<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PATINA OIL & GAS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
PATINA OIL & GAS
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
PATINA OIL & GAS CORPORATION
Notice of Annual Meeting of Stockholders
and Proxy Statement
April 8, 1998
IMPORTANT: WHETHER OR NOT YOU ARE ABLE TO ATTEND THE MEETING IN PERSON, THE
ACCOMPANYING FORM OF PROXY SHOULD BE COMPLETED, SIGNED AND RETURNED AT YOUR
EARLIEST CONVENIENCE IN THE ENVELOPE PROVIDED FOR THAT PURPOSE
<PAGE>
PATINA OIL & GAS CORPORATION
April 8, 1998
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to invite you to attend
our Annual Meeting of Stockholders, which will be held in Denver, Colorado at
the executive offices of the Company at 1625 Broadway, Suite 2000 on Wednesday,
May 13, 1998 at 9:00 a.m. Mountain Daylight Time.
Details of the meeting are given in the enclosed Notice of Annual Meeting and
Proxy Statement. Subsequent to the official meeting, we plan to review the
business and affairs of the Company and our plans for the coming year. The
Annual Report for the year ended December 31, 1997 is enclosed.
Your representation and vote are important. We urge you to vote your shares
whether or not you plan to attend the Annual Meeting. Please consider,
complete, date, sign and return the enclosed proxy card. You may revoke your
proxy prior to or at the meeting and still vote in person if you so desire.
Sincerely yours,
Thomas J. Edelman
Chairman
1625 BROADWAY, SUITE 2000, DENVER, COLORADO 80202 (303) 389-3600
<PAGE>
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 1998
To the Stockholders of Patina Oil & Gas Corporation:
The Annual Meeting of Stockholders (the "Annual Meeting") of Patina Oil & Gas
Corporation (the "Company") will be held at the corporate offices of the
Company, 20th floor, 1625 Broadway, Denver, Colorado, on Wednesday, May 13,
1998, at 9:00 a.m. Mountain Daylight Time. The list of stockholders entitled to
vote at the Annual Meeting will be open to the examination by any stockholder
during ordinary business hours for a period of ten days prior to the Annual
Meeting at the Company's corporate offices. Such list will also be produced at
the Annual Meeting and be kept open during the Annual Meeting for the inspection
by any stockholder who may be present. The purposes for which the Annual
Meeting is to be held are as follows:
1. To elect a board of eight directors, each for a one year term.
2. To consider and adopt an amendment to the Company's Articles of
Incorporation increasing the number of authorized shares of the
Company's common stock, par value $.01 per share (the "Common Stock"),
from 40 million shares to 100 million shares.
3. To consider and adopt the Company's 1998 Stock Purchase Plan covering
500,000 shares of Common Stock.
4. To transact any other business which properly may be brought before the
Annual Meeting or any adjournment(s) thereof.
Subject to the provisions of the By-laws of the Company, registered
stockholders as of April 1, 1998 (i) who are individuals may attend and vote at
the Annual Meeting in person or by proxy or (ii) that are corporations may
attend and vote at the Annual Meeting by proxy or by a duly authorized
representative.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED. ANY PERSON
GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME PRIOR TO ITS EXERCISE AND,
IF PRESENT AT THE ANNUAL MEETING, MAY WITHDRAW IT AND VOTE IN PERSON. ONLY
STOCKHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON APRIL 1, 1998 WILL BE
ENTITLED TO VOTE AT THE ANNUAL MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
Keith M. Crouch
Secretary
April 8, 1998
Denver, Colorado
<PAGE>
PATINA OIL & GAS CORPORATION
1625 Broadway
SUITE 2000
DENVER, COLORADO 80202
----------------
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 13, 1998
----------------
INTRODUCTION
The Board of Directors of Patina Oil & Gas Corporation (the "Company") is
soliciting proxies to be voted at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held in Denver, Colorado on May 13, 1998 at 9:00 a.m.
Mountain Daylight Time, and at any adjournment thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. This Proxy
Statement and the enclosed proxy are first being mailed to stockholders on or
about April 8, 1998.
VOTING OF PROXIES
The matters covered by this proxy solicitation are (i) the election of
eight directors, (ii) the proposed amendment to the Company's Articles of
Incorporation increasing the number of authorized shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), from 40 million shares to
100 million shares, (iii) the proposed adoption of the Patina Oil & Gas
Corporation 1998 Stock Purchase Plan (the "1998 Stock Purchase Plan") and (iv)
such other matters, if any, as may be properly brought before the Annual
Meeting. The proxy permits stockholders to withhold voting for any or all
nominees for election as directors and to vote against or abstain from voting on
the other matters if the stockholder so chooses. At the close of business on
April 1, 1998, the record date for determining stockholders entitled to notice
of and to vote at the Annual Meeting, the Company had outstanding 16,682,508
shares of Common Stock. Each such share of Common Stock is entitled to one
vote at the Annual Meeting. In addition, the Company had outstanding 1,660,993
shares of 8.50% Convertible Preferred Stock (the "8.50% Preferred Stock"). The
8.50% Preferred Stock entitles the holder to 2.6316 votes for each share held.
Accordingly, the holders of the 8.50% Preferred Stock are entitled to a total of
4,371,069 votes on all matters to be considered at the Annual Meeting. A
majority of the votes outstanding is necessary to provide a quorum at the Annual
Meeting.
Any proxy given may be revoked either by a written notice duly signed and
delivered to the Secretary of the Company prior to the exercise of the proxy, by
execution of a subsequent proxy or by voting in person at the Annual Meeting.
Where a stockholder's proxy specifies a choice with respect to a voting matter,
the shares will be voted accordingly. If no such specification is made, the
shares will be voted for the nominees for director and proposals identified
herein.
PROPOSAL I -- ELECTION OF DIRECTORS
If a quorum is present, the affirmative vote of a plurality of the votes
cast at the Annual Meeting by stockholders present or represented by proxy at
the Annual Meeting is required for the election of directors. A stockholder's
abstention from voting will be counted in determining whether such a plurality
vote was cast only if such stockholder is represented in person or by proxy at
the Annual Meeting. Abstentions by or on behalf of stockholders not so
represented and broker non-votes will be disregarded. The Board of Directors
has, by resolution, fixed the number of directors at eight. Each nominee is
presently serving as a director and has served as a director of the Company or
its predecessor for the period indicated in his or her biography. The term of
each director presently serving will terminate at the Annual Meeting when the
respective successor of each is elected and qualified.
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
Each nominee has consented to being named in this Proxy Statement and to serve
if elected. If any nominee should for any reason become unavailable for
election, proxies may be voted with discretionary authority by the persons named
therein for any substitute designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
NOMINEES LISTED BELOW.
Nominees for Election at Annual Meeting:
ARNOLD L. CHAVKIN (46) has served as a Director of the Company since
October 1997. Mr. Chavkin is a General Partner at Chase Capital Partners. Chase
Capital Partners is a General Partner of Chase Venture Capital Associates, L.P.
Before assuming such position, Mr. Chavkin was a member of Chemical Bank's
merchant banking group and, prior to that, a generalist in its corporate finance
group specializing in mergers and acquisitions and private placements for the
energy industry. Prior to that, Mr. Chavkin worked in corporate development for
Freeport McMoRan, and held various positions with Gulf and Western Industries.
Mr. Chavkin is a Certified Public Accountant. He received his Bachelor of Arts
and M.B.A. degrees from Columbia University. Mr. Chavkin is also a Director of
American Radio Systems, Inc., Bell Sports, Reading & Bates Corporation and
Wireless One, Inc. During 1997, Mr. Chavkin served on the Audit and Governance
Committee.
ROBERT J. CLARK (53) has served as a Director of the Company since May
1996. Mr. Clark is the President of Bear Paw Energy Inc., a wholly owned
subsidiary of TransMontaigne Oil Company. Mr. Clark formed Bear Paw Energy Inc.
in 1995 and joined TransMontaigne in 1996 when TransMontaigne acquired a
majority interest in Bear Paw Energy, Inc. From 1988 to 1995 he was President
of SOCO Gas Systems, Inc. and Vice President - Gas Management for Snyder Oil
Corporation ("SOCO"). Mr. Clark was Vice President Gas Gathering, Processing
and Marketing of Ladd Petroleum Corporation, an affiliate of General Electric
from 1985 to 1988. Prior to 1985, Mr. Clark held various management positions
with NICOR, Inc. and its affiliate NICOR Exploration, Northern Illinois Gas and
Reliance Pipeline Company. Mr. Clark received his Bachelor of Science Degree
from Bradley University and his M.B.A. from Northern Illinois University.
During 1997, Mr. Clark served on the Audit and Governance, Compensation and
Special Committees.
