O I L S E A R C H L I M I T E D

Transcription

1 O I L S E A R C H L I M I T E D (Incorporated in Papua New Guinea) ARBN Wednesday, 8 April 2009 Company Announcements Officer AUSTRALIAN SECURITIES EXCHANGE (SYDNEY) LIMITED Level 4, Exchange Centre 20 Bridge Street Sydney NSW 2000 AUSTRALIA Dear Sir/Madam, Oil Search Limited 2009 Notice of Meeting and SAMPLE Proxy Form For release to the market, attached please find Oil Search Limited s 2009 Notice of Meeting and a SAMPLE of the Proxy Form. Yours sincerely OIL SEARCH LIMITED MICHAEL SULLIVAN General Counsel/Group Secretary Encl. AUSTRALIAN REGISTERED OFFICE Level 27 Angel Place, 123 Pitt Street, Sydney NSW 2000, Australia GPO Box 2442, Sydney NSW 2001, Australia Telephone: (61 2) Facsimile: (61 2)

2 (Incorporated in Papua New Guinea) ARBN Notice of Meeting 2009 ANNUAL MEETING

3 Notice is hereby given that the seventy eighth Annual Meeting of Members of Oil Search Limited (the Company) will be held in the Ballroom at the Crowne Plaza Hotel, Port Moresby, Papua New Guinea, on Tuesday, 12 May 2009, at 11:00 a.m. BUSINESS 1. To receive and consider the balance sheet and profit and loss account of the Company and the group accounts of the Company and its subsidiaries, together with the Directors and Auditor s Reports thereon, for the year ended 31 December To elect Fraser Ainsworth as a director of the Company. Fraser Ainsworth retires in accordance with clause 15.3(b) of the Company s Constitution and, being eligible to do so, offers himself for re-election. 3. To elect Tim Warren as a director of the Company. Tim Warren retires in accordance with clause 15.3(b) of the Company s Constitution and, being eligible to do so, offers himself for re-election. 4. To appoint an auditor and to authorise the directors to fix the fees and expenses of the auditor. Deloitte Touche Tohmatsu retire in accordance with Sections 190 and 191 of the Companies Act (1997) and being eligible to do so offer themselves for re-appointment. SPECIAL BUSINESS 1. To approve the issue of 258,900 Performance Rights to the Managing Director, Peter Botten, pursuant to the rules and terms of issue of the Performance Rights Plan. 2. To approve the issue of 46,000 Performance Rights to Executive Director, Gerea Aopi, pursuant to the rules and terms of issue of the Performance Rights Plan. 3. To approve the issue of 165,873 Restricted Shares to the Managing Director, Peter Botten, pursuant to the Restricted Shares Plan by way of a mandatory deferral of 50% of the Managing Director s short term incentive in respect of the 2008 year. 4. To approve the issue of 26,732 Restricted Shares to the Executive Director, Gerea Aopi, pursuant to the Restricted Shares Plan by way of a mandatory deferral of 50% of the Executive Director s short term incentive in respect of the 2008 year. 5. To increase by A$450,000 to A$1,950,000 the maximum aggregate amount that may be paid to Non-Executive Directors by way of fees in any calendar year. All items of Special Business will be treated as ordinary resolutions. By Order of the Board M G Sullivan General Counsel/Group Secretary Dated: 7 April OIL SEARCH ANNUAL MEETING

