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 (S)240.14a-11(c) or (S)240.14a-12
MURPHY OIL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MURPHY OIL CORPORATION
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
[SPUR LOGO APPEARS HERE] [MURPHY OIL CORPORATION LOGO APPEARS HERE]
NOTICE OF ANNUAL MEETING
To the Stockholders of Murphy Oil Corporation:
The Annual Meeting of Stockholders of Murphy Oil Corporation will be held at
the South Arkansas Arts Center, 110 East 5th Street, El Dorado, Arkansas, on
Wednesday, May 8, 1996, at 10:00 a.m., local time, for the following purposes:
To elect directors to serve for the ensuing year.
To express approval or disapproval of the action of the Board of
Directors in appointing KPMG Peat Marwick LLP as the Company's independent
auditors for 1996.
To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on March 11, 1996, the
record date fixed by the Board of Directors of the Company, will be entitled
to notice of and to vote at the meeting or any adjournment thereof. A list of
all stockholders entitled to vote is on file at the offices of the Company,
200 Peach Street, El Dorado, Arkansas 71730.
Please sign, date and return the enclosed proxy card promptly.
W. Bayless Rowe
Secretary
El Dorado, Arkansas
April 4, 1996
PROXY STATEMENT
SOLICITATION April 4, 1996
The solicitation of the enclosed proxy is made on behalf of the Board of
Directors of the Company for use at the Annual Meeting of Stockholders to be
held on May 8, 1996. It is expected that this Proxy Statement and related
materials will first be mailed to stockholders on or about April 4, 1996.
The address of the Company's Executive Offices is 200 Peach Street, P.O. Box
7000, El Dorado, Arkansas 71731-7000.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting is required for approval of matters
presented to the meeting. Your executed proxy will be voted at the meeting,
unless you revoke it at any time before the vote by filing with the Secretary
of the Company an instrument revoking it, duly executing a proxy card bearing
a later date, or appearing at the meeting and voting in person. Proxies
returned to the Company, votes cast other than in person, and written
revocations will be disqualified if received after commencement of the
meeting.
Votes cast by proxy or in person at the meeting will be counted by the
persons appointed by the Company to act as election inspectors for the
meeting. The election inspectors will treat shares represented by properly
signed and returned proxies that reflect abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum and for purposes of determining the outcome of any other business
submitted at the meeting to the stockholders for a vote. Abstentions, however,
do not constitute a vote "for" or "against" any matter and thus will be
disregarded in the calculation of "votes cast."
The election inspectors will treat shares referred to as "broker non-votes"
(i.e., shares held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote and that
the broker or nominee does not have discretionary power to vote on a
particular matter) as shares that are present and entitled to vote for
purposes of determining the presence of a quorum. However, for purposes of
determining the outcome of any matter as to which the broker has physically
indicated on the proxy that it does not have discretionary authority to vote,
those shares will be treated as
1
not present and not entitled to vote with respect to that matter (even though
those shares are considered entitled to vote for quorum purposes and may be
entitled to vote on other matters).
Unless specification to the contrary is made, the shares represented by the
enclosed proxy will be voted FOR all the nominees for director; and FOR the
confirmation of the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors.
VOTING SECURITIES
On March 11, 1996, the record date for the meeting, the Company had
outstanding 44,830,459 shares of Common Stock, all of one class and each share
having one vote in respect of all matters to be voted on at the meeting. This
amount does not include 3,923,352 shares of treasury stock. Information as to
the amount of Common Stock owned by directors and officers and certain others
appears in the table under the heading "Certain Stock Ownership".
ELECTION OF DIRECTORS
The Bylaws of the Company provide for eleven directors to be elected on
May 8, 1996. The Bylaws also provide that the directors elected at each Annual
Meeting of Stockholders shall serve until their successors are elected and
qualified.
To the extent authorized by the proxies, the shares represented by the
proxies will be voted in favor of the election as directors of the eleven
nominees whose names are set forth below. If for any reason any of these
nominees is not a candidate when the election occurs, the shares represented
by such proxies will be voted for the election of the other nominees named and
may be voted for any substituted nominees. However, management of the Company
does not expect this to occur. All of management's nominees were elected at
the last Annual Meeting of stockholders except for George S. Dembroski. The
names of the nominees and certain information as to them are as follows:
PRINCIPAL OCCUPATION OR
EMPLOYMENT (FOR MORE OTHER PUBLIC
THAN THE PAST FIVE YEARS DIRECTOR COMPANY
NAME AND AGE UNLESS OTHERWISE STATED) SINCE DIRECTORSHIPS
------------ -------------------------- -------- --------------------
B.R.R. Butler*# Managing Director, 1991 Brown and Root Ltd.
London, England Retired, of The British London, England
Age: 66 Petroleum Company PLC, a KS Biomedix PLC
major international oil Guildford, England
company from 1986 to
March 1, 1991.
2
PRINCIPAL OCCUPATION OR
EMPLOYMENT (FOR MORE OTHER PUBLIC
THAN THE PAST FIVE YEARS DIRECTOR COMPANY
NAME AND AGE UNLESS OTHERWISE STATED) SINCE DIRECTORSHIPS
------------ -------------------------- -------- --------------------
George S. Dembroski+* Vice Chairman, RBC Domin- 1995 Electrohome Ltd.
