<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
GLOBAL NATURAL RESOURCES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
E. LYNN HILL
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
{GLOBAL NATURAL RESOURCES INC. LOGO} GLOBAL NATURAL RESOURCES INC.
JAMES G. NIVEN
CHAIRMAN OF THE BOARD
April 7, 1994
To Our Shareholders:
You are cordially invited to attend the 1994 Annual Meeting of
Shareholders of Global Natural Resources Inc., which will be held in the
Colonnade Room of The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas at
9:00 a.m. on Tuesday, May 3, 1994.
The accompanying Notice of Annual Meeting and Proxy Statement describe
the formal matters to be acted upon at the meeting. In addition, we will
discuss current matters concerning the future of the Company and review the
Company's operations during the past year. At the conclusion of the formal
meeting, an opportunity will be provided for questions by the shareholders.
Representation of your shares at the meeting is very important. We
urge each shareholder, whether or not you now plan to attend the meeting, to
promptly date, sign and return the enclosed proxy in the envelope furnished for
that purpose. If you do attend the meeting, you may, if you wish, revoke your
proxy and vote in person.
It is always a pleasure to meet with our shareholders, and I
personally look forward to seeing as many of you as possible at the Annual
Meeting.
Sincerely,
James G. Niven
5300 Memorial, Suite 800 Houston, Texas 77007-8295 (713) 880-5464
P.O. Box 4682 Houston, Texas 77210-9698
Telecopy: (713) 865-4386 Telex: 49602475 GLOBAL NATURAL
<PAGE> 3
GLOBAL NATURAL RESOURCES INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 1994
To the Shareholders of
Global Natural Resources Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
Global Natural Resources Inc., a New Jersey corporation (the "Company"), will
be held in the Colonnade Room of The Ritz-Carlton, 1919 Briar Oaks Lane,
Houston, Texas on Tuesday, May 3, 1994 at 9:00 a.m. (C.D.T.), for the following
purposes:
(1) To elect two directors to hold office for a term of three
years or until their respective successors shall be duly
elected and qualified.
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 15,
1994 as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting. A list of all
shareholders entitled to vote is on file at the principal offices of the
Company, 5300 Memorial Drive, Suite 800, Houston, Texas.
So that we may be sure your vote will be included, please date, sign
and return the enclosed proxy promptly. For your convenience, a postpaid
return envelope is enclosed for your use in returning your proxy. If you
attend the meeting, you may revoke your proxy and vote in person.
By Order of the Board of Directors,
E. Lynn Hill
Secretary
April 7, 1994
<PAGE> 4
GLOBAL NATURAL RESOURCES INC.
5300 Memorial, Suite 800
Houston, Texas 77007-8295
(713) 880-5464
-----------------
PROXY STATEMENT
-----------------
SOLICITATION AND REVOCABILITY OF PROXIES
The Board of Directors of Global Natural Resources Inc., a New Jersey
corporation (the "Company"), is furnishing this proxy statement in connection
with the solicitation of proxies for use at the 1994 Annual Meeting of
Shareholders (the "Annual Meeting") of the Company to be held in the Colonnade
Room of The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas at 9:00 a.m.
(C.D.T.) on Tuesday, May 3, 1994 (and any adjournment(s) thereof).
Solicitation of proxies will be primarily by mail, but proxies may also be
solicited personally or by telephone or telegraph by officers, directors,
regular employees and other representatives of the Company. The Company will
bear the cost of such solicitation. The Company also will make arrangements
with brokerage firms, banks and other nominees to forward proxy materials to
beneficial owners of shares and will reimburse such nominees for their
reasonable costs.
The enclosed proxy, even though executed and returned, may be revoked
at any time prior to the voting of the proxy by either (i) attending the
meeting and voting in person or (ii) giving written notice of such revocation
to Mr. E. Lynn Hill, Secretary of the Company, at Global Natural Resources
Inc., 5300 Memorial, Suite 800, Houston, Texas 77007-8295. The enclosed proxy
may also be revoked by a subsequently dated proxy received by the Company prior
to voting of the previously dated proxy.
This proxy statement and the related form of proxy are being first
mailed or delivered to shareholders of the Company on or about April 7, 1994.
VOTING SECURITIES AND PRINCIPAL HOLDERS
On March 15, 1994, the record date for those entitled to notice of and
to vote at the Annual Meeting, there were outstanding 30,046,968 shares of
Common Stock, par value $1.00 per share (the "Common Stock"). Each of the
shares of Common Stock outstanding is entitled to one vote and may be voted in
person or by proxy.
The following table sets forth, with respect to each person (or
"group" within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) who is known by the Company to be the
beneficial owner of more than 5% of the Common Stock of the Company, the number
of shares beneficially owned by such person or group and the percentage such
number constitutes of the entire class as of March 15, 1994.