4 NOTE A Member entitled to attend and vote at the Meeting may appoint a proxy, who need not necessarily be a Member of the Company. A proxy form is enclosed and, where a proxy is to be appointed, the form of proxy should be completed and lodged at any one of the following addresses not less than 48 hours before the time at which the meeting is to be held: The registered office of the Company: Level 7 Credit House Cuthbertson Street Port Moresby, NCD PO Box 842, Port Moresby PAPUA NEW GUINEA Facsimile: (675) The office of the Company in Australia: Level 27 Angel Place 123 Pitt Street Sydney NSW 2000 GPO Box 2442 Sydney NSW 2001 AUSTRALIA Facsimile: (61 2) The office of the Company s share registry: Computershare Investor Services Pty Limited GPO Box 242, Melbourne VIC 3001 AUSTRALIA Facsimile: (61 3) VOTING EXCLUSION STATEMENT (SPECIAL BUSINESS ITEMS 1, 2, 3 AND 4) Pursuant to ASX Listing Rules and 10.15A.6, the Company will disregard any votes cast on Items 1, 2, 3 and 4 of the Special Business by Peter Botten and Gerea Aopi, being the only directors eligible to participate in the Performance Rights Plan and the Restricted Shares Plan, and any of their associates. However, the Company need not disregard a vote if: it is cast by a person as proxy for a person to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. VOTING EXCLUSION STATEMENT (SPECIAL BUSINESS ITEM 5) Pursuant to ASX Listing Rule 10.17, the Company will disregard any votes cast on Item 5 of the Special Business by any director, and any of their associates. However, the Company need not disregard a vote if: it is cast by a person as proxy for a person to vote, in accordance with the directions on the proxy form; or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides OIL SEARCH ANNUAL MEETING 3

5 EXPLANATORY NOTES TO THE SPECIAL BUSINESS OF THE 2009 ANNUAL MEETING 1. Issue of Performance Rights to the Managing Director, Peter Botten, and to Executive Director, Gerea Aopi under the Performance Rights Plan Item 1 of the Special Business covers Performance Rights ( PRs ) proposed to be issued to the Managing Director, Peter Botten, under the Performance Rights Plan ( PR Plan ). Item 2 of the Special Business covers performance rights proposed to be issued to Executive Director, Gerea Aopi, under the PR Plan. In 2004, the Company introduced new equity incentive arrangements for its senior executives and other employees. These arrangements were approved at the 2004 Annual Meeting. The arrangements comprise: A PR Plan for key executives; and A share option plan for the broader employee population. The terms of the PR Plan are summarized below to assist your understanding of the proposed issue of performance rights to Peter Botten and to Gerea Aopi. (a) Type of plan Awards under the PR Plan are structured as PRs to acquire ordinary shares in the Company for nil consideration, provided specified performance hurdles are met within defined time restrictions. The PR Plan rules allow participation by any executive, executive director or any other employee deemed to be eligible by the Board. Awards under the plan are expressed as a number of PRs to acquire a certain number of ordinary shares in the Company (generally one share for each PR). (b) Purchase Price PR Plan participants are not required to pay any amount in respect of the PRs or on acquisition of the shares pursuant to the PRs. (c) Size of Award The Board determines the size of the annual long-term incentive award to be granted to each participant through an assessment of market remuneration practices and in line with Oil Search s executive remuneration strategy. (d) Frequency of Awards Awards under the PR Plan are made annually, normally following the Company s annual meeting. (e) Vesting of PRs PRs vest three years after the date of grant to the extent performance criteria have been met. (f) Performance Criteria The performance criteria for the award of PRs are based on the Company s Total Shareholder Return ( TSR ) over the three-year performance period OIL SEARCH ANNUAL MEETING

6 The performance period for awards made in 2009 will be the three-year period from 1 January 2009 to 31 December To determine the level of vesting of the awards, the Company s TSR over the performance period will be ranked: (a) as regards 50% of the award, against the relative TSR of each of the first 150 bodies corporate comprised in the ASX 200 Index as at the commencement of the three-year performance period; and (b) as regards the other 50% of the award, against the TSR of a peer group of domestic and international oil and gas exploration and production companies identified at the commencement of the three-year performance period. If, as regards any particular part of the award described in (a) or (b) immediately above, the Company s TSR performance is: (a) Below median, that is, the 50th percentile, the number of PRs comprising that part of the award that vest will be zero; (b) At median, the number of PRs that vest will be 50% of the total number of PRs comprised in that part of the award; (c) Equal to or greater than the 75th percentile, the number of PRs that vest will be 100% of the total number of PRs comprised in that part of the award; (d) Greater than median and less than the 75th percentile, the number of PRs that vest will increase on a straight line basis from 50% to 100% of the total number of PRs comprised in that part of the award. The Board retains discretion to allow vesting of all PRs and to waive any restrictions in the event of a change of control or de-merger of the Company. (g) Lapsing of PRs PRs that do not vest following assessment of the performance conditions lapse immediately. If a participant dies or ceases employment, all unvested PRs lapse unless the Board determines otherwise. Any PRs that remain unexercised lapse on the fifth anniversary of the date of grant. (h) Management of the PR Plan and other general terms The PR Plan is administered by the Board. The PR Plan rules provide flexibility to allow the use of newly issued or existing shares (for example through purchase on market) to satisfy awards under the PR Plan. PRs do not attract dividends or voting rights. The Board may engage third party share managers to assist with the administration of the PR Plan OIL SEARCH ANNUAL MEETING 5