Toronto, Ontario ion Securities Inc. Kitchener, Ontario,
Canada Canada
Age: 61
Claiborne P. Deming(S) President and Chief 1993 First United
El Dorado, Arkansas Executive Officer of the Bancshares, Inc.
Age: 41 Company since October 1, El Dorado, Arkansas
1994, Executive Vice
President and Chief
Operating Officer of the
Company from March 1,
1992 to October 1, 1994,
President of Murphy Oil
USA, Inc. from July 1,
1989 to March 1, 1992.
H. Rodes Hart(S) *# Chairman and Chief 1975 None
Nashville, Tennessee Executive Officer,
Age: 64 Franklin Industries
Inc., engaged in the
manufacture of brick and
industrial minerals,
President and Chief
Executive Officer of
Franklin Industries Inc.
from 1967 to February 1,
1992.
Vester T. Hughes, Jr.+# Partner, Hughes & Luce, 1973 None
Dallas, Texas Attorneys.
Age: 67
C. H. Murphy, Jr.(S)* Chairman of the Board of 1950 First Commercial
El Dorado, Arkansas the Company from June 1, Corporation
Age: 76 1972 to October 1, 1994. Little Rock, Arkan-
sas
Michael W. Murphy(S)+* President, Marmik Oil Com- 1977 First Commercial
El Dorado, Arkansas pany, engaged in explo- Corporation
Age: 48 ration for and produc- Little Rock, Arkan-
tion of oil and gas. sas
Chairman and Chief Exec-
utive Officer of Murphy-
Graham, Inc. and Presi-
dent, Murphy Motor Co.,
engaged in automobile
dealerships.
R. Madison Murphy(S) Chairman of the Board of 1993 First United
El Dorado, Arkansas the Company since Octo- Bancshares, Inc.
Age: 38 ber 1, 1994, Executive El Dorado, Arkansas
Vice President and Chief
Financial and Adminis-
trative Officer of the
Company from March 1,
1992 to October 1, 1994,
Chief Administrative po-
sition added February 3,
1993, Vice President,
Planning of the Company
from February 1, 1988 to
March 1, 1992, also held
additional office of
Treasurer of the Company
from July 1, 1990 to Au-
gust 1, 1991.
William C. Nolan, Partner, Nolan and 1977 First Commercial
Jr.(S)+* Alderson, Attorneys. Corporation
El Dorado, Arkansas Little Rock, Arkan-
Age: 56 sas
Caroline G. Theus*# President, Inglewood Land 1985 None
Alexandria, Louisiana and Development Company,
Age: 52 a farming and land
holding corporation.
3
PRINCIPAL OCCUPATION OR
EMPLOYMENT (FOR MORE OTHER PUBLIC
THAN THE PAST FIVE YEARS DIRECTOR COMPANY
NAME AND AGE UNLESS OTHERWISE STATED) SINCE DIRECTORSHIPS
------------ -------------------------- -------- --------------------
Lorne C. Webster+* Chairman of Prenor Group 1989 Bankmont Financial
Montreal, Quebec, Ltd., a financial Corp.
Canada services corporation. Chicago, Illinois
Age: 67 H. B. Fuller Company
St. Paul, Minnesota
- ---------
(S) Executive Committee
+ Audit Committee
* Executive Compensation and Nominating Committee
# Public Policy and Environmental Committee
Claiborne P. Deming, C. H. Murphy, Jr., Michael W. Murphy, R. Madison
Murphy, William C. Nolan, Jr. and Caroline G. Theus are all related by blood.
Michael W. Murphy and R. Madison Murphy are sons of C. H. Murphy, Jr.,
Claiborne P. Deming and William C. Nolan, Jr. are nephews of C. H. Murphy,
Jr., and Caroline G. Theus is a niece of C. H. Murphy, Jr. These six nominees,
their spouses, and members of their immediate families directly or indirectly
own in the aggregate approximately 25% of the outstanding Common Stock of the
Company and may be considered the controlling persons of the Company. See also
"Certain Stock Ownerships".
COMMITTEES
The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee, the Executive Compensation and Nominating
Committee, and the Public Policy and Environmental Committee. The Executive
Committee is empowered to exercise certain functions of the Board of Directors
when the Board is not in session. The Audit Committee's functions include
supervision and review of the results and scope of the work of the Company's
independent auditors and the Company's internal Audit Division. This committee
meets with representatives of the independent auditors and with members of the
internal Audit Division for these purposes. The Executive Compensation and
Nominating Committee administers the Company's Stock Incentive Plan and
reviews generally the compensation of all executive and key personnel of the
Company and subsidiaries. This committee specifically determines the
compensation of the Chairman of the Board, the President, and certain other
officers.
4
Other duties and authority of the Executive Compensation and Nominating
Committee, as fixed by the Board of Directors, are as follows:
"The Executive Compensation and Nominating Committee shall have the
power to: propose and consider suggestions as to candidates for membership
on the Board; review and propose to the Board criteria for Board
membership and responsibilities; periodically recommend to the Board
candidates for vacancies on the Board due to resignations or retirements
or due to such standards for composition of Board membership as may from
time to time legally prevail; review and recommend to the Board such
modifications to the prevailing Board of Directors retirement policy as
may be deemed appropriate in light of contemporary standards; and propose
to the Board on or before the February meeting of each year a slate of
directors for submission to the stockholders at the annual meeting."