BRIAN J. CREE (34) has served as Executive Vice President, Chief Operating
Officer and Director of the Company since May 1996. Prior to the acquisition of
Gerrity Oil & Gas Corporation by the Company in May 1996 (the "Gerrity
Acquisition"), he served as Chief Operating Officer and Director of Gerrity
since 1993. From 1992 to 1993, Mr. Cree served as Senior Vice President -
Operations and Chief Accounting Officer of Gerrity. Prior to that, Mr. Cree
served as Vice President of Gerrity and its predecessor since 1989 and served in
various accounting capacities with that company from 1987 to 1989. Prior to
that, Mr. Cree was employed as an accountant with the public accounting firm of
Deloitte, Haskins & Sells. Mr. Cree received his Bachelor of Arts Degree in
Accounting from the University of Northern Iowa. During 1997, Mr. Cree served
on the Dividend Administration Committee.
JAY W. DECKER (46) has served as a Director of the Company since May 1996.
On March 16, 1998, Mr. Decker was elected President of the Company. Prior to
that, he was the Executive Vice President and a Director of Hugoton Energy
Corporation, a public independent oil company from 1995 to March 1998. From
1989 until its merger into Hugoton Energy, Mr. Decker was the President and
Chief Executive Officer of Consolidated Oil & Gas, Inc., a private independent
oil company based in Denver, Colorado and President of a predecessor company.
Prior to 1989, Mr. Decker served as Vice President - Operations for General
Atlantic Energy Company and in various capacities for Peppermill Oil Company,
Wainoco Oil & Gas and Shell Oil Company. Mr. Decker received his Bachelor of
Science Degree in Petroleum Engineering from the University of Wyoming. Mr.
Decker also serves as a Director of FX Energy. During 1997, Mr. Decker served
on the Compensation and Special Committees and was Chairman of the Audit and
Governance Committee.
2
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
THOMAS R. DENSION (37) has served as a Director of the Company since
January 1998. Mr. Denison is a Managing Director and the General Counsel of
First Reserve Corporation. He joined the corporation in January 1998 and opened
its Denver office. Prior to joining First Reserve, he was a Partner in the
international law firm of Gibson, Dunn & Crutcher LLP, a firm which he joined in
1986 as an Associate. Mr. Denison received his Bachelor of Science degree in
Business Administration from the University of Denver and his Juris Doctor from
the University of Virginia. Mr. Denison also serves on the Board of Directors of
Phoenix Energy Services.
THOMAS J. EDELMAN (47) has served as Chairman of the Board and Chief
Executive Officer of the Company since its formation and was the Company's
President until March 16, 1998. He co-founded SOCO and was its President from
1981 through February 1997. From 1980 to 1981, he was with The First Boston
Corporation and from 1975 through 1980, with Lehman Brothers Kuhn Loeb
Incorporated. Mr. Edelman received his Bachelor of Arts Degree from Princeton
University and his Masters Degree in Finance from Harvard University's Graduate
School of Business Administration. Mr. Edelman serves as Chairman of Lomak
Petroleum, Inc., and is a Director of Petroleum Heat & Power Co. Inc., Star Gas
Corporation, Weatherford Enterra, Inc. and Paradise Music & Entertainment, Inc.
Mr. Edelman is also a Trustee of The Hotchkiss School. During 1997, Mr. Edelman
served as Chairman of the Executive and Dividend Administration Committees.
ELIZABETH K. LANIER (46) has served as a Director of the Company since
January 1998. Mrs. Lanier has served as Vice President and Chief of Staff of
Cinergy Corp since 1996. She is a member of the Management Committee, Operating
Committee and Strategy Committee and a Cinergy Foundation Trustee. Mrs. Lanier
is responsible for Information Technology, Real Estate, Facilities, Corporate
and Office Services, Technology Integration (R&D), Community Affairs,
Shareholder Relations, Corporate Records and Diversity Performance. Mrs. Lanier
received her Bachelor of Arts Degree with honors from Smith College in 1973 and
her law degree from Columbia Law School in 1977 where she was a Harlan Fiske
Stone Scholar. Mrs. Lanier was awarded an Honorary Doctorate of Technical
Letters by Cincinnati Technical College in 1991 and an Honorary Doctorate of
Letters in 1995 from the College of Mt. St. Joseph. From 1982 to 1996 she was a
Partner in the Corporate and Litigation Departments of Frost & Jacobs a law firm
in Cincinnati, Ohio. From 1977 to 1982 she was with the law firm of Davis Polk
& Wardwell in New York City. She is Chair of the Ohio Board of Regents.
ALEXANDER P. LYNCH (46) has served as a Director of the Company since May
1996. Mr. Lynch is currently a General Partner of The Beacon Group, a private
investment and financial advisory firm. Mr. Lynch had been Co-President and Co-
Chief Executive Officer of The Bridgeford Group, a financial advisory firm,
since 1995. From 1991 to 1994, he served as Senior Managing Director of
Bridgeford. From 1985 until 1991, Mr. Lynch was a Managing Director of Lehman
Brothers, a division of Shearson Lehman Brothers Inc. Mr. Lynch received his
Bachelor of Arts Degree from the University of Pennsylvania and his M.B.A. from
the Wharton School of Business at the University of Pennsylvania. Mr. Lynch also
serves as a Director of Illinois Central Corporation and Lincoln Snacks Company.
During 1997, Mr. Lynch served on the Executive Committee and was Chairman of the
Compensation and Special Committees.
BOARD AND COMMITTEE MEETINGS; COMMITTEES OF THE BOARD
The Board held 11 meetings in 1997. All directors attended at least 75% of
the aggregate number of meetings of the Board of Directors and committees on
which they served.
The Board has established five committees to assist in the discharge of its
responsibilities. The committee membership of each Director is included with
his or her biography.
EXECUTIVE COMMITTEE. The Executive Committee may exercise many of the
powers of the Board in the management of the business and affairs of the Company
in the intervals between meetings of the Board. Although the Committee has very
broad powers, in practice it meets only when it would be impractical to call a
meeting of the Board. The Executive Committee did not meet during 1997.
3
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
AUDIT AND GOVERNANCE COMMITTEE. The Audit and Governance Committee reviews
the professional services provided by the Company's independent public
accountants and the independence of such accountants from management of the
Company. This Committee also reviews the scope of the audit coverage, the
annual financial statements of the Company and such other matters with respect
to the accounting, auditing and financial reporting practices and procedures of
the Company as it may find appropriate or as have been brought to its attention.
The Audit and Governance Committee met twice during 1997.
COMPENSATION COMMITTEE. The Compensation Committee reviews and approves
executive salaries and administers bonus, incentive compensation and stock
option plans of the Company. This Committee advises and consults with
management regarding other benefits and significant compensation policies and
practices of the Company. This Committee also considers nominations of
candidates for corporate officer positions. The Compensation Committee met
twice during 1997. The Compensation Committee is also responsible for the
administration of the 1998 Stock Purchase Plan covered by Proposal III.
DIVIDEND ADMINISTRATION COMMITTEE. The Dividend Administration Committee
authorizes, declares and sets the record date for the dividends that are paid on
the Company's Common Stock, its 7.125% Convertible Preferred Stock and the 8.50%
Preferred Stock. The Dividend Administration Committee will declare the
dividends quarterly unless instructed otherwise by the Board. The Dividend
Administration Committee met four times in 1997.
SPECIAL COMMITTEE. The Special Committee, which consisted of members who
were not affiliated with SOCO, was established in May 1997 to review
alternatives related to the divestiture of SOCO's ownership interest in the
Company. The Special Committee met six times in 1997 to consider and approve
the transactions that eliminated SOCO's ownership interest in the Company in
October 1997. Upon the closing of the transactions, the Committee was
disbanded.
DIRECTOR COMPENSATION
During 1997, non-employee directors of the Company received an annual
retainer of $18,000, payable quarterly in shares of the Company's Common Stock
having a market value of $2,250 and cash payments of $2,250. At its February
1998 meeting, the Board of Directors accepted a recommendation from the
Compensation Committee to increase the annual retainer to $20,000, payable
quarterly in shares of the Company's Common Stock having a market value of
$2,500 and cash payments of $2,500. In addition, non-employee directors receive
$1,000 for attendance at each meeting of the Board of Directors, and $250 for
attendance at each meeting of a committee of the Board of Directors that cannot
be held in conjunction with a meeting of the Board, in each case excluding
telephone meetings. Directors are also reimbursed for expenses incurred in
attending Board of Directors and committee meetings, including those for travel,
food and lodging. Directors and members of committees of the Board of Directors
who are employees of the Company or its affiliates are not compensated for their
Board of Directors and committee activities.
