<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 / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GLOBAL NATURAL RESOURCES INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 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.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
<PAGE> 2
[LOGO] GLOBAL NATURAL RESOURCES INC.
Robert F. Vagt
CHAIRMAN OF THE BOARD
April 3, 1995
To Our Shareholders:
You are cordially invited to attend the 1995 Annual Meeting of
Shareholders of Global Natural Resources Inc., which will be held in the
Director's Room of The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas at
9:00 a.m. on Tuesday, May 9, 1995.
The accompanying Notice of Annual Meeting and Proxy Statement describe
the formal matters to be acted upon at the meeting. In addition, we will
review the Company's operations during the past year and discuss the future of
the Company. 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,
Robert F. Vagt
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 9, 1995
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 Director's Room of The Ritz-Carlton, 1919 Briar Oaks Lane,
Houston, Texas on Tuesday, May 9, 1995 at 9:00 a.m. (C.D.T.), for the following
purposes:
(1) To elect one director to hold office for a term of one year,
one director to hold office for a term of two years and three
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,
1995 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 3, 1995
<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 1995 Annual Meeting of
Shareholders (the "Annual Meeting") of the Company to be held in the Director's
Room of The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas at 9:00 a.m.
(C.D.T.) on Tuesday, May 9, 1995 (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 3, 1995.
VOTING SECURITIES AND PRINCIPAL HOLDERS
On March 15, 1995, the record date for those entitled to notice of and
to vote at the Annual Meeting, there were outstanding 29,437,240 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, 1995.
-1-
<PAGE> 5
<TABLE>
<CAPTION>
Beneficial Ownership as of
--------------------------
March 15, 1995
--------------
Amount and
Nature of Percentage
Benefical of
Name and Address of Beneficial Owner Ownership Class
------------------------------------ ----------- ------------
<S> <C> <C>
Interamerican Securities Corp. 1,520,048 (1) 5.2 %
One Riverway, Suite 2450
Houston, Texas 77056
Metropolitan Life Insurance Company 2,081,200 (2) 7.1 %
One Madison Avenue
New York, New York 10010-3690
The Prudential Insurance Company 6,311,547 (3) 21.4 %
of America
Prudential Plaza
Newark, New Jersey 07102-3777
</TABLE>
--------
(1) Information on Interamerican Securities Corp. ("Interamerican") is from
Interamerican's Schedule 13G dated February 6, 1995, filed under the
Exchange Act. Shares reported include 265,330 shares beneficially owned by
certain shareholders of Interamerican, as to which Interamerican disclaims
beneficial ownership.
(2) Information on Metropolitan Life Insurance Company ("Met Life") is from Met
Life's Schedule 13G dated February 13, 1995, filed under the Exchange Act.
The shares were acquired by a subsidiary of Met Life, State Street Research
and Management Company, Inc. ("State Street"). State Street has the sole
power to vote or to direct the vote of 1,440,000 of the shares. State
Street disclaims any beneficial interest in all of the securities as the
shares are owned by various clients.
(3) Information on The Prudential Insurance Company of America ("Prudential")
is from Prudential's Schedule 13G dated February 10, 1995, 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, one class I, one class II
and three class III 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. Ms. Sjoman, a Class III
nominee, has not previously served as a director of the Company. All other
nominees for director are currently members of the Board of Directors. Mr.
Macdougall and Mr. Carlton were appointed by the Board to replace Mr. Lamphere
and Mr. Pascal. Mr. Lamphere and Mr. Pascal resigned from the Board effective
May 31, 1994. 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 five
nominees for election as directors and the four continuing directors of the
Company, including the principal occupations of each during the
-2-
<PAGE> 6
last five years and the number of shares of Common Stock beneficially owned by
each of them as of March 15, 1995:
<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 1995(3) Class
---------------------- --- -------------- ------------ ------------
<S> <C> <C> <C> <C>
NOMINEES
CLASS I - TERM EXPIRES IN 1996
------------------------------
PATRICK L. MACDOUGALL . . . . . . . . . . . . . . . 55 1994 10,000 *
Chairman of the Board and Chief
Executive Officer of West Merchant
Bank Limited for more than five years.
CLASS II - TERM EXPIRES IN 1997
-------------------------------
PAUL E. CARLTON . . . . . . . . . . . . . . . . . . 69 1994 12,000 *
Independent investor since 1984.