Stockholders desiring to recommend for consideration by the Executive
Compensation and Nominating Committee candidates for membership on the Board
of Directors should address their recommendations to: Executive Compensation
and Nominating Committee of the Board of Directors, c/o Secretary, Murphy Oil
Corporation, P.O. Box 7000, El Dorado, Arkansas 71731-7000.
In May 1994, the Board established the Public Policy and Environmental
Committee. This committee is to review and provide oversight of the Company's
environmental, health and safety compliance policies, programs and practices.
MEETINGS AND ATTENDANCE
During 1995 there were seven meetings of the Board of Directors, twelve
meetings of the Executive Committee, four meetings of the Audit Committee, two
meetings of the Executive Compensation and Nominating Committee, and two
meetings of the Public Policy and Environmental Committee. All nominees
attended a minimum of 75% of the total number of meetings of the Board of
Directors and committees on which they served.
COMPENSATION OF DIRECTORS
The Company has a standard arrangement for compensation of directors who are
not also employees of the Company. Under this arrangement nonemployee
directors are compensated at the rate of $20,000 per annum plus $1,000 for
each meeting attended of the Board, the Audit Committee, the Executive
Compensation and Nominating Committee, or the Public Policy and Environmental
Committee. The Chairman of the Board is paid
5
$70,000 per annum. No compensation is paid for attendance at meetings of the
Executive Committee. The Company also reimburses directors for travel, lodging
and related expenses they incur in attending Board and committee meetings.
The Company adopted a retirement plan for nonemployee directors (the
"Director Retirement Plan") effective May 1, 1994. The Director Retirement
Plan provides a retirement benefit to any nonemployee director who has served
as a director with at least five (5) years of service if retirement occurs at
or after the age of 72, or with at least ten (10) years of service if
retirement occurs prior to the age of 72. The Director Retirement Plan will
pay an annual benefit equal to the annual retainer in effect at the time of
the director's retirement. Benefits will be paid for a period equal to years
of service. Payment of retirement benefits will be in the form of quarterly
payments which will commence on the first day of the calendar quarter
following the later of the director's attainment of age 65 or actual
retirement from the Board. If a director dies prior to retirement from the
Board, no benefits will be paid under this plan. In the event a director dies
after retirement from the Board, benefits will be paid to the surviving
spouse, but in no event will the total of such benefits exceed ten (10) years.
If there is no surviving spouse, no benefits will be paid to any other party,
beneficiary or estate.
CERTAIN STOCK OWNERSHIPS
The following table and related text sets forth information, by the
categories listed, concerning ownership of Common Stock of the Company at
February 1, 1996 with respect to each director or nominee, directors, nominees
and officers as a group, and each person known to the Company to own as much
as 5% of the Company's Common Stock.
TYPE OF OWNERSHIP
----------------------------------------------
VOTING AND
INVESTMENT
PERSONAL, POWER ONLY, SUBJECT TO
WITH FULL SPOUSE AND NOT OPTIONS PERCENT OF
VOTING AND PERSONAL, AS AND OTHER INCLUDED IN EXERCISABLE OUTSTANDING
INVESTING BENEFICIARY HOUSEHOLD OTHER WITHIN (IF GREATER
NAME POWER OF TRUST(S) MEMBERS(1) COLUMNS(2) 60 DAYS TOTAL THAN .09)
---- ---------- ------------ ---------- ----------- ----------- --------- -----------
B. R. R. Butler......... 2,000 -- -- -- -- 2,000 --
George S. Dembroski..... -- -- -- -- -- -- --
Claiborne P. Deming..... 99,797 382,384 88,644 471,980 31,250 1,074,055 2.4
H. Rodes Hart........... -- -- -- 264,670 -- 264,670 .6
Vester T. Hughes, Jr.... 3,474 -- -- -- -- 3,474 --
C. H. Murphy, Jr........ 1,188,361 -- 3,036 2,997,312 -- 4,188,709 9.3
Michael W. Murphy....... 137,195 306,696 32,049 27,927 -- 503,867 1.1
R. Madison Murphy....... 112,111 610,862 81,536 619,052 -- 1,423,561 3.2
William C. Nolan, Jr.... 163,483 130,798 500 484,196 -- 778,977 1.7
Caroline G. Theus....... 106,725 161,342 13,378 140,115 -- 421,560 .9
Lorne C. Webster........ -- -- -- 2,600 -- 2,600 --
All directors together
with seven officers
as a group............. 1,831,872 1,592,082 219,253 5,007,852 76,287 8,727,346 19.5
6
- ---------
(1) Includes shares directly owned and shares owned as beneficiary of trusts.
(2) Includes shares held as trustee for others and shares owned by a
corporation or other organization of which the named person is an officer.
Under the securities laws of the United States, the Company's directors and
its executive officers are required to report their ownership of the Company's
common stock and any changes in that ownership to the Securities and Exchange
Commission and the New York Stock Exchange. Specific due dates for these
reports have been established and the Company is required to report in this
proxy statement any failure to file by these dates. During 1994 and 1995, each
of the directors and officers satisfied their filing requirements except for
H. Rodes Hart. Mr. Hart is one of the trustees for certain trusts of which his
three adult children are beneficiaries. Mr. Hart expressly disclaims
beneficial ownership of shares of the Company's common stock held by the
trusts. Two of the trusts made sales totalling 10,000 shares in 1994 and
totalling 15,000 shares in 1995. Four reports reporting five transactions were
not filed on a timely basis but have now been submitted.
