Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 o | |
| Check the appropriate box: |
| o Preliminary Proxy Statement | |
| o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| x Definitive Proxy Statement | |
| o Definitive Additional Materials | |
| o Soliciting Material Pursuant to §240.14a-12 |
PRIMEENERGY 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 No fee required. | |
| o 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: |
| o Fee paid previously with preliminary materials. |
| o 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: |
| SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
Table of Contents
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS OF
PrimeEnergy
Corporation
TO BE
HELD
June 7,
2007
Notice is hereby given that the Annual Meeting of Stockholders
of PrimeEnergy Corporation will be held on Thursday,
June 7, 2007, at 8:00 a.m., CDT, at the Hilton Midland
Plaza, 117 West Wall Street, Midland, Texas, 79701 for the
following purposes:
1. To elect a Board of Directors of seven (7) persons
as nominated in the accompanying Proxy Statement, such Directors
to hold office until the next annual meeting of stockholders and
until their successors are elected; and
2. To transact such other procedural business as may
properly be brought before the Meeting or at any adjournment or
adjournments thereof.
The Meeting may be adjourned from time to time without other
notice than by announcement at the Meeting, or at any
adjournment thereof, and any and all business for which the
Meeting is hereby noticed may be transacted at any such
adjournment.
The Board of Directors has fixed April 12, 2007, as the
date for the taking of a record of the stockholders entitled to
notice of and to vote at the Meeting and at any adjournment or
adjournments thereof. The stock transfer books will not be
closed.
Enclosed is a form of proxy solicited by the Board of Directors
of the Company. Stockholders who do not plan to attend the
Meeting in person are requested to date, sign and return the
enclosed proxy in the enclosed envelope, to which no postage
need be affixed if mailed in the United States. Your proxy may
be revoked at any time before it is exercised and will not be
used if you attend the Meeting and prefer to vote in person.
BY ORDER OF THE BOARD OF
DIRECTORS
James F. Gilbert
Secretary
April 27, 2007
TABLE OF CONTENTS
Table of Contents
PrimeEnergy
Corporation
One Landmark Square
Stamford, Connecticut 06901
PROXY STATEMENT
Solicitation by the Board of Directors of Proxies from
Stockholders for Annual Meeting of Stockholders
June 7, 2007
The Board of Directors of PrimeEnergy Corporation, a Delaware
corporation, (hereinafter called the “Company”)
solicits your proxy in the enclosed form which, if you do not
plan to attend the Annual Meeting of Stockholders of the Company
on Thursday, June 7, 2007, you are requested to fill out,
sign as indicated and return to the Company in the enclosed
self-addressed envelope, which requires no postage if mailed in
the United States. Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any time before it is
exercised by notice in person or in writing to the Company. The
approximate day on which the proxy statement and form of proxy
will be sent to security holders is April 27, 2007.
Proxies are being solicited by mail and all expenses of
solicitation have been or will be borne by the Company. In
addition, arrangements may be made with brokerage houses and
other custodians, nominees and fiduciaries to send proxies and
proxy material to their principals, and the Company will
reimburse them for their expenses in so doing.
Only stockholders of record at the close of business on
April 12, 2007, are entitled to vote at the 2007 Annual
Meeting. At that date, the Company had outstanding and entitled
to vote 3,194,731 shares of Common Stock, each share
entitling the record holder thereof to one vote.
All shares of the Company represented by proxies received in
time and in proper form and condition and not revoked will be
voted as specified in the proxy; or in the absence of specific
direction, the proxy will be voted by the person designated
therein:
FOR the election as Directors of the Company of the seven (7)
nominees named below, to hold office until the next annual
meeting of stockholders and until their respective successors
shall be duly elected. In the event any of the nominees should
become unable to serve as a Director, the proxies will be voted
in accordance with the best judgment of the person acting under
it.
The election of Directors will require the affirmative votes of
a plurality of the shares of the Common Stock voting in person
or by proxy at the Annual Meeting. The Company’s transfer
agent will tabulate all votes which are received prior to the
date of the Annual Meeting. The Company will appoint two
inspectors of election, who may be officers or employees, to
receive the transfer agent’s tabulation, to tabulate all
other votes, and to certify the results of the elections.
Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting (i.e.,
for quorum purposes), but shall not be counted.
The management knows of no matter to be submitted to the 2007
Annual Meeting with respect to which the stockholders are
entitled to vote other than the election of Directors, but if
procedural matters do properly come before the Meeting, the
persons named in the proxy will vote according to their best
judgment.
