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
UNIT CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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:
___________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________________________________________________
(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):
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
(5) Total fee paid:
___________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
___________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
(3) Filing Party:
___________________________________________________________________________
(4) Date Filed:
___________________________________________________________________________
Notes:
UNIT CORPORATION
__________
Notice of Annual Meeting
and
Proxy Statement
__________
Annual Meeting of Shareholders
May 1, 19967, 1997
TABLE OF CONTENTS
_________________
Page
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CHAIRMAN'S LETTER.......................................... 1LETTER. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS................... 2SHAREHOLDERS . . . . . . . . . . . . . . . .2
PROXY STATEMENT............................................ 4STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
General Information................................... 4Information . . . . . . . . . . . . . . . . . . . . . . . .4
Expenses of Solicitation......................... 4Solicitation . . . . . . . . . . . . . . . . . . .4
Revocability of Proxies.......................... 5Proxies . . . . . . . . . . . . . . . . . . .5
Manner of Voting Proxies......................... 5Proxies . . . . . . . . . . . . . . . . . . .5
Item No. 1 Election of Directors...................... 6Directors. . . . . . . . . . . . . . . . . .5
Board of Directors and Committees................ 10
General................................ 10Committees. . . . . . . . . . . . . . .9
General . . . . . . . . . . . . . . . . . . . . . . . . .9
Committees of the Board................Board . . . . . . . . . . . . . . . . .9
Compensation. . . . . . . . . . . . . . . . . . . . . . .9
Executive Compensation . . . . . . . . . . . . . . . . . . . 10
Compensation........................... 11
Executive Compensation........................... 12
Summary Compensation Table............. 12Table. . . . . . . . . . . . . . . 10
Option/SAR Grants in 1995.............. 131996 . . . . . . . . . . . . . . . 12
Aggregate Option/SAR Exercises in
19951996 and Option Values at
December 31, 1995................. 141996. . . . . . . . . . . . . . . . . 13
Long Term Incentive Plan Awards........Awards . . . . . . . . . . . . 13
Pension Plans . . . . . . . . . . . . . . . . . . . . . 13
Change-In-Control Arrangements. . . . . . . . . . . . . 14
Pension Plans.......................... 14
Change-In-Control Arrangements......... 15
Report of Compensation Committee of
The Board of Directors on
Executive Compensation............ 15Compensation . . . . . . . . . . . . . . 14
Voting Securities and Common Stock Ownership
of Directors and Management................. 18Management . . . . . . . . . . . . . . 16
Stock Performance Graph.......................... 19
(i)
Graph. . . . . . . . . . . . . . . . . . . 18
Compensation Committee Interlocks
and Insider Participation................... 20Participation . . . . . . . . . . . . . . . 19
(i)
Item No. 2. Ratification of Selection
of Independent Accountants....................... 21Accountants . . . . . . . . . . . . . . . . . 19
Other Matters......................................... 21Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Certain Transactions Between the Company
and Its Officers, Directors, Nominees
for Directors and Their Associates.......... 21Associates . . . . . . . . . . 19
Voting Securities and Common Stock Ownership of
Certain Beneficial Owners................... 22Owners. . . . . . . . . . . . . . . 20
Compliance with Section 16(a) of the
Exchange Act................................ 23Act . . . . . . . . . . . . . . . . . . . . . 21
Matters Which May Come Before The Meeting........ 24Meeting. . . . . . . . . . 21
Submission of Shareholder Proposals.............. 24Proposals. . . . . . . . . . . . . 21
(ii)
Dear Shareholders:
On behalf of the Board of Directors and management, I would like to invite
you to attend Unit Corporation's Annual Meeting of Shareholders to be held on
Wednesday, May 1, 1996,7, 1997, at 11:008:30 a.m., in the Green Room on the ninth floor of
the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma.
By attending the meeting you will have an opportunity to hear a report on
the operations of the Company and to meet our directors and officers.
Information about the meeting, including the various matters on which you,
as our shareholders, will act may be found in the attached Notice of Annual
Meeting of Shareholders and Proxy Statement.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. Please sign, date and return the
enclosed proxy in the envelope provided.
I look forward to your participation and thank you for your continued
support.
Sincerely,
King P. Kirchner
Chairman and Chief
Executive Officer
1
UNIT CORPORATION
1000 Kensington Tower I
7130 South Lewis
Tulsa, Oklahoma 74136
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 1, 19967, 1997
TO THE SHAREHOLDERS OF UNIT CORPORATION:
The Annual Meeting of Shareholders of Unit Corporation, a Delaware
corporation (the "Company"), will be held in the Green Room on the ninth floor
of the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma, on
Wednesday, May 1, 1996,7, 1997, at 11:008:30 a.m., local time, for the following purposes:
Item No. 1 To elect threetwo Class IIII Directors, comprising the members of
the class of directors whose terms expire at the Annual Meeting, for a
three-year term expiring in 1999;2000;
Item No. 2 To ratify the selection of Coopers & Lybrand L.L.P., Tulsa,
Oklahoma, as independent certified public accountants for the Company for
its fiscal year 1996;1997;
and to transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on March 13,
199619, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment(s) thereof. Only shareholders
of record at the close of business on the record date are entitled to notice of
and to vote at the Annual Meeting. A complete list of such shareholders will be
open for examination by any shareholder for any purpose germane to the meeting
at the Company's office at 1000 Kensington Tower I, 7130 South Lewis, Tulsa,
Oklahoma 74136, for a period of ten days prior to the meeting.
2
The Company's Proxy Statement and Annual Report are submitted herewith.
By Order of the Board of Directors
Mark E. Schell
Secretary and
General Counsel
Tulsa, Oklahoma
March 25, 19961997
YOUR VOTE IS IMPORTANT
EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO DATE,
SIGN AND PROMPTLY RETURN YOUR ENCLOSED PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISH AND IN ORDER THAT THE
PRESENCE OF A QUORUM MAY BE ASSURED. THE GIVING OF SUCH PROXY DOES
NOT AFFECT YOUR RIGHT TO TIMELY REVOKE IT LATER OR VOTE YOUR SHARES
IN PERSON IN THE EVENT YOU SHOULD ATTEND THE MEETING.
3
UNIT CORPORATION
1000 Kensington Tower I
7130 South Lewis
Tulsa, Oklahoma 74136
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS MAY 1, 19967, 1997
GENERAL
INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the management and Board of Directors of Unit Corporation (the
"Company") to be used at the Annual Meeting of Shareholders to be held
Wednesday, May 1, 1996,7, 1997, at 11:008:30 a.m., local time, in the Green Room on the ninth
floor of the Bank of Oklahoma Tower, One Williams Center, Tulsa, Oklahoma and
all adjournment(s) thereof, for the purposes set forth in the copy of the Notice
of Annual Meeting which precedes this Proxy Statement. The Company's
executive offices are located at 1000 Kensington Tower I, 7130 South Lewis,
Tulsa, Oklahoma 74136. The approximate date upon which this Proxy Statement,
the accompanying proxy card and the Company's Annual Report to Shareholders are
being mailed to shareholders is March 25, 1996.31, 1997.