The only persons or entities known to the Company to be the owner of more
than 5% of the Company's outstanding stock, other than C. H. Murphy, Jr., 200
Jefferson Avenue, El Dorado, Arkansas, whose holdings are described above,
are: First United Bancshares, Inc., Main at Washington Streets, El Dorado,
Arkansas; and Capital Guardian Trust Company and Capital Research and
Management Company, 333 South Hope Street, Los Angeles, California. First
United Bancshares, Inc. has advised the Company that it exercises voting or
investment power over 2,543,419 shares of the Company's Common Stock,
representing 5.7% of the total outstanding. Capital Guardian Trust Company and
Capital Research and Management Company, operating subsidiaries of The Capital
Group Companies, Inc., exercised as of December 29, 1995, investment
discretion with respect to 232,900 and 3,350,400 shares, respectively, or a
combined total of 8.0% of outstanding stock which was owned by various
institutional investors.
7
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the individual
who served as the Company's chief executive officer during 1995 and the four
other most highly compensated executive officers of the Company at the end of
1995:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
---------------------
ALL
RESTRICTED OTHER
STOCK SECURITIES COMPEN-
NAME AND PRINCIPAL SALARY BONUS AWARDS UNDERLYING SATION
POSITION YEAR ($)(1) ($)(2) ($)(3) OPTIONS (4)
- ---------------------- ---- ------- ------- ---------- ---------- -------
Claiborne P. Deming 1995 400,008 -- -- 12,000 29,728
President and Chief
Executive Officer, 1994 330,840 74,873 141,750 6,500 25,132
Murphy Oil Corporation 1993 292,500 110,000 -- 7,000 19,721
Enoch L. Dawkins 1995 251,674 13,433 -- 8,000 19,385
President, Murphy
Exploration & 1994 241,668 45,000 91,125 4,000 18,152
Production Company (a 1993 233,250 60,000 -- 4,000 15,512
100% subsidiary)
Herbert A. Fox, Jr. 1995 251,674 -- -- 8,000 17,760
Vice President, 1994 216,670 65,000 70,875 2,750 15,438
Murphy Oil Corporation 1993 197,505 35,000 -- 3,000 12,781
Steven A. Cosse 1995 217,504 -- -- 8,000 14,750
Senior Vice President
and General 1994 185,335 33,500 50,625 2,250 12,738
Counsel, Murphy Oil 1993 166,670 42,500 -- 2,500 10,613
Corporation
Gerald McAully 1995 203,217(5) -- -- -- 4,550
President, 1994 189,412(5) 20,000(5) 70,875 2,750 3,981
Murphy Eastern Oil 1993 177,540(5) 60,000(5) -- 3,000 2,188
Corporation
(a 100% subsidiary)
- ---------
(1) Includes amounts of cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.
(2) Bonuses were awarded and paid in February or March of the following year.
(3) There were no grants of performance-based restricted stock in 1995.
Represents the closing stock price of unrestricted stock on date of grant
($40.50 on March 2, 1994) times the number of restricted shares granted.
Dividends are being paid on restricted stock at the same rate paid to all
shareholders. Awards are subject to performance based conditions and are
forfeited if grantee terminates for any reason other than retirement,
death or full disability. None of the restricted stock awards vest in
under five years from the date of grant. On December 31, 1995, Mr. Deming
held a total of 7,000 restricted shares having a then current value of
$290,500; Mr. Dawkins held a total of 4,750 restricted shares having a
then current value of $197,125; Mr. Fox held a total of 3,500
8
restricted shares having a then current value of $145,250; Mr. Cosse held a
total of 2,500 restricted shares having a then current value of $103,750;
Mr. McAully held a total of 3,500 restricted shares having a then current
value of $145,250.
(4) The total amounts shown in this column for 1995 consist of the following:
Mr. Deming: $9,100--Dividends on restricted stock; $20,004--Company
contributions to defined contribution plan; $624--Benefit attributable to
Company-owned term life insurance policy. Mr. Dawkins: $6,175--Dividends
on restricted stock; $12,586--Company contributions to defined
contribution plan; $624--Benefit attributable to Company-owned term life
insurance policy. Mr. Fox: $4,550--Dividends on restricted stock;
$12,586--Company contributions to defined contribution plan; $624--Benefit
attributable to Company-owned term life insurance policy. Mr. Cosse:
$3,250--Dividends on restricted stock; $10,876--Company contributions to
defined contribution plan; $624--Benefit attributable to Company-owned
term life insurance policy. Mr. McAully: $4,550--Dividends on restricted
stock.
(5) Represents U.S. dollar equivalent. Actual payments made in British pounds
sterling.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to stock options exercised in fiscal
1995 and the fiscal year-end value of unexercised options for each officer
listed in the compensation table (Named Executives).