-1-
<PAGE> 5
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF
--------------------------
MARCH 15, 1994
--------------
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------------------ --------- ----------
<S> <C> <C>
Interamerican Securities Corp. 1,925,048(1) 6.4%
One Riverway, Suite 1250
Houston, Texas 77056
Greenhaven Associates, Inc. 1,580,158(2) 5.3%
100 Park Avenue
New York, New York 10021
The Prudential Insurance Company 6,311,547(3) 21.0%
of America
Prudential Plaza
Newark, New Jersey 07102
</TABLE>
- ----------------
(1) Information on Interamerican Securities Corp. ("Interamerican") is from
Interamerican's Schedule 13G dated February 10, 1994, filed under the
Exchange Act. Interamerican has sole voting and investment power with
respect to its shares.
(2) Information on Greenhaven Associates, Inc. ("Greenhaven") is from
Greenhaven's Schedule 13G dated January 24 ,1994, filed under the Exchange
Act. Greenhaven is an Investment Adviser registered under Section 203 of
the Investment Advisers Act of 1940. Greenhaven has investment discretion
with respect to all 1,580,158 shares of Common Stock, but has sole power to
vote only 310,500 of those shares. Clients of Greenhaven, both individuals
and business entities, are direct owners of all other shares that
Greenhaven beneficially owns. Such clients have the sole right to receive
and the power to direct receipt of dividends from, and the proceeds from
the sale of, such securities. No individual client beneficially owns more
than 5% of the Common Stock.
(3) Information on The Prudential Insurance Company of America ("Prudential")
is from Prudential's Schedule 13G dated January 31, 1994, filed under the
Exchange Act. Prudential has sole voting and investment power with respect
to its shares.
ELECTION OF DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors is divided into three classes and each director
serves a term of three years. At the Annual Meeting, two Class II directors
are to be elected. Proxies cannot be voted for a greater number of persons
than the number of nominees named on the enclosed form of proxy. A plurality
of the votes cast in person or by proxy at the meeting is required to elect a
director. Accordingly, abstentions and broker non-votes would have no effect
on the election of directors. A broker non- vote occurs if a broker or other
nominee does not have discretionary authority and has not received instructions
with respect to a particular item. Shareholders may not cumulate their votes
in the election of directors.
All properly executed proxies delivered pursuant to this solicitation
and not revoked will be voted at the Annual Meeting in accordance with the
directions given. If no specific instructions are given with respect to the
election of directors, the shares represented by each signed proxy will be
voted for the election of the nominees listed below. Mr. John E. Kilgore,
Jr., a Class II director, is retiring from the Board effective on the date of
the Annual Meeting. A replacement for Mr. Kilgore will not be nominated at
this meeting. The Board of Directors intends to appoint a director to fill the
vacancy as soon as possible, which director will be up for election in 1995.
All nominees for director are currently members of the Board of Directors. If
any nominee becomes unavailable for election to the Board of Directors, the
persons appointed as proxies will have discretionary authority to vote the
proxy for such other person, if any, as may be designated by the Board of
Directors. However, the Board of Directors has no reason to believe that any
nominee named herein will be unable to accept nomination or election.
The following table sets forth the information concerning the two
nominees for election as directors and the seven continuing directors of the
Company, including the principal occupations of each
-2-
<PAGE> 6
during the last five years and the number of shares of Common Stock
beneficially owned by each of them as of March 15, 1994:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
NAME AND PRINCIPAL OWNED AS OF
OCCUPATION DURING THE SERVED AS A MARCH 15, PERCENT OF
LAST FIVE YEARS (1)(2) AGE DIRECTOR SINCE 1994 (3) CLASS
- ---------------------- --- -------------- ------------- -----
<S> <C> <C> <C> <C>
NOMINEES
CLASS II - TERM EXPIRES IN 1997
- -------------------------------
SIDNEY R. PETERSEN (a) . . . . . . . . . . . . . . . 63 1992 14,500(4) *
Independent investor since 1984. Prior thereto,
was Chairman and Chief Executive Officer of Getty
Oil Co.
JAMES G. NIVEN (c)(d) . . . . . . . . . . . . . . . . 48 1985 1,021,862(5) 3.4%
Chairman of the Board of the Company since November
1989. Member of the Board of Directors of Texneft
Inc. since November 1991. General Partner of
Pioneer Associates Co., a venture capital firm, for
more than five years.
CONTINUING DIRECTORS
CLASS III -- TERM EXPIRES IN 1995
- ---------------------------------
J. CHARLES HOLLIMON (a)(b) . . . . . . . . . . . . . 45 1985 22,500 *
Independent oil and gas operator for more than five
years.
JOHN E. MCFARLANE (a) . . . . . . . . . . . . . . . . 48 1982 163,247(6) *
Vice-Chairman of the Board of Texneft Inc. from
March 1991 to June 1993. Consultant to the Company
from 1985 to April 1993. Has been engaged for more
than five years in managing his investments.
ROBERT F. VAGT(c)(d) . . . . . . . . . . . . . . . . 47 1992 195,547(7) *
President and Chief Executive Officer of the
Company since May 1992. Prior thereto, was a
Director, President and Chief Operating Officer of
Adobe Resources Corporation (Director from May 1986
to May 1992 and President and Chief Operating
Officer from November 1990 to May 1992). Prior
thereto, was Executive Vice President of Adobe
Resources Corporation from August 1987 to October
1990.
