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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Amerada Hess Corporation
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(Name of Registrant as Specified in Its Charter)
Amerada Hess Corporation
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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 0-11:1
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(4) Proposed maximum aggregate value of transaction:
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/ / 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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(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
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AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
March 28, 1995
Dear Stockholder:
The Annual Meeting of Stockholders will be held at the Hess Office
Building, 1 Hess Plaza, Route 9, Woodbridge, New Jersey, on Wednesday, May 3,
1995, at 2:00 P.M., local time. The formal Notice of Annual Meeting and Proxy
Statement, which are contained in the following pages, outline the action to be
taken by the stockholders at the meeting.
You are cordially invited to attend this meeting. The Hess Office Building
may be reached, if you travel by car, from Exits 127 (northbound) and 129
(southbound) of the Garden State Parkway or Exit 11 of the New Jersey Turnpike
or, if you travel by train, from the Metropark station in Iselin, New Jersey.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING WHETHER OR
NOT YOU ARE PERSONALLY ABLE TO ATTEND. ACCORDINGLY, YOU ARE REQUESTED TO SIGN,
DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR COOPERATION WILL BE
APPRECIATED.
Sincerely yours,
/s/ Leon Hess /s/ Robert F. Wright
Chairman of the Board, President and
Chairman of the Executive Committee Chief Operating Officer
and Chief Executive Officer
/s/ John B. Hess
Senior Executive
Vice President
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AMERADA HESS CORPORATION
1185 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, MAY 3, 1995, AT 2:00 P.M.
To the Stockholders:
The Annual Meeting of Stockholders of Amerada Hess Corporation will be held
at the Hess Office Building, 1 Hess Plaza, Route 9, Woodbridge, New Jersey, on
Wednesday, May 3, 1995, at 2:00 P.M., local time, for the following purposes:
1. To elect six directors for the ensuing three-year term (pages 1 to 14
of Proxy Statement);
2. To act upon the ratification of the selection by the Board of
Directors of Ernst & Young LLP as independent auditors (page 15); and
3. To transact any other business which properly may be brought before
the meeting.
All stockholders are cordially invited to attend, although only
stockholders of record at the close of business on March 13, 1995 will be
entitled to vote at the meeting.
By order of the Board of Directors,
Carl T. Tursi
Secretary
New York, New York
March 28, 1995
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING FORM OF PROXY,
SO THAT IF YOU ARE UNABLE TO ATTEND THE MEETING YOUR SHARES MAY NEVERTHELESS BE
VOTED.
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AMERADA HESS CORPORATION
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Amerada Hess
Corporation (the "Corporation") for use at the Annual Meeting of Stockholders
(the "Annual Meeting") on May 3, 1995, at 2:00 P.M., local time.
The Corporation's principal executive office is located at 1185 Avenue of
the Americas, New York, New York 10036. The approximate date on which this Proxy
Statement is first being sent to stockholders is March 28, 1995.
You may revoke the proxy at any time prior to its use by delivering a
written notice to the Secretary of the Corporation, by executing a later-dated
proxy in a form permitted under Delaware law, or by attending the Annual Meeting
and voting in person. Proxies in the form enclosed, unless revoked prior to the
closing of polls for each matter upon which the stockholders will be entitled to
vote at the Annual Meeting, will be voted at the Annual Meeting in accordance
with the specifications made by you thereon or, in the absence of such
specifications, for the election of directors nominated herein and the proposal
to ratify the selection of Ernst & Young LLP ("Ernst & Young") as independent
auditors for the fiscal year ending December 31, 1995.
Holders of record of Common Stock, par value $1.00 per share ("Common
Stock"), of the Corporation at the close of business on March 13, 1995 will be
entitled to vote at the Annual Meeting. Each share of Common Stock will be
entitled to one vote. On March 13, 1995, there were 92,992,755 shares of Common
Stock outstanding. There are no other voting securities of the Corporation
outstanding. A majority of the outstanding shares of Common Stock, present in
person or represented by proxy, will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining the
presence of a quorum for the transaction of business.
ELECTION OF DIRECTORS
At the Annual Meeting, six directors are to be elected to serve for a term
of three years and until their successors are elected and qualified. It is
intended that proxies will be voted for the nominees set forth herein. Election
of directors shall be had by a plurality of the votes cast. Accordingly,
abstentions and broker non-votes will not affect tabulation of the vote for
directors. Although it is expected that all candidates will be able to serve, if
one or more are unable to do so, the proxy holders will vote the proxies for the
remaining nominees and for substitute nominees chosen by the Board of Directors
unless it reduces the number of directors to be elected.
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The table below presents information as of February 1, 1995 on the nominees
for election as directors of the Corporation and the directors continuing in
their respective terms of office:
NOMINEES FOR DIRECTOR
Class I
For Three-Year Term Expiring in 1998
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- ------------------------------- ----- --------- ---------------------------
Marco B. Bianchi....... Senior Vice President 55 1988 --
Nicholas F. Brady...... Chairman, Darby Overseas 64 1994 Capital Cities/ABC, Inc.
Investments, Ltd. (Investment Christiana Companies, Inc.
firm); H.J. Heinz Company
Former Secretary of the Director or trustee of 27
United States Department of Templeton mutual funds
the Treasury;
Former Chairman of the Board,
Dillon, Read & Co. Inc.