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT FY-
SHARES OPTION AT FY-END (#) END ($)(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ ------------ ----------- ------------- ----------- -------------
Claiborne P. Deming..... -- -- 25,000 22,000 $147,094 $28,312
Enoch L. Dawkins........ -- -- 4,500 14,000 24,281 16,625
Herbert A. Fox, Jr...... -- -- 10,000 12,250 39,719 12,078
Steven A. Cosse......... -- -- 3,250 11,500 17,609 10,000
Gerald McAully.......... -- -- 15,500 4,250 72,469 12,078
- ---------
(1) Represents market value of underlying securities at year-end less the
exercise price.
9
OPTION GRANTS
Shown below is further information on grants of stock options pursuant to
the 1992 Stock Incentive Plan during the fiscal year ended December 31, 1995,
to the officers of the Company listed in the compensation table.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES BASE PRICE EXPIRATION PRESENT
NAME GRANTED (#)(1)(2) IN FISCAL YEAR ($/SH) DATE VALUE ($)(3)
- ---- ----------------- -------------- ----------- ---------- ------------
Claiborne P. Deming..... 12,000 8.45% $43.9375 01/31/05 $163,920
Enoch L. Dawkins........ 8,000 5.63% 43.9375 01/31/05 109,280
Herbert A. Fox, Jr...... 8,000 5.63% 43.9375 01/31/05 109,280
Steven A. Cosse......... 8,000 5.63% 43.9375 01/31/05 109,280
Gerald McAully.......... -- -- -- -- --
- ---------
(1) No stock appreciation rights were granted in 1995.
(2) Options granted in 1995 vest 50% at the end of two years and 100% at the
end of three years from the date of grant and are exercisable for a period
of 10 years from the date of grant.
(3) Values were based on the Black-Scholes option pricing model adapted for
use in valuing executive stock options. The actual value, if any, an
executive may realize will depend on the excess of the stock price over
the exercise price on the date the option is exercised, so there is no
assurance that value realized by the executive will be at or near the
value estimated by the Black-Scholes model. The estimated values under
that model are based on arbitrary assumptions as to certain variables and
in 1995 included the following:
. Risk-free rate of return___________________7.7%
. Stock volatility_________________________19.49%
. Future dividend yield_____________________3.10%
. Option term____________________________10 years
Based on the Black-Scholes option pricing model, using the above
assumptions, the options granted in 1995 have been valued at $13.66 per
share as of the grant date.
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Executive Compensation and Nominating Committee of the
Board of Directors of the Company during 1995 were Messrs. Butler, Hart, C. H.
Murphy, Jr., Michael W. Murphy, Nolan, Webster, and Ms. Theus.
In 1995 the Company purchased crude oil at competitive prices, and on terms
no more favorable to the sellers than those offered by unaffiliated third
parties, from properties in which interests were owned by directors and
affiliates of directors. These directors and their affiliates and the amounts
of such purchases were: Marmik Oil Company (89% owned by Michael W. Murphy)
$255,667 and Munoco Company (associate of Mr. Nolan) $138,716.
COMPENSATION COMMITTEE REPORT FOR 1995
The Executive Compensation and Nominating Committee of the Board of
Directors of the Company, which is comprised entirely of independent, outside
directors, has prepared this Compensation Committee Report which describes the
guiding principles followed by the Company in establishing its pay practices
and reviews compensation decisions which were made during 1995 affecting the
Company president and four other most highly compensated executive officers.
EXECUTIVE COMPENSATION PHILOSOPHY AND PRINCIPLES
The Company's executive compensation programs and plans are based on
principles designed to align the interests of executives with those of
stockholders and provide a direct link with Company values, objectives,
business strategy and financial results. The following general guidelines have
been adopted by the Committee and have been used as the basic architecture for
all executive compensation and benefit arrangements for the Company:
. All programs are directed toward attracting and retaining key executives
who are critical to the long-term success of the Company and each of its
business units and who exhibit a high degree of business responsibility,
personal integrity and professionalism.
. These programs are designed to reward executives for both the short and
long-term achievement of Company and business unit objectives that lead
to the enhancement of shareholder value.
. All pay and benefit programs are intended to be competitive within each
industry segment, with upside opportunity and downside risk linked to
the achievement of annual and long-term performance objectives which are
regularly reviewed and approved by the Committee.
11
At the present time, executive compensation programs consist of base salary,
an annual cash incentive plan and long-term incentives in the form of both
stock options and performance-based restricted stock. The executive benefits
that are offered are typical of those provided by others in the industry. Each
of these compensation arrangements is briefly reviewed in the following
section.
BASE SALARY PRACTICES
Officers and other employees are compensated within established salary range
guidelines that are generally based on similar positions in companies of
comparable size, complexity, and industry orientation to the Company. The
actual base pay level for each officer is based on a combination of
experience, performance and other factors that are determined to be important
by the Committee. Each year, the Company participates in salary surveys within
each industry segment and from time to time uses the services of outside
consultants to further supplement its competitive information. The petroleum
industry survey in which the Company participates contains over 25
corporations that the Committee believes are representative of the Company's
labor market for management talent. The survey is conducted by a major
compensation consulting firm. Many of the companies in the survey group are
included in the S&P Oil-Domestic Integrated line on our performance graph. The
Committee generally targets the base salary of most officers to be at or near
the median (50th percentile) of the competitive market which has been
described to be other integrated energy companies. The actual salaries and the
amount of increase for 1995 to the Named Executives were near the median
levels of the salaries and increases in the referenced survey. The base salary
of most officers is reviewed annually, with the amount of any increases based
on factors such as Company performance, general economic conditions,
marketplace compensation trends and individual performance. In determining
base salary and increase in salaries, the most important criteria in the
Committee's analysis are marketplace comparisons and individual performance.