Prior thereto, was Group Vice
President, Domestic Exploration and
Production of Getty Oil Co.
CLASS III -- TERM EXPIRES IN 1998
---------------------------------
J. CHARLES HOLLIMON (a)(b) . . . . . . . . . . . . . 46 1985 25,000 *
Independent oil and gas operator for more than
five years.
LINDA F. SJOMAN . . . . . . . . . . . . . . . . . . . 48 -- --
Secretary General and member of the Board of
Directors of the Petroleum Advisory Forum of Russia
since July 1993. Prior thereto, was Special
Counsel in the Moscow office of Vinson & Elkins
L.L.P. from February 1990 to July 1993. Prior
thereto, was engaged in private law practice for
more than five years.
ROBERT F. VAGT(c)(d) . . . . . . . . . . . . . . . . 48 1992 286,195(5) *
Chairman of the Board of the Company since December
1994. 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.
CONTINUING DIRECTORS
CLASS I -- TERM EXPIRES IN 1996
-------------------------------
WILLIAM L. BENNETT(b)(c) . . . . . . . . . . . . . 45 1990 23,925(6) *
Chairman of the Board of HealthPlan Services
Corporation since March 1995. Prior thereto,
served as Chairman and Chief Executive Officer of
Noel Group Inc. ("Noel") from July 1994 to March
1995 and from April 1988 to November 1991. Served
as Co-Chairman of the Board of Directors and Chief
Executive Officer of Noel from November 1991 to
July 1994.
</TABLE>
-3-
<PAGE> 7
<TABLE>
<S> <C> <C> <C> <C>
JOHN A. BROCK(a)(c) . . . . . . . . . . . . . . . . 64 1993 12,500 *
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.
CLASS II - TERM EXPIRES IN 1997
-------------------------------
SIDNEY R. PETERSEN (b) . . . . . . . . . . . . . . 64 1992 17,000 (4) *
Independent investor since 1984.
Prior thereto, was Chairman and Chief Executive
Officer of Getty Oil Co.
JAMES G. NIVEN (c)(d) . . . . . . . . . . . . . . . 49 1985 351,666 1.2%
Chairman of the Board of Directors of Simmons
Outdoor Corporation since December 1994.
Chairman of the Board of the Company from November
1989 to December 1994. 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.
</TABLE>
----------
* Represents less than 1%
(1) Directorships other than those listed in the table are: William L.
Bennett--Noel Group, Inc., HealthPlan Services Corporation, Lincoln Snacks
Company, Belding Heminway Company, Simmons Outdoor Corporation, Allegheny
Power Systems; and Sylvan Inc.; Sidney R. Petersen--Avery Dennison
Corporation, Broadway Stores, Inc., Group Technologies Corporation, Nicor,
Inc., and Union Bank; James G. Niven--Noel Group, Inc., The Prospect
Group, Inc., Lincoln Snacks Company, HealthPlan Services Corporation,
Tatham Offshore, Inc., Simmons Outdoor Corporation, The Lynton Group,
Inc., and is an advisory director of Houston National Bank; 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 written recommendations by shareholders for nominees for
director at any meetings of shareholders called for the election of
directors delivered to the Nominating Committee c/o E. Lynn Hill, Secretary,
Global Natural Resources Inc., 5300 Memorial Drive, Suite 800, Houston,
Texas 77007 not fewer than fourteen (14) days nor more than fifty (50) days
prior to such meeting. Each such notice shall set forth (i) the name,
business address, if any, and residence address of the nominator, (ii) the
name, age, business address and, if known, resident address of each nominee
proposed in such notice, (iii) the principal occupation or employment of
each such nominee, (iv) the number of shares of the Company which are owned
beneficially and the number of shares which are owned of record by each such
nominee, and (v) the number of shares of the Company which are owned
beneficially and the number of shares which are owned of record by the
nominator. 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, 1995 includes shares of Common Stock of the Company that
could be acquired within 60 days after March 15, 1995, upon the exercise of
options granted pursuant to the Company's stock option plans as follows:
Mr. Petersen, 15,000 shares; Mr. Niven, 325,000 shares; Mr. Hollimon,
15,000 shares; Mr. Vagt, 270,000 shares; Mr. Bennett, 15,000 shares; Mr.
Brock, 12,500 shares; Mr. Macdougall, 10,000 shares; and Mr. Carlton,
10,000 shares.