At the close of business on March 13, 1996,19, 1997, there were 21,009,63524,176,734
outstanding shares of the Common Stock, par value $.20 per share, of the
CompanyCompany's ("Common Stock"), the holders of which are entitled to one
vote per share on all matters. There is no other class of securities of the
Company entitled to vote at the meeting. Only shareholders of record at the
close of business on March 13, 199619, 1997 will be entitled to vote at the
Annual Meeting.
EXPENSES OF SOLICITATION
The expenses in connection with the solicitation of proxies, including the
cost of preparing, handling, printing and mailing the Notice of Annual Meeting,
Proxy Statement and form of proxy, have been or will be borne by the Company.
The Company may reimburse banks, brokerage houses and other custodians, nominees
and fiduciaries for reasonable expenses incurred in sending proxy material to
their principals to obtain authorization for the execution of proxies.
4
Directors, officers and other employees of the Company may solicit proxies
personally, by telephone or telegram from some shareholders if proxies are not
received promptly. In addition, the firm of Regan & Associates, Inc., New York,
New York, has been retained to assist in the solicitation of proxies at a fee of
$3,500, plus expenses.
4
REVOCABILITY OF PROXIES
The form of proxy enclosed is for use at the Annual Meeting if a
shareholder is unable to attend or does not desire to vote in person. At any
time before the shares represented by the proxy are voted at the Annual
Meeting, the shareholder may revoke the proxy by delivering to the Secretary of
the Company a written revocation of proxy or by the shareholder's affirmatively
electing to vote in person while in attendance at the Annual Meeting.
MANNER OF VOTING PROXIES
The accompanying proxy card is designed to permit each shareholder of
record at the close of business on March 13, 199619, 1997 to vote in the election of
directors and on the proposals described in this statement.
With respect to the election of directors, the proxy card provides space
for a shareholder to withhold voting for any or all nominees for the Board of
Directors or to abstain from voting for any proposal if the shareholder chooses
to do so. Under the provisions of the Delaware General Corporation law and the
Company's By-laws, a majority of the shares of Common Stock, present in person
or represented by proxy, shall constitute a quorum for purposes of the Annual
Meeting. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
Annual Meeting and entitled to vote on the subject matter shall be the act of
the shareholders. Abstentions are treated as votes against a proposal and
broker non-votes have no effect on the vote. Directors shall be elected by a
plurality of the votes present in person or represented by proxy at the Annual
Meeting and entitled to vote on the election of directors.
All shares represented by valid proxies received prior to the meeting, and
not revoked, will be voted. Shares represented by the proxy will be voted in
accordance with the instructions on the proxy.
If the proxy is signed and returned to the Company but no instructions are
given, the proxies intend to vote the shares represented thereby to approve
Items numbered 1 and 2, as set forth in the 5
accompanying Notice of Annual
Meeting of Shareholders. Although the Board of Directors does not contemplate
that any of its nominees will be unavailable for election, in the event of a
vacancy in the slate of nominees it is presently intended that the proxy will be
voted for the election of a nominee who will be selected by the Board of
Directors. As to any other business that may properly come before the meeting,
including all matters incident to the conduct of the meeting, it is intended
that the proxy will be voted in respect thereof in accordance with the judgment
of the person voting the proxies.
ITEM NO. 1 ON THE PROXY CARD
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes - Class I, Class II
and Class III - with each class being as equal in size as possible and with the
term of office of each class ending in successive years. There are currently
eight members of the Board of Directors, two members in Class I and three
members in Class II and Class III. The terms of office of Class IIII will expire
with this Annual Meeting of Shareholders. The terms of the directors of Class
III and Class IIIII do not expire until 19971998 and 1998,1999, respectively, and,
5
consequently, their successors are not to be elected at this Annual Meeting.
The threetwo members of Class III, King P.
Kirchner, Don CookI, John G. Nikkel and Don Bodard,John S. Zink, have been nominated
for re-election. These nominees will, if elected, serve three years until their
successors are duly elected and qualified.
THE BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE BOARD OF DIRECTORS'
NOMINEES FOR CLASS III.I. PROXIES SOLICITED HEREBY WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.
Following is certain information about each nominee - incumbent and those
Directors whose terms of office will continue after the Annual Meeting.
6
NOMINEES FOR TERMS EXPIRING IN 19992000
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 13, 1996(1)
- ---------------- --- ---------------------------- -------- -----------------
King P. Kirchner 68 Chairman of the Board of 1963 1,321,758 (2)
Directors of the Company
and Chief Executive Officer.
Don Cook 71 Member of the Audit and 1963 16,138 (3)
Compensation Committees.
Retired Partner with the
accounting firm of
Finley & Cook.
Don Bodard 76 Chairman of the Board of 1994 1,682,928 (3)
Directors of Ameribank,
Shawnee, Oklahoma.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 13, 1996(1)19, 1997(1)
- -------------- --- ---------------------------- -------- -----------------
John G. Nikkel 6162 President and Chief 1983 394,666 (4)361,509(2)
Operating Officer.
John S. Zink 6768 Member of the Audit and 1982 51,000 (3)53,500(3)
Compensation Committees.
Founder of Zeeco, Inc.,
Tulsa, Oklahoma.
7
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 13, 1996(1)19, 1997(1)
- ------------- --- ---------------------------- -------- -----------------
Earle Lamborn 6162 Senior Vice President- 1979 336,291 (5)300,131(4)
Drilling.
6
William B. Morgan 5152 Member of the Audit 1988 20,000 (3)22,500(3)
Committee. Executive
Vice President and General
Counsel of St. John Medical
Center, Inc.
John H. Williams 7778 Member of the Compensation 1988 11,000 (3)13,500(3)
Committee. Retired in 1978
as Chairman and Chief
Executive Officer of The
Williams Companies of Tulsa,
Oklahoma.
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Approximate
Number of
Shares
Served of Common Stock
As Beneficially
Principal Occupation and Director owned as of
Name Age Five Year Employment History Since March 19, 1997(1)
- ---------------- --- ---------------------------- -------- -----------------
King P. Kirchner 69 Chairman of the Board of 1963 1,224,342(5)
Directors of the Company
and Chief Executive Officer.
Don Cook 72 Member of the Audit and 1963 18,138(3)
Compensation Committees.