7 (i) Maximum number of shares to be issued The aggregate number of shares and shares subject to outstanding rights (that is, rights that have not yet been exercised and that have not lapsed) that have been awarded under all of Oil Search s equity incentive plans may not exceed 5% of Oil Search s issued share capital. ASX Listing Rule requires shareholder approval before the following persons can acquire securities in the Company under an employee incentive plan: A director; An associate of the director; and A person whose relationship with the entity is, in the ASX s opinion such that approval should be obtained. Accordingly, shareholder approval is sought in respect of the grant of PRs to Peter Botten, Managing Director, and the grant of PRs to Gerea Aopi, Executive Director, in accordance with the PR Plan. ASX Listing Rule 10.15A requires certain information to be given in a notice of meeting to approve the acquisition of securities under an employee incentive plan. For the purposes of Listing Rule 10.15A it is noted: Under the terms of the PR Plan, it is proposed that Peter Botten be awarded 258,900 PRs and that Gerea Aopi be awarded 46,000 PRs in respect of the 2009 financial year. Peter Botten and Gerea Aopi may each acquire one ordinary share in the capital of the Company for each PR awarded to them. However, the ability of Peter Botten and Gerea Aopi to exercise the PRs is subject to the performance conditions described in the summary of the PR Plan above being met. The acquisition price for the shares will be nil; The following details are disclosed in respect of all persons referred to in ASX Listing Rule who received PR s under the PR Plan following the last approval at the 2008 Annual Meeting: NAME OF PARTICIPANT NO. OF PRS RECEIVED ACQUISITION PRICE Peter Botten 338,600 Nil Gerea Aopi 48,900 Nil For the purposes of Listing Rule 10.14, Peter Botten and Gerea Aopi are the only persons participating in the PR Plan who require shareholder approval for the right to acquire shares in the capital of the Company under the PR Plan; Details of any PRs issued under the PR Plan will be published in each annual report of the Company relating to a period in which PRs have been issued, and the report will state that approval for the issue of those PRs was obtained under ASX Listing Rule No person for whom shareholder approval is required under ASX Listing Rule may participate in the PR Plan until approval is obtained in accordance with ASX Listing Rule The respective rights of Peter Botten and Gerea Aopi to PRs for 2009 will be awarded to them as soon as practicable following the close of the Meeting OIL SEARCH ANNUAL MEETING

8 2. Issue of Restricted Shares to the Managing Director, Peter Botten, and to Executive Director, Gerea Aopi in lieu of STI Awards Item 3 of the Special Business deals with the issue of 165,873 Restricted Shares to the Managing Director, Peter Botten, pursuant to the Restricted Shares Plan. Item 4 of the Special Business deals with the issue of 26,732 Restricted Shares to Executive Director, Gerea Aopi, pursuant to the Restricted Shares Plan. In order to assist the Company in retaining key management and other employees, the Company introduced the Restricted Shares Plan in Details of the Restricted Shares Plan are set out below. (a) Type of plan Awards under the Restricted Shares Plan are structured as grants of Restricted Shares for nil consideration. Restricted Shares are held on behalf of participants in trust, subject to disposal restrictions and forfeiture conditions, until released under the terms of the Plan. The Restricted Shares Plan rules allow participation by any executive, executive director or any other key employee deemed to be eligible by the Board. Executives based outside Australia and Papua New Guinea may participate in the Restricted Shares Plan if selected by the Board. The Board may adopt additional rules for the Restricted Shares Plan to take into account overseas legal or tax implications. (b) Purchase price Restricted Shares Plan participants are not required to pay any amount in respect of the Restricted Shares. (c) Size of awards The number of Restricted Shares to be granted to the participant is the number of ordinary shares that can be acquired on market with a specific percentage of the participant s total fixed remuneration ( TFR ) determined at the time of the grant. (d) Frequency of awards Awards under the Restricted Shares Plan are made where the Board determines that a significant retention risk exists. (e) Performance criteria The vesting of Restricted Shares is subject to continued employment only no additional performance conditions will apply. Unless the Board otherwise determines, unvested Restricted Shares will be forfeited where a participant ceases employment before the vesting date. (f) Disposal restrictions/forfeiture conditions on shares Restricted Shares are held in trust prior to the Restricted Shares vesting. Restricted Shares will be released from the trust when a request is received from the participant after the vesting date. Whilst the Restricted Shares are held in trust, the Restricted Shares will be subject to disposal restrictions and forfeiture conditions. Restricted Shares held in trust (whether vested or not) will be forfeited by participants who are considered by the Board to have acted fraudulently or dishonestly. Once a participant s Restricted Shares have vested, disposal restrictions and forfeiture conditions will cease and the Restricted Shares will be released from the trust when certain events occur, including the following: The participant ceases employment with Oil Search (subject to application of the forfeiture conditions); and The participant submits an application to the Board for the Restricted Shares to be released and the application is approved OIL SEARCH ANNUAL MEETING 7