Table of Contents
SECURITIES
OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of
shares of the Common Stock of the Company owned beneficially by
any person, including any “group” as that term is
defined in Section 12d(3) of the Securities Exchange Act of
1934, known to the Company to be the beneficial owner of five
percent (5%) or more of the Common Stock, as of April 12,
2007. Information as to beneficial ownership is based upon
statements furnished to the Company by such persons. Except as
indicated, all shares are held directly, with full voting and
dispositive powers, and percentages are calculated on the basis
of the shares issued and outstanding, and with respect to those
named persons holding options presently exercisable or within 60
days of April 12, 2007, includes the number of shares to be
issued upon exercise of such options.
|
Amount and |
||||||||
|
Name and |
Nature of |
|||||||
|
Address of |
Beneficial |
Percent |
||||||
|
Beneficial Owner
|
Ownership
|
of Class | ||||||
| Charles E. Drimal, Jr. | 1,299,106 | (1) | 33.38 | |||||
|
One Landmark Square Stamford, Connecticut 06901 |
||||||||
| McJunkin Corporation | 623,521 | (2) | 19.52 | |||||
|
835 Hillcrest Drive Charleston, West Virginia 25311 |
||||||||
| Amrace, Inc. | 473,732 | 14.83 | ||||||
|
1251 Avenue of the Americas 51st Floor New York, New York 10020 |
||||||||
| Matthias Eckenstein | 224,000 | (3) | 7.00 | |||||
|
Solothurner Str 94 4008 Basel, Switzerland |
||||||||
| Clint Hurt | 201,250 | (4) | 6.30 | |||||
|
107 North “N” Midland, Texas 79701 |
||||||||
| Jan K. Smeets | 197,500 | (5) | 6.20 | |||||
|
9 Locust Avenue Larchmont, New York 10538 |
||||||||
| (1) | Includes 506,606 shares held of record and beneficially, 697,500 shares subject to options, all presently exercisable, and 95,000 shares for which Mr. Drimal has sole voting rights pursuant to a voting agreement dated June 20, 2006, between Mr. Drimal and his mother, who is the record holder of such shares. Mr. Drimal has no dispositive power with respect to such 95,000 shares and no pecuniary interest in such shares. |
| (2) | Shares held of record by McJunkin Corporation, a private corporation. Investment funds affiliated with The Goldman Sachs Group, Inc. are the beneficial owners of a majority of the shares of McJunkin Corporation and such persons may be deemed to control McJunkin Corporation and to beneficially own the shares of the Company held by McJunkin Corporation. |
| (3) | Mr. Eckenstein has sole voting power with respect to these shares, pursuant to voting agreements dated September 25, 2006, with two of his adult children, who are the record owners of such shares. Mr. Eckenstein has no dispositive power with respect to such shares and no pecuniary interest in such shares. |
| (4) | Shares held of record by Clint Hurt & Associates, Inc., a private company controlled by Mr. Hurt. |
| (5) | Includes 190,000 shares held of record and beneficially and sole voting rights with respect to an aggregate of 7,500 shares pursuant to voting agreements dated June 29, 2006, as to 2,500 each, between Mr. Smeets and his |
2
Table of Contents
| three sons. Mr. Smeets has no dispositive power with respect to such 7,500 shares and no pecuniary interest in such shares. |
The following table sets forth information at April 12,
2007, with respect to the shares of the Company’s Common
Stock beneficially owned by the Company’s Directors and
nominees and by all Directors and officers of the Company as a
group:
|
Amount |
||||||||
|
Beneficially |
||||||||
|
Name
|
Owned(1)
|
Percent of Class (1)
|
||||||
|
Beverly A. Cummings
|
85,000 | (2) | 2.60 | |||||
|
Charles E. Drimal, Jr.