In 1996, the Company adopted a stock option plan for non-employee directors
(the "Directors Plan"), The Directors' Plan provides that the Company will
automatically grant to each non-employee director, on the date of his
appointment, election, reappointment or reelection as a member of the Board of
Directors, a stock option for 5,000 shares of Common Stock. The exercise price
for all director stock options is the fair market value on the date of grant.
The duration of each option is five years from the date of award, and each
option vests as to 30% of the shares covered after one year, an additional 30%
of the shares after two years, and all remaining shares three years after the
date of grant.
In addition to the compensation described above, the members of the Special
Committee were paid $10,000 each and the Chairman was paid $25,000 for their
services on the Special Committee.
4
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
BENEFICIAL OWNERSHIP OF SECURITIES
The following table provides information as to the beneficial ownership of
Common Stock of the Company as of April 1, 1998 by each person who, to the
knowledge of the Company, beneficially owned 5% or more of the Common Stock of
the Company, each director of the Company, the five most highly compensated
executive officers, including the Chief Executive Officer ("Named Officers"),
and by all executive officers and directors of the Company as a group. No
directors or executive officers of the Company beneficially own any equity
securities of the Company other than Common Stock and warrants. The business
address of each individual listed below is: c/o Patina Oil & Gas Corporation,
1625 Broadway, Suite 2000, Denver, Colorado 80202.
PATINA COMMON STOCK
---------------------------
NUMBER OF PERCENT OF
SHARES CLASS
OWNED(A)(B) OUTSTANDING
------------- ------------
Thomas J. Edelman 970,802 4.5%
Jay W. Decker 226,825 1.1
Brian J. Cree 123,758 *
Keith M. Crouch 56,145 *
Ronald E. Dashner 56,592 *
David J. Kornder 56,643 *
Arnold L. Chavkin (c) 1,643,902 7.8
Robert J. Clark 26,825 *
Thomas R. Denison (d) 2,373,928 11.3
Elizabeth K. Lanier 564 *
Alexander P. Lynch 6,825
All 14 executive officers
and directors as a group 5,649,527 26.2
Chase Venture Capital Associates, L.P. (c) 1,643,902 7.8
380 Madison Avenue, 12th Floor
New York, New York 10017
First Reserve Fund VII, Limited Partnership (d) 2,373,928 11.3
475 Steamboat Road
Greenwich, Connecticut 06830
Schroder Capital Management, Inc. (e) 1,282,100 6.1
787 Seventh Avenue, 34th Floor
New York, New York 10019
* Less than 1%
- -----------------
5
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
(a) The number of shares of Common Stock of the Company subject to stock
options exercisable within 60 days after April 1, 1998, are as follows: Mr.
Edelman, 325,000 shares; Mr. Decker, 4,500 shares; Mr. Cree, 60,000 shares;
Mr. Crouch, 22,500 shares; Mr. Dashner, 21,000 shares; Mr. Kornder, 17,250
shares; Mr. Clark, 4,500 shares; Mr. Lynch, 4,500 shares; and all 14
executive officers and directors as a group, 494,200 shares.
(b) The number of shares of Common Stock of the Company subject to common stock
warrants exercisable at $12.50, are as follows: Mr. Cree 5,092 shares; Mr.
Crouch 217 shares; Mr. Kornder 109 shares; and all 14 executive officers
and directors as a group 5,743 shares.
(c) Mr. Chavkin may be deemed to share beneficial ownership of the 593,216
shares of the 8.50% Preferred Stock (convertible into 1,561,095 common
shares) and 82,143 shares of Common Stock owned by Chase Venture Capital
Associates, L.P. through his role with Chase Venture Capital Associates,
L.P. Mr. Chavkin disclaims beneficial ownership of such shares of the
8.50% Preferred Stock and Common Stock.
(d) Mr. Denison may be deemed to share beneficial ownership of the 856,867
shares of the 8.50% Preferred Stock (convertible into 2,254,913 common
shares) and 118,651 shares of Common Stock owned by First Reserve Fund VII,
Limited Partnership through its ownership of common stock of First Reserve
Corporation, which is the sole general partner of First Reserve Fund VII,
Limited Partnership. Mr. Denison disclaims beneficial ownership of such
shares of the 8.50% Preferred Stock and Common Stock.
(e) The number of shares reported is based on information set forth in Schedule
13G dated February 6, 1998 filed by Schroder Capital Management, Inc.
6
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term compensation
for services in all capacities to the Company for the fiscal year ended December
31, 1997 of the Named Officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE (A)
-------------------------------------------------------------------------------------------
ANNUAL COMPENSATION (B) LONG TERM COMPENSATION
------------------------ -------------------------------
SECURITIES
NAME AND RESTRICTED STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(C) AWARDS ($)(D) OPTIONS(#)(E) COMPENSATION($)(F)
------------------ ---- ---------- ----------- ---------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas J. Edelman 1997 $ 303,535 $ 350,000 $2,652,188 300,000 $ 41,594
Chairman and Chief 1996 166,667 75,000 - 100,000 27,974
Executive Officer
Brian J. Cree 1997 200,000 95,000 144,141 40,000 36,594
Executive Vice President 1996 133,333 325,000 - 80,000 23,357
Keith M. Crouch 1997 150,000 30,000 115,313 15,000 30,324
Senior Vice President, 1996 100,000 5,000 - 30,000 16,624
General Counsel
Ronald E. Dashner 1997 144,167 47,500 115,313 14,000 29,000
Senior Vice President, 1996 93,333 30,000 - 28,000 15,278
Operations
David J. Kornder 1997 121,250 50,000 115,313 11,500 23,797
Vice President, 1996 76,667 10,000 - 23,000 11,912
Chief Financial Officer
</TABLE>
- -------------------------
(a) Excludes the cost to the Company of other compensation that, with respect
to any Named Officer, does not exceed the lesser of $15,000 or 10% of the
Named Officer's salary and bonus.
(b) The salary amounts in the table are for the period January 1, 1997 through
December 31, 1997 and May 2, 1996 through December 31, 1996. Prior to May
2, 1996 (the effective date of the Gerrity Acquisition), the Company had no
employees.
(c) Bonuses are paid in March of each year based on performance during the
preceding year. Bonus amounts are accrued in the year preceding the year
in which the bonus is paid.
(d) The restricted stock award, valued at the year end per share price of
$7.6875, was granted to certain officers and key managers of the Company in
conjunction with the October 1997 transactions that resulted in the
elimination of SOCO's ownership interests in the Company. For a
description of the restricted stock award, see "Certain Relationships and
Related Transactions."
(e) Stock options were granted in May 1996, February 1997 and October 1997. In
future years, stock options will generally be granted in February or March
of each year based in part on performance during the preceding year.
7
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
(f) Includes amounts accrued or contributed for the year for the Named
Officers under the Company's Profit Sharing and Savings Plan and as
matching contributions under the Company's Deferred Compensation Plan
for Select Employees as follows:
PROFIT DEFERRED
SHARING PLAN COMPENSATION PLAN
------------ -----------------
Thomas J. Edelman 1997 $16,594 $25,000
1996 15,474 12,500
Brian J. Cree 1997 16,594 20,000
1996 13,357 10,000
Keith M. Crouch 1997 15,324 15,000
1996 9,124 7,500
Ronald E. Dashner 1997 14,583 14,417
1996 8,278 7,000
David J. Kornder 1997 11,672 12,125
1996 6,162 5,750
STOCK OPTION GRANTS AND EXERCISES
In 1996, the Company adopted the Employee Stock Option Plan which is
administered by the Compensation Committee and provides for the granting of
options to purchase shares of Common Stock to key employees of the Company and
certain other persons who are not employees of the Company, but who from time to
time provide substantial advice or other assistance or services to the Company.
The plan permits options to acquire up to three million shares of Common Stock
to be outstanding at any one time. During 1996, options to purchase 512,000
shares of Common Stock were granted to 50 employees at an average exercise price
of $7.75 per share. During 1997, options to purchase 271,000 shares of Common
Stock were granted to 56 employees at an average exercise price of $9.25 per
share. The exercise price of all such options was equal to the fair market
value of the Common Stock on the date of grant. All such options granted during
1996 and 1997 were for a term of five years, with 30% of the options becoming
exercisable after one year, an additional 30% becoming exercisable after two
years and the remaining options becoming exercisable after the three years. In
addition to the above, and in accordance with his employment agreement, Mr.
Edelman was granted a five year fully vested option in October 1997 to purchase
250,000 shares of Common Stock at $9.875 per share.