CLASS I -- TERM EXPIRES IN 1996
- -------------------------------
WILLIAM L. BENNETT (b)(c) . . . . . . . . . . . . . 44 1990 726,621(5)(8) 2.4%
Co-Chairman and Chief Executive Officer of Noel
Group, Inc. since November 1991. Served Noel
Group, Inc. as President from December 1987 to
November 1991, Chairman of the Board and Chief
Executive Officer from April 1988 until November
1991.
JOHN A. BROCK (c) . . . . . . . . . . . . . . . . . 63 1993 10,000 *
Owner and President of Rockford Exploration, Inc.
for more than five years. Until April 1992,
principal owner, Chairman and Chief Executive
Officer of Medallion Petroleum, Inc. for more than
five years.
</TABLE>
-3-
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
NAME AND PRINCIPAL OWNED AS OF
OCCUPATION DURING THE SERVED AS A MARCH 15, PERCENT OF
LAST FIVE YEARS (1)(2) AGE DIRECTOR SINCE 1994 (3) CLASS
- ---------------------- --- -------------- ------------- -----
<S> <C> <C> <C> <C>
GILBERT H. LAMPHERE (a)(c)(d) . . . . . . . . . . . 41 1990 721,119(5) 2.4%
Co-Chairman and Chief Executive Officer of Noel
Group, Inc. since November 1991. Chairman and
Chief Executive Officer of The Prospect Group,
Inc. since January 1990. Served The Prospect
Group, Inc. as President from November 1989 until
October 1991 and Chairman of the Executive
Committee from December 1985 until November 1989.
DONALD T. PASCAL (a)(b) . . . . . . . . . . . . . . 34 1992 720,773(5) 2.4%
Managing Director of Noel Group, Inc. since
November 1991. Served Noel Group, Inc. as Vice
President and Secretary from May 1988 to November
1991.
</TABLE>
- -------------------------------
* Represents less than 1%
(1) Directorships other than those listed in the table are: William L.
Bennett-Noel Group, Inc., Lincoln Snacks Company, Belding Heminway
Company, Simmons Outdoor Corporation, VISX, Inc., TDX Corporation, The
Forschner Group, Inc. and Allegheny Power Systems; Sidney R.
Petersen-Avery Dennison Corporation, Nicor, Inc., Carter Hawley Hale
Stores, Inc. and Union Bank; Gilbert H. Lamphere-Noel Group, Inc.,
Recognition International Inc., Children's Discovery Centers of America,
Inc., Illinois Central Corporation, Illinois Central Railroad Company,
Lincoln Snacks Company, Cleveland-Cliffs, Inc., R.P. Scherer Corporation,
Simmons Outdoor Corporation, Sylvan Foods Holding, Inc., Belding Heminway
Company, Inc. and The Prospect Group, Inc.; James G. Niven-Noel Group,
Inc., The Prospect Group, Inc., Lincoln Snacks Company, Simmons Outdoor
Corporation and The Lynton Group, Inc.; Donald T. Pascal-Sylvan Food
Holdings, Inc., Lincoln Snacks Company and TDX Corporation; and Robert F.
Vagt-First Albany Corporation and Santa Fe Energy Resources, Inc.
(2) Committee memberships are indicated by "(a)" for Audit Committee, "(b)" for
Compensation Committee, "(c)" for Nominating Committee and "(d)" for
Executive Committee. The Audit Committee recommends to the Board of
Directors the appointment of independent auditors and meets with the
independent auditors to review the scope and results of their examination
and the adequacy of the Company's system of internal accounting controls
and to approve services performed by the auditors. The Compensation
Committee consults with and advises senior management regarding
compensation of executive officers and certain eligible directors and
submits to the Board of Directors its recommendation with respect to
compensation of the Company's executive officers. The Nominating Committee
designates the nominees for election as directors at the Annual Meeting of
Shareholders and will consider recommendations by shareholders for nominees
for director at annual meetings sent to the Nominating Committee c/o E.
Lynn Hill, Global Natural Resources Inc., 5300 Memorial Drive, Suite 800,
Houston, Texas 77007. The Executive Committee has and may exercise all the
powers and authority of the Board of Directors except that the Executive
Committee shall not (1) make, alter or repeal any By-law, (2) elect or
appoint any director or remove any officer or director, (3) submit to
shareholders of the Company any action that requires shareholder approval,
(4) amend or repeal any resolution theretofore adopted by the Board of
Directors which by its terms is amendable or repealable only by the Board
of Directors, or (5) authorize the issuance of stock (including Preferred
Stock or any series thereof) of the Company or take any other action then
prohibited by law.