(Investment banking firm)
J. Barclay Collins II.. Executive Vice President and 50 1986 Dime Bancorp, Inc.
General Counsel
Leon Hess.............. Chairman of the Board, Chairman 80 1968 --
of the Executive Committee
and Chief Executive Officer
Thomas H. Kean......... President, Drew University; 59 1990 ARAMARK Corporation
Former Governor of the Bell Atlantic Corporation
State of New Jersey Beneficial Corporation
Fiduciary Trust Company
International
United HealthCare
Corporation
H. W. McCollum......... Chairman of the Finance 81 1969 --
Committee
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
Class II
Term Expiring in 1996
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- ------------------------------ ----- --------- ---------------------------
Bernard T. Deverin..... Former Executive Vice President 69 1971 --
of the Corporation
Edith E. Holiday....... Attorney; Former Assistant to 42 1993 Bessemer Trust Company,
the President of the United N.A.
States and Secretary of the Bessemer Trust Company of
Cabinet; New Jersey
Former General Counsel, Hercules, Incorporated
United States Department of H.J. Heinz Company
the Treasury
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MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE -- (Continued)
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- ------------------------------ ----- -------- ---------------------------
W. S. H. Laidlaw....... Executive Vice President 39 1994 --
Roger B. Oresman....... Consulting Partner, 74 1969 --
Milbank, Tweed,
Hadley & McCloy
(Attorneys)
Richard B. Sellars..... Former Chairman of the Board 79 1980 --
and Chief Executive Officer,
Johnson & Johnson
Robert F. Wright....... President and Chief Operating 69 1981 --
Officer
Class III
Term Expiring in 1997
PRINCIPAL OCCUPATION DIRECTOR
NAME AND BUSINESS EXPERIENCE AGE SINCE OTHER DIRECTORSHIPS
- ----------------------- ------------------------------- ----- -------- ---------------------------
Peter S. Hadley........ Former Senior Vice President, 66 1991 --
Metropolitan Life Insurance
Company
John B. Hess........... Senior Executive Vice President 40 1978 --
William A. Pogue....... Former Chairman of the Board 67 1989 Bethlehem Steel
and Chief Executive Officer, Corporation
CBI Industries, Inc. Nalco Chemical Company
(Company operating in diver-
sified businesses, including
construction of metal plate
structures and other con-
tracting services, industrial
gases, and oil transport and
storage)
Michael W. Press....... Executive Vice President; 47 1994 --
Former Senior Vice President,
BP Oil Company
John Y. Schreyer....... Executive Vice President and 55 1990 --
Chief Financial Officer
William I. Spencer..... Independent Consultant; 77 1982 --
Former President and Chief
Administrative Officer,
Citicorp and Citibank, N.A.
All of the nominees and directors named above have held substantially the
positions or former positions indicated for the past five years, except as
described below. Mr. Brady served as Secretary of
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the United States Department of the Treasury from 1988 to 1993. Prior to his
election as a Director and Executive Vice President of the Corporation in
October 1994, Mr. Press was a Senior Vice President of BP Oil Company, a unit of
The British Petroleum Company p.l.c. which is responsible for supply and
trading, refining, marketing and transportation of crude oil and petroleum
products. From 1990 until 1993, Ms. Holiday served as an assistant to President
Bush and prior thereto in several senior positions in the United States
Department of the Treasury. Mr. Hadley retired as Senior Vice President of
Metropolitan Life Insurance Company in May 1991 and was elected a director of
the Corporation in June 1991. Prior to his election as Director and Executive
Vice President of the Corporation in July 1990, Mr. Schreyer was a partner in
the accounting firm of Ernst & Young.
Leon Hess is John B. Hess' father. Leon Hess may be deemed to be a control
person of the Corporation by virtue of his stock ownership. See "Ownership of
Equity Securities by Management."
The Audit Committee of the Board of Directors is composed of William I.
Spencer, Chairman, Edith E. Holiday, Thomas H. Kean, William A. Pogue and
Richard B. Sellars. The Audit Committee met four times in 1994, once in
connection with 1993 business, and three times in connection with 1994 business.
The Audit Committee reviews the audit plan developed by the Corporation's
independent auditors in connection with their annual audit of the Corporation's
financial statements, the results of audits performed by the Corporation's
independent auditors, the independent auditors' charges to the Corporation, the
response of management of the Corporation to management letters issued by the
Corporation's independent auditors, current accounting rules and changes
therein, the operations of the Corporation's internal audit department and the
Corporation's audited financial statements. The Audit Committee also recommends
the selection of independent auditors to the Board of Directors each year.
The Board of Directors' Compensation and Incentive Awards Committee is
composed of Leon Hess, Chairman, Peter S. Hadley, William A. Pogue and William
I. Spencer. This Committee, which met three times in 1994, approves and
administers the Corporation's compensation policies for executive officers and
approves the compensation of the Chief Executive Officer and in connection
therewith makes awards of restricted Common Stock and book value appreciation
units under the Corporation's Executive Long-Term Incentive Compensation and
Stock Ownership Plan. The Board of Directors of the Corporation does not have a
nominating committee.
The Board of Directors met twelve times in 1994, and each director attended
at least 75% of the aggregate of all Board of Directors' meetings and all
meetings of committees of the Board of Directors on which he or she served
during 1994.
CERTAIN TRANSACTIONS AND OTHER INFORMATION
The Corporation retained Milbank, Tweed, Hadley & McCloy, of which Mr.
Oresman was a partner through 1990 and is currently a consulting partner, to
provide legal services in 1994. It is expected that the Corporation's dealings
with this firm will continue in 1995.