8
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
STOCK OPTION GRANTS
The following table sets forth information for the fiscal year ended December
31, 1997 with respect to the grant of stock options to the Named Officers. The
stock options were granted at the market price on the date of grant. No stock
appreciation rights have been granted by the Company.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS
-------------------------------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES OF
UNDERLYING OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERMS (A)
GRANTED EMPLOYEES IN PRICE EXPIRATION --------------------------
Name # FISCAL YEAR $/SHARE DATE 5% 10%
---- --------- ----------- ------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Thomas J. Edelman (b) 300,000 57.6% $9.875 10/21/02 $949,443 $1,965,707
Brian J. Cree 40,000 7.7 9.25 2/20/02 102,224 225,889
Keith M. Crouch 15,000 2.9 9.25 2/20/02 38,334 84,708
Ronald E. Dashner 14,000 2.7 9.25 2/20/02 35,778 79,061
David J. Kornder 11,500 2.2 9.25 2/20/02 29,389 64,943
</TABLE>
(a) The assumed annual rates of stock price appreciation used in showing the
potential realizable value of stock option grants are prescribed by rules
of the Securities and Exchange Commission. The actual realized value of
the options may be significantly greater or less than the amounts shown.
For options granted during 1997 at an exercise price of $9.25, the values
shown for 5% and 10% appreciation equate to a common stock price of $11.81
and $14.90, respectively, at the expiration date of the options. For
options granted during 1997 at an exercise price of $9.875, the values
shown for 5% and 10% appreciation equate to a common stock price of $12.60
and $15.90 respectively, at the expiration date of the options.
(b) Options granted to Mr. Edelman in 1997 include an option to purchase 50,000
shares of Common Stock exercisable at $9.25 per share with an expiration
date of February 20, 2002. The potential realizable values at assumed
annual rates of stock price appreciation for the option term at 5% and 10%
are $127,780 and $282,361, respectively.
9
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
YEAR-END OPTION VALUES TABLE
The following table sets forth information at December 31, 1997 with respect
to exercisable and non-exercisable options held by the Named Officers. The
table also includes the value of "in-the-money" options which represents the
spread between the exercise price of the existing stock options and the year-end
Common Stock price of $7.6875 per share.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN 1997 AND YEAR-END VALUES
--------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT YEAR END 1997 OPTIONS AT YEAR END 1997(A)
ACQUIRED VALUE -------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas J. Edelman - - 280,000 120,000 - -
Brian J. Cree - - 24,000 96,000 - -
Keith M. Crouch - - 9,000 36,000 - -
Ronald E. Dashner - - 8,400 33,600 - -
David J. Kornder - - 6,900 27,600 - -
</TABLE>
(a) As of December 31, 1997, all outstanding stock options were priced at a
level above the share price on December 31, 1997 of $7.6875 per Common
share. As such, there is no value attributed to these options. Actual
gains, if any, on exercise will depend on the value of the Common Stock on
the date of exercise.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The Compensation Committee of the Board of Directors, which is comprised of
non-employee directors of the Company, establishes the general compensation
policies of the Company, establishes the compensation plans and compensation
levels for officers and certain other key employees and administers the
Company's stock option plan, deferred compensation plan and stock purchase plan.
The Committee also establishes salary and bonus ranges for other officers and
key employees, and generally approves specific amounts within those ranges on
the recommendation of management. In July 1997, the Company entered into an
employment agreement with Mr. Edelman in contemplation of a series of
transactions that were designed to eliminate the ownership interest of SOCO in
the Company. Those transactions were approved by the stockholders of the
Company in October 1997 and the employment agreement, the terms of which are
summarized below, became effective on October 21, 1997. In February 1998, the
agreement was amended and restated to clarify certain provisions thereof.
In establishing compensation policies, the Committee believes that the cash
compensation of executive officers, as well as other key employees, should be
competitive with other oil companies or other business opportunities available
to such executive officers while, within the Company, being fair and
discriminating on the basis of personal performance. Awards of stock options and
stock grants are intended both to retain executives and to motivate them to
accomplish long-term growth objectives.
In establishing the base salary and bonus ranges for its executive
officers, the Company targets the median cash compensation of competitor's
executives having similar responsibilities. Adjustments, in large part
subjective, are made to
10
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
account for cases in which the responsibilities of Company executives differ
from the responsibilities of executives from the companies surveyed. Base
salaries have historically been set below the median, so that bonuses, which,
except for the most senior officers, are primarily determined by individual
performance, will constitute a larger portion of cash compensation. The
Committee is advised as to compensation levels of competitors based on detailed
data believed to be most comparable to the Company as well as the results of
more general surveys. Guided by this information, compensation ranges are
established, and individual executive compensation within these ranges is
determined based upon the individual's responsibilities and performance.
The Committee was not involved in determining initial base salary levels
for the Company, including the salary levels of Mr. Edelman and other officers
of the Company, for 1996. Those salary levels were determined pursuant to the
terms of the 1996 Merger Agreement that resulted in the Gerrity Acquisition. In
February 1997, effective March 1, 1997, the Committee made certain adjustments
to the salary levels of the officers of the Company, including Mr. Edelman,
which are reflected above.
Mr. Edelman's employment agreement provides for a yearly target bonus equal
to his base salary, which was $350,000 effective August 1, 1997. Mr. Edelman's
bonus is based primarily on Company performance. The Committee has not
established any particular formula or identified particular factors as more
important than others. The Committee considers various factors, including
growth in reserves, net income and cash flow, as well as performance of the
Company's Common Stock. The Committee also considers other matters, such as the
extent to which these factors were influenced by management to position the
Company for future growth. During 1997, the Committee specifically considered
the continued progress associated with the consolidation of the predecessor
entities, the improving financial and operating results and the elimination of
SOCO's ownership interest in the Company. In 1997, the Company made significant
progress in finalizing the consolidation of the operations of the predecessors
and achieved better than expected results in optimizing production from its core
assets. Mr. Edelman was the central figure in structuring, arranging and
consummating the transactions that resulted in the elimination of SOCO's
ownership interest in the Company, positioning the Company to pursue an
independent growth strategy involving acquisitions, consolidation and
exploitation activities. Based on these and other considerations, the Committee
awarded Mr. Edelman an Incentive Contribution, in the amount of $350,000 to his
deferred compensation plan in lieu of a bonus for 1997. In arriving at the
amount of the Incentive Contribution, the Committee considered, among other
things, that nearly all aspects of the Company's performance during 1997 showed
significant improvement. Mr. Edelman then elected to use the entire Incentive
Contribution to purchase Company Common Stock under the 1998 stock purchase
plan. Bonuses for other officers and key employees are influenced by Company
performance, but are determined primarily on senior management's assessment of
individual performance.
Stock options are granted annually to Mr. Edelman and other officers and
key employees to retain and motivate the grantees to improve long-term stock
market performance. Options are granted only at the prevailing market price and
will have value only if the price of the Company's Common Stock increases.
Generally, options have a term of five years and vest 30% after one year, an
additional 30% after two years and are fully vested after three years; an
employee must be employed by the Company at the time of vesting in order to
exercise the options. In addition to the annual awards of stock options, Mr.
Edelman's employment agreement provided for a five year fully vested option to
purchase 250,000 shares of the Company's Common Stock at $9.875, the public
offering price of the secondary offering of the Company's Common Stock owned by
SOCO completed in October 1997.
The Committee generally determines the number of options granted to Mr.
Edelman and to other executives and key employees based on a formula under which
the number of options granted is equal to a percentage, which varies with the
degree to which an individual's responsibilities might affect the long-term
price of the Company's Common Stock, of the individual's base
11
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
salary. The Committee occasionally grants additional options when the Committee
believes additional incentives are appropriate. No such awards were made during
1997.
The Committee maintains a Deferred Compensation Plan for select employees
as a means to provide additional incentive for key employees to remain in the
employ of the Company. Under the Plan, key employees selected by the Committee
are permitted to defer a portion of their compensation for periods determined by
them or until their employment by the Company ceases. The Committee also
determines annually the matching contribution to be made by the Company and may,
in addition, authorize additional Company contributions to be made on behalf of
designated individuals. Company matching contributions vest at 33% per year
over three years, and additional Company contributions vest over the period
determined by the Committee. The Committee designated nine key employees in
1997 as eligible to participate and determined that Company contributions would
equal one hundred percent of each participant's contribution up to a maximum
Company contribution of ten percent of any participant's salary.
COMPENSATION COMMITTEE
Alexander P. Lynch, Chairman
Robert J. Clark
Jay W. Decker
12
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder return on the Company's Common Stock against the
total return of the Dow Jones Equity Market Index and the Dow Jones Secondary
Oils Index for the period May 1996 through December 1997. The Secondary Oils
Index is composed of thirteen companies, all of which are significantly larger
than the Company, selected by Dow Jones & Company, Inc. to represent non-major
oil producers that generally do the bulk of their business domestically. The
graph assumes that the value of the investment in the Company's Common Stock and
each index was $100 on May 3, 1996 and that all dividends were reinvested. The
closing sales prices of the Company's Common Stock on the last trading day of
1997 was $7.6875.