(3) The persons listed have sole voting and investment power with respect to
their shares, except as noted. Shares of common stock beneficially owned
as of March 15, 1994 includes shares of Common Stock of the Company that
could be acquired within 60 days after March 15, 1994, upon the exercise of
options granted pursuant to the Company's stock option plans as follows:
Mr. Petersen, 12,500 shares; Mr. Niven, 290,000 shares; Mr. Hollimon,
12,500 shares; Mr. McFarlane, 50,000 shares; Mr. Vagt, 180,000 shares; Mr.
Bennett, 12,500 shares; Mr. Brock, 10,000 shares; Mr. Lamphere, 12,500
shares; and Mr. Pascal, 12,500 shares.
(4) Of the 14,500 shares held by Mr. Petersen, 2,000 are held in The Petersen
Family Trust, as to which he is one of two trustees.
(5) Includes 705,196 shares held by Noel Group, Inc., of which Messrs. Bennett
and Lamphere are members of the Board of Directors and Executive Officers,
Mr. Pascal is an Executive Officer and Mr. Niven is a Director. Each of
them disclaim beneficial ownership of such shares.
(6) Of the 163,247 shares held by Mr. McFarlane, 16,908 shares are held in
trust for his children. Mr. McFarlane disclaims beneficial ownership of
such shares.
(7) Mr. Vagt's common stock ownership includes 547 shares arising from
participation in Global Natural Resources Inc. Employees 401(K) Savings
Plan.
(8) Of the 726,621 shares held by Mr. Bennett, 771 are held in trust for his
children, as to which his wife acts as trustee. Mr. Bennett disclaims
beneficial ownership of such shares.
-4-
<PAGE> 8
Each director who is not a salaried officer of the Company and does not
receive compensation under consulting arrangements receives $13,000 annually for
serving as a director, an additional fee of $1,000 per board meeting attended,
$2,000 for serving as the Chairman of a committee and $650 for attending any
committee meeting.
Under the Company's 1992 Stock Option Plan (the "1992 Plan"), each
director of the Company who is not also an employee is granted non-qualified
stock options to purchase 10,000 shares of the Common Stock of the Company on
the first business day following their election to the Board. Thereafter, on
the first business day following the anniversary of such directors' initial
grant, each director is granted a non-qualified stock option to purchase 2,500
shares of the Common Stock of the Company. The options are issued at a price
equal to the fair market value of the Common Stock on the date of grant. The
options have a ten year term and are fully exercisable after the date of grant
and may be exercised only during the non-employee director's lifetime, only
while he or she is a member of the Board of Directors of the Company and during
the one-year period immediately following the termination of such membership
status.
In 1993, Mr. McFarlane was granted non-qualified stock options to
purchase 50,000 shares of the Common Stock of the Company under the 1992 Plan.
The options were issued to Mr. McFarlane for his contribution to the Company
while serving as a consultant and were issued at a price equal to the fair
market value of the Common Stock on February 5, 1993.
During 1993, the Board of Directors held six meetings, the Compensation
Committee held four meetings, the Audit Committee held three meetings, and the
Nominating Committee held one meeting. No incumbent director attended fewer
than 75% of the total meetings held by the Board and all committees of which
they were members except, Mr. Lamphere who attended 67% of the aggregate of
Board of Directors meetings.
The Company's executive officers are elected by the Board of Directors
to serve for a term of one year or until their successors are elected and
qualified. The Company's executive officers, in addition to those named in the
above table, are:
<TABLE>
<CAPTION>
NAME AND PRESENT PRIOR BUSINESS
---------------- --------------
POSITION AGE EXPERIENCE
-------- --- ----------
<S> <C> <C>
Kelly M. Barnes 40 Vice President - Land of Global Natural Resources
Vice President - Land and Assistant Corporation of Nevada, a wholly-owned subsidiary of the
Secretary since July 1993. Company ("GNRC") since August 1992; Senior Staff Landman
for Santa Fe Energy, Inc from April 1992 to August 1992;
Southern Division Landman for Adobe Resources Corporation
from January 1988 to April 1992.
Gerald R. Colley 43 Vice President - International Exploration of GNRC since
Vice President - International October 1992; Vice President and Exploration Director of
Exploration since July 1993. Hadson Europe, Inc. from August 1986 to October 1992.
Gregory S. Cusack 34 Vice President - Operations of GNRC since September 1991;
Vice President - Operations since July Manager of Operations from August 1991 to September 1991;
1993. Operations Engineer from October 1983 to August 1991.
Scott A. Griffiths 39 Vice President - Exploration of GNRC since September 1991;
Vice President - Exploration since July Manager of Exploration from August 1991 to September 1991;
1993. Chief Geologist from May 1988 to August 1991.
</TABLE>
-5-
<PAGE> 9
<TABLE>
<CAPTION>
NAME AND PRESENT PRIOR BUSINESS
---------------- --------------
POSITION AGE EXPERIENCE
-------- --- ----------
<S> <C> <C>
E. Lynn Hill 48 Vice President - Finance and Administration and Secretary
Senior Vice President - of the Company from July 1988 until August 1992.
Finance and Administration and
Secretary - Treasurer since August
1992.