In March 1994, one of the Corporation's subsidiaries renewed for a one-year
term a long-standing crude oil supply contract with BP Oil Supply Company, an
affiliate of The British Petroleum Company p.l.c. of which Mr. Press then served
as President. Pursuant to this contract, the Corporation's subsidiary purchased
crude oil with an aggregate value of $551,307,000 for its Virgin Islands
refinery during 1994. All prices and other terms thereunder were negotiated at
arms length. The Corporation's
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subsidiary expects to renew this contract and purchase a comparable amount of
crude oil thereunder in 1995.
See "Compensation Committee Interlocks and Insider Participation" under
"Executive Compensation and Other Information" with respect to transactions
involving the Corporation and Mr. Leon Hess.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF COMPENSATION
The following table sets forth information on cash and other compensation
paid or accrued for each of the fiscal years ended December 31, 1994, 1993 and
1992 to each of the Chief Executive Officer and the four most highly compensated
executive officers other than the Chief Executive Officer, for services in all
capacities to the Corporation and its subsidiaries.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------- -------------------------------------
AWARDS PAYOUTS
------------------------ ----------
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL ANNUAL AWARD(S)($) OPTIONS/ LTIP COMPENSATION($)
POSITION YEAR SALARY($) BONUS($) COMPENSATION($) ** SARS(#) PAYOUTS($) ***
- ------------------------ ---- --------- -------- --------------- ----------- ---------- ---------- ---------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------ ---- --------- -------- --------------- ----------- ---------- ---------- ---------------
Leon Hess,.............. 1994 300,000 -- -- -- -- -- 7,500
Chairman of the Board 1993 300,000 -- -- -- -- -- 11,792
and Chief Executive 1992 300,000 -- -- -- -- -- 11,443
Officer
Robert F. Wright,....... 1994 1,025,000 -- -- 990,000 -- -- 7,500
President and Chief 1993 1,025,000 -- -- -- -- -- 11,792
Operating Officer 1992 1,025,000 -- -- -- -- -- 11,443
John B. Hess,........... 1994 735,000 -- -- 990,000 -- -- 7,500
Senior Executive Vice 1993 735,000 -- -- -- -- -- 11,792
President 1992 735,000 -- -- -- -- -- 11,443
W. S. H. Laidlaw,....... 1994 575,000 -- 203,000* 990,000 -- -- 7,500
Executive Vice 1993 575,000 -- 30,000* -- -- -- 11,792
President 1992 575,000 -- 72,000* -- -- -- 11,443
John Y. Schreyer,....... 1994 550,000 -- -- 495,000 -- -- 7,500
Executive Vice 1993 550,000 -- -- -- -- -- 11,792
President and Chief 1992 525,000 -- -- -- -- -- 11,443
Financial Officer
- ---------------
* In connection with Mr. Laidlaw's overseas employment, the Corporation makes
payments on behalf of Mr. Laidlaw to United Kingdom taxing authorities equal
to the difference between Mr. Laidlaw's actual United Kingdom income tax
liability and a notional United States income tax on his compensation. These
disbursements made in 1994 (for several tax years), 1993 and 1992, based on
the average dollar-sterling exchange rate for each such year, amounted to
approximately $179,000, $30,000 and $54,000, respectively. The amounts shown
in column (e) for 1994 and 1992 also include disbursements made in
connection with Mr. Laidlaw's use of an automobile.
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** At December 31, 1994, the named executives each held shares of restricted
Common Stock, subject to vesting pursuant to the Corporation's Executive
Long-Term Incentive Compensation and Stock Ownership Plan (the "Plan"), in
the following amounts and having the following aggregate market values at
such date: Mr. Wright, 35,000 shares, $1,596,875; Mr. J. B. Hess, 40,000
shares, $1,825,000; Mr. Laidlaw, 35,000 shares, $1,596,875; and Mr.
Schreyer, 30,000 shares, $1,368,750. To the extent paid on the Corporation's
Common Stock generally, dividends accrue on shares of restricted stock and
are held in escrow until vesting, at which time they are paid, together with
interest accrued thereon at short-term market rates, to the named
executives. In addition to shares of restricted stock awarded in 1994, the
named executives were awarded book value appreciation units, which are
subject to vesting pursuant to the Plan together with related shares of
restricted stock and which had no value on the date of award, in the
following amounts: Mr. Wright, 20,000 units; Mr. J. B. Hess, 20,000 units;
Mr. Laidlaw, 20,000 units; and Mr. Schreyer, 10,000 units. At December 31,
1994, the named executives held book value appreciation units subject to
vesting in the following amounts and having the following aggregate dollar
values at such date: Mr. Wright, 35,000 units, $59,700; Mr. J. B. Hess,
40,000 units, $55,200; Mr. Laidlaw, 35,000 units, $44,500; and Mr. Schreyer,
30,000 units, $40,400. Each book value appreciation unit entitles the holder
to a cash payment equal to the increase, if any, in the book value per share
of Common Stock over the vesting period of the restricted stock.
The award of restricted stock and book value appreciation units shown in
column (f) for Mr. Wright was made in February 1994 and consisted of 20,000
shares and 20,000 units vesting on the following schedule: 10,000 shares and
units six months from the date of award; and 10,000 shares and units one
year from the date of award.
*** Amounts shown in column (i) represent matching contributions of the
Corporation credited to the named executive officers under the Corporation's
Employees' Savings and Stock Bonus Plan.