Retired Partner with the
accounting firm of
Finley & Cook.
Don Bodard 77 Chairman of the Board of 1994 1,485,428(3)
Directors of Ameribank,
Shawnee, Oklahoma.
(1) The number of shares includes the shares presently issued and outstanding
plus the number of shares which any owner has the right to acquire within
60 days after March 13, 1996.19, 1997. For purposes of calculating the percent of
the shares outstanding held by each owner, the total number of shares
excludes the shares which all other persons have the right to acquire
within 60 days after March 13, 1996,19, 1997, pursuant to the exercise of
outstanding warrants or stock options.
(2) Includes 5,932102,460 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder; 27,913 shares held under the Company's 401(k) thrift plan as of
December 31, 1995.1996; and 7,149 shares held by a private company over which
Mr. Nikkel has voting and investment power. Of the shares listed,
Mr. KirchnerNikkel disclaims any beneficial interest in 8,82876,000 shares.
7
(3) Includes unexercised stock options under the Company's Non-Employee
Directors' Stock Option Plan to each of the following which may be
exercised at the discretion of the holder: Don Cook, 10,000;12,500; William B.
Morgan, 10,000;12,500; John H. Williams, 10,000;12,500; John S. Zink, 10,000;12,500; Don
Bodard, 2,500;5,000; all non-Employee Directors as a group, 42,500.55,000.
(4) Includes 175,500 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder; 26,252 shares held under the Company's 401(k) thrift plan as of
December 31, 1995; and 28,560 shares held by a private company over which
Mr. Nikkel has voting and investment power. Of the shares listed, Mr.
Nikkel disclaims any beneficial interest in 76,000 shares.
8
(5) Includes 96,00053,500 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder and 7,8319,416 shares held under the Company's 401(k) thrift plan as
of December 31, 1995.1996. Of the shares listed, 232,460199,460 are held in trust for
Mr. Lamborn's wife for her benefit and Mr. Lamborn disclaims beneficial
interest in such shares.
(5) Includes 7,594 shares of Common Stock held under the Company's 401(k)
thrift plan as of December 31, 1996. Of the shares listed, Mr. Kirchner
disclaims any beneficial interest in 28,828 shares.
_______________
Mr. Lamborn has been actively involved in the oil field for over 40 years,
joining the Company's predecessor in 1952 prior to its becoming a publicly-held
corporation. He was elected Vice President, Drilling in 1973 and to his current
position as Senior Vice President, Drilling and Directordirector in 1979.
Mr. Morgan was elected a director of the Company in February, 1988. Mr.
Morgan has been Executive Vice President and General Counsel of St. John Medical
Center, Inc., Tulsa, Oklahoma, since March 1, 1995.1995 and, since October 1, 1996,
the President of its principal for profit subsidiary Utica Services, Inc. Prior
thereto, he was a Partner in the law firm of Doerner, Saunders, Daniel &
Anderson, Tulsa, Oklahoma.
Mr. Williams was elected a director of the Company in December of 1988.
Prior to retiring on December 31, 1978, he was Chairman of the Board and Chief
Executive Officer of The Williams Companies, Inc. Mr. Williams also serves as a
director of Apco Argentina, Inc. and Willbros Group, Inc.
Mr. Kirchner, a co-founder of the Company, has been the Chairman of the
Board and a director since 1963 and was President until November, 1983. Mr.
Kirchner is a Registered Professional Engineer within the State of Oklahoma,
having received degrees in Mechanical Engineering from Oklahoma State University
and in Petroleum Engineering from the University of Oklahoma.
Mr. Nikkel joined the Company in 1983 as its President and a director.
From 1976 until January 1982 when he co-founded Nike Exploration Company, Mr.
Nikkel was an officer and director of Cotton Petroleum Corporation, serving as
the President of the Company from 1979 until his departure. Prior to joining
Cotton, Mr. Nikkel was employed by Amoco Production Company for 18 years, last
serving as Division Geologist for Amoco's Denver Division. Mr. Nikkel presently
serves as President and a director of Nike Exploration Company. Mr. Nikkel
received a Bachelor of Science degree in Geology and Mathematics from Texas
Christian University.
Mr. Zink was elected a director of the Company in May, 1982. He is a
principle in several privately held companies engaged in the businesses of
designing and manufacturing equipment used in the petroleum industry,
construction and heating and air conditioning services and installation. He
holds a Bachelor of Science degree in Mechanical Engineering from 9
Oklahoma State
University. He is also a director of Liberty Bankcorp, Tulsa and Oklahoma City,
Oklahoma and Matrix Service Company, Tulsa, Oklahoma.
8
Mr. Cook has served the Company as a director since the Company's
inception. He is a Certified Public Accountant and a retired partner in the
accounting firm of Finley & Cook, Shawnee, Oklahoma.
Mr. Bodard, a co-founder of the Company, served as a Directordirector from 1963
until February, 1988 when he resigned. From February, 1988 until August 23,
1994, when Mr. Bodard was again elected a Directordirector of the Company, he served as
a Consultant to the Board of Directors. He is Secretary-Treasurer of Bodard &
Hale Drilling Company, an Oklahoma based drilling company President of Bodard Drilling Company, Inc., an Oklahoma
based oil service company, and owner of Bodard Equipment Company, a sole
proprietorship, of Shawnee, Oklahoma. He is alsoand Chairman
of the Board of Ameribank Corporation, Shawnee, Oklahoma.
BOARD OF DIRECTORS AND COMMITTEES
General
- -------
The business of the Company is managed under the direction of the Board of
Directors. The Board meets on a regularly scheduled basis during the Company's
fiscal year to review significant developments affecting the Company and to act
on matters requiring Board approval. It also holds special meetings when an
important matter requires Board action between scheduled meetings. The Board of
Directors held sixseven regular meetings during fiscal 1995.1996. No director attended
fewer than 75% of the aggregate of the total of such meetings and of the
committees of the Board on which he served during the fiscal year.
Committees of the Board
- -----------------------
The Board of Directors has established standing Audit and Compensation
committees. The membership of each of these committees is determined from time
to time by the Board. The Audit Committee appoints the independent auditors
subject to ratification by the Board, meets with the independent auditors to
review with them the scope and results of their audit of the Company's financial
statements and consults with the Company's personnel to determine the adequacy
of internal accounting controls. The Compensation Committee determines
the salaries payable to the Company's officers and authorizes grants of stock
options. Only directors who are not officers of the Company serve on the Audit
and 10
Compensation Committees. The Audit Committee met twothree times and the
Compensation Committee met one timetwo times during the fiscal year ended December 31,
1995.