William D. Hubbard 50 Senior Vice President - Exploration of GNRC since June
Senior Vice President - 1992; Division Exploration Manager for Santa Fe Energy,
Exploration since July 1993. Inc. from May 1992 until June 1992; Vice President-
Exploration of Adobe Resources Corp. from October 1987 to
May 1992.
David W. Martin 55 Vice President - Engineering of Trend Exploration, a
Senior Vice President since July 1993 subsidiary of Adobe Resources Corporation, for more than
and President of Texneft Inc., a five years prior to October 1992.
subsidiary of the Company, since
October 1992.
Gordon L. McConnell 47 Controller of GNRC since October 1991; Assistant
Controller since July 1993. Controller from July 1991 to October 1991; Vice President
- Accounting for Prairie Producing from June 1989 to July
1990; Vice President - Finance and Administration for
Felmont Oil Company from January 1988 to 1989.
Darrell G. Molnar 47 Senior Vice President - Operations of GNRC since August
Senior Vice President - Operations 1992; Drilling Superintendent and Engineering Manager of
since July 1993. Transco Exploration and Production Co. from August 1988
until July 1992.
Thomas H. Pielech 33 Manager of Gas Supply for USAgas from April 1990 until May
Vice President - USAgas Pipeline, Inc., 1992; Manager of Gas Supply for Amalgamated Pipeline Co.
a wholly owned subsidiary of the from July 1989 to April 1990; Gas Contract Representative
Company, since May 1992. for Arco Oil and Gas Company from June 1987 until July
1989.
M. Lee Van Winkle 41 Vice President - Corporate Planning of GNRC since August
Vice President - 1992; Corporate Manager - Planning and Budget for Adobe
Corporate Planning since July 1993. Resources Corporation for more than five years prior to
August 1992.
</TABLE>
COMPENSATION COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION
Decisions regarding compensation of the Company's executive officers are
generally made by the three member Compensation Committee of the Company's Board
of Directors. Each member of the Compensation Committee is a non-employee
director. In addition to setting compensation levels, the Committee selects
officers and key employees for participation in stock option plans, establishes
performance goals for those officers and key employees who participate in such
plans and reviews and monitors benefits under all employee benefit plans of the
Company. The Compensation Committee does not currently intent to award
compensation that would result in a limitation on the deductibility of a portion
of such compensation pursuant to Section 162 (m) of the Internal Revenue Code;
however, the Compensation Committee may in the future decide to authorize
compensation in excess of the limits of Section 162 (m) if it determines that
such compensation is in the best interests of the Company.
-6-
<PAGE> 10
COMPENSATION POLICES FOR EXECUTIVE OFFICERS
The Compensation Committee's executive compensation policies are
intended to provide competitive levels of compensation in order to attract and
retain qualified executives, to recognize individual contributions to the
successful achievement of the Company's business objectives, and to align
management's and shareholders' interests in the enhancement of shareholder
value over the long-term. The Committee does this by setting specific annual
objectives for the Company and for each of the Company's key employees. The
basis for these annual targets are the operational objectives, and the asset
growth and the financial objectives contained in the capital budget and
operating plan which is adopted annually. Individual performance relative to
these goals is reviewed at least annually.
The key tool used to provide long-term incentives is the stock option
plan which is intended to align the interests of the Company's employees with
that of its shareholders. Thus, success in achieving annual objectives and
success in enhancing shareholder value should translate directly into an
enhanced benefit for key employees. The Compensation Committee believes that
rewarding employees through stock based performance compensation arrangements
enhances shareholder value over the long-term.
Once yearly, there is also a review of salary levels. At that time the
Compensation Committee considers on an informal basis the prevailing levels of
compensation paid by comparable organizations, individual contributions to the
Company which each of the executives has made and can be expected to make in
the future, and such other factors as the Committee may deem relevant at the
time of making such determinations.
In 1993, the Company adopted an annual management incentive plan for
the Company's executive officers. This plan established performance goals for
the Company and for each individual, and is administered by the Compensation
Committee. In 1993, performance goals emphasized "increases" in cash flow,
growth in reserves, and several other quantitative measures. Based on
performance versus 1993 objectives, the Committee awarded $304,000 in bonuses
to 15 individuals in December 1993.