|
1,299,106 | (3) | 33.38 | |||||
|
Matthias Eckenstein
|
224,000 | (4) | 7.00 | |||||
|
H. Gifford Fong
|
136,941 | (5) | 4.30 | |||||
|
Thomas S. T. Gimbel
|
50,000 | 1.60 | ||||||
|
Clint Hurt
|
201,250 | (6) | 6.30 | |||||
|
Jan K. Smeets
|
197,500 | (7) | 6.20 | |||||
|
All Directors and officers as a
group
|
2,193,797 | (2)(3)(4)(5)(6)(7) | 55.37 | |||||
| (1) | Unless otherwise indicated, all shares are owned directly and the holder thereof has sole voting and investment powers with respect thereto, and percentages are calculated on the basis of the shares issued and outstanding, and with respect to those persons, or group, holding options presently exercisable or within 60 days, includes the number of shares to be issued upon exercise of such options. |
| (2) | Includes 15,000 shares held directly and 70,000 shares subject to options all presently exercisable. |
| (3) | Includes 506,606 shares held of record and beneficially, 697,500 shares subject to options, all presently exercisable, and 95,000 shares for which Mr. Drimal has sole voting rights pursuant to a voting agreement dated June 20, 2006, between Mr. Drimal and his mother, who is the record holder of such shares. Mr. Drimal has no dispositive power with respect to such 95,000 shares and no pecuniary interest in such shares. |
| (4) | Mr. Eckenstein has sole voting power with respect to these shares, pursuant to voting agreements dated September 25, 2006, with two of his adult children, who are the record owners of such shares. Mr. Eckenstein has no dispositive power with respect to such shares and no pecuniary interest in such shares. |
| (5) | Includes 54,141 shares held of record and beneficially and an aggregate of 82,800 shares for which Mr. Fong has sole voting rights pursuant to voting agreements dated June 28, 2006, between Mr. Fong and his two sons who are the record owners of such shares. Mr. Fong has no dispositive powers with respect to such 82,800 shares and no pecuniary interest in such shares. |
| (6) | Shares held of record by Clint Hurt & Associates, Inc., a private company controlled by Mr. Hurt. |
| (7) | Includes 190,000 shares held of record and beneficially and sole voting rights with respect to an aggregate of 7,500 shares pursuant to voting agreements dated June 29, 2006, as to 2,500 each, between Mr. Smeets and his three sons who are the record owners of such shares. Mr. Smeets has no dispositive power with respect to such 7,500 shares and no pecuniary interest in such shares. |
3
Table of Contents
DIRECTORS
AND EXECUTIVE OFFICERS
There will be submitted by the management to the 2007 Annual
Meeting for election as Directors, the seven (7) nominees
whose names, together with certain information concerning them,
are set out below. In the event any of the nominees shall become
unable to serve as a Director, the proxy will be voted in
accordance with the best judgment of the person acting under it;
however, no circumstances are at present known which would
render any nominee unavailable.
|
Offices Held |
||||||||
|
With The |
Director |
|||||||
|
Nominee
|
Age
|
Principal Occupation
|
Company
|
Since
|
||||
|
Beverly A. Cummings
|
54 |
Executive Vice President
and Treasurer of the Company |
Director; Executive
Vice President and Treasurer |
February 1988 |
||||
|
Charles E. Drimal, Jr.
|
59 |
President of the Company
|
Director; President
|
October 1987 |
||||
|
Matthias Eckenstein
|
77 |
Architect and Developer,
Basel, Switzerland |
Director
|
August 1989 |
||||
|
H. Gifford Fong
|
62 |
Investment Technology
Consultant, Lafayette, California |
Director
|
May 1994 |
||||
|
Thomas S. T. Gimbel
|
52 |
Managing Director,
Business and Product Development, Optima Fund Management LLC, New York, New York |
Director
|
March 1989 |
||||
|
Clint Hurt
|
71 |
President, Clint Hurt &
Associates, Inc., a private oil and gas exploration company,
Midland, Texas
|
Director
|
February 1988 |
||||
|
Jan K. Smeets
|
59 |
Private Investor,
Larchmont, New York |
Director
|
February 1988 |
All of the above named nominees are currently Directors of the
Company, and each has served continuously as a Director since
the date indicated. There is no family relationship between any
nominee for Director or executive officer of the Company.
The Board of Directors met two times in 2006. All of the
incumbent Directors attended at least 75% of the aggregate of
the total number of meetings of the Board of Directors and of
all committees of the Board on which that Director served.
Directors are reimbursed for travel and related expenses in
connection with attendance at Board and committee meetings. All
Directors receive $500 for each Board meeting attended.
Directors do not receive any fee for attending Committee
meetings. Directors are encouraged to attend the Company’s
annual meeting of stockholders. All Directors attended the
Company’s 2006 annual meeting of stockholders.
The Board of Directors has an Executive Committee, an Audit
Committee and a Compensation Committee, but no other standing
committees. All Committee members attended all meetings of their
respective Committees.
The Executive Committee, composed of Messrs. Drimal, Jr.,
Hurt, Smeets and Ms. Cummings, is authorized to exercise
all the authority of the Board in the business and affairs of
the Company, except as limited by applicable law. The Executive
Committee met two times during 2006, and informally, by
telephone or office conference on a regular basis, usually
weekly, during the year.