9 (g) Cessation of employment Unless the Board otherwise determines, participants who cease employment prior to vesting will forfeit their unvested Restricted Shares except on death or cessation due to ill health, permanent disablement, redundancy or where the Board determines in its discretion that unvested Restricted Shares should vest. Vested Restricted Shares will be released from the trust and transferred to the participant on cessation of employment for any reason (subject to application of the forfeiture conditions). (h) Management of the plans and other general terms The Restricted Shares Plan will be administered by the Board or a committee to whom the Board has delegated responsibility for administering the Restricted Shares Plan. The Restricted Shares Plan rules provide flexibility to allow the use of newly issued or existing shares (for example through purchase on market) to satisfy awards under the Restricted Shares Plan. Participants will be entitled to dividends and voting rights from the date the Restricted Shares are granted. (i) Maximum number of Restricted Shares to be issued The aggregate number of Restricted Shares and shares subject to outstanding rights (that is, rights that have not yet been exercised and have not lapsed) that have been awarded under all of Oil Search s equity incentive plans will not exceed 5% of Oil Search s issued share capital. Grant of Restricted Shares in lieu of STI awards Grants for Restricted Shares in lieu of a portion of a participant s STI award may be made under the Restricted Shares Plan. These awards are made on the same terms as outlined above except for the following specific terms: (a) Type of plan Participants are required to defer 50% of their STI award for a financial year into Restricted Shares. Deferral of the prescribed portion of the STI award will be mandatory for employees, including all senior executives selected to participate in the arrangement. (b) Size of awards The number of Restricted Shares to be granted will be the number of ordinary shares that can be acquired on market with 50% of the participant s STI award (determined shortly after the end of the performance period). (c) Frequency of awards The first grant of Restricted Shares by way of the mandatory STI deferral will be made in 2009, in respect of performance in the financial year to 31 December It is envisaged that annual grants will be made to the extent that STI awards are determined for eligible senior management employees. (d) Vesting of awards Shares granted in the first quarter of 2009 (in respect of the 2008 financial year) will vest on 1 January (e) Performance criteria Performance criteria determine the quantum of the STI award based on achievement of operating, financial, exploration success and business growth targets set by the Board over the relevant financial year. No additional performance conditions apply to the Restricted Shares issued by way of the mandatory deferral of a portion of a participant s STI award other than continued employment until the vesting date. (f) Cessation of employment Participants who cease employment prior to vesting will forfeit their unvested Restricted Shares unless the Board exercises its discretion and permits all or some of the unvested Restricted Shares to vest prior to the vesting date OIL SEARCH ANNUAL MEETING