RETIREMENT PLANS
The following table shows the estimated pension benefits payable to a
covered participant at normal retirement age under the Corporation's Employees'
Pension Plan (the "Pension Plan"), a qualified defined benefit pension plan, as
well as a nonqualified supplemental plan that provides benefits, paid from the
general assets of the Company, that would otherwise be paid to participants
under the Pension Plan but for certain Internal Revenue Code limitations on
qualified plan benefits and compensation, based on remuneration that is covered
under the Pension Plan and supplemental plan and years of service:
PENSION PLAN TABLE
YEARS OF SERVICE
-------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ --------- --------- --------- --------- ---------
$ 300,000 $ 72,000 $ 96,000 $ 120,000 $ 144,000 $ 168,000
500,000 120,000 160,000 200,000 240,000 280,000
600,000 144,000 192,000 240,000 288,000 336,000
700,000 168,000 224,000 280,000 336,000 392,000
800,000 192,000 256,000 320,000 384,000 448,000
1,000,000 240,000 320,000 400,000 480,000 560,000
1,250,000 300,000 400,000 500,000 600,000 700,000
A participant's remuneration covered by the Pension Plan and the
supplemental plan is twelve times the participant's average monthly compensation
(as reported on an annual basis in column (c) of
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the Summary Compensation Table) in the 36 consecutive months (or the number of
consecutive months of employment, if fewer) of highest compensation during the
60 months immediately preceding the participant's retirement date. Benefits
shown are computed as a straight life annuity beginning at age 65 and do not
reflect the offset for a portion of social security benefits as required under
the Pension Plan. Covered compensation for the named executives (other than Mr.
Leon Hess) as of December 31, 1994 was: Mr. Wright: $1,025,000; Mr. J. B. Hess:
$735,000; Mr. Laidlaw: $575,000; and Mr. Schreyer: $541,667.
Since April 1, 1985, Mr. Leon Hess has been receiving annual pension
benefits under the Employees' Pension Plan of $120,391 as required under Section
401(a)(9) of the Internal Revenue Code. The years of credited service for the
named executives under the Pension Plan and, except for Messrs. Leon Hess and
Schreyer, the supplemental plan as of February 1, 1995, are as follows: John B.
Hess, 17 years; Leon Hess, 62 years; W. S. H. Laidlaw, 13 years; John Y.
Schreyer, 4 years; and Robert F. Wright, 31 years. As of February 1, 1995, Mr.
Schreyer had 30 years of credited service under the supplemental plan pursuant
to a determination of the Compensation and Incentive Awards Committee, which
gave Mr. Schreyer credit for 26 years of prior service with Ernst & Young (or
its predecessors) for purposes of determining benefits payable under the
supplemental plan. However, retirement benefits payable to Mr. Schreyer in
connection with his prior employment will be deducted from benefits payable
under the supplemental plan. Mr. Leon Hess is ineligible to receive benefits
under the supplemental plan.
DIRECTORS' COMPENSATION
Each director who is not an employee of the Corporation or any of its
subsidiaries receives an annual fee of $50,000 and a fee of $1,000 for each
Board of Directors' and Stockholders' meeting attended. Each such director
receives an annual fee of $4,000 for membership on each committee of the Board
of Directors (other than the Compensation and Incentive Awards Committee) on
which such director serves and a fee of $1,000 for each committee meeting
attended, except that each such director who is a member of the Executive
Committee receives an annual fee of $75,000, but no fee for each meeting
attended. The members of the Executive Committee are Leon Hess, Chairman,
Nicholas F. Brady, John B. Hess, Thomas H. Kean, W. S. H. Laidlaw, Michael W.
Press, John Y. Schreyer, William I. Spencer and Robert F. Wright. Messrs. L.
Hess, J. B. Hess, Laidlaw, Press, Schreyer and Wright are employees of the
Corporation and receive no additional compensation for serving on any committee
of the Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Leon Hess, Hadley, Pogue and Spencer served as members of the
Corporation's Compensation and Incentive Awards Committee during 1994. Mr. Leon
Hess also served as Chief Executive Officer of the Corporation during 1994 and
continues to serve in that position.
Mr. Leon Hess owns 11 1/2%, and owns a 50% equity interest in another
corporation which owns 34%, of the capital stock of Galaxie Corporation, of
which Southland Oil Co. ("Southland") is a wholly-owned subsidiary. From January
1, 1994 through January 31, 1995, the Corporation sold $19,540,000 of crude oil
to Southland at competitive market prices. It is expected that the Corporation's
dealings with this company will continue in 1995.
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Mr. Leon Hess owns 50% of the capital stock of Mississippi Valley Gas
Company ("Mississippi Valley"), of which Mississippi Energies Inc. is a
wholly-owned subsidiary. Prior to 1994, the Corporation, Southland, Mississippi
Energies Inc. and Capitol Street Corporation, a wholly-owned subsidiary of
Galaxie Corporation, participated with unrelated third parties in the drilling
of two oil and gas development wells in Mississippi, in one of which the
above-named parties own undivided interests of 40%, 13%, 13% and 13%,
respectively, and in one of which they own undivided interests of 45%, 15%, 15%
and 15%, respectively. The Corporation also participated in the construction of
a gathering system in which the above-named parties own undivided interests of
40%, 13%, 13% and 13%, respectively. Pursuant to the terms of its
participations, the Corporation expended $120,000 for operating expenses in 1994
in connection with the operation of these wells. The Corporation sold its share
of natural gas produced from these wells during 1994 to Mississippi Valley for
$134,000. The Corporation believes that the terms of its participation in each
of these wells and the gathering system and the prices and terms of its sales of
natural gas production therefrom are at least as favorable to it as those it
would have received if all participants and the purchaser of such natural gas
production were unrelated third parties. In 1995, the Corporation will incur its
share of operating expenses for the wells and the gathering system. The
Corporation also expects to continue to sell its share of natural gas production
from these wells to Mississippi Valley at competitive market prices during 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Incentive Awards Committee (the "Committee") of the
Board of Directors of the Corporation is responsible for approving and
administering the Corporation's compensation policies for executive officers and
approving the compensation of the Chief Executive Officer. The following report
was prepared by the Committee after its meeting on February 1, 1995 and the
Committee reported to the Board of Directors at its meeting held March 1, 1995.