The Audit Committee, composed of Messrs. Eckenstein, Hurt
and Smeets, met once in 2006. The Board of Directors believes
that the Audit Committee members satisfy applicable requirements
for independence, financial literacy and expertise. The
Committee selects and engages independent auditors to audit the
books, records and accounts of the Company, determines the scope
of such audits, and reviews the financial policies and control
4
Table of Contents
procedures of the Company. The report of the Audit Committee is
included in this Proxy Statement on page 10. The Board of
Directors and the Audit Committee have adopted a written charter
for the Audit Committee, a copy of which was attached as Annex A
to the Company’s proxy statement delivered with respect to
the Company’s annual meeting of stockholders in June, 2004.
The Compensation Committee, composed of Messrs. Hurt,
Gimbel and Smeets, met once in 2006. The Committee evaluates the
Company’s compensation policies and establishes salaries,
bonuses and other compensation for the Company’s executive
officers. The Board of Directors believes that the Compensation
Committee members satisfy applicable regulatory requirements for
independence. The report of the Compensation Committee is
included in this Proxy Statement on page eight. The Board
of Directors and the Compensation Committee have adopted a
written charter, a copy of which was attached as Annex B to the
Company’s proxy statement delivered with respect to the
Company’s annual meeting of stockholders in June, 2004.
The Company does not have a standing nominating committee. The
Board of Directors of the Company acts as the nominating
committee, Mr. Drimal and Ms. Cummings abstaining, in
the review and selection of Directors for election at the annual
meeting of the Company’s stockholders. The remaining
Directors of the Company, Messrs. Eckenstein, Fong, Gimbel,
Hurt and Smeets function as a nominating committee, and are
believed to satisfy applicable regulatory requirements for
independence. The Board of Directors believes that this
procedure is adequate in the process of selecting persons for
elections as directors of the Company. The Board of Directors of
the Company has previously adopted a charter for a nominating
committee, which was attached as Annex C to the
Company’s proxy statement delivered with respect to the
Company’s annual meeting of stockholders held in June,
2004, and the members of the Company’s Board of Directors
functioning in the nomination of directors relies upon, and is
governed by such charter. The seven Directors of the Company
currently serving as Directors were designated as nominees for
re-election at the 2007 Annual Meeting of Stockholders. No other
nominees were considered and no nominations were proposed by any
stockholder or group. The Board of Directors will consider
meritorious director candidates submitted to it by stockholders
of the Company. Candidates for election must be willing to
devote the time necessary to serve as a director and must
possess the level of education, experience, and expertise, both
with respect to financial matters and the oil and gas industry
in general, required to perform the duties of a member of the
board of directors of a public company, and in particular of the
Company. Submission must be accompanied by biographical material
of the proposed candidate and such other information as would be
required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission.
Submissions should be forwarded to the Secretary of the Company
at One Landmark Square, Stamford, Connecticut 06901, in
compliance with the procedures described under
“Stockholders’ Proposals” set out below.
The executive officers of the Company, together with certain
information concerning them, are set out below.
|
Offices Held |
||||
|
Officer
|
Age
|
With the Company
|
||
|
Charles E. Drimal, Jr.
|
59 |
President
|
||
|
Beverly A. Cummings
|
54 |
Executive Vice President
and Treasurer |
||
|
James F. Gilbert
|
74 |
Secretary
|
Each of the above officers were elected by the Board of
Directors to their respective offices in May, 2006, at the
annual meeting of the Board and each will hold their respective
offices until their successors are elected by the Board.
The principal occupation and employment for the past five years
of each of the Directors and nominees for Director and of each
of the executive officers of the Company is as follows:
Ms. Cummings is a Certified Public Accountant and holds a
Bachelor of Science degree from the State University of New York
and a Master of Business Administration from Rutgers University.
She was elected Vice President, Finance and Treasurer of the
Company in October, 1987, and Executive Vice President and
Treasurer in May, 1991. Ms. Cummings holds similar
positions with the Company’s subsidiaries. She has served
as a Director of the Company since February, 1988.
5
Table of Contents
Mr. Charles E. Drimal, Jr. has served as a Director and
President and Chief Executive Officer of the Company since
October, 1987. He also holds similar positions with the
Company’s subsidiaries. Mr. Drimal is a graduate of the
University of Maryland and Samford University School of Law and
is a member of the New York State Bar.