In addition to its standing Audit and Compensation Committees, the
Board of Directors may, from time to time, appoint members to a special
committee to assist or otherwise make recommendations to the full Board
of Directors. One such committee was formed in late 1994 and met one time
during 1995. Its members were comprised entirely of non-employee
directors. This committee was responsible for evaluating the Company's
current Articles of Incorporation, By-laws and other related matters and,
if deemed advisable, making recommendations relating thereto to the full
Board of Directors. This committee completed its task in 1995 and was
subsequently dissolved.1996.
Compensation
- ------------
Committee members are paid an annual retainer fee of $2,000 per standing
committee served upon and $500 for any committee meetings attended. Directors
of the Company (other than officers) are paid attendance fees of $750 per
meeting attended and an annual retainer fee of $10,000$15,000 payable quarterly.
On May 6, 1992, the Company's shareholders approved the Unit Corporation
Non-Employee Directors' Stock Option Plan (the "Plan") providing for the
granting of options for up to an aggregate of 100,000 shares of Common Stock of
the Company, subject to adjustment in certain events, to members of the Board of
Directors who are not employees of the Company or any subsidiary (a "non-Employee"non-
Employee Director"). Automatic grants of options to purchase 2,500 shares of
the Company's Common Stock are made to each non-Employee Director on the first
9
business day following each annual meeting of shareholders of the Company from
May 1992 to May 2002. The option price will be the fair market value of the
Company's Common Stock on the date of grant. Payment may be made in cash or in
shares of Company Common Stock that have been held by the director for at least
one year. No stock option may be exercised during the first six months of its
term except in the case of death.
Each option extends for 10 years from the date of grant. If any optionee's
service as a director terminates for any reason other than death, resignation or
removal for cause, any unexpired option which is then exercisable will remain
exercisable for a period of one year following the date of termination. If a
non-Employee Director dies while in office, the option will be exercisable for
two years following the date
11
of death whether or not the option was exercisable
at such date. If a non-Employee Director dies after ceasing to be a director
and during a period when a stock option is exercisable, the option will be
exercisable for one year after the date of death. If a non-Employee Director
resigns or is removed from office for cause, any option which is not yet
exercisable will be forfeited, and any exercisable option must be exercised
within 90 days.
The Plan may be terminated at any time or may, from time to time, be
modified or amended by the Board of Directors except the Plan provisions shall
not be amended more than once every six months other than to comport with
changes in the Internal Revenue Service Code or the rules thereunder or to
assure that stock options granted under the Plan qualify for the exemption
provided by Rule 16b-3 of the Securities Exchange Act of 1934. In 19951996 stock
options were granted for an aggregate of 12,500 shares at $3.375$6.875 per share. An
aggregate of 42,50055,000 shares are currently subject to outstanding options. None
of these options have been exercised.
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth information with respect to the compensation
of the Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company for services in all capacities to
the Company and its subsidiaries in 1993, 1994, 1995 and 1995.
121996.
10
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation(1)Compensation Awards Payouts
---------------------------- --------------------------------------------------------- ---------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Securities
Name Annual Restricted Under- All OtherSecurities
and Compen- Stock lyingUnderlying LTIP Compen-All Other
Principal Salary Bonus sation Award(s) Options/options/ Payout sationCompensation
Position(s) Year ($) ($) ($)(2) ($) SARs (#) ($) ($)(3)
- ------------------------------- ---- ---------------- -------- ------- ----------------- ----------- -------- ------ -------------------
King P. Kirchner 1995 $1996 200,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 4,4857,500
Chairman and CEO 1995 200,000 0 0 0 0 0 4,485
1994 200,000 0 0 0 0 0 3,231
1993 170,000 8,333 0 0 0 0 3,231
John G. Nikkel 1996 210,000 168,333 7,669 0 30,000 0 7,500
President and COO 1995 210,000 61,666 6,391 0 0 0 4,485
President and COO 1994 200,000 43,333 1,554 0 22,500 0 4,786
1993 200,000 38,333 2,998Earle Lamborn 1996 115,000 33,333 1,440 0 22,50010,000 0 4,787
Earle Lamborn7,359
Sr. Vice President - 1995 115,000 25,000 2,718 0 0 0 4,186
Sr. Vice President -Drilling 1994 110,000 15,000 1,252 0 10,000 0 2,495
Drilling 1993 103,333 17,000 2,669 0 7,500 0 1,502
Philip M. Keeley 1996 155,000 110,000 1,440 0 10,000 0 5,812
Sr. Vice President - 1995 155,000 28,800 8,056 0 0 0 4,485
Sr. Vice President -Exploration & 1994 150,000 23,333 376 0 10,000 0 3,358
Exploration & 1993 150,000 18,666 2,390Produciton
Larry D. Pinkston 1996 110,000 19,667 0 0 7,500 0 2,496
Production
Larry D. Pinkston5,323
V. P., CFO 1995 105,000 17,000 0 0 0 0 3,033
V. P., CFOand Treasurer 1994 100,000 14,000 0 0 7,500 0 2,150
and Treasurer 1993 92,000 14,000 0 0 7,500 0 2,151
(1) Compensation deferred at the election of an executive is included in the
year earned.
(2) Compensation deferred at the election of an executive is included in the
year earned.
The amount listed under the Other Annual Compensation column represents
the dollar value associated with the use of a Company vehicle by the named
executive officer.
(3) "All Other Compensation" represents the Company vehicle by the named
executive officer.
"All Other Compensation" represents the Company's matching contributions
to the Company 401(k) thrift plan for the named executive officer. The amounts indicated reflect the acceleration of the payment of bonuses
awarded to Mr. Nikkel and Mr. Keeley in 1995 and 1996. These awards are
generally paid out in three annual installments. The amounts shown
reflect the payment of the third installment of the 1995 bonus, otherwise
due January 1997, and the second and third installments of the 1996 bonus
awards, otherwise due January 1997 and January 1988, respectively. These
bonus awards were accelerated at the discretion of the Compensation
Committee and used by the named executive officer to pay the exercise
price of certain stock options exercised in fiscal 1996.
11
Option/SAR Grants in 19951996
- -------------------------
There were noThe following table sets forth information concerning individual grants of
stock options during 19951996 to anyeach of the named executive officers of the
Company.
13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term
--------------------------------------------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ---------------- -------------- --------------- ---------- ---------- ------- -------
King P. Kirchner
Chairman and CEO N/A N/A N/A N/A N/A N/A
John G. Nikkel
President and COO 30,000 20.07 8.75 12/20/06 165,090 418,350
Earle Lamborn
Sr. Vice President
Drilling 10,000 6.69 8.75 12/20/06 55,030 139,450
Philip M. Keeley
Sr. Vice President
Exploration and
Production 10,000 6.69 8.75 12/20/06 55,030 139,450
Larry D. Pinkston
V.P., CFO and
Treasurer 7,500 5.02 8.75 12/20/06 41,273 104,588
No Stock Appreciation Rights (SARs) were awarded in the 1996 fiscal year.
