J. Burke Asher (5 years), and Edward V. Howard (11 years).
15
PENSION PLANS - CONTINUED
(4) The normal form of payment is a life annuity for a single participant or a
50% joint and survivor annuity for a married participant. Such benefits are
not subject to a deduction for Social Security or other offset amounts.
16
CHANGE IN CONTROL ARRANGEMENTS AND
EMPLOYMENT CONTRACTS
All of our full-time regular employees are covered by a severance plan that we
adopted in 1997. Under this plan, if an employee is involuntarily terminated, as
that term is defined in the plan, the employee will be entitled to a payment of
between two months base pay and eighteen months base pay depending on the
employee's job and years of experience. If an employee voluntarily quits, is
terminated for cause as defined in the plan, dies, leaves due to a disability
for which benefits are payable, or the termination is expected to be of short
duration, the employee is not eligible for payment under the plan. In addition,
under certain circumstances, a change in control could cause immediate vesting
and triggering of stock options and contingent restricted stock grants. If the
vesting of the contingent restricted stock grants were accelerated by a change
in control, it would result in the issuance of a maximum aggregate of 662,592
shares to directors and employees.
Employment Agreements
We have employment agreements with James A. Watt, Robert P. Murphy, Steven J.
Craig, and J. Burke Asher. The most significant terms of such agreements are
summarized below:
James A. Watt
- Term of three years from January 31, 2000, subject to single year
extensions by mutual agreement
- Base salary of $270,000 a year subject to discretionary increases
- Eligible to receive discretionary performance bonus (targeted at 70%
of base salary, as amended)
- If terminated prior to a change in control, without cause, he receives
his salary plus a pro rata bonus
- He receives 2.99 times the sum of his base salary plus his target
bonus if he is terminated within 24 months of a change in control,
other than for death, disability or cause, or he leaves for good
reason within the 24 month period
Robert P. Murphy
- Term of three years from September 30, 1999, subject to single year
extensions by mutual agreement
- Base salary of $175,000 a year subject to discretionary increases
- Eligible to receive discretionary performance bonus (targeted at 50%
of base salary, as amended)
- If terminated prior to a change in control, without cause, he receives
his salary plus a pro rata bonus
- He receives 2.99 times the sum of his base salary plus his target
bonus if he is terminated within twelve months of a change in control,
other than for death, disability or cause, or he leaves for good
reason within the twelve month period
Steven J. Craig and J. Burke Asher
- Term of two years from September 30, 1999, subject to single year
extensions by mutual agreement
17
CHANGE IN CONTROL ARRANGEMENTS AND
EMPLOYMENT CONTRACTS - CONTINUED
- Base salary of $114,200 (Mr. Craig) and $109,200 (Mr. Asher) subject
to discretionary increases
- Eligible to receive discretionary performance bonus (targeted at 20%
of base salary)
- Severance payments similar to Robert Murphy's, except that Mr. Craig
and Mr. Asher each receive 2 times the sum of his respective annual
salary plus target bonus in connection with leaving employment within
twelve months of a change in control
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
David E. Preng, William E. Greenwood, and James Arthur Lyle served on the
compensation committee in 2001. No executive officer or employee serves on the
compensation committee of the board. None of our executive officers serves on
the board of directors of any other entity that has an executive officer serving
on our board.
18
BOARD COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
We believe that employing and retaining highly qualified and high performing
executive officers is vital to our achievement of long-term business goals. To
this end, the Compensation Committee of the Board of Directors (the "Committee")
developed an executive compensation program which is designed to attract and
retain such officers.
The philosophy is to develop a systematic, competitive executive compensation
program which recognizes an executive officer's position and responsibilities,
takes into account competitive compensation levels payable within the industry
by similarly sized companies, and reflects both individual and company
performance.
The executive compensation program developed by the Committee is composed of the
following three elements: (i) a base salary, (ii) a performance-based annual
cash incentive (short-term), and (iii) a stock-based incentive (long-term).
Under this program, short-term and long-term incentives are "at risk" and are
based on performance of the company versus defined goals.
The Committee compiles data reflecting the compensation practices of a broad
range of organizations in the oil and gas industry that are similar to us in
size and performance. For both the base salary and annual cash incentives
portions of executive compensation discussed below, the Committee adopted a
philosophy of paying the executive officers at a level that is competitive and
within the ranges reflected by the data compiled.