Mr. Eckenstein is a Swiss citizen and a resident of Switzerland.
He studied law and architecture in Basel, Switzerland, and at
the University of Geneva and the Ecole des Beaux Arts, Paris,
France. He is a director and principal in several privately held
companies providing financial consulting services in
construction, hotel management and architectural matters. He was
elected a Director of the Company in August, 1989.
Mr. Fong is president of Gifford Fong Associates, investment
technology consultants, Lafayette, California. He holds a
Bachelor of Science, a Master of Business Administration and law
degrees from the University of California. He is the editor of
The Journal of Investment Management and is the author and
contributor of numerous trade journal publications.
Mr. Fong was elected a Director of the Company in May, 1994.
Mr. Gimbel is the Executive Managing Director of Optima Fund
Management LLC, New York, prior to which he was Managing
Director, Business and Product Development of that Firm since
July, 2004. Prior to that date, and from February, 1999, he was
the Managing Director of Hedge Fund Investments at Credit Suisse
Asset Management, New York. Mr. Gimbel holds a Bachelor of
Arts degree in economics from Bowdoin College and a Master of
Business Administration from Columbia University Graduate School
of Business. He was elected a Director of the Company in March,
1989.
Mr. Hurt is president of Clint Hurt & Associates, Inc., a
private oil and gas exploration company located in Midland,
Texas. He is past president of the Independent Oil & Gas
Association of West Virginia and is a former director of Chase
Bank of Texas, Midland, Texas. He was elected a Director of the
Company in February, 1988.
Mr. Smeets, a citizen of the Netherlands and a resident of the
United States, is a private investor in Larchmont, New York. He
was elected as a Director of the Company in February, 1988. He
is a graduate of M.I.T. and holds a Master of Business
Administration from Stanford Business School.
Mr. Gilbert has been Secretary of the Company from March, 1973,
and serves as secretary of the Company’s subsidiaries. He
is an attorney in Dallas, Texas.
6
Table of Contents
COMPENSATION
DISCUSSION AND ANALYSIS
Executive compensation of the Company is administered by the
Compensation Committee of the Board of Directors. The report of
the Compensation Committee follows this discussion. The Board of
Directors and the Committee has adopted a Compensation Committee
Charter which requires the Committee to annually review and
approve executive compensation consistent with the growth of the
Company and in the best long-term interest of the Company’s
stockholders.
The Company’s executive compensation consists of base
salaries and annual cash bonuses. The Company does not have in
place any non-cash compensation awards, such as stock option
awards, nor does the Company have any pension or retirement
benefits, other than the Company’s 401(k) contributions,
termination benefits or payments in the event of change in
control of the Company or any deferred compensation plans. The
Company does not have any executive employment agreements. The
Company maintains medical and hospital insurance coverage for
its eligible employees, including its executives who may
participate in such coverage on the same basis as the rest of
the Company’s employees. Executive officers are eligible to
receive reimbursement for, or have paid directly, health club
and/.or professional and business organization dues, automobile
allowances and similar perquisites and certain disability and
life insurance premiums.
Base salaries for the Company’s executives are generally
established based on the scope of their responsibilities,
competitive market compensation paid by other companies for
similar positions, and an evaluation of the executive’s
performance. The Committee also reviews the executive’s
historical pay levels, past performance and expected future
contributions. The Committee does not use any particular formula
to arrive at executive pay level.
The Company does not have any Company stock ownership
requirements for its Directors or executive officers. However,
the seven incumbent Directors, which includes the Company’s
principal executive officers, are each the beneficial owners of
a significant number of the Company’s outstanding shares
and the management of the Company believes that the views of the
Company’s Directors and executive officers with regard to
executive compensation are consistent with the best interests of
the Company and its stockholders. The Executive Officers of the
Company met with the Compensation Committee to discuss the
operations and financial condition of the Company. Such Officers
do not participate in the decisions of the Committee. The
Committee has not adopted any formal guidelines for determining
cash bonuses, but mainly consider the Officer’s performance
and the significant increase in the Company’s oil and gas
reserves, production, revenues and assets during 2006.
Section 162(m) of the Internal Revenue Code generally limits
deductions by publicly held corporations for federal income tax
purposes to $1 million of compensation paid to each of the
executive officers shown on the Summary Compensation Table
included herein for any fiscal year unless such excess
compensation is “performance based” as defined in that
Section 162(m). The Company does not meet such definitions,
including approval of such “performance based”
compensation by stockholders, and such excess compensation may
not be deductible by the Company for federal income tax
purposes. The Compensation Committee has considered and will
continue to consider the deductibility of the Company’s
executive compensation. However, the Compensation Committee
intends to establish executive compensation that it believes to
be in the best interests of the Company and its stockholders,
even if such compensation may not be fully deductible.