Executive Compensation Policies.
The Corporation's executive compensation policy is designed to attract and
retain executives and motivate them to achieve the Corporation's business goals
through a combination of cash and stock-based compensation. The key elements of
executive compensation consist of cash salary, occasional discretionary cash
bonuses, and restricted stock awards. However, in considering executive
compensation, the Committee also takes into account the full compensation
package afforded to each executive, including retirement benefits and other
benefits generally available to all eligible employees, such as the
Corporation's matching contributions under the Employees' Savings and Stock
Bonus Plan, and group life insurance and health benefits.
Cash Compensation -- Salary. Cash salary is the primary element of
executive compensation. The Committee believes that, in general, cash salary
represents a higher percentage of total direct compensation for the
Corporation's executive officers than for executive officers of most similarly-
sized companies. In determining salary levels for executive officers, the
Committee considers the following subjective and quantitative factors:
- job level and responsibility;
- recent corporate performance, including results of operations, success in
implementing corporate strategy and long-term goals and development of
future strategies;
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- individual performance, particularly as related to special projects or
for extraordinary contributions; and
- an objective of keeping total cash compensation at the 75th percentile or
better of a group of companies compiled by an independent consultant
comprising 135 industrial companies with sales in excess of $1 billion
(which group includes 2 companies also included in Standard & Poor's Oil
(Domestic Integrated) Stock Index discussed under "Performance Graph"),
in recognition of the Corporation's need to remain competitive in
attracting and retaining talented executives to work as part of a lean
management team functioning in a demanding corporate and market
environment.
The Committee has access to independent consultants to aid in establishing
salary and compensation levels.
There were no salary increases for executive officers in 1994 because of
the difficult conditions which continued to prevail in the petroleum industry
and the Corporation's significant operating loss in 1993.
Cash Compensation -- Bonus. Cash bonuses are generally not paid, but they
are occasionally utilized to reward extraordinary effort by an individual or
performance which was particularly beneficial to the Corporation.
Although cash bonuses are granted on a discretionary basis primarily to
reward individual contribution and thus are not necessarily tied to any
particular measure or level of corporate performance, such bonuses have
generally been awarded more liberally following periods of superior performance
by the Corporation. For example, cash bonuses were paid for 1990 following two
years of substantially improved earnings. No cash bonuses have been paid since.
Restricted Stock. Under the Corporation's Executive Long-Term Incentive
Compensation and Stock Ownership Plan approved by stockholders of the
Corporation in 1981, restricted shares of the Corporation's Common Stock
together with book value appreciation units (each representing the increase, if
any, in the Corporation's book value per share of Common Stock over the vesting
period) are awarded to attract and retain key management and executive employees
and to provide incentives for such employees to work for the Corporation's
long-term growth and return to stockholders. Although the Plan gives the
Committee discretion to determine the terms of vesting and payment, in the past
these awards generally have had a five-year vesting period, assuring that
individuals who vest in such shares and units have been participants in
long-term corporate efforts. In selecting employees to participate in the Plan
and in determining the amount of an award to be granted, the Committee considers
a number of subjective factors, including the functions and responsibilities of
the employee, the employee's past and potential contribution to the
profitability and growth of the Corporation, the value of the employee's
services, and the amount and timing of prior awards. The Plan originally had
1,500,000 shares of Common Stock and an equal number of book value appreciation
units available for grant; at year-end 1994, the Plan had 179,500 shares of
Common Stock and 179,500 book value appreciation units available for grant. The
Plan is scheduled to expire in 1997. Awards of 482,500 shares and 482,500 book
value appreciation units were made in 1994. These awards were made in an effort
to retain key management and executive employees and to maintain competitive
overall compensation levels following a three-year period in which little or no
salary increases were given to executive officers. Included in these awards were
142,000 shares and 142,000 book value appreciation units granted to executive
officers. Of this amount, 20,000 shares and 20,000 book value appreciation
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units, vesting 50% in six months and 50% in one year, were granted to Mr. Robert
F. Wright, President of the Corporation, in February 1994. This award was made
in recognition of the fact that Mr. Wright had worked well past his retirement
age in order to devote most of his time over the two and one-half years prior to
the award to the massive project of constructing the fluid catalytic cracking
unit and associated gasoline upgrading facilities at the Corporation's Virgin
Islands refinery, spending much of 1993 in the Virgin Islands away from his
family.
Other Benefit Plans. The Corporation has adopted certain broad-based
employee benefit plans in which executive officers are permitted to participate
on the same terms as other eligible employees of the Corporation, subject to
applicable limits imposed on contributions and benefits under Internal Revenue
Code regulations. In addition to group life insurance and health benefit plans,
the Corporation has adopted the Employees' Savings and Stock Bonus Plan,
approved by stockholders in 1981, under which participants can elect to invest,
on a pre-tax or after-tax basis, up to 5% of salary in several funds, one of
which invests in the Corporation's Common Stock, and the Corporation provides
matching contributions for each participant, all of which are invested in the
Corporation's Common Stock. The Corporation believes that this matching
structure helps to align the financial interests of all participants with those
of stockholders by encouraging them to work toward enhancing the value of the
Corporation's Common Stock.
Compensation of Chief Executive Officer.