(4) Of the 17,000 shares held by Mr. Petersen, 2,000 are held in The Petersen
Family Trust, as to which he is one of two trustees.
(5) Mr. Vagt's common stock ownership includes 1,195 shares arising from
participation in Global Natural Resources Inc. Employees 401(K) Savings
Plan.
(6) Of the 8,295 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.
During 1994, the Board of Directors held seven meetings, the
Compensation Committee held three meetings, the Audit Committee held three
meetings, and the Nominating Committee held two meetings. No incumbent
director attended fewer than 75% of the total meetings held by the Board and
all committees of which they were members.
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 41 Vice President - Land of Global Natural Resources
Vice President - Land and Assistant Corporation of Nevada ("GNRC"), a wholly-owned subsidiary
Secretary since July 1993. of the Company 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 44 Vice President - International Exploration of the Company
Senior Vice President - International from July 1993 to December 1994; Vice President -
Exploration since December 1994. International Exploration of GNRC since October 1992; Vice
President and Exploration Director of Hadson Europe, Inc.
from August 1986 to October 1992.
Gregory S. Cusack 35 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 40 Vice President - Exploration of GNRC since September 1991;
Vice President - Exploration since Manager of Exploration from August 1991 to September 1991;
July 1993. Chief Geologist from May 1988 to August 1991.
E. Lynn Hill 49 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.
</TABLE>
-5-
<PAGE> 9
<TABLE>
<S> <C> <C>
William D. Hubbard 51 Senior Vice President - Exploration of GNRC since June
Senior Vice President - 1992; Division Exploration Manager for Santa Fe Energy,
Domestic Exploration since July 1993. Inc. from May 1992 until June 1992; Vice President -
Exploration of Adobe Resources Corporation from October
1987 to May 1992.
David W. Martin 56 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 48 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
1991; Vice President - Finance and Administration for
Felmont Oil Company from January 1988 to 1989.
Darrell G. Molnar 48 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 34 Manager of Gas Supply for USAgas from April 1990 until May
Vice President - USAgas Pipeline, 1992; Manager of Gas Supply for Amalgamated Pipeline Co.
Inc., 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 42 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 intend 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.
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
-6-
<PAGE> 10
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 specific performance
goals for the Company and for each individual, and is administered by the
Compensation Committee. Performance goals for 1994 required that production of
oil and gas, cash flow and oil and gas reserves reach the levels established in
the Company's capital budget and operating plan. In addition, a goal was
established for the Company's stock price performance compared to the Company's
peer group. Based on performance versus 1994 objectives, the Committee awarded
$447,000 in bonuses to 13 individuals in January 1995.
In January 1995 the Committee authorized, and the Company issued,
approximately 144,000 non-qualified stock options to 31 executive officers and
key employees. 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 was granted 450,000
non-qualified stock options. Under the Company's annual management incentive
plan, the Committee awarded Mr. Vagt a bonus of $180,000 in respect of 1994.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
William L. Bennett, Chairman
J. Charles Hollimon
Sidney R. Petersen
-7-
<PAGE> 11
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued during
each of the Company's last three fiscal years to the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Name and Principal Securities Underlying All Other
Position Year Salary Bonus Options Compensation(1)
-------- ---- ------ ----- ------- ---------------
($) ($) (#) ($)
<S> <C> <C> <C> <C> <C>
Robert F. Vagt 1994 300,000 180,000 -- 4,620
Chairman of the Board, President 1993 280,000 190,000 -- 4,000
and Chief Executive Officer 1992 173,000 (2) -- 450,000 71,748 (3)
William D. Hubbard 1994 160,650 59,000 -- 2,310
Senior Vice President - 1993 153,000 50,000 36,000 2,206
Exploration 1992 77,558 (2) -- 20,000 --
David W. Martin 1994 147,000 54,000 -- 2,310
Senior Vice President 1993 140,000 20,000 18,000 875
1992 32,250 (2) -- 7,500 --
Gerald R. Colley 1994 121,800 58,000 -- 1,540
Senior Vice President - 1993 116,000 25,000 17,500 1,350
International Exploration 1992 23,693 (2) -- 500 --
E. Lynn Hill 1994 131,250 42,000 -- 3,281
Senior Vice President - 1993 125,000 15,000 14,000 1,156
Finance and Administration, 1992 115,833 -- -- --
Secretary-Treasurer
</TABLE>
----------
(1) Amounts received in 1993 and 1994 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 $71,748 payment to Mr. Vagt in 1992 is associated with the sale of his
prior home and relocation to Houston, Texas.