7
Table of Contents
EXECUTIVE
AND DIRECTOR COMPENSATION
Summary
Compensation Table
The following table discloses compensation for the fiscal year
ended December 31, 2006, received by the Company’s
Principal Executive Officer and Principal Financial Officer(1).
|
All |
||||||||||||||||||
|
Other |
||||||||||||||||||
|
Name and Principal |
Annual Compensation |
Compensation |
Total |
|||||||||||||||
|
Position(2)
|
Year | Salary($) | Bonus($) | ($) | ($) | |||||||||||||
|
Charles E. Drimal, Jr.
|
2006 | 270,816 | 2,200,000 | 9,800(3 | ) | 2,516,536 | ||||||||||||
|
President and Director;
the Principal Executive Officer |
||||||||||||||||||
|
Beverly A. Cummings
|
2006 | 270,816 | 880,000 | 9,800(4 | ) | 1,175,251 | ||||||||||||
|
Executive Vice
|
||||||||||||||||||
|
President, Treasurer
|
||||||||||||||||||
|
and Director;
|
||||||||||||||||||
|
the Principal Financial Officer
|
||||||||||||||||||
| (1) | Columns for “Stock Awards”, “Option Awards”, “Non-Equity Incentive Plan Compensation” and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” are omitted as the Company has no such compensation awards or plans. |
| (2) | Each of the named officers hold similar positions with the Company’s subsidiaries and also serve as directors of each of the subsidiaries. |
| (3) | Includes $1,000 Director’s fees; $8,800 as the Company’s contribution to its 401(k) plan; club dues, $10,400; automobile allowance, $7,060; long term disability insurance premium, $6,460; and life insurance premiums, $12,000. |
| (4) | Includes $1,000 Director’s fees; $8,800 as the Company’s contribution to its 401(k) plan; club dues, $5,000; automobile allowance, $3,175; and long term disability insurance premium, $6,460. |
Director
Compensation
The following table discloses compensation to the Company’s
Directors for the fiscal year ended December 31, 2006.
Columns for “Stock Awards”, “Option Awards”,
“Non-Equity Incentive Plan Compensation”, “Change
in Pension Value and Non-Qualified Deferred Compensation
Earnings”, and “All Other Compensation” have been
omitted as the Company has no such Director awards or
compensation.
|
Fees Earned or |
Total |
|||||
|
Name
|
Paid in Cash ($) | ($) | ||||
|
All Directors as a group of eight
in 2006
|
1,000 | 8,000 | ||||
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COMPENSATION
COMMITTEE REPORT
The
Compensation Committee reports as follows:
The Compensation Committee of the Board of Directors consists of
Messrs. Gimbel, Hurt and Smeets, none of whom is an
employee of the Company. The Company believes that each member
of the Compensation Committee meets applicable regulatory
independence requirements. The Compensation Committee makes all
decisions concerning compensation of executive officers who
receive salary and bonus in excess of $100,000 annually and
determines the total amount of bonuses to be paid annually. The
Compensation Committee’s policy is to offer executive
officers competitive compensation packages that will permit the
Company to attract and retain highly qualified individuals and
to motivate and reward such individuals on the basis of the
Company’s performance.
The Compensation Committee has reviewed the Compensation
Discussion and Analysis (the “CD&A”) section
included in this Proxy Statement and has discussed the CD&A
with the executive officers of the Company. Based on this review
and discussion, the Compensation Committee recommended that the
CD&A be included in this Proxy Statement and be incorporated
by reference in the Company’s Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006, filed with the
Securities and Exchange Commission.
The compensation of the Principal Executive Officer and
Principal Financial Officer is largely dependent upon the
overall performance of the Company. For the year ended
December 31, 2007, the base salary of the Principal
Executive Officer of the Company, Charles E. Drimal, Jr.,
has increased 3.3 percent to $279,753 from $270,816, and
the base salary of the Principal Financial Officer, Beverly A.
Cummings, has increased 3.3 percent to $279,753 from
$270,816. For the year ended December 31, 2006, a cash
bonus award of $2,200,000 was paid to Mr. Drimal and a cash
bonus award of $880,000 was paid to Ms. Cummings.