BASE SALARIES
Base salary is the portion of an executive officer's total compensation package
which is payable for performing the specific duties and assuming the specific
responsibilities defining the executive's position with the company. The
Committee's objective is to provide each executive officer a base salary that is
competitive at the desired level.
ANNUAL CASH INCENTIVES
The Committee developed a performance-based annual cash incentive plan covering
the executive officers and top managers. The objectives in designing the plan
are to reward participants for accomplishing objectives which are generally
measurable and increase shareholder value. Under the annual cash incentive plan,
the Committee has established a "target" cash incentive award for each executive
officer (including the Chief Executive Officer) that is payable based mostly
upon the company's achieving certain performance targets and, to a lesser
extent, for achieving highly challenging individual performance objectives. The
performance targets are increasing reserves and production; controlling finding,
development, and production costs; and achieving an overall return on capital;
all of which are competitive with a peer group of oil and gas companies. The
Committee also determined that award levels under the plan should be fiscally
prudent.
19
BOARD COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION - CONTINUED
LONG-TERM STOCK-BASED INCENTIVES
We maintain a stock option plan for officers and other employees. The philosophy
is to award stock options to selected plan participants based on their levels
within the company and upon individual merit. The plan is to grant stock options
which are competitive within the industry for other individuals at the
employee's level and which provide the employee a meaningful incentive to remain
with the company, to increase performance, and to focus on achieving long-term
increases in shareholder value. Other factors the Committee considers in
granting stock options include the employee's contributions toward achieving the
company's long-term objectives, such as reserve replacements and acquisitions,
as well as the employee's contributions in achieving the company's short-term
and long-term profitability targets.
COMPENSATION COMMITTEE
David E. Preng
William E. Greenwood
James Arthur Lyle
20
PERFORMANCE GRAPH
The following performance graph compares the performance of all classes of our
common stock to the Nasdaq indices of United States companies and to a peer
group comprising Nasdaq companies listed under the Standard Industrial
Classification Codes 1310-1319 for the company's last five fiscal years. Such
industrial codes include companies engaged in the oil and gas business. The
graph assumes that the value of an investment in our common stock and in each
index was $100 at December 31, 1996, and that all dividends were reinvested.
(PERFORMANCE GRAPH)
--------------------------------------------------------------------------------------------------
12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001
--------------------------------------------------------------------------------------------------
ROILA(1) 100.00 56.76 39.63 48.18 161.62 215.08
ROILB(1) 100.00 56.85 34.93 42.47 142.47 189.59
NASDAQ U.S. 100.00 122.50 172.70 320.80 193.00 153.10
NASDAQ O&G 100.00 95.30 46.30 47.80 99.40 74.50
---------------
(1) The last day of trading for ROILA and ROILB was December 24, 1998. Effective
at the opening of trading on December 28, 1998, both former classes of stock
were replaced by a new single class of voting common stock (ROIL). The
values shown above as of December 31, 1998, 1999, 2000, and 2001 for ROILA
give effect to the 1.15:1 exchange ratio that the former holders of ROILA
received in the exchange for the new class of common stock, and the 1:1
exchange ratio that the former holders of ROILB received in the exchange for
the new class of common stock.
21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Ownership of Certain Beneficial Owners
As of April 16, 2002, the following persons held shares of the company's common
stock in amounts totaling more than 5% of the total shares of common stock
outstanding. This information was furnished to us by such persons or statements
filed with the Commission.
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED COMMON STOCK
------------------------------------ ------------ ------------
J.R. Simplot............................................. 5,631,028(1) 21.7%
999 Main Street
Boise, Idaho 83702(1)
---------------
(1) Mr. J.R. Simplot is the trustee and beneficiary of the J.R. Simplot Self
Declaration of Revocable Trust, an inter vivos revocable trust. The Trust is
the manager of JRS Investments, L.L.C. which is the sole holder of the 1%
general partnership interest of JRS Properties III, LP ("JRS III"). In
addition, the trust holds the 99% limited partnership interest in JRS III.