Based on a total of 149,500 options being granted to certain employees during fiscal 1996.
All options were granted on December 20, 1996 at an exercise price equal to the closing market price of the Company's
Common Stock on the New York Stock Exchange on that date. The options vest in 20% annual increments commencing
12 months after their date of grant. All options vest immediately in the event of a change in control, as defined in the
plan.
Caution is recommended in interpreting the financial significance of these figures. They are calculated by multiplying
the number of options granted by the difference between a future hypothetical stock price and the option exercise price
and are shown pursuant to rules of the Securities and Exchange Commission. They assume the value of the Company's
Common Stock appreciates 5% and 10% each year, compounded annually, for ten years (the life of each option). They
are not intended to forecast possible future appreciation, if any, of such stock price or to establish a present value of
options. Also, if appreciation does occur at the 5% or 10% per year rate, the amounts shown would not be realized by
the recipients until the year 2006. Depending on inflation rates, these amounts may be worth significantly less in 2006,
in real terms, than their value today.
12
Aggregate Option/SAR Exercises in 19951996
and Option Values at December 31, 19951996
- -------------------------------------------------------------------------------------------------------------------
The following table provides information as to stock options exercised by
each of the named executive officers in 19951996 and the value of the stock options
held by such executives at year end measured in terms of the fair market value
of the Common Stock on December 29, 1995.31, 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
Number of
Shares Securities Value of
AcquiredShares Underlying Unexercised
onAcquired Value Unexercised In-the-Money
on Exercise Realized Options/SARs at Options/SARs at
Name (#) ($)(1) FY-End (#) FY-End ($)(2)
- ---------------- ----------- -------- ----------- ------------------------ ------------------------------------------------------ --------------------------
Exercisable UnexercisedUnexercisable Exercisable Unexercisable
----------- ------------------------ ----------- -------------
King P. Kirchner 0 $ 0.00 0 0 $ 0 $ 0N/A N/A N/A N/A N/A N/A
John G. Nikkel 38,000 $ 64,750.00 230,500 41,500 $ 617,512 $ 77,112137,000 534,750 112,500 52,500 797,219 180,844
Earle Lamborn 0 $ 0.00 96,000 16,500 $ 248,080 $ 30,45750,000 231,250 53,500 19,000 377,756 70,313
Philip M. Keeley 17,100 $ 28,800.00 148,900 16,500 $ 413,392 $ 30,457102,900 464,512 53,500 19,000 377,756 70,313
Larry D. Pinkston 0 $ 0.00 32,500 12,500 $ 76,102 $ 22,697
(1) Value realized equals fair market value of the stock on date of exercise,
less the exercise price, times the number of shares acquired. Taxes must
be paid by the individual on the value realized.
(2) The value of unexercised in-the-money options at year end assumes a fair
market value for the Company's Common Stock of $4.625, the average of the
high and low prices of the Company's Common Stock on December 29, 1995.
Value is calculated on the basis of the difference between the option
exercise price and $4.62510,000 46,250 27,500 15,000 193,831 57,938
Value realized equals fair market value of the stock on date of exercise, less the exercise price, times the number of
shares acquired.
The value of unexercised in-the-money options at year end assumes a fair market value for the Company's Common Stock of
$9.6875, the average of the high and low prices of the Company's Common Stock on the New York Stock Exchange on December 31,
1996. Value is calculated on the basis of the difference between the option exercise price and $9.6875 multiplied by the
number of shares of Common Stock underlying the options.
Long Term Incentive Plan Awards
- -------------------------------
The Company does not currently have any Long Term Incentive Plans.
Pension Plans
- -------------
The Company does not currently have any Pension Plans.
1413
Change-In-Control Arrangements
- ------------------------------
The Unit Corporation Amended and Restated Stock Option Plan contains a
provision whereby all stock options will automatically become fully vested and
immediately exercisable without the requirement of any further act by the
Company or participant in the event of a "change of control" of the Company. A
"change-in-control" is deemed to have occurred at such time as any person (as
such term is used in Sections 3(a)(9) and 13(d) of the Securities Exchange Act
of 1934, as amended), other than the Company or an Exempt Person, is or becomes
the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities. An Exempt Person is generally defined to be any person
(or estate or trust of such person) who, on the date of the plan, owned
securities of the Company representing more than 20% of the combined voting
power of the Company's then outstanding securities, and any spouse, parent or
issue of such person.
On December 20, 1996, effective as of January 1, 1997, the Company's Board
of Directors adopted the Separation Benefit Plan of Unit Corporation and
Participating Subsidiaries (the "Plan"). The Plan is generally applicable to
all full time salaried employees of the Company and its two principal
subsidiaries, excluding any employees who are also directors of the Company, who
have been with their employer for at least one year. Subject to all of the
terms of the Plan, any eligible employee whose employment is terminated by his
or her employer is entitled to receive a separation benefit in an amount
calculated by dividing such eligible employee's annual base salary in effect
immediately prior to such employee's separation by 52 to determine a weekly
separation benefit amount. The number of weekly separation benefit payments
then payable to such employee is calculated based on the employee's years of
service in accordance with a schedule set forth in the Plan. Employees who
voluntarily leave their employment are not entitled to receive a separation
benefit unless they have completed at least 20 years of service. Any eligible
employee who has completed 20 years of service or more is vested in his or her
separation benefit, subject to fulfilling the other requirements of the Plan.
Separation benefit payments are limited to a maximum of 104 weekly payments.
The Plan also provides that, unless otherwise provided by the Company's Board of
Directors prior to a "change-in-control" of the Company, as defined in the Plan,
all eligible employees shall be vested in their separation benefit as of the
date of such "change-in-control" based on their years of service. As a
precondition to receiving the separation benefits, employees must sign a
separation agreement waiving any claims the employee may have against the
Company or its subsidiaries.
Report of the Compensation Committee of the
- -------------------------------------------
Board of Directors on Executive Compensation
- --------------------------------------------
The disclosure contained in this section of the Proxy Statement should not
be incorporated by reference into any prior filing by the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934 that incorporated
future filings or portions thereof (including this proxy statement or the
"Executive Compensation" section of this proxy statement).
The Committee is responsible for setting and overseeing the compensation of
the Company's executive officers. The Compensation Committee of the Board of
Directors is composed entirely of independent outside directors. Furthermore,
14
there are no interlocking relationships between any executive officers of the
Company and any entity whose directors or executive officers serve on the
Committee. The members of the Committee are John S. Zink, Don Cook and John H.
Williams.