In December 1993 the Committee authorized, and the Company issued,
approximately 145,000 non-qualified stock options to 30 executive officers and
key employees. In addition, 102,500 non-qualified stock options to 27
executive officers and key employees were authorized in December 1992 and
issued in January 1993. The options granted will vest twenty percent (20%)
after six months from the date of grant with an additional twenty percent (20%)
becoming vested and exercisable on each of the first, second, third and fourth
anniversaries of the date of grant. Such options are forfeitable in the event
the employee voluntarily terminates employment prior to vesting.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Vagt was retained as President and Chief Executive Officer in May
1992. The subjective factor given the most weight in determining his
compensation was to provide a salary level competitive with that which would be
made available to him by organizations with which the Company competes for the
services of qualified executives. In 1992, consistent with the Company's
philosophy of issuing long-term compensation to help align an executive's
interests with that of the Company's shareholders, Mr. Vagt
-7-
<PAGE> 11
was granted 450,000 non-qualified stock options. Under the Company's annual
management incentive plan, the Committee awarded Mr. Vagt bonuses totalling
$190,000 in 1993.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
William L. Bennett, Chairman
J. Charles Hollimon
Donald T. Pascal
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued during
each of the Company's last three fiscal years to the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
NAME AND PRINCIPAL STOCK OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS (SHARES) COMPENSATION (1)
-------- ---- ------ ----- -------- ----------------
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Robert F. Vagt 1993 280,000 190,000 -- 4,000
President and 1992 173,000(2) -- 450,000 71,748(3)
Chief Executive Officer 1991 N/A N/A N/A N/A
William D. Hubbard 1993 153,000 50,000 36,000 2,206
Senior Vice President - 1992 77,558(2) -- 20,000 --
Exploration 1991 N/A N/A N/A N/A
David W. Martin 1993 140,000 20,000 18,000 875
Senior Vice President 1992 32,250(2) -- 7,500 --
1991 N/A N/A N/A N/A
Gerald R. Colley 1993 116,000 25,000 17,500 1,350
Vice President - 1992 23,673(2) -- 7,500 --
International Exploration 1991 N/A N/A N/A N/A
E. Lynn Hill 1993 125,000 15,000 14,000 1,156
Senior Vice President - 1992 115,833 -- -- --
Finance and 1991 115,000 -- 30,000 --
Secretary-Treasurer
</TABLE>
- -----------------------
(1) Amounts received in 1993 by the individuals listed above reflect matches
made by the Company for employee contributions to the Global Natural
Resources Inc. Employees 401(K) Savings Plan. (See Benefit Plans - Savings
Plan for a description of the Savings Plan).
(2) The 1992 salaries for Mr. Vagt, Mr. Hubbard, Mr. Martin and Mr. Colley
represent less than a full year, as each of these individuals joined the
Company in 1992.
(3) The $71,748 payment to Mr. Vagt in 1992 is associated with the sale of his
prior home and relocation to Houston, Texas.
-8-
<PAGE> 12
STOCK OPTIONS
The following table sets forth information with respect to grants of
stock options to the Named Officers during the last fiscal year pursuant to
the Company's stock option plans:
STOCK OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SHARES PERCENT OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED FOR OPTION TERMS
OPTIONS TO EMPLOYEES IN EXERCISE OR EXPIRATION ----------------
NAME GRANTED (1) FISCAL YEAR BASE PRICE DATE 5% 10%
---- ----------- ----------- ---------- ---- -- ---
(#) ($/sh) $ $
<S> <C> <C> <C> <C> <C> <C>
William D Hubbard 36,000 14% 6.25/8,000 1/4/03 31,445 79,687
6.6875/28,000 12/8/03 117,761 298,428
David W. Martin 18,000 7% 6.25/8,000 1/4/03 31,445 79,687
6.6875/10,000 12/8/03 42,057 106,582
Gerald R. Colley 17,500 6.8% 6.25/5,000 1/4/03 19,653 49,804
6.6875/12,500 12/8/03 52,572 133,227
E. Lynn Hill 14,000 5.5% 6.25/8,000 1/4/03 31,445 79,687
6.6875/6,000 12/8/03 25,234 63,949
</TABLE>
- -----------------------
(1) Stock options granted in 1993 were granted under the Company's 1989
Stock Option Plan. The options have a ten year term and vest twenty
percent (20%) after six months from the date of grant, with an
additional twenty percent (20%) becoming vested and exercisable on
each of the first, second, third and fourth anniversaries of the
grant. Termination of the employee for cause or voluntary resignation
shall cause forfeiture of all awards one day after service to the
Company terminates. In the event of an involuntary termination
without good cause, or in the event of termination by reason of
disability, retirement or death, options earned as of the date of
termination are forfeited one year after service to the Company ends.
The following table sets forth the aggregate option exercises during
the last fiscal year and the value of outstanding options at year-end held by
the Named Officers:
OPTION EXERCISES AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF
SHARES UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
ACQUIRED ON AT YEAR-END OPTIONS AT YEAR-END
NAME EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ----------- ------------- ----------- -------------
(#) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C>
Robert F. Vagt 0 180,000 270,000 0 0
William D. Hubbard 0 9,600 46,400 1,600 22,150
David W. Martin 0 4,600 20,900 3,850 15,400
Gerald R. Colley 0 4,000 21,000 3,063 14,125
E. Lynn Hill 0 84,600 29,400 129,163 28,775
</TABLE>
-9-
<PAGE> 13
STOCK OWNERSHIP
The following table sets forth, with respect to each Named Officer,
the number of shares beneficially owned by such person and the percentage such
number constitutes of the entire class as of March 15, 1994.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF
--------------------------
MARCH 15, 1994
--------------
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1)(2) CLASS
------------------------ ---------------- ----------
<S> <C> <C>
Robert F. Vagt 195,547 *
William D. Hubbard 16,502 *
David W. Martin 6,320 *
Gerald R. Colley 5,185 *
E. Lynn Hill 97,358 *
All officers and directors as a group (20 persons) 1,710,029 5.7%
</TABLE>
- ----------------------------------------
* Represents less than 1%
(1) The persons listed have sole voting and investment power with respect
to their shares. Shares of common stock beneficially owned as of
March 15, 1994 includes shares of common stock of the Company that
could be acquired within 60 days after March 15, 1994, upon the
exercise of options granted pursuant to the Company's stock option
plan as follows: Mr. Vagt, 180,000 shares; Mr. Hubbard, 11,200
shares; Mr. Martin, 6,200 shares; Mr. Colley, 5,000 shares; and
Mr. Hill, 97,200 shares.