-8-
<PAGE> 12
STOCK OPTIONS
The following table sets forth the aggregate option exercises during the
last fiscal year and the value of outstanding options at year-end held by the
Named Officers:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of
Shares Unexercised Options Unexercised In-the-Money
Acquired on at Year-End Options at Year-End
Name Exercise Exercisable Unexercisable Exercisable Unexercisable
---- -------- ----------- ------------- ----------- -------------
(#) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C>
Robert F. Vagt 0 270,000 180,000 202,500 135,000
William D. Hubbard 0 26,400 29,600 35,000 46,250
David W. Martin 0 11,700 13,800 23,450 27,675
Gerald R. Colley 0 11,500 13,500 22,281 26,156
E. Lynn Hill 0 99,600 14,400 267,363 33,075
</TABLE>
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, 1995.
<TABLE>
<CAPTION>
Beneficial Ownership as of
--------------------------
March 15, 1995
--------------
Amount and
Nature of Percentage
Beneficial of
Name of Beneficial Owner Ownership Class
------------------------ --------- ------------
(1)(2)
------
<S> <C> <C>
Robert F. Vagt 286,195 *
William D. Hubbard 33,626 *
David W. Martin 13,747 *
Gerald R. Colley 12,901 *
E. Lynn Hill 107,801 *
All officers and directors as a group (20 1,055,759 3.6%
persons)
</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, 1995 includes shares of common stock of the Company that
could be acquired within 60 days after March 15, 1995, upon the
exercise of options granted pursuant to the Company's stock option
plan as follows: Mr. Vagt, 270,000 shares; Mr. Hubbard, 28,000
shares; Mr. Martin, 13,300 shares; Mr. Colley, 12,500 shares; and
Mr. Hill, 107,200 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, 1,195 shares; Mr. Hubbard, 626
shares; Mr. Martin, 447 shares; Mr. Colley, 401 shares; and Mr.
Hill, 601 shares.
-9-
<PAGE> 13
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, 1989 and that all dividends were reinvested.
Five Year Cumulative Total Return
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GNR $100 $89 $127 $83 $92 $108
Peer Group $100 $64 $66 $67 $75 $70
NYSE Index $100 $96 $124 $130 $148 $145
---------------------------------------------------------------------------------------------------------------------
</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
-10-
<PAGE> 14
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 for 1994 and 1995 cannot exceed $9,240. 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 covers employees of the Company and
employees of affiliated companies who are at least 21 years old and who have
completed certain service requirements.
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 1994 were approximately 8.98% 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
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
------------------------------
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.
-11-
<PAGE> 15
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 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 1994 to $118,800 per year for those whose social security
retirement age is 65. The estimated number of years of credited service
completed through December 31, 1994 by the named officers are as follows:
<TABLE>
<CAPTION>
Name Years Name Years
---- ----- ---- -----
<S> <C> <C> <C>
Robert F. Vagt Three E. Lynn Hill Six
William D. Hubbard Three Gerald R. Colley Two
David W. Martin Two
</TABLE>
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 1994, its executive officers, directors and greater than
10% shareholders complied with all applicable filing requirements.
INDEPENDENT ACCOUNTANTS
The firm of KPMG Peat Marwick LLP 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, 1995. 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 LLP 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
1996 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 4, 1995, 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.
-12-
<PAGE> 16
GLOBAL NATURAL RESOURCES INC.
PROXY FOR 1995 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Robert F. Vagt and E. 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 9, 1995
at 9:00 a.m., and any adjournment(s) thereof, with authority to vote as
follows:
<TABLE>
<S> <C> <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 I - term ending 1996 Class II - term ending 1997 Class III - term ending 1998
Patrick L. Macdougall Paul E. Carlton J. Charles Hollimon, Linda F. Sjomon, Robert F. Vagt
</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.
THIS 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 __________________, 1995
[Please sign exactly as name
appears hereon and return in
accompanying postage-prepaid
envelope. When signing as
attorney, executor,
administrator, trustee,
guardian, etc., give full
title of such. For joint
accounts, each joint owner
should sign.]