Objectives and Considerations - The general objectives of the Compensation
Committee in determining executive compensation are to attract, retain and
reward qualified individuals serving as executive officers of the Company. To
achieve these objectives, the Committee relies primarily on salary, annual
bonuses (awardable either in stock or cash) and awards under the Company's stock
option plan, with the last two being variable. In making its decisions, the
Committee takes into account
15
the conditions within the Company's industry, the
generation of income and cash flow by the Company and its various subsidiaries
and the attainment of any designated business objectives. Individual
performances are also reviewed, taking into account the executive officer's
responsibilities, experience and potential, his or her period of service and
current salary and compensation levels as compared to similar positions at other
companies. The Committee's evaluation of these considerations is primarily
subjective and, to-date, it has not established any specific written
compensation plans or formulas pursuant to which the executive officers' annual
compensation is determined.
Base Salary - The Company does not currently have an employment agreement
with any of the executive officers. In determining the base salaries for the
executive officers for 19951996 the Committee relied primarily on its evaluation of
the responsibilities of the position as compared with other executive positions
in the marketplace. In doing so, the Committee relied, to a large extent, on
the Peat Marwick Oil and Gas Corporation Survey 19941995 Report which surveyed the
compensation and benefit programs of ninety-three oil and gas related companies,
one of which was the Company. It was the Committee's objective to set the
executives' base salary at approximately the competitive mid-range reflected in
the survey. Within this established range structure, the Committee then
approved any changes in amounts of executive compensation based on individual
performance evaluations. Taking these factors into consideration, the
Committee, with the exception of Mr. Kirchner's salary which is discussed below,
decided not to increase the salaries of each of the named executive officers
by 5% with the exception of Mr. KeeleyPinkston whose salary was increased by 3%4.8%.
Bonuses - Executive officers are eligible to earn annual bonuses either in
cash or in stock. Stock bonuses are awarded pursuant to the Company's Employee
Bonus Plan approved by the Company's shareholders on May 1, 1985 and amended on
May 3, 1995. The amount and type of any bonuses awarded to executive officers
is determined solely at the subjective discretion of the Committee. The
Committee does not base its decisions on predetermined formulas, choosing
instead to rely on its evaluation of the various considerations set forth above.
In addition, when appropriate, bonuses are awarded to recognize short-term
individual performance.
Stock Options - The stock options granted under the Company's Amended and
Restated Stock Option Plan, approved by the Company's shareholders on May 2,
1985 and amended on May 3, 1989 and May 3, 1995, provide an incentive for
executive
16
officers to manage with a view to maximization of long-term
shareholder value. Historically, although not required, stock option grants are
made at 100% of the market price on the date of grant and are exercisable in
annual 20% increments after one year and have a ten year life. The number of
options that are granted to an executive officer are based on the individual's
performance and level of responsibility. Option awards will vary in size based
15
on position level (more senior managers receive a higher multiple). Stock
Options are granted to the executive officers at the discretion of the
Committee. The Committee's decisions with respect to awarding stock options are
generally made late each year thus allowing the Committee to evaluate the
Company's annual results as part of its decision making process. The Committee,
as part of its evaluation of the executive officers' compensation for fiscal
year 1995, did not award any1996, awarded, in the aggregate, stock options covering a total of 65,000
shares of the Company's Common Stock to the Company's executive officers. Generally,officers as a
group, with the decision
whetherexception of Mr. Kirchner who to grantdate has not been awarded any
stock options. The stock options granted to the executive officers iswere based
on a subjective analysis by the Committee of the executive officers' individual
performance, rather than any specific Company performance criteria. In
addition, the Committee also takestook into consideration the relationship of the
awards to peer, subordinate and superior positions, prior awards and future
performance expectations for the individual executives.
Chief Executive Officer - Mr. Kirchner's salary and bonus are determined by
the Committee substantially in accordance with the policies described above
relating to all executive officers of the Company. Based on its review, the
Committee determined to keep Mr. Kirchner's salary for the fiscal year 1996 at
its present level.
1993 OBRA - Executive Compensation Tax Deductibility - Beginning in 1995,
the Internal Revenue Code, Section 162(m), limits the Company's ability to
deduct, for federal income tax purposes, certain compensation in excess of $1
million per year paid to individual officers named in the Summary Compensation
Table. Based on the amount of compensation paid to each of the named officers
in fiscal 1995,1996, it does not appear that Section 162(m) will have a significant
impact on the Company in the near term. However, the Committee will continue to
monitor whether its executive compensation plans should be amended to meet the
deductibility requirements of the tax law.
Members of the Compensation Committee:
John S. Zink
Don Cook
John H. Williams
17
VOTING SECURITIES AND COMMON STOCK OWNERSHIP
OF DIRECTORS AND MANAGEMENT
The following table sets forth certain information, as of March 13,
1996,19, 1997,
regarding the beneficial ownership of the Common Stock of the Company by each
nominee for election as a director, each continuing director, the Company's
Chief Executive Officer, each of the Company's four other most highly
compensated executive officers for fiscal 19951996 and the directors and executive
officers of the Company as a group.
16
Name of Beneficial Aggregate Number of Percent of Outstanding
Owner Beneficially Owned Common Stock (1)Stock(1)
Shares
- ------------------ -------------------------------------------- ----------------------
King P. Kirchner 1,321,7581,224,342 (2)(3) 6.295.06
Don Cook 16,13818,138 (4) *
Earle Lamborn 336,291300,131 (2)(3)(5) 1.591.24
William B. Morgan 20,00022,500 (4) *
John G. Nikkel 394,666361,509 (2)(3)(5)(6) 1.861.50
John H. Williams 11,00013,500 (4) *
John S. Zink 51,00053,500 (4) *
Don Bodard 1,682,9281,485,428 (4) 8.06.14
Philip M. Keeley 247,530218,595 (2)(5)(6)(7) 1.16 *
Larry D. Pinkston 120,840126,273 (2)(3)(5) *
All Directors and 4,253,655 (2)-(7) 19.78
Officers
as a Group (11 individuals) 3,881,084 (2)-(6) 15.85
* Less than 1%
(1) The number of shares includes the shares presently issued and outstanding
plus the number of shares which any owner has the right to acquire within
60 days after March 13, 1996.19, 1997. For purposes of calculating the percent of
the Common Stock outstanding held by each owner, the total number of shares
excludes the shares which all other persons have the right to acquire
within 60 days after March 13, 1996,19, 1997, pursuant to the exercise of
outstanding warrants or stock options.
(2) Includes shares of Common Stock held under the Company's 401(k) thrift plan
as of December 31, 1995,1996, the latest valuation available at the time this
18
Proxy Statement was prepared, for the account of: King P. Kirchner, 5,932;7,594;
Earle Lamborn, 7,831;9,416; John G. Nikkel, 26,252;27,913; Philip M. Keeley, 32,781;28,968;
Larry D. Pinkston, 11,375;13,032; and Directors and Officers as a group, 91,664.96,028.