[PERFORMANCE CHART APPEARS HERE]
13
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
In July 1997, the Company entered into an employment agreement with Thomas
J. Edelman, the Chairman of the Board and Chief Executive Officer of the
Company. The agreement became effective on October 21, 1997 with the closing of
certain transactions that eliminated SOCO's ownership interest in the Company.
In February 1998, the agreement was amended and restated to clarify certain
provisions thereof. The agreement has a term ending on January 1, 2001 and
provides Mr. Edelman with a base salary of $350,000 and a yearly target bonus in
a like amount to be determined by the Compensation Committee in its sole
discretion. Increases in Mr. Edelman's salary are at the discretion of the
Compensation Committee. On February 19, 1998, the Compensation Committee
approved an increase in Mr. Edelman's Base Salary to $360,000, effective March
1, 1998. The agreement provides Mr. Edelman with certain protections in the
event of a change in control of the Company and with certain other compensation
plans, benefits and perquisites commensurate with his executive positions with
the Company.
In June 1997, the Company adopted a Change In Control Plan (the "Plan")
which established three levels of severance benefits in the event of a change in
control of the Company. The Executives of the Company, as defined in the Plan,
receive the highest level of compensation in the event of a change of control
with the Key Managers, as identified by the Board, and Regular Employees, as
defined in the Plan, receiving more limited severance benefits. Upon a change
in control, all non-vested securities of the Company held by employees will
automatically vest as will all non-vested rights under or in connection with all
the Company's benefit plans, including the 401(k) plan, deferred compensation
plan, and restricted stock grant.
If an Executive is terminated within one year of a change in control or if
an Executive resigns after a Material Change, as defined in the Plan, occurring
within one year of a change in control, the Executive will receive an Executive
Payment which consists of 150% of Base Compensation as defined in the Plan,
accrued but unpaid bonuses and the greater of the Executive's most recent annual
bonus or the projected annual bonus for the year in which the change of control
occurs. If a Key Manager or a Regular Employee is terminated without cause
within one year of a change in control, or resigns within 30 days of a reduction
in Base Compensation occurring within one year of a change in control, the Key
Manager will receive a Key Manager Payment and the Regular Employee will receive
a Regular Employee Payment. A Key Manager Payment consists of 100% of Base
Compensation, accrued but unpaid bonuses and the greater of the most recent
annual bonus or the projected annual bonus for the year in which the change of
control occurs. A Regular Employee Payment consists of one quarter of Base
Compensation, accrued but unpaid bonuses and the greater of one quarter of the
most recent annual bonus or one quarter of the projected annual bonus for the
year in which the change of control occurs.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Edelman was previously the President and a Director of SOCO. He
resigned those positions in February 1997. Mr. Edelman is also the Chairman of
Lomak Petroleum, Inc. an oil and gas exploration and production company. SOCO
owned approximately 74% of the Common Stock of the Company until October 21,
1997 when a series of transactions were closed that eliminated SOCO's ownership
interest in the Company. During 1997, SOCO, Lomak and the Company did not hold
interests or participate together in any transactions involving the same oil and
gas properties. During 1997, SOCO provided the Company with support pursuant to
a Corporate Services Agreement that was entered into in connection with the
Gerrity Acquisition. Effective October 21, 1997, SOCO and the Company entered
into an agreement pursuant to which SOCO is to provide the Company with certain
support services, including payroll, tax and computer system support, for a
transition period following the elimination of SOCO's ownership interest in the
Company. As of January 1, 1998, all support services, other than for the
computer system, have been terminated.
14
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
In connection with the October 21, 1997 closing, the Company's stockholders
approved the grant of restricted shares of the Company's Common Stock to the
following directors and officers:
<TABLE>
<CAPTION>
NAME POSITION SHARES GRANTED
---- --------------------------------------- --------------
<S> <C> <C>
Thomas J. Edelman Chairman and Chief Executive Officer 345,000
Brian J. Cree Director, Executive Vice President 18,750
Ronald E. Dashner Senior Vice President, Operations 15,000
Keith M. Crouch Senior Vice President, General Counsel 15,000
David J. Kornder Vice President, Chief Financial Officer 15,000
David R. Macosko Vice President 11,250
Terry L. Ruby Vice President 11,250
David W. Siple Vice President 11,250
</TABLE>
The shares are subject to an Amended and Restated Restricted Stock
Agreement dated effective October 21, 1997 which provides that the restrictions
on the transfer of the granted shares lapse at the rate of 25% per year
commencing January 1, 1998 or upon the death or disability of the Grantee. The
Restricted Stock Agreement also provides for the pro-rata forfeiture of the
granted shares against which the transfer restrictions have not lapsed should
the Grantee's employment with the Company terminate, if such termination is by
the Company without Cause or by the Grantee for Good Reason, as defined in the
Agreement. The shares were issued at no cost to the Grantees as an inducement
for them to remain with the Company and to align their interests in the future
growth and success of the Company with the interests of the Company's
stockholders. Each Grantee is entitled to vote the granted shares and receive
any dividends that might be paid in connection with the Common Stock, even
though the restrictions against the transfer of such shares have not lapsed.
In connection with his election as President of the Company on March 16,
1998, Jay W. Decker was granted 100,000 restricted shares of the Company's
Common Stock. The shares are subject to a Restricted Stock Agreement dated
March 16, 1998 which provides that the restrictions on the transfer of the
granted shares lapse at the rate of 33.33% per year commencing March 16, 1999 or
upon the death or disability of Mr. Decker. The Restricted Stock Agreement also
provides for the pro-rata forfeiture of the granted shares against which the
transfer restrictions have not lapsed should Mr. Decker's employment with the
Company terminate, if such termination is by the Company without Cause or by him
for Good Reason, as defined in the Agreement. The shares were issued at no cost
to Mr. Decker as an inducement for him to accept employment with the Company.
Mr. Decker is entitled to vote the granted shares and receive any dividends that
might be paid in connection with the Common Stock even though the restrictions
against the transfer of such shares have not lapsed.
15
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
PROPOSAL II -- APPROVAL OF AMENDMENT TO THE
COMPANY'S ARTICLES OF INCORPORATION
On February 19, 1998, the Board of Directors unanimously approved a
proposed amendment to Article IV of the Company's Articles of Incorporation.
The proposed amendment would increase the number of authorized shares of Common
Stock from 40 million shares to 100 million shares. The proposed amendment, a
copy of which is set forth in Exhibit A, is being submitted at the Annual
Meeting for Stockholder approval.
REASONS FOR PROPOSED AMENDMENT
The Company's goal is to become a growth oriented and profitable
independent oil and gas company. A portion of the expected growth will likely
be financed through the issuance of additional equity securities of the Company.
The Board believes that the authorization of additional shares of the Company's
Common Stock will provide the Company with greater flexibility in finding and
closing acquisitions and raising capital.
The Board of Directors has the authority to issue shares of Common Stock
for such corporate purposes as it may from time to time deem to be in the best
interests of the Company without stockholder approval. The proposed amendment
would not change the rights of the holders of any of the Company's outstanding
Common Stock or preferred stock.
If the amendment is approved, the Board may issue additional shares of
Common Stock without further vote of the stockholders of the Company, except as
provided under Delaware corporate law or under the rules of any securities
exchange on which shares of Common Stock are then listed. Current stockholders
have no preemptive or like rights which means they do not have a prior right to
purchase any new issue of capital stock of the Company in order to maintain
their proportionate ownership thereof. The effects of the authorization of
additional shares of Common Stock include the dilution of voting power and
perhaps in the payment of dividends. In addition, the Board could use the
authorized but unissued shares of Common Stock to create impediments to a take
over or a transfer of control of the Company. Accordingly, the increase in the
number of authorized shares of Common Stock may deter a future takeover attempt
which the holders of the Common Stock may deem to be in their best interest or
in which holders of Common Stock may be offered a premium for their shares over
the market price. The Board is not currently aware of any attempt to take over
or acquire the Company. While it may be deemed to have potential anti-takeover
effects, the amendment to increase the number of authorized shares of Common
Stock is not prompted by any specific effort or takeover threat currently
perceived by management.
The Board will, in the exercise of its fiduciary duties to the
stockholders, weigh all the factors carefully, together with the needs and
prospects of the Company, before committing to the issuance of further shares
not requiring stockholder approval.
REQUIRED VOTE AND RECOMMENDATION
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES ENTITLED TO
VOTE AT THE MEETING IS REQUIRED FOR APPROVAL OF THE PROPOSED AMENDMENT. AN
ABSTENTION OR BROKER NON-VOTE WITH RESPECT TO PROPOSAL II WILL HAVE THE SAME
EFFECT AS A VOTE AGAINST PROPOSAL II AS THERE WILL BE ONE LESS VOTE FOR APPROVAL
OF PROPOSAL II. A BROKER NON-VOTE OCCURS IF A BROKER OR OTHER NOMINEE DOES NOT
HAVE DISCRETIONARY AUTHORITY AND HAS NOT RECEIVED INSTRUCTION WITH RESPECT TO A
PARTICULAR ITEM. THE BOARD BELIEVES THAT IT IS APPROPRIATE AND ADVISABLE THAT
THE STOCKHOLDERS ADOPT THE PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION AND RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE PROPOSED
AMENDMENT.