Compensation Committee
Clint Hurt, Chairman
Thomas S. T. Gimbel
Jan K. Smeets
This report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
Compensation
Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 2006,
Messrs. Clint Hurt, Thomas S.T. Gimbel and Jan K.
Smeets served as members of the Compensation Committee. None of
such persons was, during the fiscal year, or was formerly, an
officer or employee of the Company or any of its subsidiaries.
There are no committee interlocks with other companies within
the meaning of the Securities and Exchange Commission’s
rules.
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STOCK
OPTION GRANTS, OPTIONS EXERCISES AND HOLDINGS
There were no stock options granted by the Company to the named
executive officers during the fiscal year ended
December 31, 2006, and no options were exercised by any of
such persons. The following table sets forth information with
respect to all unexercised options held by the named executive
officers of the Company at December 31, 2006. All
unexercised options are fully exercisable. References to SARs
and similar instruments in the table below have been omitted as
the Company has no such securities.
Unexercised
Options and Fiscal Year End Option Values
|
Number of |
Value of |
|||||||
|
Unexercised Options at |
Unexercised In-the-Money Options |
|||||||
| Fiscal Year-End | at Fiscal Year-End(1) | |||||||
|
Name
|
Exercisable | Exercisable | ||||||
|
Charles E. Drimal, Jr.
|
697,500 | $ | 44,247,656 | |||||
|
Beverly A. Cummings
|
70,000 | $ | 4,440,625 | |||||
| (1) | The average bid price of the Company’s Common Stock on December 31, 2006, as reported in the over-the-counter market, was $64.50. |
AUDIT
COMMITTEE REPORT
The Audit Committee oversees the Company’s financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial
statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities,
the Audit Committee reviewed the audited financial statements in
the Annual Report with management including a discussion of the
quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who
are responsible for expressing an opinion on the conformity of
those audited financial statements with generally accepted
accounting principles, their judgments as to the quality, not
just the acceptability, of the Company’s accounting
principles and such other matters as are required to be
discussed with the Audit Committee under generally accepted
auditing standards. These include, but are not limited to, those
matters under Statements on Auditing Standards. In addition, the
Audit Committee has discussed with the independent auditors the
auditors’ independence from management and the Company
including the matters in the written disclosures required by the
Independence Standards Board. The Company’s auditors do not
perform financial information system design and implementation
services, internal audit or tax services.
The Audit Committee discussed with the Company’s
independent auditors the overall scope and plans for their
audits. The Audit Committee meets with the independent auditors,
with and without management present, to discuss the results of
their examinations, their evaluations of the Company’s
internal controls, and the overall quality of the Company’s
financial reporting.
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board of Directors (and
the Board has approved) that the audited financial statements be
included in the Annual Report on
Form 10-K
for the year ended December 31, 2006, for filing with the
Securities and Exchange Commission. The Committee has also
recommended the selection of the Company’s independent
auditors for 2007.
Audit Committee
Jan K. Smeets, Chairman
Matthias Eckenstein
Clint Hurt
This report of the Audit Committee shall not be deemed
incorporated by reference by any general statement incorporating
by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such Acts.
10
Table of Contents
CODE OF
BUSINESS CONDUCT AND ETHICS
The Company is committed to observing sound, ethical principles
in the conduct of its business and operations and by our
officers and employees in the course of their duties. The
Company has adopted a Code of Business Conduct and Ethics which
is available at the Company’s web-site,
www.primeenergy.com. These provisions are applicable to the
Company’s operations and to its employees, including the
Company’s principal executive officer and principal
financial officer. Any amendments or waivers from the Code, to
the extent applicable to the Company’s principal executive
officers, will be posted on the Company’s web-site.
The Company believes that a majority of its Directors, and
nominees, are “independent”, within the meaning of
applicable regulatory standards.
SECTION 16(a)
BENEFICIAL OWNER COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company’s executive officers and Directors, and persons
who own more than ten percent of a registered class of the
Company’s equity securities, to file reports of ownership
and changes in ownership of such securities with the Securities
and Exchange Commission and to furnish the Company with copies
of such reports. To the Company’s knowledge, based solely
on review of the copies of such reports furnished to the Company
with respect to the fiscal year ended December 31, 2006,
all required reports were timely filed by such persons.