(3) Of the shares listed as being beneficially owned, the following individuals
disclaim any beneficial interest in shares held by spouses or for the
benefit of family members: King P. Kirchner, 8,828;28,828; John G. Nikkel
76,000; Earle Lamborn, 232,460;199,460; and Larry D. Pinkston, 2,000.
(4) Includes unexercised stock options under the Company's Non-Employee
Directors' Stock Option Plan to each of the following which may be
exercised at the discretion of the holder: Don Cook, 10,000;12,500; William B.
Morgan, 10,000;12,500; John H. Williams, 10,000;12,500; John S. Zink, 10,000;12,500; Don Bodard,
2,500;5,000; all non-Employee Directors as a group, 42,500.55,000.
(5) Includes unexercised stock options under the Company's Amended and Restated
Stock Option Plan to each of the following which may be exercised within 60
days at the discretion of the holder: Earle Lamborn, 96,000;53,500; John G. Nikkel
175,500;17
102,460; Philip M. Keeley, 148,900;53,500; Larry D. Pinkston, 32,500;27,500; and Directors
and Officers as a group, 485,400.324,460.
(6) Includes 28,5607,149 shares and 11,4402,862 shares beneficially owned by Mr. Nikkel and
Mr. Keeley, respectively, held by a private company over which Mr. Nikkel
and Mr. Keeley have voting and investment power.
(7) Includes 2,100 Warrants to purchase 2,100 shares of the Company's Common
Stock.
STOCK PERFORMANCE GRAPH
The graph and the related disclosure contained in this section of the Proxy
Statement should not be incorporated by reference into any prior filings by the
Company under the Securities Act of 1933 or the Securities Exchange Act of 1934
that incorporated future filings or portions thereof (including this proxy
statement or the "Executive Compensation" section of this
proxy statement).
The following graph reflects a comparison of the cumulative total return
(change in stock price plus reinvested dividends, assuming $100 invested on
December 31, 1990)1991) of the Common Stock of the Company from December 31, 19901991
through December 31, 19951996 with the Standard & Poor's 500 Composite Index S&P Oil and
Gas Drilling andthe S&P Oil - Integrated Domestic Indexes. The comparisons in this table are
required by the Securities and Exchange Commission and, therefore, are not
intended to forecast or be indicative of possible future performance of the
Company's stock. 19
[graph]In the past, the Company also included the S&P Oil and Gas
Drilling index in its stock performance graph. However, that index is no longer
available and, accordingly, it is not included in the following graph.
(GRAPH)
Dollar Value of $100 Investment at December 31,
-----------------------------------------------------
1990----------------------------------------------------
1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- -------
The Company $100.00 $ 53.85 $ 53.85 $ 84.62 $ 92.31 $146.15$100.00 $157.14 $171.43 $271.43 $564.29
S&P 500 $100.00 $130.47 $140.41 $154.56 $156.60 $215.45$107.62 $118.46 $120.03 $165.13 $203.05
S&P Oil-Integ. $100.00 $ 93.48 $ 95.47 $100.59 $105.54 $120.16
S&P O&G $100.00 $ 61.56 $ 81.94 $ 94.52 $ 75.79 $104.34$102.13 $107.60 $112.90 $128.53 $162.55
18
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995,1996, the members of the Compensation Committee were
responsible for determining executive compensation, including decisions relating
to stock option grants to executive officers. None of the executive officers of
the Company are members of the Compensation Committee.
20
ITEM NO. 2 ON THE PROXY CARD
RATIFICATION OF SELECTION OF INDEPENDENT
ACCOUNTANTS
The Board of Directors, based on the recommendation of the Audit Committee,
has unanimously selected Coopers & Lybrand L.L.P. (formerly
known as Coopers & Lybrand) as the independent certified
public accountants for the Company for its 19961997 fiscal year. The Board of
Directors is asking the shareholders to ratify and approve this action. A
representative of Coopers & Lybrand L.L.P., who will attend the Annual Meeting,
will have the opportunity to make a statement if he or she desires to do so and
will be available to answer appropriate questions.
Although such ratification is not required by law, the Board of Directors
believes that shareholders should be given the opportunity to express their
views on this matter. Failure to ratify such selection is not binding on the
Board of Directors.
THE BOARD OF DIRECTORS DEEMS ITEM NO. 2 TO BE IN THE BEST INTEREST OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE "FOR" APPROVAL,
WHICH VOTE SHALL ALSO ACT TO RATIFY THE SELECTION OF COOPERS & LYBRAND,
L.L.P.
OTHER MATTERS
CERTAIN TRANSACTIONS BETWEEN THE COMPANY AND ITS OFFICERS,
DIRECTORS, NOMINEES FOR DIRECTORS AND THEIR ASSOCIATES
Since 1984 one of the subsidiaries of the Company, or its predecessor, has
formed certain employee limited partnerships for investment by certain of the
employees and directors of the Company and its subsidiaries. The limited
partnerships participate with Unit Petroleum Company, a subsidiary of the
Company, in its exploration and production operations. During the period
commencing with the past fiscal year, Mr. John Nikkel, a Directordirector and the
President of the Company, and Mr. Don Bodard, a director of the Company,
invested $54,000$50,000 and $150,000, respectively, in the Unit 19951996 Oil and Gas
Limited Partnership and invested $50,000$60,000 and $100,000, respectively, in the Unit
19961997 Oil and Gas Limited Partnership. In addition, Nike Exploration Company,
which is owned 71.4% by Mr. Nikkel, invested $55,000 and $80,000 respectively, in each of these
two employee programs.
Mr. Don Bodard, a director of the Company, is the majority shareholder and
Chairman of the Board of Directors of Ameribank, the
21
parent company of American
National Bank and Trust Company of Shawnee, Shawnee, Oklahoma ("American
National"). American National is a participating bank in the Company's bank
credit agreements. American National's participation is governed by the terms
and conditions of an intercreditor agreement executed by and between all of the
participating banks.
19
VOTING SECURITIES AND COMMON STOCK OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of March 13,
1996,19, 1997,
regarding the only persons known by the Company to own, directly or indirectly,
five percent or more of the outstanding shares of Common Stock of the Company.