16
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
PROPOSAL III -- APPROVAL OF
1998 STOCK PURCHASE PLAN
THE PROPOSAL
On February 19, 1998, the Board of Directors adopted the Patina Oil & Gas
Corporation 1998 Stock Purchase Plan (the "1998 Stock Purchase Plan") covering
500,000 shares of Common Stock, subject to stockholder approval. The purpose of
the 1998 Stock Purchase Plan is to both retain directors, officers, key
employees and consultants and advisers on whom the Company depends
("Participants") and align their interests in the growth and future prospects of
the Company with those of the stockholders of the Company. Under the 1998 Stock
Purchase Plan, Participants may purchase a specified number of shares of Common
Stock at a specified discount (ranging from 10% to 50%) from the closing price
of the Common Stock on the day prior to the day the shares are purchased.
Participants may assign their right to purchase Common Stock under the Plan to
members of their immediate family, a trust or other legal entity of which the
Participant or a member of his immediate family is a Trustee, beneficiary or
beneficial owner. Also, Participants who are employees of the Company, may be
granted the right to purchase shares of Common Stock pursuant to the 1998 Stock
Purchase Plan with all or a portion of their salary and bonus. Any shares
purchased under the 1998 Stock Purchase Plan may not be sold by the Participant
for a period of at least one year from the date of purchase.
The 1998 Stock Purchase Plan will be administered by the Compensation
Committee which has the sole power to determine the terms and conditions of
making shares of Common Stock available for purchase under the 1998 Stock
Purchase Plan including the selection of the Participants, the number of shares
that will be available to each Participant and the applicable discount from the
closing price at which shares may be purchased. The 1998 Stock Purchase Plan is
designed to operate on a year by year basis coinciding with the annual meetings
of the Company ("Plan Year") until the all shares being made available have been
purchased or until the Committee elects otherwise. The initial Plan Year
commenced February 19, 1998 and will terminate on May 13, 1998, the date of the
Annual Meeting. A copy of the 1998 Stock Purchase Plan is annexed hereto as
Exhibit B.
In the initial Plan Year, an allocation of 137,500 shares were made
available for purchase under the 1998 Stock Purchase Plan, exclusive of shares
made available for purchase with Participant's salaries and bonuses. The
allocation was recommended by the Compensation Committee and unanimously
accepted by the Board of Directors at the February 1998 Board meeting. As of
March 25, 1998, Participants have purchased 161,712 shares of Common Stock,
including 76,712 shares purchased with Participant's 1997 bonuses, at prices
ranging from $6.9375 to $7.125 per share ($5.20 to $5.34 net price per share).
Approval of the 1998 Stock Purchase Plan by the Company's stockholders will
ratify the purchases of Stock under the Plan made to-date, as well as all future
purchases under the Plan by the Participants.
17
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
REQUIRED VOTE AND RECOMMENDATION
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT THE MEETING IS
REQUIRED FOR APPROVAL OF THE 1998 STOCK PURCHASE PLAN. ABSTENSIONS AND BROKER
NON-VOTES WILL NOT BE CONSIDERED AS VOTES CAST AT THE ANNUAL MEETING AND
ACCORDINGLY, WILL HAVE NO EFFECT ON THE OUTCOME OF THE VOTE WITH RESPECT TO
PROPOSAL III. THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR APPROVAL OF THE 1998 STOCK PURCHASE PLAN.
INDEBTEDNESS OF MANAGEMENT
In October 1997, the Company closed a series of transactions which
eliminated the ownership interest of SOCO in the Company. The transactions
included: (i) the sale by SOCO of 10.9 million common shares of its Company
stock to the public in a secondary offering, (ii) the repurchase and retirement
by the Company of SOCO's remaining Common Shares, (iii) the sale by the Company
of $40 million of the 8.50% Preferred Stock and 160,000 Common Shares to certain
institutional investors and (iv) the sale of $3.0 million of Common Shares and
the grant of 496,250 restricted Common Shares, net of forfeitures, to certain
officers and key managers of the Company. In conjunction with these
transactions, Mr. Edelman purchased 202,532 Common Shares at $9.875 per share
for a total of $2.0 million. A total of 85% of the remaining $1.0 million of
Common Shares purchased by other officers and key managers was financed by the
Company. As a result, the following Executive Officers of the Company are
indebted to the Company as of April 1, 1998 :
<TABLE>
<CAPTION>
NAME TITLE AMOUNT
---- ----- --------
<S> <C> <C>
Brian J. Cree Executive Vice President $106,250
Ronald E. Dashner Senior Vice President-Operations 85,000
Keith M. Crouch Senior Vice President-General Counsel 85,000
David J. Kornder Vice President-Chief Financial Officer 85,000
David R. Macosko Vice President 63,750
Terry L. Ruby Vice President 63,750
David W. Siple Vice President 63,750
</TABLE>
The Company loaned an additional $297,500 to a total of ten other key
managers of the Company who purchased shares of Common Stock in the
transactions. The indebtedness of each officer and key manager is in the form
of a recourse promissory note which bears interest at the rate of 8.50% per
annum payable each March 31 until the notes are paid. The maturity date for the
indebtedness is January 2, 2001. The obligation of each officer and key manager
is secured by all of the shares purchased and granted to him or her in the
transactions described above.
In connection with his election as President of the Company on March 16,
1998, Mr. Decker purchased 100,000 shares of Common Stock at a per share price
of $6.875 for a total purchase price of $687,500. The Company loaned Mr. Decker
$584,375, or 85% of the total purchase price, represented by a recourse
promissory note which bears interest at the rate of 8.5% per annum payable each
March 31 until the note is paid. The maturity date of Mr. Decker's note is
March 16, 2001. Mr. Decker's obligation is secured by all of the shares
purchased and granted to him in connection with his employment with the Company.
18
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors and persons who beneficially own more than ten percent of
the Company's stock to file initial reports of ownership and reports of changes
of ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Copies of such reports are required to be furnished to the Company.
Based solely on a review of such forms furnished to the Company and certain
written representations from the Executive Officers and Directors, the Company
believes that all Section 16(a) filing requirements applicable to its Executive
Officers, Directors and greater than ten percent beneficial owners were
complied with on a timely basis.
OTHER BUSINESS
The Board does not know of any business to be presented for consideration
at the Annual Meeting other than as stated in the Notice. It is intended,
however, that the persons authorized under the accompanying proxy will, in the
absence of instructions to the contrary, vote or act in accordance with their
judgment with respect to any other proposal properly presented for action at
such meeting.
SUBMISSION OF PROPOSALS BY STOCKHOLDERS
In order to be eligible for inclusion in the Company's proxy statement for
the 1999 Annual Meeting of Stockholders, any proposal of a stockholder must be
received by the Company at its corporate offices in Denver, Colorado by December
31, 1998.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Arthur Andersen LLP is the principal accountant selected by the Company.
Representatives of such firm are expected to be present at the Annual Meeting,
with the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
ANNUAL REPORT AND FORM 10-K
The 1997 Annual Report of the Company for the fiscal year ended December
31, 1997, including audited financial statements, is being forwarded to each
stockholder of record as of April 1, 1998, together with this Proxy Statement.
A COPY OF THE COMPANY'S REPORT ON FORM 10-K FOR 1997, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS ON REQUEST TO:
Patina Oil & Gas Corporation
1625 Broadway, Suite 2000
Denver, Colorado 80202
Attention: Investor Relations
19
<PAGE>
Patina Oil & Gas Corporation
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998
______________________________________________________________________________
OTHER MATTERS
The accompanying form of proxy has been prepared at the direction of the
Company, of which you are a stockholder, and is sent to you at the request of
the Board of Directors. The proxies named therein have been designated by your
Board of Directors.
The Board of Directors of the Company urges you, even if you presently plan
to attend the meeting in person, to execute the enclosed proxy and mail it as
indicated immediately. You may revoke your proxy and vote in person if you are
in fact able to attend.
PATINA OIL & GAS CORPORATION
By Order of the Board of Directors
Keith M. Crouch
Secretary
Denver, Colorado
April 8, 1998
20
<PAGE>
EXHIBIT A
---------
FOURTH: The total number of shares of all classes of stock that the
Corporation shall have authority to issue is One Hundred Five Million
(105,000,000) shares of capital stock, consisting of One Hundred Million
(100,000,000) shares of common stock, par value one cent ($.01) per share
("Common Stock"), and Five Million (5,000,000) shares of preferred stock, par
value one cent ($.01) per share ("Preferred Stock").