Overall corporate performance which may include those measures used to
determine annual incentive compensation awards were also considered by the
Committee in making salary adjustments in 1995.
ANNUAL INCENTIVE COMPENSATION PROGRAM
Officers and other key management employees of the Company are eligible to
participate in an annual incentive compensation plan with awards based on
criteria that the Committee has determined are critical to the short-term
success of the Company. These criteria include corporate and business unit
financial objectives as well as individual objectives. The program establishes
threshold, target and maximum levels of awards that may
12
be paid for the achievement of specific predetermined performance objectives.
Each participant in the annual incentive compensation plan has a target
incentive opportunity that would provide an industry median incentive award if
the Company and/or its business units achieved the targeted level of
performance. For corporate officers and staff, 100% of the award is based on
Company financial results. For other participants, at least 50% of the award
is based upon corporate-wide financial results, while the remaining 50% is
based on business unit and/or individual results. Target awards for officers
and other participants range from 45% of base salary for the President to 15%
for certain other participants. The Committee has targeted bonuses for each
position to correspond with the median bonus of similar positions in other
domestic integrated oil companies as reported in the same petroleum survey
cited for base salary comparisons. The Company uses a performance payout
matrix to determine actual awards, which in most instances are based on at
least two measurable financial or operational results. For 1995, these
measures included the following: return on average assets, cash flow, reserve
replacement ratio, finding and development costs, earnings per barrel, and
similar measures related to specific business unit performance.
The Company did not meet either its corporate-wide return on average assets
target or targeted cash flow goal for 1995 and as such made no annual
incentive awards to corporate officers and staff participants. As stated
above, 50% of incentive awards for other participants were also based on the
corporate-wide financial performance. The remaining 50% portion of such
participant's incentive award was evaluated on a case-by-case basis and was
made according to business unit and individual performance as determined by
the Committee.
LONG-TERM INCENTIVE COMPENSATION
Under the 1992 Stock Incentive Plan (the 1992 Plan) as approved by the
Company's stockholders, long-term incentives may be provided through stock
options, stock appreciation rights and performance-based restricted stock, all
designed to increase the stock ownership of management and link these key
individuals directly to stockholders. All long-term incentive awards granted
during 1995 were granted under the 1992 Plan. Where appropriate, the Committee
uses the Black-Scholes option valuation model to determine the expected value
of stock options. Under the 1992 Plan, the Committee may award up to one-half
of one percent of the total issued and outstanding shares as of December 31 of
the immediately preceding year for executive long-term incentives. The 1992
Plan provides that no more than 50% of the shares may be granted as incentive
stock options, and no more than 50% can be granted as performance-based
restricted stock.
A stock option granted under the Plan gives the executive the right to
purchase a specified number of shares of the Company's common stock at an
option price equal to the
13
market price on the date the option was granted. Options, which may be either
non-qualified stock options or incentive stock options, vest 50% at the end of
two years and 100% at the end of three years from the date of grant and are
exercisable for a period of 10 years from the date of grant. The size of
option grants awarded each year is based on competitive practices in general
industry using comparative data provided by a major compensation consulting
firm. Actual grant levels of long-term incentive award opportunities are
generally based in a range between the 25th and 50th percentile competitive
practices in the survey data base. The Company's stock option grants in 1995
were between the 25th and 50th percentile levels of general industry
practices. In addition, the Committee considers the total number of grants
each executive has been awarded in recent years in determining whether to
grant additional stock options or performance-based restricted stock. Non-
qualified stock options were granted in 1995 to all Named Executives, with the
exception of Mr. McAully; however, no stock appreciation rights were granted
in 1995. In addition, there were no grants of performance-based restricted
stock in 1995.
The Company is continuing to study Section 162(m) of the Internal Revenue
Code which limits the amount of compensation that can be deducted by the
Company each year to $1,000,000.00 per proxy-named executive. The transitional
period for compliance extends until 1997. Therefore, the Company intends to
review the final regulations as they apply to the above stated plans to
determine what actions, if any, may be necessary for stockholder disclosure
and approval. The Company believes that all compensation paid to the Named
Executives for 1995 will be fully deductible to the Company for tax purposes.
DISCUSSION OF 1995 COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
Mr. Claiborne P. Deming assumed the role of President and Chief Executive
Officer on October 1, 1994. He served as President and Chief Executive Officer
of the Company for the complete fiscal year 1995. During 1995, the Committee
made the following determinations regarding Mr. Deming's compensation:
. Mr. Deming received no base salary adjustment during 1995. When Mr.
Deming was promoted on October 1, 1994 to the position of President and
Chief Executive Officer, his salary was increased at that time to
$400,000. As a result of this action in late 1994, the Committee did not
see the requirement for a further salary adjustment during 1995.
. As noted earlier, the Company failed to reach its corporate-wide
performance thresholds and targets for return on average assets and cash
flow for 1995. According
14
to the terms of the annual incentive compensation plan, Mr. Deming did
not receive a cash incentive award for 1995 performance.