(2) Common stock ownership for the persons listed includes shares arising
from participation in Global Natural Resources Inc. Employees 401(K)
Savings Plan as follows: Mr. Vagt, 547 shares; Mr. Hubbard, 302
shares; Mr. Martin, 120 shares; Mr. Colley, 185 shares; and Mr.
Hill, 158 shares.
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's Common Stock to the NYSE Index and to an index of peer companies for
the Company's last five fiscal years. The companies in the peer index were
selected based on the following criteria: (i) total assets ranging from
approximately $100 million to $625 million, (ii) total revenue ranging from
approximately $40 million to $300 million and (iii) oil and gas and related
revenue comprising at least 64% of total revenue. The companies included in the
peer index were American Exploration Co., Crystal Oil Corporation, Forest Oil
Corporation, Harkin Energy Corporation, Kelley Oil and Gas Partners, Plains
Resources, Inc., Plains Petroleum Co., Pogo Producing Co., Wainoco Oil
Corporation and Wiser Oil Co. The graph assumes that the value of the
investment in the Company's Common Stock and each index was $100 at December
31, 1988 and that all dividends were reinvested.
-10-
<PAGE> 14
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) GNR Peer Group NYSE Index
- --------------------- --- ---------- ----------
<S> <C> <C> <C>
1988 $100 $100 $100
1989 $147 $147 $128
1990 $130 $ 98 $122
1991 $186 $108 $158
1992 $121 $101 $166
1993 $135 $114 $188
</TABLE>
BENEFIT PLANS
The Company maintains a 401(K) employee savings plan ("Savings Plan")
and a defined benefit pension plan ("Pension Plan"). These plans are briefly
described below.
Savings Plan - The Savings Plan was established by the Company
effective October 1, 1993. The Savings Plan offers eligible employees an
opportunity to make long-term investments on a regular basis through salary
contributions, which are supplemented by matching employer contributions. All
employees at least eighteen (18) years of age and that have completed six (6)
months of service are eligible to participate. The Company will match up to
50% of the first 5% of compensation deferred. The employee's contribution
could not exceed $8,994 in 1993. The limit amount is increased each year to
reflect cost-of-living increases and is $9,240 in 1994. The employer matching
contribution is made in the Company's common stock.
The Savings Plan is intended to qualify as a Section 401(K) cash or
deferred compensation arrangement whereby, an employee's contributions and the
employer's matching contributions are not subject to federal income taxes at
the time of the contribution to the Savings Plan, and the Savings Plan is
subject to the restrictions imposed by the Internal Revenue Code of 1986, as
amended. Investment alternatives to which contributions may be allocated by
the participants include a fixed income fund, a balanced fund, a diversified
fund and a concentrated fund. Only the employer matching contribution is
allowed to be made in Company common stock. Employees may, however, direct the
sale of Company common stock held in their account and allocate proceeds to any
of the other investment alternatives.
Pension Plan - The Pension Plan which covers employees of the Company
and employees of affiliated companies, who are at least 21 years old and who
have completed certain service requirements.
-11-
<PAGE> 15
The Company pays the entire cost of the Pension Plan, the amount of
the contribution being determined annually on an actuarial cost method under
which contributions are determined for all participants as a group, and
individual participant contributions are not readily available. Aggregate
contributions to the Pension Plan for 1993 were approximately 8.75% of total
remuneration of participants covered under the Pension Plan.
The following table shows the estimated annual benefits payable upon
retirement at age 65 to persons in specified compensation and years-of-service
classifications under the Pension Plan.
PENSION PLAN TABLE
YEARS OF SERVICE AT RETIREMENT
<TABLE>
<CAPTION>
10 15 20 25 30 35 40
AVERAGE SALARY YEARS YEARS YEARS YEARS YEARS YEARS YEARS
- -------------- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50,000 $15,000 $17,500 $20,000 $21,250 $22,500 $23,750 $25,000
75,000 22,500 26,250 30,000 31,875 33,750 35,625 37,500
100,000 30,000 35,000 40,000 42,500 45,000 47,500 50,000
150,000 45,000 52,500 60,000 63,750 67,500 71,250 75,000
200,000 45,000 52,500 60,000 63,750 67,500 71,250 75,000
300,000 45,000 52,500 60,000 63,750 67,500 71,250 75,000
400,000 45,000 52,500 60,000 63,750 67,500 71,250 75,000
500,000 45,000 52,500 60,000 63,750 67,500 71,250 75,000
</TABLE>
The term "average salary" in the table refers to the average annual
compensation, including bonuses and overtime pay, during the period of 60
consecutive months which results in the highest such average.