Percent of
Name and Address of Amount and Nature of Outstanding
Beneficial Owner Beneficial Ownership Common Stock(1)
- ----------------------- -------------------- ---------------
King P. Kirchner
1000 Kensington Tower I
1,321,758 (2) 6.29
7130 South Lewis 1,224,342 (2) 5.06
Tulsa, Oklahoma 74136
Don Bodard
P.O.P. O. Box 1089 1,682,9281,485,428 (3) 8.006.14
Shawnee, Oklahoma 74802
Scottish Amicable Life
Assurance Society 1,326,100 (4) 6.31
7 Hanover Square
New York, NY 10004
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor 1,334,300 (5) 6.351,291,300 (4) 5.34
Santa Monica, California 90401
(1) The number of shares includes the shares presently issued and outstanding
plus the number of shares which any owner has the right to acquire within
60 days after March 13, 1996.19, 1997. For purposes of calculating the percent of
the Common Stock outstanding held by each owner, the total number of shares
excludes the shares which all other persons have the right to acquire
within 60 days after March 13, 1996,19, 1997, pursuant to the exercise of
outstanding warrants or stock options.
22
(2) Includes 5,9327,594 shares of Common Stock held under the Company's 401(k)
thrift plan as of December 31, 1995.1996. Of the shares listed, Mr. Kirchner
disclaims any beneficial interest in 8,82828,828 shares.
(3) Includes 2,5005,000 shares attributable to shares of Common Stock not
outstanding but which may be exercised within 60 days at the discretion of
the holder.
(4) This information is based on the most recent amendment, dated August 30,
1994, to the Schedule 13D filed with the Securities and Exchange Commission
by Scottish Amicable Life Assurance Society ("Life Assurance"), Scottish
Amicable Pension Investments Ltd. ("Pension"), Scottish Amicable Exempt
American Trust (previously known as Scottish Amicable International Exempt
Unit Trust) ("Unit Trust") and Scottish Amicable American Unit Trust
("American Trust"). Life Assurance holds sole voting and sole disposition
power over 567,900 shares of Common Stock and shared voting power over
818,200 shares of Common Stock of which 300,000 shares are issuable upon
conversion of Warrants. It is deemed to hold beneficial ownership
of 1,326,100 shares of Common Stock of which 300,000 shares are issuable
upon conversion of Warrants. Unit Trust holds shared voting power over
225,000 shares of Common Stock of which 120,000 shares are issuable upon
conversion of Warrants. Pension holds shared voting power over 250,000
shares of Common Stock of which 125,000 shares are issuable upon conversion
of Warrants. American Trust holds shared voting power over 343,200 shares
of Common Stock of which 55,000 shares are issuable upon conversion of
Warrants.
(5) This information is based on Amendment No. 45 to Schedule 13G, dated
February 7, 1996,5, 1997, filed with the Securities and Exchange Commission by
Dimensional Fund Advisors Inc. ("Dimensional"). Dimensional, a registered
investment advisor, is deemed to have beneficial ownership of 1,334,3001,291,300
shares of Unit Common Stock as of December 31, 1995,1996, all of which shares
are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in a series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares.
20
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers and persons who own more than 10% of a
registered class of the Company's equity securities to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange. Such persons are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to fiscal 1995,1996, or written representations from certain 23
reporting
persons, the Company believes that it has complied with all filing requirements
applicable to its directors, officers and persons who own more than 10% of a
registered class of the Company's equity securities have, with the exception that a
form 4, covering one exception, been complied with. Mr.Nikkel, an executive officertransaction, was filed late by each of Mr. John Nikkel, Mr.
Earle Lamborn, Mr. Philip Keeley and Director of the Company, inadvertently failed to report a gift of 23,000
shares of the Company's Common Stock on his Form 5 for the fiscal year
ended December 31,1994. An amendment to the Form 5 reporting the gifted
shares was subsequently filed.Mr. Larry Pinkston.
MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors does not intend to bring any other matters before
the meeting, nor does the Company know of any matters which other persons intend
to bring before the meeting. If, however, any other matters not mentioned in
this proxy statement properly come before the meeting, the persons named in the
accompanying proxy card will vote thereon in accordance with their best
judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS
Under the rules of the Securities and Exchange Commission now in effect, in
order to be considered for inclusion in the Company's proxy statement relating
to the 19971998 Annual Meeting of Shareholders, a shareholder proposal must be
received by the Company at its principal offices, 1000 Kensington Tower I, 7130
South Lewis, Tulsa, Oklahoma 74136, addressed to the Secretary of the Company,
on or before November 26, 1996.1997.
FORM 10-K ANNUAL REPORT TO THE
SECURITIES AND EXCHANGE COMMISSION
COPIES OF THE ANNUAL REPORT (FORM 10-K) OF THE COMPANY FOR THE FISCAL
YEAR ENDED DECEMBER 31, 19951996 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO: MARK E. SCHELL,
SECRETARY, UNIT CORPORATION, P. O. BOX 702500, TULSA, OKLAHOMA 74170.
PLEASE SIGN, DATE AND RETURN YOUR PROXY TO ASSURE THAT ALL OF YOUR
SHARES WILL BE VOTED.
2421
UNIT CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 19967, 1997
THIS PROXY IS SOLICITED ON BEHALF OF UNIT CORPORATION'S BOARD OF DIRECTORS
P The undersigned hereby appoints King P. Kirchner and Mark E. Schell, and
each of them, proxies for the undersigned, with full power of
R substitution, to vote all shares of Unit Corporation Capital Stock which
the undersigned may be entitled to vote at the Annual Meeting of
O Shareholders of Unit Corporation, Tulsa, Oklahoma, on Wednesday, May 1,
19967,
1997 at 11:008:30 A.M., or at any adjournment thereof, upon the matters set
X forth on the reverse side and described in the accompanying Proxy
Statement and upon such other business as may properly come before the
Y meeting or any adjournment thereof.
Please mark this proxy as indicated on the reverse side to vote on
any item. If you wish to vote in accordance with the Board of
Directors' recommendation, please sign the reverse side; no boxes need
to be checked.
_______________________________________________________________________________
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued, and to be marked, dated & signed on reverse side)
Please mark
your votes ( )
this way
The Board of Directors recommends a vote FOR items 1 and 2.
WITHHELD
FOR FOR ALL FOR AGAINST ABSTAIN
Item 1 - ELECTION OF ( ) ( ) Item 2 - APPROVAL OF ( ) ( ) ( )
DIRECTORS AUDITORS
Nominees:
King P. Kirchner
Don Cook
Don BodardJohn G. Nikkel
John S. Zink
WITHHELD FOR: (Write that nominee's name in the
space provided below).
____________________________________________
PLEASE MARK THIS BOX IF YOU
PLAN TO ATTEND THE MEETING ( )
COMMENTS/ADDRESS CHANGE
Please mark this box if you have
written comments/address change
on the reverse side. ( )
Receipt is hereby acknowledged of
the Unit Corporation Notice of
Meeting and Proxy Statement.
Signature(s)_________________________________ Date: ___________________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.