The Committee believes that the circumstances determining the compensation
of the Chief Executive Officer are unique and may be simply stated. Recognizing
his significant ownership position in the Corporation, Mr. Leon Hess, Chairman
of the Board and Chief Executive Officer, has requested that his compensation
remain at below-market levels and the Committee has approved this request for
1995. His annual salary has been kept at $300,000 since 1987. As a member of the
Compensation and Incentive Awards Committee, Mr. Leon Hess is ineligible to
receive awards of restricted stock or book value appreciation units and has
never received any such awards, nor has he received any cash bonus or any other
type of long-term incentive compensation. In short, the Committee believes that
Mr. Leon Hess' total compensation for 1994, consistent with his levels of
compensation for prior years, remained at a level far below that of his
counterparts at similarly-sized companies and below that which may otherwise
have been warranted by the Corporation's past performance.
Peter S. Hadley William A. Pogue
Leon Hess William I. Spencer
10
14
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return, assuming reinvestment of dividends, on the Corporation's Common Stock
with the cumulative total return, assuming reinvestment of dividends, of the
Standard & Poor's 500 Stock Index, which includes the Corporation, and the
cumulative total return, assuming reinvestment of dividends, of Standard &
Poor's Oil (Domestic Integrated) Stock Index, a published industry index which
includes the Corporation, as of each December 31 over a five-year period
commencing on December 31, 1989 and ending on December 31, 1994:
TOTAL SHAREHOLDER RETURNS
(DIVIDENDS REINVESTED)
YEARS ENDED DECEMBER 31
S&P OIL
(DOMESTIC
MEASUREMENT PERIOD AMERADA HESS S&P 500 STOCK INTEGRATED)
(FISCAL YEAR COVERED) CORPORATION INDEX STOCK INDEX
1989 100.00 100.00 100.00
1990 96.35 96.89 94.94
1991 99.87 126.42 88.76
1992 98.05 136.05 90.64
1993 97.35 149.76 95.50
1994 99.71 151.74 100.20
11
15
OWNERSHIP OF VOTING SECURITIES BY CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of the most recent practicable date,
information as to the ownership of more than 5% of any class of the
Corporation's voting securities by beneficial owners known by the Corporation to
hold more than 5% of any such class:
AMOUNT AND
NAME AND ADDRESS NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP(a) OF CLASS
- ----------------------------- ------------------------------ ------------ --------
Common Stock................. Leon Hess 11,985,226(b) 12.9
c/o Amerada Hess Corporation
1185 Avenue of the Americas
New York, New York 10036
Common Stock................. FMR Corp. 12,663,400(c) 13.62
82 Devonshire Street
Boston, Massachusetts 02109
- ---------------
(a) The information in the above table and in the notes thereto, other than
with respect to Mr. Leon Hess, was obtained from the Schedule 13G filed with the
Securities and Exchange Commission in February 1995 by FMR Corp. Information
with respect to Mr. Leon Hess is as of February 1, 1995 and with respect to FMR
Corp. is as of December 31, 1994.
(b) Mr. Leon Hess has sole voting and dispositive power over these shares.
(c) This amount includes 850,782 shares as to which such beneficial owner
has sole voting power, 10,900 shares as to which it has shared voting power,
12,652,500 shares as to which it has sole dispositive power and 10,900 shares as
to which it has shared dispositive power. FMR Corp. controls Fidelity Management
& Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp. and a
registered investment adviser, which beneficially owns and has sole dispositive
power, but no voting power, over 11,260,218 shares of Common Stock of the
Corporation as a result of acting as investment adviser to several registered
investment companies. FMR Corp. also controls Fidelity Management Trust Company,
a wholly-owned bank subsidiary which is the beneficial owner of 1,239,082 shares
of Common Stock of the Corporation, of which it has sole dispositive power over
all such shares and of which it has sole voting power over 697,582 shares.
Mr. Edward C. Johnson 3d and Abigail P. Johnson each own 24.9% of the
outstanding voting common stock of FMR Corp. Mr. Johnson is chairman of FMR
Corp. Various Johnson family members and trusts for the benefit of Johnson
family members own FMR Corp. voting common stock. These Johnson family members,
through their ownership of voting common stock and the execution of a family
shareholders' voting agreement, form a controlling group with respect to FMR
Corp. The number of shares reported in the table above with respect to such
beneficial owner includes 23,400 shares owned directly by Mr. Johnson or in
Johnson family trusts. Mr. Johnson has sole voting and dispositive power over
12,500 shares, and shared voting and dispositive power over 10,900 shares.
12
16
Of the shares reported in the table above with respect to such beneficial
owner, 140,700 shares are beneficially owned by Fidelity International Limited
("FIL"), a Bermudian joint stock company and an investment adviser to various
foreign investment companies and certain institutional investors. FIL has sole
voting and dispositive power over these shares. A partnership controlled by Mr.
Edward C. Johnson 3d and members of his family owns shares of FIL stock having
47.22% of the voting power of FIL voting stock. Mr. Johnson is also the chairman
of FIL. FIL currently operates as an entity independent of FMR Corp. and
Fidelity. FMR Corp. and FIL are of the view that they are not acting as a group
for purposes of Section 13(d) under the Securities Exchange Act of 1934 and that
they are not otherwise required thereunder to attribute to each other securities
beneficially owned by each other. However, FMR Corp. made its 13G filing on a
voluntary basis as if all of the shares are beneficially owned by FMR Corp. and
FIL on a joint basis.