Included in shares of common stock beneficially owned by Mr. Simplot are all
of the following, of which Mr. Simplot may be deemed a beneficial owner:
2,785,028 shares owned by JRS III; 2,845,000 shares owned by the Trust; and
1,000 shares owned jointly by Mr. Simplot and his spouse.
Ownership of Management
The number of shares of the company's common stock beneficially owned as of
April 16, 2002, by directors of the company, each officer listed in the Summary
Compensation Table on page 12, and as a group comprising all directors and
executive officers, are set forth in the following table. This information was
furnished to the company by such persons.
OPTIONS
SHARES OF EXERCISABLE
COMMON STOCK WITHIN 60 DAYS PERCENT OF
BENEFICIALLY OF APRIL 16, COMMON
NAME OWNED 2002 TOTAL STOCK
---- ------------ -------------- --------- ----------
J. Burke Asher............................... 11,447 74,484 85,931 *
Don D. Box................................... 73,244 153,334 226,578 *
Steven J. Craig.............................. 23,867 67,666 91,533 *
John E. Goble, Jr. .......................... 18,072 101,667 119,739 *
William E. Greenwood......................... 15,785 101,667 117,452 *
David H. Hawk................................ 2,430 -- 2,430 *
Edward V. Howard............................. 26,583 36,402 62,985 *
James Arthur Lyle............................ 30,214 101,667 131,881 *
Robert P. Murphy............................. 18,729 141,008 159,737 *
David E. Preng............................... 50,170 111,667 161,837 *
Thomas W. Rollins............................ 15,629 76,667 92,296 *
Alan C. Shapiro.............................. 40,787 101,667 142,454 *
James A. Watt................................ 76,179 308,488 384,667 1.5%
All directors and executive officers as a
group (14 persons)......................... 403,136 1,440,050 1,843,186 6.7%
---------------
* Less than one percent of the outstanding shares.
22
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
A resolution adopted in 1992 by our board of directors authorizes us to enter
into a transaction with an affiliate of ours so long as the board of directors
determines that such a transaction is fair and reasonable to us and is on terms
no less favorable to us than can be obtained from an unaffiliated party in an
arms' length transaction.
A long-term receivable in the aggregate amount of $354,000 acquired in a merger
reflects CKB Petroleum's claims under Collateral Assignment Split Dollar
Insurance Agreements among CKB Petroleum and Don D. Box and two of his brothers.
23
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
REMINGTON OIL AND GAS CORPORATION
May 21, 2002
o PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED o
------------------------------------------------------------------------------------------------------------------------------------
PLEASE MARK YOUR
VOTES AS INDICATED
[X] IN THIS EXAMPLE.
FOR WITHHELD
1. Election of NOMINEES: Don D. Box, John E. 2. In their discretion, the
Directors. [ ] [ ] Goble, Jr., William E. proxies are authorized
Greenwood, David H. to vote upon such other
For, except vote withheld from the following Hawk, James Arthur business as may properly
Nominee(s). Lyle, David E. Preng, come before the meeting.
Thomas W. Rollins,
-------------------------------------------- Alan C. Shapiro and
James A. Watt
--------------------------------------------
--------------------------------------------
Signature(s) Date: 2002
------------------------------------------------- ---------------------------------- -------------------,
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such.
REMINGTON OIL AND GAS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Steven J. Craig and J. Burke Asher, or
either of them, proxies with the full power of substitution, to vote as set
forth herein all shares of common stock of Remington Oil and Gas Corporation
(the "Company") held of record by the undersigned as of April 16, 2002, at the
Annual Meeting of Stockholders of the Company (the "Annual Meeting"), to be held
on May 21, 2002 at 9:00 a.m. central daylight time, and any adjournments or
postponements thereof, hereby revoking any proxies heretofore given.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED "FOR" THE ELECTION OF THE DIRECTORS NOMINATED BY THE BOARD OF
DIRECTORS, AND IN THE DISCRETION OF THE PROXIES ON ANY OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT
THEREOF.
You are encouraged to specify your choices by marking the appropriate
box. SEE REVERSE SIDE, but you need not mark any box if you wish to vote in
accordance with the Board of Directors recommendations. The Proxies cannot vote
your shares unless you sign and return this card.
(TO BE SIGNED ON THE REVERSE SIDE)