. On January 31, 1995, the Committee granted 12,000 non-qualified stock
options to Mr. Deming. The options were granted at a share price of
$43.9375, which was the share's fair market value on the date of grant.
These options will vest 50% two years from the date of grant and 100%
three years from the date of grant. The option grant was made in
consideration of Mr. Deming's performance during the preceding fiscal
year and in recognition of his promotion to President and Chief Executive
Officer. The size of Mr. Deming's grant was below the 25th percentile of
competitive practice based upon survey data provided by a major
compensation consulting firm.
The Executive Compensation and Nominating Committee members during 1995 were
Messrs. Butler, Hart, C. H. Murphy, Jr., Michael W. Murphy, Nolan, Webster,
and Ms. Theus.
15
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following line graph presents a comparison of the cumulative five-year
shareholder returns (including the reinvestment of dividends) for the Company,
the Standard and Poor 500 Stock Index and the S&P Oil-Domestic Integrated
Index.
MURPHY OIL CORPORATION
COMPARISON OF FIVE-YEAR CUMULATIVE SHAREHOLDER
RETURNS
[GRAPH APPEARS HERE]
================================================================================
1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------
Murphy Oil Corporation 100 90 98 113 124 125
S&P 500 Index 100 130 140 155 157 215
S&P Oil--Domestic Integrated 100 93 95 101 106 120
================================================================================
Data are provided by Standard & Poor's Compustat.
16
RETIREMENT PLANS
The following table shows the estimated annual pension benefit payable, at
age 65, under Murphy Oil Corporation's Retirement Plan at December 31, 1995
for the salary and length of service indicated. The amounts shown are subject
to reduction for social security benefits.
PENSION PLAN TABLE
YEARS OF SERVICE
------------------------------------------------------------------------------
REMUNERATION(/1/) 15 20 25 30 35 40
- ----------------- -------- -------- -------- -------- -------- --------
$150,000................ $ 36,000 $ 48,000 $ 60,000 $ 72,000 $ 84,000 $ 96,000
200,000................ 48,000 64,000 80,000 96,000 112,000 128,000(/2/)
250,000................ 60,000 80,000 100,000 120,000 140,000(/2/) 160,000(/2/)
300,000................ 72,000 96,000 120,000 144,000(/2/) 168,000(/2/) 192,000(/2/)
350,000................ 84,000 112,000 140,000(/2/) 168,000(/2/) 196,000(/2/) 224,000(/2/)
400,000................ 96,000 128,000(/2/) 160,000(/2/) 192,000(/2/) 224,000(/2/) 256,000(/2/)
450,000................ 108,000 144,000(/2/) 180,000(/2/) 216,000(/2/) 252,000(/2/) 288,000(/2/)
500,000................ 120,000 160,000(/2/) 200,000(/2/) 240,000(/2/) 280,000(/2/) 320,000(/2/)
600,000................ 144,000(/2/) 192,000(/2/) 240,000(/2/) 288,000(/2/) 336,000(/2/) 384,000(/2/)
700,000................ 168,000(/2/) 224,000(/2/) 280,000(/2/) 336,000(/2/) 392,000(/2/) 448,000(/2/)
- ---------
(1) During 1995, the maximum compensation limit for qualified plans, as
established by the Internal Revenue Service, was $150,000. The
compensation limit is unchanged in 1996.
(2) Exceeds presently allowable maximum legislative limits for annual pension
benefits under a defined benefit pension plan. In 1995, the maximum
benefit allowable was $120,000.
A portion of the benefits shown above would be paid under the Company's
Supplemental Benefit Plan to the extent such benefits exceed legislative
limitations.
The credited years of service for Messrs. Deming, Fox and Cosse are
seventeen years, twenty-six years and sixteen years, respectively.
As of January 1, 1992 employees of Murphy Exploration & Production Company,
formerly named Ocean Drilling & Exploration Company (ODECO), began
participating in the Company's plans. Prior to that time such employees
participated in similar plans of ODECO. Employees of the Company or one of its
100% owned subsidiaries who were previously included in the ODECO Retirement
Plan may receive a benefit upon retirement
17
which is based on a combination of the Company and ODECO plans. The following
table indicates the estimated annual benefit computed on a straight life
annuity basis payable, at age 65, under the ODECO plan for the salary and
length of service indicated.
PENSION PLAN TABLE
YEARS OF SERVICE
-----------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
$200,000....................... $ 59,352 $ 78,082 $ 98,812 $118,542 $138,272*
250,000....................... 74,352 98,082 123,812* 148,542* 173,272*
300,000....................... 89,352 118,082* 148,812* 178,542* 208,272*
350,000....................... 104,352 138,082* 173,812* 208,542* 243,272*
- ---------
* Exceeds presently allowable maximum legislative limits for annual pension
benefits under a defined benefit pension plan.
The above tables do not reflect any reductions in retirement benefits that
would result from the selection of one of either plan's various available
survivorship options nor the actuarial reductions required by the plans for
retirement earlier than age 62.
The credited years of service for Mr. Dawkins is thirty years.
It is not feasible to calculate the specific amount attributable to the plan
in respect to each employee. The Company had no required contributions to the
Retirement Plan in 1995 and therefore no contributions were made.