INDEPENDENT
PUBLIC ACCOUNTANTS — FEES AND SERVICES
The Company engaged Pustorino, Puglisi & Co. LLP as the
principal accountants for the Company with respect to the audit
of the Company’s financial statements for the years ended
December 31, 2005 and 2006. There were no disagreements
with Pustorino, Puglisi & Co., LLP on any matters of
accounting principles or practices, financial statement
disclosure or auditing scope or procedures in connection with
their audits. Representatives of Pustorino, Puglisi &
Co. LLP are not expected to be present at the 2007 Annual
Meeting of Stockholders, but will be available by speaker
telephone during the Meeting and will have the opportunity to
make a statement if they desire to do so, and will be available
to answer stockholders’ questions.
The audit fees for professional audit services provided by
Pustorino, Puglisi & Co., LLP, for the audit of the
Company’s annual financial statements for each of the years
ended December 31, 2006, and December 31, 2005, were
$107,700 and $85,000. No fees were billed, or paid by the
Company for audit-related, tax or other services for the years
ended December 31, 2006, or 2005.
11
Table of Contents
STOCKHOLDERS’
PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of
1934, as amended, stockholders may present proper proposals for
inclusion in the Company’s proxy statement and form of
proxy and for consideration at its annual meeting of
stockholders by submitting their proposals to the Company in a
timely manner. In order to be so included for the
2008 annual meeting, stockholder proposals must be received
by the Company no later than December 28, 2007, and must
otherwise comply with the requirements of
Rule 14a-8.
Stockholder proposals to be brought before the 2008 annual
meeting, made outside the
Rule 14a-8
processes, must be submitted to the Company pursuant to
Rule 14a-4,
no later than March 13, 2008, or will be considered
untimely and entitle the Company to discretionary voting under
Rule 14a-4.
ANNUAL
REPORT AND FINANCIAL STATEMENTS
The Annual Report of the Company for its fiscal year ended
December 31, 2006, accompanies this Proxy Statement. The
audited financial statements of the Company are included in such
Annual Report.
It is important that proxies be returned promptly. Stockholders
are requested to date, sign and return the enclosed proxy in the
enclosed envelope, to which no postage need be affixed if mailed
in the United States. If you attend the 2007 Annual Meeting, you
may revoke your proxy and vote in person if you so desire,
otherwise your proxy will be voted for you.
BY ORDER OF THE BOARD OF DIRECTORS
James F. Gilbert
Secretary
Stamford, Connecticut
April 27, 2007
12
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PrimeEnergy Corporation
P E C 1
600.000000
C 0000001236 C O R
 |
||
| o | Mark this box with an X if you have made changes to your name or address details above. | |
Annual Meeting Proxy Card
| A | Election of Directors |
1. The Board of Directors recommends a vote FOR the listed nominees.
| For | Withhold | |||
01-Beverly A. Cummings |
o | o | ||
02-Charles E. Drimal, Jr. |
o | o | ||
03-Matthias Eckenstein |
o | o | ||
04-H. Gifford Fong |
o | o | ||
| For | Withhold | |||
05-Thomas S. T. Gimbel |
o | o | ||
06-Clint Hurt |
o | o | ||
07-Jan K. Smeets |
o | o | ||
2. In their discretion, the proxies appointed herein are
authorized to vote upon any other business as may properly
come before the meeting or any adjournments thereof.
authorized to vote upon any other business as may properly
come before the meeting or any adjournments thereof.
| B | Authorized Signatures — Sign Here — This section must be completed for your instructions to be executed. |
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.
Signature 1 — Please keep signature within the box
|
Signature 2 — Please keep signature within the box | Date (mm/dd/yyyy) | ||
| / / | ||||
1 U P X
0 0 3 5 2 1 1
Table of Contents
Proxy — PrimeEnergy Corporation
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of PrimeEnergy Corporation (the “Company”), revoking all prior proxies, does by these presents name, constitute and appoint Charles E. Drimal, Jr. and James F. Gilbert, and each of them, the true and lawful proxy and attorney-in-fact of the undersigned, with full power of substitution, to vote all shares of the Common Stock, par value $.10 per share, of the Company standing in the name of the undersigned on the books of the Company at the close of business on April 12, 2007, or in respect of which the undersigned is entitled to vote at the Company’s Annual Meeting of Stockholders to be held on Thursday, June 7, 2007, at 8:00 a.m., CDT, at the Hilton Midland Plaza, Midland, Texas, and at any and all adjournments of said meeting, hereby granting to said proxies and attorneys-in-fact, and each of them, full power and authority to vote in the name of the undersigned at said meeting, and at any and all adjournments thereof, on the matters set forth on reverse side.
PLEASE SIGN ON REVERSE SIDE AND RETURN PROMPTLY
(Continued and to be signed on reverse side.)