OWNERSHIP OF EQUITY SECURITIES BY MANAGEMENT
The table below sets forth as to each director and named executive officer,
and all directors and executive officers as a group, information regarding their
ownership of equity securities of the Corporation on February 1, 1995, except as
otherwise noted. The persons listed below each have sole voting and investment
power as to all shares indicated except as set forth in the footnotes to the
table. Where no information appears in the column "Percent of Outstanding Shares
of Common Stock Owned", the securities held represent less than one percent of
the Common Stock.
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
OWNERSHIP OF SHARES OF
COMMON COMMON
NAME STOCK(a) STOCK OWNED
---- ------------ -----------
Marco B. Bianchi....................................... 18,895 --
Nicholas F. Brady...................................... 1,000(b) --
J. Barclay Collins II.................................. 17,801 --
Bernard T. Deverin..................................... 30,636 --
Peter S. Hadley........................................ 1,022(c) --
John B. Hess........................................... 1,584,737(d) 1.7
Leon Hess.............................................. 9,629,271 10.4
2,355,955(e) 2.5
Edith E. Holiday....................................... 1,000 --
Thomas H. Kean......................................... 1,000 --
W. S. H. Laidlaw....................................... 61,761(f) --
H. W. McCollum......................................... 92,642 --
Roger B. Oresman....................................... 77,824(g) --
William A. Pogue....................................... 1,000 --
Michael W. Press....................................... 25,000 --
John Y. Schreyer....................................... 32,720 --
Richard B. Sellars..................................... 3,400 --
William I. Spencer..................................... 500 --
Robert F. Wright....................................... 131,356 --
All directors and executive officers as a group........ 14,221,652 15.3
- ---------------
(a) These figures include 1,370 shares vested in the name of Mr. Bianchi,
10,132 shares vested in the name of Mr. J. B. Hess, 4,761 shares vested
in the name of Mr. Laidlaw, 7,123 shares vested in the name of Mr.
McCollum, 1,720 shares vested in the name of Mr. Schreyer, 11,267
shares vested in the name of Mr. Wright and 118,450 shares vested for
all executive officers and directors as a group under the Corporation's
Employees' Savings and Stock Bonus
13
17
Plan, as to which these individuals and the group have investment power
but generally do not have voting power, except with respect to shares
purchased with each such individual's own contributions, which will be
voted by the plan trustee in accordance with such individual's written
instructions; and 5,000 shares held in escrow under the Corporation's
Executive Long-Term Incentive Compensation and Stock Ownership Plan for
Mr. Bianchi, 10,000 shares held in escrow under said Plan for Mr.
Collins, 20,000 shares held in escrow under said Plan for Mr. J. B.
Hess, 20,000 shares held in escrow under said Plan for Mr. Laidlaw,
25,000 shares held in escrow under said Plan for Mr. Press, 30,000
shares held in escrow under said Plan for Mr. Schreyer, 10,000 shares
held in escrow under said Plan for Mr. Wright, and 153,000 shares held
in escrow under said Plan for all executive officers and directors as a
group, as to which these individuals and the group have voting power
but not investment power.
(b) Information as to Mr. Brady's ownership of equity securities is as of
February 13, 1995.
(c) Mr. Hadley holds these shares jointly with his wife and shares voting
and investment power.
(d) This figure includes 1,280,094 shares held by a family corporation, the
preferred stock of which is held by a trust of which Mr. J. B. Hess is
trustee and 33 1/3% of the common stock of which is owned by Mr. J. B.
Hess. The preferred stock of such corporation has 99% of the total
voting power of all classes of stock of such corporation. As trustee
Mr. J. B. Hess has voting power and investment power with respect to
such preferred stock. Mr. J. B. Hess' mother is the beneficiary of this
trust and Mr. Leon Hess has a remainder interest therein. This figure
also includes 65,063 shares held by a trust for the benefit of Mr. J.
B. Hess and his children, of which Mr. J. B. Hess is trustee. This
figure excludes 22,542 shares held by a trust of which Mr. J. B. Hess
is the beneficiary.
(e) This figure includes 175,218 shares held by five corporations
(including that referred to in note (f) below) of which Mr. Leon Hess
is an officer, director and owner of voting preferred stock having at
least 80% of the total voting power of all classes of stock and 26,186
shares held by five trusts of which Mr. Leon Hess is trustee. It also
includes 2,154,551 shares held by Hess Foundation, Inc. of which Mr.
Leon Hess is an officer and a director. It excludes 107,286 shares held
by Capitol Street Corporation, in which Mr. Hess indirectly owns an
equity interest as described in "Compensation Committee Interlocks and
Insider Participation" under "Executive Compensation and Other
Information." Mr. Hess disclaims beneficial ownership of such shares.
Mr. Leon Hess' address is in care of the Corporation, 1185 Avenue of
the Americas, New York, New York 10036.
(f) Mr. Laidlaw also owns the common stock of a corporation, the preferred
stock of which is owned by Mr. Leon Hess, which owns 35,000 shares of
Common Stock. The preferred stock has more than 92% of the total voting
power of all classes of stock of this corporation.
(g) This figure includes 67,926 shares held in trusts (including 22,542
shares held in the trust referred to in the last sentence of note (d)
above) of which Mr. Oresman is a co-trustee and with respect to which
he has shared voting and investment power.
14
18
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Based on the recommendation of its Audit Committee, the Board of Directors
has selected the firm of Ernst & Young as the independent auditors of the
Corporation for the fiscal year ending December 31, 1995. Ernst & Young has
acted for the Corporation in such capacity since November 1, 1971. The Board
proposes that the stockholders ratify such selection at the Annual Meeting.