10 ASX Listing Rule requires shareholder approval before the following persons can acquire securities in the Company under an employee incentive plan: A director; An associate of the director; and A person whose relationship with the entity is, in the ASX s opinion, such that approval should be obtained. Accordingly, shareholder approval is sought in respect of the grant of Restricted Shares to Peter Botten, Managing Director, and the grant of Restricted Shares to Gerea Aopi, Executive Director, in accordance with the Restricted Shares Plan. ASX Listing Rule 10.15A requires certain information to be given in a notice of meeting to approve the acquisition of securities under an employee incentive plan. For the purposes of Listing Rule 10.15A it is noted that: The Managing Director, Peter Botten, will be issued pursuant to the Restricted Shares Plan with 165,873 Restricted Shares by way of mandatory deferral of 50% of the Managing Director s STI for 2008; Executive Director, Gerea Aopi, will be issued pursuant to the Restricted Shares Plan with 26,732 Restricted Shares by way of mandatory deferral of 50% of the Executive Director s STI for 2008; The acquisition price for the Restricted Shares will be nil; The following details are disclosed in respect of all persons referred to in ASX Listing Rule who received Restricted Shares in lieu of STI Awards and by way of Retention Awards under the Restricted Shares Plan following the last approval at the 2008 Annual Meeting: NAME OF PARTICIPANT NO. OF RESTRICTED SHARES RECEIVED ACQUISITION PRICE Peter Botten 87,760 Nil Gerea Aopi 17,537 Nil For the purposes of Listing Rule 10.14, Peter Botten and Gerea Aopi are the only persons participating in the Restricted Shares Plan who require shareholder approval to acquire Restricted Shares under the Restricted Shares Plan; No person for whom shareholder approval is required under Listing Rule may participate in the Restricted Shares Plan until approval is obtained in accordance with Listing Rule 10.14; Peter Botten and Gerea Aopi will be required to defer 50% of their short term incentive awards for the 2008 financial year into restricted shares during the first quarter of 2009 and in any event, no later than 3 years after the date of the Meeting; and Details of any Restricted Shares issued under the Restricted Shares Plan will be published in each annual report of the Company relating to a period in which Restricted Shares have been issued and the report will state that approval under ASX Listing Rule was obtained OIL SEARCH ANNUAL MEETING 9

11 3. Increase by A$450,000 to A$1,950,000 the maximum aggregate amount that may be paid to Non-Executive Directors by way of fees in any calendar year Item 5 of the Special Business covers: (a) an increase of A$450,000 to A$1,950,000 in the maximum aggregate amount that may be paid to non-executive directors by way of fees; (b) a change in the period to which this limit applies so that henceforth the limit applies to each calendar year and not each period of twelve months as currently applies. The current aggregate payment limit for non-executive directors fees is A$1,500,000 in any twelve month period and was approved by shareholders at the 2006 Annual Meeting. The proposed increase in the aggregate payment limit to A$1,950,000 for fees that may be paid to non-executive directors will provide the Board with the ability to recruit an additional non-executive director, should this be desirable either to introduce new competencies to the Board or to enable sound management of Board succession. With Oil Search moving towards one of the most significant investment decisions in its history, with a Financial Investment Decision on the PNG LNG Project, additional Board competencies, particularly in the LNG sphere, may be desirable. It is important for Oil Search to be able to attract additional top class directors in these challenging times and the increase in the aggregate payment limit will enable Oil Search to recruit additional non-executive directors as required. Although it is unlikely that the Board will need to increase the fees paid to individual non-executive directors in the short term, the proposed increase in the aggregate payment limit will also provide the Board with the ability to maintain market competitive remuneration levels for non-executive directors should some significant external event occur in future which requires response. Otherwise, it is not planned to review the competitiveness of non-executive director fees until 2010 at earliest. These fees were last reviewed in To ensure alignment with the Oil Search financial year, it is also proposed to change the period to which the maximum aggregate payment limit applies from any twelve month period, to any calendar year OIL SEARCH ANNUAL MEETING

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13 2009 Annual Meeting Lydia Warubi: Joined Oil Search in 2004 as a Process Technician Apprentice. Lydia, who comes from Pimaga, a village in the Kutubu area, undertook Oil Search s Apprenticeship training programme for school leavers and qualified as a certified Process Technician in She now works with the production department at the Central Processing Facility, Kutubu, focusing on minimising equipment down time in the plant, to optimise oil production. Oil Search is committed to the development of PNG citizens and the localisation of roles currently undertaken by expatriates.

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