The designations and the powers, preferences, rights, qualifications,
limitations and restrictions of the Preferred Stock and Common Stock are as
follows:
1. PROVISIONS RELATING TO THE PREFERRED STOCK.
(a) The Preferred Stock may be issued from time to time in one or more
series or classes, the shares of each series or class to have such
designations and powers, preferences and rights, and
qualifications, limitations and restrictions thereof, as are
stated and expressed herein and in the resolution or resolutions
providing for the issuance of such series or class adopted by the
Board of Directors of the Corporation as hereinafter prescribed.
(b) Authority is hereby expressly granted to and vested in the Board
of Directors to authorize the issuance of the Preferred Stock from
time to time in one or more series or classes, and with respect to
each series or class of the Preferred Stock, to fix and state by
resolution or resolutions from time to time adopted providing for
the issuance thereof the following:
(i) whether or not a series or class is to have voting rights,
full, special, or limited, or is to be without voting
rights, and whether or not such series or class is to be
entitled to vote as a separate class either alone or
together with the holders of one or more other series or
classes of stock;
(ii) the number of shares to constitute the series or class and
the designations thereof;
(iii) the preferences, and relative, participating, optional, or
other special rights, if any, and the qualifications,
limitations, or restrictions thereof, if any, with respect
to any series or class;
(iv) whether or not the shares of any series or class shall be
redeemable at the option of the Corporation or the holders
thereof or upon the happening of any specified event, and,
if redeemable, the redemption price or prices (which may be
payable in the form of cash, notes, securities, or other
property), and the time or times at which, and the terms and
conditions upon which, such shares shall be redeemable and
the manner of redemption;
(v) whether or not the shares of a series or class shall be
subject to the operation of retirement or sinking funds to
be applied to the purchase or redemption of such shares for
retirement, and, if such retirement or sinking fund or funds
are to be established, the annual amount thereof, and the
terms and provisions relative to the operation thereof;
<PAGE>
(vi) the dividend rate, whether dividends are payable in cash,
stock of the Corporation, or other property, the conditions
upon which and the times when such dividends are payable,
the preference to or the relation to the payment of
dividends payable on any other series or class or classes of
stock, whether or not such dividends shall be cumulative or
noncumulative, and if cumulative, the date or dates from
which such dividends shall accumulate;
(vii) the preferences, if any, and the amounts thereof which the
holders of any series or class thereof shall be entitled to
receive upon the voluntary or involuntary dissolution of, or
upon any distribution of the assets of, the Corporation;
(viii)whether or not the shares of any series or class, at the
option of the Corporation or the holder thereof or upon the
happening of any specified event, shall be convertible into
or exchangeable for, the shares of any other class or
classes or of any other series of the same or any other
class or classes of stock, securities, or other property of
the Corporation and the conversion price or prices or ratio
or ratios or the rate or rates at which such exchange may be
made, with such adjustments, if any, as shall be stated and
expressed or provided for in such resolution or resolutions;
and
(ix) such other special rights and protective provisions with
respect to any class or series as may to the Board of
Directors seem advisable.
(c) The shares of each series or class of the Preferred Stock may vary
from the shares of any other series or class thereof in any or all
of the foregoing respects. Except as otherwise provided in any
resolution or resolutions providing for the issuance of any series
or class of Preferred Stock, the Board of Directors may increase
the number of shares of the Preferred Stock designated for such
series or class by a resolution adding to such series or class
authorized and unissued shares of the Preferred Stock not
designated for any other series or class. The Board of Directors
may decrease the number of shares of the Preferred Stock
designated for any existing series or class by a resolution
subtracting from such series or class authorized and unissued
shares of the Preferred Stock designated for such existing series
or class.
2. PROVISIONS RELATING TO THE COMMON
(a) Each share of Common Stock of the Corporation shall have identical
rights and privileges in every respect. The holders of shares of
Common Stock shall be entitled to vote upon all matters submitted
to a vote of the stockholders of the Corporation and, shall be
entitled to one vote for each share of Common Stock held.
(b) Subject to the prior rights and preferences, if any, applicable to
shares of the Preferred Stock or any series or class thereof, the
holders of shares of the Common Stock shall be entitled to receive
such dividends (payable in cash, stock, or otherwise) as may be
declared thereon by the Board of Directors at any
2
<PAGE>
time and from time to time out of any funds of the Corporation
legally available therefor.
(c) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, after distribution
in full of the preferential amounts, if any, to be distributed to
the holders of shares of Preferred Stock or any series or class
thereof, the holders of shares of Common Stock shall be entitled
to receive all of the remaining assets of the Corporation
available for distribution to its stockholders, ratably in
proportion to the number of shares of the Common Stock held by
them. A liquidation, dissolution, or winding-up of the
Corporation, as such terms are used in this Paragraph (c), shall
not be deemed to be occasioned by or to include any consolidation
or merger of the Corporation with or into any other corporation or
corporations or other entity or entities or a sale, lease,
exchange, or conveyance of all or a part of the assets of the
Corporation.
No stockholder shall have a preemptive right to acquire any shares or
securities of any class, whether now or hereafter authorized, which may at
any time be issued, sold or offered for sale by the Corporation.
3
<PAGE>
EXHIBIT B
PATINA OIL & GAS CORPORATION
1998 STOCK PURCHASE PLAN
ARTICLE I
Purpose
-------
The purpose of the Plan is to provide Eligible Persons, as defined herein,
of Patina Oil & Gas Corporation (the "Company") with an opportunity and an
inducement to purchase Common Stock of the Company and thereby participate in
the growth and future prospects of the Company as well as to better align the
interests of such Eligible Persons with the stockholders. Each Eligible Person
will be entitled to purchase up to a specified number of shares or a specified
dollar amount of restricted Common Stock at prices ranging from fifty percent
(50%) to ninety percent (90%) of the closing price of the Common Stock on the
trading day prior to the day an Eligible Person elects to purchase such stock.
In addition, Eligible Persons who are employees of the Company may be granted
the right to purchase shares of Common Stock pursuant to the Plan with all or a
portion of their salary and bonus. Notwithstanding any restrictions or
exemptions to the contrary under the Securities Act of 1933 or any other
applicable law, rule or regulation, an Eligible Person who purchases shares of
Common Stock pursuant to the Plan may not sell such shares for a period of one
year from the date of purchase. The Plan is not intended to comply with the
provisions of Section 423 of the Internal Revenue Code of 1986, as amended.
ARTICLE II
Definitions
-----------
The following terms, when capitalized, shall have the meanings specified
below unless the context clearly indicates to the contrary.
2.1 "Board of Directors" shall mean the Board of Directors of the Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.3 "Committee" or "Stock Purchase Plan Committee" shall mean the
Compensation Committee of the Board of Directors, the members of which shall be
non-employee directors within the meaning of Paragraph (b) (3) of Rule 16 b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
2.4 "Committee Member" shall mean any member of the Committee.
2.5 "Common Stock" shall mean the Common Stock, $0.1 par value per share,
of the Company.
2.6 "Company" shall mean Patina Oil & Gas Corporation, a Delaware
corporation.
2.7 "Effective Date" shall mean the date the Plan is declared operative by
the Board of Directors.
<PAGE>
2.8 "Eligible Person" shall mean those persons who are officers,
directors, key employees of, or consultants or advisors to, the Company
determined to be eligible from time to time in the sole discretion of the
Committee.
2.9 "Plan" shall mean the Patina Oil & Gas Corporation 1998 Stock Purchase
Plan.
2.10 "Plan Year" shall mean initially, the period of time between the
Effective Date and the date of the 1998 annual meeting of the Company and,
thereafter, the period of time between successive annual meetings of the
Company.
The masculine gender, whenever used in this Plan, includes the feminine,
the singular includes the plural and the plural includes the singular unless the
context otherwise requires.
ARTICLE III
Administration of Plan
----------------------
The Plan shall be administered by the Committee. Members of the Committee
may be removed at any time by the Board of Directors and the Board of Directors
shall have the power to fill any vacancy which may occur in the Committee. The
Committee shall have full and final authority to make rules and regulations,
subject to the express provisions of the Plan, for the administration of the
Plan and to settle any disputes which may arise under the terms of the Plan.
The Committee's interpretations and decisions with regard to the provisions of
the Plan and any rules or regulations promulgated thereunder shall be final and
conclusive. A majority of the Committee shall constitute a quorum, and acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee, shall be deemed the
acts of the Committee
ARTICLE IV
Shares
------
There shall be 500,000 shares of Common Stock reserved under the Plan,
subject to adjustment in accordance with Article IX hereof. The shares of
Common Stock subject to the Plan shall be shares of authorized but unissued
Common Stock.