The normal retirement benefit is a monthly benefit that commences on
the first day of the month coincident with or next following the later of (i)
the attainment of age 65 and (ii) the fourth anniversary of the date on which
participation commenced, and is payable for the lifetime of the participant in
an amount that it is equal to 3% of the average salary for each of the first
ten years of service plus 1% of the average salary for each of the next ten
years of service plus 1/2% of the average salary for each year of service in
excess of twenty, limited in 1993 to $115,641 per year for those whose social
security retirement age is 65. The estimated number of years of credited
service completed through December 31, 1993 by the named officers are as
follows:
<TABLE>
<CAPTION>
NAME YEARS NAME YEARS
---- ----- ---- -----
<S> <C> <C> <C>
Robert F. Vagt Two E. Lynn Hill Five
William D. Hubbard Two Gerald R. Colley One
David W. Martin One
</TABLE>
-12-
<PAGE> 16
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act and the rules issued thereunder
require the Company's executive officers and directors, and persons who own
more than 10% of a registered class of equity securities of the Company, to
file with the Securities and Exchange Commission and the New York Stock
Exchange reports of ownership and changes in ownership of such securities.
Based solely on its review of the copies of such reports furnished to the
Company, or written representations that no reports were required, the Company
believes that during 1993, its executive officers, directors and greater than
10% shareholders complied with all applicable filing requirements, except that
Mr. Bennett, Mr. Lamphere, and Mr. Pascal each failed to timely file a report
on Form 4 covering the grant of 2,500 non-qualified stock options to Directors
of the Company.
CERTAIN TRANSACTIONS
During 1993, John E. McFarlane was paid $43,750 under a consulting
agreement which expired April 15, 1993.
INDEPENDENT ACCOUNTANTS
The firm of KPMG Peat Marwick has acted as independent public
accountants for the Company continually since 1976. The Board of Directors
contemplates the continuation of the services of that firm for the year ended
December 31, 1994. However, the Board of Directors will act pursuant to the
recommendation of the Audit Committee in connection with the selection of
independent accountants. A representative of KPMG Peat Marwick is expected to
be present at the Annual Meeting and will have an opportunity to make a
statement and respond to shareholder questions.
SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals intended to be presented by shareholders at the Company's
1995 Annual Meeting must be received by the Company, at the address set forth
on the first page of this Proxy Statement, no later than December 7, 1994, in
order to be included in the Company's proxy statement and form of proxy
relating to such meeting. Shareholder proposals must also be otherwise
eligible for inclusion.
OTHER MATTERS
Management of the Company does not know of any other matter to be
acted upon at the Annual Meeting, and so far as is known to management, no
matters are to be brought before the Annual Meeting except as specified in the
notice thereof. However, if any other matters should come before the Annual
Meeting, it is intended that proxies will be voted in respect thereof in
accordance with the judgment of the persons holding such proxies.
-13-
<PAGE> 17
- --------------------------------------------------------------------------------
GLOBAL NATURAL RESOURCES INC.
PROXY FOR 1994 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Robert F. Vagt and Eric Lynn Hill, and either of them, with full
power of substitution, are hereby authorized as attorneys and proxies
of the undersigned to represent and to vote the common stock of the
undersigned at the Annual Meeting of Shareholders of Global Natural
Resources Inc. (the "Company") to be held at The Ritz-Carlton, 1919
Briar Oaks Lane, Houston, Texas on May 3, 1994 at 9:00 a.m., and any
adjournment(s) thereof, with authority to vote as follows:
<TABLE>
<S> <C>
ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as listed to the contrary) all nominees listed below
Class II -- term ending 1997
Sidney R. Petersen, James G. Niven
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL STRIKE
A LINE THROUGH THE NOMINEE'S NAME.)
In accordance with their discretion, said attorneys and proxies
are authorized to vote upon such other matters as may properly come
before such meeting or any adjournment(s) thereof.
- --------------------------------------------------------------------------------
<PAGE> 18
- --------------------------------------------------------------------------------
YOUR PROXY, IF PROPERLY SIGNED, WILL BE VOTED IN ACCORDANCE WITH
THE SPECIFICATIONS MADE HEREON, IF NOT OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL AND IN ACCORDANCE WITH THE JUDGEMENT OF
THE PERSONS VOTING THE PROXY WITH RESPECT TO ANY OTHER MATTERS WHICH
MAY PROPERLY BE PRESENTED AT THE MEETING.
------------------------------------------
------------------------------------------
SIGNATURE(S)
DATED ------------------------------, 1994
{Please sign exactly as name appears hereon
and return in accompanying postage-paid
envelope. When signing as attorney,
executor, administrator, trustee, guardian,
etc., give full title of such. For joint
accounts, each joint owner should sign.}
- --------------------------------------------------------------------------------