Murphy Eastern Oil Company has a non-contributory Retirement Benefit Plan in
which officers participate on the same basis as other employees. Under the
plan, a retired employee will receive a monthly payment equal to 1/60 of his
monthly basic pay (bonuses and other form of additional compensation are
excluded) for each year of employment and based on the final 12 months of
salary. The amount will fluctuate depending on the number of years of
employment and is subject to social security limits.
The following table indicates the estimated annual benefit computed on a
straight line annuity basis paid at age 65 under the Murphy Eastern Oil
Company Plan for the salary and length of service indicated. The benefits are
computed on the basis of the British pounds sterling.
18
PENSION PLAN TABLE
YEARS OF SERVICE
----------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ -------------- -------------- -------------- --------------- ---------------
(Pounds)100,000......... (Pounds)25,000 (Pounds)33,333 (Pounds)41,667 (Pounds) 50,000 (Pounds) 58,333
125,000......... 31,250 41,667 52,083 62,500 72,917
150,000......... 37,500 50,000 62,500 75,000 87,500
175,000......... 43,750 58,333 72,917 87,500 102,083
200,000......... 50,000 66,667 83,333 100,000 116,667
The above table does not reflect the actuarial reductions required by the
plan for retirement earlier than age 62.
The credited years of service for Mr. McAully is twenty-nine years.
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors desires to obtain from the stockholders an indication
of their approval or disapproval of the Board's action in appointing KPMG Peat
Marwick LLP, Certified Public Accountants, as independent auditors of the
Company for the year 1996. KPMG Peat Marwick LLP has been serving the Company
and its subsidiaries as independent auditors for many years. The firm has
advised the Company that its members have no direct or indirect financial
interest in the Company or any of its subsidiaries. Members of the firm are
expected to be present at the Annual Meeting for the purpose of responding to
inquiries by stockholders and such representatives will have an opportunity to
make a statement if they desire to do so.
In the event a majority of the stockholders voting should indicate they
disapprove the appointment of KPMG Peat Marwick LLP the adverse vote will be
considered as a directive to the Board of Directors to select other auditors
for the following year. Because of the difficulty and expense of making any
substitution of auditors during a year, it is contemplated that the
appointment for 1996 will be permitted to stand unless the Board finds other
good reason for making a change.
STOCKHOLDER PROPOSALS
Stockholder proposals for the 1997 Annual Meeting of stockholders must be
received by the Company at its executive offices on or before December 2, 1996
in order to be considered for inclusion in the proxy materials.
19
OTHER INFORMATION
The management of the Company knows of no business other than that described
above that will be presented for consideration at the meeting. If any other
business properly comes before the meeting, it is the intention of the persons
named in the proxies to vote such proxies thereon in accordance with their
judgment.
The expense of this solicitation, including cost of preparing and mailing
this Proxy Statement, will be paid by the Company. Such expenses may also
include the charges and expenses of banks, brokerage houses and other
custodians, nominees or fiduciaries for forwarding proxies and proxy material
to beneficial owners of shares.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
W. BAYLESS ROWE
Secretary
El Dorado, Arkansas
April 4, 1996
________________________________________________________
PLEASE COMPLETE AND RETURN YOUR PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IF IT IS MAILED
IN THE UNITED STATES OF AMERICA.
________________________________________________________
20
[SPUR LOGO APPEARS HERE]
[MURPHY OIL CORPORATION LOGO APPEARS HERE]
[SPUR LOGO
APPEARS HERE]
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
ANNUAL MEETING
OF STOCKHOLDERS
EL DORADO, ARKANSAS
MAY 8, 1996
- --------------------------------------------------------------------------------
PLEASE MARK VOTE IN OVAL USING DARK INK ONLY. [x]
[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. ELECTION OF DIRECTORS-- For Withhold For All (Except
B.R.R. Butler, G.S. Dembroski, [_] [_] [_] Nominee(s)
C.P. Deming, H.R. Hart, written below) __________
V.T. Hughes, Jr., C.H. Murphy, Jr.,
M.W. Murphy, R.M. Murphy,
W.C. Nolan, Jr., C.G. Theus,
and L.C. Webster.
2. Ratify the appointment of For Against Abstain
KPMG Peat Marwick LLP [_] [_] [_]
as auditors. _________
Dated_________ , 1996
-----------------------------------------
-----------------------------------------
Please sign exactly as your name or names
appear hereon. For joint accounts, each
owner should sign. When signing as
executor, administrator, attorney,
trustee or guardian, etc., please give
your full title. Please return promptly.
- --------------------------------------------------------------------------------
[SPUR LOGO APPEARS HERE] [MURPHY OIL CORPORATION LOGO APPEARS HERE]
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, MAY 8, 1996
The stockholder(s) whose name(s) appears on the reverse side hereby appoints
R. Madison Murphy and Claiborne P. Deming, or each of them, as the
stockholder's proxy or proxies, with full power of substitution, to vote all
shares of Common Stock of Murphy Oil Corporation which the stockholder is
entitled to vote at the Annual Meeting of Stockholders to be held at the South
Arkansas Arts Center, 110 East 5th Street, El Dorado, Arkansas, on May 8,
1996, at 10:00 a.m., local time, and any adjournments thereof, as fully as the
stockholder could if personally present.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE, BUT IF NONE ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL
---
NOMINEES LISTED ON THE REVERSE SIDE, AND FOR PROPOSAL 2.
---
(continued on reverse side)