ARTICLE V
Purchase of and Payment for Shares
----------------------------------
Prior to the commencement of any Plan Year, the Committee shall identify
Eligible Persons for the Plan Year, determine the number of shares and/or the
dollar amount as well as the discount from the market value of such shares that
any Eligible Person is entitled to purchase during any Plan Year. The Committee
may at any time, in its sole discretion, add or eliminate Eligible Persons,
change the discount applicable to the purchase of shares of Common Stock or the
number of shares an Eligible Person may
2
<PAGE>
purchase pursuant to this Plan. Any Eligible Person may purchase all or any
portion of the shares allocated to him by giving a written notice to the Chief
Financial Officer of the Company that specifies the whole number of shares being
purchased. Within ten (10) days of giving such notice, the Eligible Person shall
pay to the Company the purchase price for the shares of Common Stock purchased.
The purchase price for such shares shall be the closing price of a share of
Common Stock on the New York Stock Exchange on the last business day preceding
the date of the notice, multiplied by the number of shares specified in the
notice and then reduced by the applicable discount. No share of the Company's
Common Stock may be issued to an Eligible Person until such time as the share
has been fully paid for as above provided. At the determination of the Company,
the Company may require as a condition to the purchase of shares of Common Stock
pursuant to the Plan, the making of such payments by an Eligible Person as the
Company deems necessary to satisfy any income tax withholding requirements of an
Eligible Person with respect to such purchase.
ARTICLE VI
Issuance of Shares; Stock Certificates
--------------------------------------
The shares of Common Stock purchased by an Eligible Person shall, for all
purposes, be deemed to have been issued and sold on the date of the notice given
pursuant to Article V. Prior to that time, none of the rights or privileges of
a stockholder of the Company shall exist with respect to such shares.
As soon as practicable after any purchase of shares of Common Stock by an
Eligible Person, a certificate representing the Common Stock purchased pursuant
to the Plan will be issued in the name of the Eligible Person, unless the
Eligible Person shall otherwise instruct the Committee. With respect to shares
of Common Stock purchased by an Eligible Person, the Eligible Person shall be
entitled to vote or to consent as a stockholder to any action with respect to
which other stockholders of the Company are entitled to vote or give consent.
Unless the shares of Common Stock have been registered under the Securities Act
of 1933, as amended, such shares will be restricted and will bear a legend
evidencing such restrictions.
ARTICLE VII
Termination of Employment or Agency Relationship
------------------------------------------------
In the event of termination of the employment or retention relationship
between an Eligible Person and the Company, for any reason, including death or
permanent disability, the Plan shall terminate automatically as to the shares of
Common Stock that remain unpurchased five (5) days following the date the
employment or retention relationship was terminated.
ARTICLE VIII
Rights Transferable
-------------------
The right of any Eligible Person to purchase shares of Common Stock under
the Plan may be assigned by such Eligible Person to members of his immediate
family, a trust or other legal entity of
3
<PAGE>
which the Eligible Person or a member of his immediate family is a trustee, a
beneficiary or a beneficial owner. Transfers to any other person or entity are
prohibited unless approved by the Committee.
ARTICLE IX
Recapitalization; Effect of Certain Transactions
------------------------------------------------
The aggregate number of shares of Common Stock reserved for purchase under
the Plan as provided in Article IV hereof shall be appropriately adjusted by the
Board of Directors to reflect a stock dividend, stock split-up, share
combination, exchange of shares, recapitalization, merger, consolidation,
liquidation or other similar changes or transactions by the Company.
ARTICLE X
Termination and Amendment of the Plan
-------------------------------------
The Plan shall continue in effect through January 1, 2008, unless
terminated prior thereto by the Board of Directors. The Board of Directors
shall have the right to modify, amend or terminate the Plan at any time provided
that Eligible Persons are given five (5) business days notice in writing of such
amendment, modification or termination. During such five (5) day period,
Eligible Persons may purchase allocated but unpurchased shares of Common Stock
for the Plan Year in which the amendment, modification or termination is to
occur by giving the notice provided for in Article V. Upon the expiration or
termination of the Plan pursuant to this Article, the right of any Eligible
Person to purchase allocated, but unpurchased shares of Common Stock for the
Plan Year in which such expiration or termination occurs, shall cease and
terminate automatically. Other than as expressly set forth herein, the Board of
Directors may not amend the Plan if such amendment would materially increase the
cost of the Plan to the Company without the approval of the stockholders of the
Company.
ARTICLE XI
Indemnification of Committee
----------------------------
In addition to such other rights of indemnification as they may have as
directors or officers of the Company, past and current Committee Members shall
be indemnified by the Company against the reasonable expenses, including
attorney's fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan and against all amounts paid
by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjusted in such action, suit or
proceeding that such Committee Member is liable for willful misconduct in the
performance of his duties.
4
<PAGE>
ARTICLE XII
Regulatory Matters
------------------
The purchase of shares of Common Stock by Eligible Persons pursuant to the
Plan, the issuance of Common Stock to the Eligible Persons pursuant to the Plan
and the transfer of shares of Common Stock by Eligible Persons acquired pursuant
to the Plan shall be subject to compliance with the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, the requirements of any stock
exchange upon which the shares of Common Stock may then be listed and shall be
subject to prior approval by the Company's legal counsel with respect to all
legal matters in connection therewith.
Specifically, the purchase, issuance and transfer of such shares are each
subject to a decision by the Chief Financial Officer of the Company, who acting
with the Company's legal counsel with respect to legal matters, to refuse a
request to purchase, issue or transfer any of such shares if such purchase,
issue or transfer would, or may, in the Chief Financial Officer's opinion, be in
violation of any such law, rule, regulation or requirement. The decision of the
Chief Financial Officer shall be final and binding on the Eligible Person so
affected.
ARTICLE XIII
Construction
------------
This Plan shall be construed and enforced in accordance with the laws of
the State of Delaware.
5
<PAGE>
PATINA OIL & GAS CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 13, 1998
The Annual Meeting of Stockholders (the "Annual Meeting") of Patina Oil &
Gas Corporation (the "Company") will be held at the corporate offices of the
Company, 20th floor, 1625 Broadway, Denver, Colorado, on Wednesday, May 13,
1998, at 9:00 a.m. Mountain Daylight Time. The list of stockholders entitled to
vote at the Annual Meeting will be open to the examination by any stockholder
during ordinary business hours for a period of ten days prior to the Annual
Meeting at the Company's corporate offices. Such list will also be produced at
the Annual Meeting and be kept open during the Annual Meeting for the inspection
by any stockholder who may be present. The purposes for which the Annual
Meeting is to be held are as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends that the stockholders vote FOR the nominees listed below
Please mark [X]
your vote as
indicated in
this example.
<S> <C> <C> <C> <C>
1. To elect a board of eight directors, FOR WITHHELD Subject to the provisions of the By-Laws of the
each for a one year term. FOR ALL Company, registered stockholders as of April 1, 1998
Nominees for Election at Annual Meeting: [_] [_] (i) who are individuals may attend and vote at the
Annual Meeting in person or by proxy or (ii) that are
Arnold L. Chavkin, Robert J. Clark, corporations may attend and vote at the Annual
Brian J. Cree, Jay W. Decker, Meeting by proxy or by a duly authorized
Thomas R. Denison, Thomas J. Edelman, representative.
Elizabeth K. Lanier, Arnold P. Lynch
WITHHELD FOR: (Write in Nominee's name
in the space provided below)
- -------------------------------------------
FOR AGAINST ABSTAIN
2. To consider and adopt an amendment to Whether or not you plan to attend the Annual Meeting,
the Company's Articles of Incorporation [_] [_] [_] please complete, date and sign the enclosed proxy and
increasing the number of authorized return it in the envelope provided. Any person giving
shares of the Company's common stock, par a proxy has the power to revoke it at any time prior
value $.01 per share (the "Common to its exercise and, if present at the Annual
Stock") from 40 million shares to 100 Meeting, may withdraw it and vote in person.
million shares. Attendance at the Annual Meeting is limited to
stockholders, their proxies and invited guests of the
3. To consider and adopt the Company's 1998 [_] [_] [_] Company.
Stock Purchase Plan covering 500,000
shares of Common Stock.
4. To transact any other business which [_] [_] [_]
properly may be brought before the Annual
Meeting or any adjournment(s) thereof.
_____________________________________________________
(Signature)
_____________________________________________________
(Signature if held jointly)
Date: _____________________________________________
(Please sign exactly as your name appears hereon. If
stock is registered in more than one name, each
holder should sign. When signing as an attorney,
administrator, executor, guardian or trustee, please
add your title as such. If executed by a corporation
or other entity, the proxy should be signed by a duly
authorized officer or other representative.
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