If the stockholders do not ratify the selection of Ernst & Young, the
selection of independent auditors will be reconsidered by the Board of
Directors.
Representatives of Ernst & Young are expected to be present at the Annual
Meeting and will be afforded the opportunity to make a statement if they desire
and will be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters to come before the
meeting. Should any unanticipated business properly come before the meeting, the
persons named in the enclosed form of proxy will vote in accordance with their
best judgment.
The cost of preparing and mailing this Proxy Statement and the accompanying
proxy and the cost of solicitation of proxies on behalf of the Board of
Directors will be borne by the Corporation. Solicitation will be made by mail.
Some personal solicitation may be made by directors, officers
and employees without special compensation, other than reimbursement for
expenses. In addition, D. F. King & Co. has been retained to aid in the
solicitation. The fees of said organization for this solicitation are not
expected to exceed $20,000, exclusive of expenses.
Proposals which stockholders wish to include in the Corporation's proxy
materials relating to the 1996 Annual Meeting of Stockholders must be received
by the Corporation no later than November 29, 1995.
It is important that proxies be returned promptly. Stockholders are urged
to date and sign the enclosed proxy and return it promptly in the accompanying
envelope.
By order of the Board of Directors,
CARL T. TURSI
Secretary
New York, New York
March 28, 1995
15
19
AMERADA HESS CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 3, 1995
The undersigned appoints LEON HESS, ROBERT F. WRIGHT and JOHN B. HESS,
or any of them, proxies, each with power of substitution, to vote all shares
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
Amerada Hess Corporation to be held at its offices, 1 Hess Plaza, Route 9,
Woodbridge, New Jersey, on May 3, 1995, at 2:00 p.m., local time, and all
adjournments thereof as directed on the reverse side of this card and, in their
discretion, upon any other matters which may properly come before the Meeting
or any adjournment thereof.
The undersigned hereby revokes any proxy heretofore given to vote said
shares, and hereby ratifies all that said proxies may do at the Meeting or at
any adjournment thereof.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO
BE VOTED.
IF NOT OTHERWISE SPECIFIED, SHARES WILL BE VOTED FOR ALL NOMINEES IN
ITEM 1 AND FOR PROPOSAL 2 ON THE REVERSE SIDE OF THIS CARD.
Receipt of Notice of the Meeting and of the Proxy Statement is hereby
acknowledged.
(Continued and to be signed on the other side)
20
__________ ___________________ /X/ Please mark
SHARES DIV. REINV. SHS. your votes
like this
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
1. Election of the following nominees as Directors for three-year term expiring
in 1998:
M.B. Bianchi, N.F. Brady, J.B. Collins II, L. Hess, T.H. Kean,
H.W. McCollum
FOR WITHHOLD AUTHORITY
all nominees to vote for all nominees
/ / / /
WITHHOLD FOR THE FOLLOWING ONLY
(Write the name of the nominee(s) in the space below)
____________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
2. Ratification of the selection of Ernst & Young LLP as independent auditors
for fiscal year ending December 31, 1995.
FOR AGAINST ABSTAIN
/ / / / / /
Date , 1995
- ------------------------------------------
Signature
- ------------------------------------------
Signature
- ------------------------------------------
Please mark, date, and sign your name as it
appears to the left and return in the enclosed
envelope. When signing as an attorney, executor,
administrator, trustee, or guardian, please give
title as such. If signer is a corporation,
please sign full corporate name by authorized
officer and attach corporate seal. For
joint accounts, each joint owner should sign.
21
CONFIDENTIAL VOTING INSTRUCTIONS
AMERADA HESS CORPORATION
EMPLOYEES' SAVINGS AND STOCK BONUS PLAN
FOR ANNUAL MEETING OF STOCKHOLDERS
OF AMERADA HESS CORPORATION, MAY 3, 1995
NOTE: Members of the Amerada Hess Corporation Employees' Savings and Stock
Bonus Plan (the "Plan") may instruct the Plan Trustee how to vote the
shares credited to their Plan accounts that were purchased with
employee contributions and with cash dividends on those shares. (This
does not apply to shares derived from employer matching contributions.)
To: CHEMICAL BANK, as Trustee of the Plan
The undersigned instructs the Trustee to vote all full and fractional
shares credited to his or her account in the Amerada Hess Corporation Common
Stock Fund in the Plan at the Annual Meeting of Stockholders of Amerada Hess
Corporation to be held at its offices, 1 Hess Plaza, Route 9, Woodbridge, New
Jersey, on May 3, 1995, at 2:00 p.m., local time, and all adjournments thereof,
as directed on the reverse side of this card.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO BE VOTED.
Receipt of Notice of the Meeting and of the Proxy Statement is hereby
acknowledged.
(Continued and to be signed on the other side)
22
__________ /X/ Please mark
SHARES your votes
like this
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
1. Election of the following nominees as Directors for three-year term expiring
in 1998:
M.B. Bianchi, N.F. Brady, J.B. Collins II, L. Hess, T.H. Kean,
H.W. McCollum
FOR WITHHOLD AUTHORITY
all nominees to vote for all nominees
/ / / /
WITHHOLD FOR THE FOLLOWING ONLY
(Write the name of the nominee(s) in the space below)
____________________________________________________
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
2. Ratification of the selection of Ernst & Young LLP as independent auditors
for fiscal year ending December 31, 1995.
FOR AGAINST ABSTAIN
/ / / / / /
Date , 1995
- ------------------------------------------
Signature
- ------------------------------------------
Signature
- ------------------------------------------
Please mark, date, and sign your name as it
appears to the left and return in the enclosed
envelope no later than April 25, 1995.
