<PAGE> 1
SCHEDULE 14A
(RULE 14A)
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Belden & Blake Corporation
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(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):
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
Not Applicable
/ / 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:
Not Applicable
(2) Form, Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Not Applicable
(4) Date Filed:
Not Applicable
<PAGE> 2
BELDEN & BLAKE CORPORATION
5200 STONEHAM ROAD
NORTH CANTON, OHIO 44720
_________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_________________________
Notice is hereby given that the Annual Meeting of Shareholders of
Belden & Blake Corporation will be held at the Sheraton Inn Canton, 4375 Metro
Circle N.W., Canton, Ohio, on May 25, 1995 at 2:30 p.m., local time, for the
following purposes:
1. To elect four directors, each for a term of three years.
2. To consider and vote upon an amendment to the Company's Stock Option
Plan increasing the number of shares available for issuance
thereunder.
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on March 31, 1995
are entitled to notice of and to vote at the meeting or any adjournment
thereof.
You are cordially invited to attend the meeting in person. Whether or
not you expect to be present, you are requested to complete, sign, date and
mail the enclosed proxy in the enclosed return envelope to assure that your
shares will be represented at the meeting.
By order of the Board of Directors
Joseph M. Vitale
Secretary
April 21, 1995
<PAGE> 3
BELDEN & BLAKE CORPORATION
5200 STONEHAM ROAD
NORTH CANTON, OHIO 44720
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of Belden & Blake
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies to be voted at the Annual Meeting of
Shareholders to be held on May 25, 1995 and any adjournment thereof. This
Proxy Statement and the accompanying form of proxy were initially mailed to
shareholders on or about April 21, 1994.
If a proxy in the accompanying form is duly executed and returned, the
shares represented thereby will be voted as specified therein, and if no
specification is made, the shares will be voted in accordance with the
recommendations of the Board of Directors. The proxy may be revoked prior to
its exercise by executing a later dated proxy or by giving notice of revocation
to the Company in writing or in open meeting.
Solicitation of proxies may be made by mail, personal interview,
telephone or telegraph by directors, officers and regular employees of the
Company without special compensation. Arrangements have also been made with
brokerage firms and other custodians, nominees and fiduciaries for the
forwarding of proxy soliciting material to the beneficial owners of the voting
securities of the Company, and the Company will reimburse such brokerage firms,
custodians, nominees and fiduciaries for their expenses in connection
therewith.
Only shareholders of record at the close of business on March 31, 1995
will be entitled to notice of and to vote at the meeting. On that date there
were 7,106,246 shares of Common Stock and 24,000 shares of Class II Serial
Preferred Stock outstanding and entitled to vote, and each such share is
entitled to one vote on each matter to be considered. There are no cumulative
voting rights in the election of directors.
ELECTION OF DIRECTORS
The Amended Code of Regulations of the Company provides that the Board
of Directors shall be divided into three (3) classes as nearly equal in number
as possible and that each director shall be elected for a term of three (3)
years with the term of one class expiring each year.
Four (4) directors are to be elected at the 1995 Annual Meeting to
serve for a term of three (3) years and until their respective successors are
elected. The Board of Directors has designated as nominees for election as
directors Messrs. Henry S. Belden IV, Max L. Mardick, George M. Smart and
Joseph M. Vitale, all of whom are currently directors of the Company. It is
intended that, unless authority is withheld, proxies given will be voted "FOR"
all the nominees named above. In case any nominee is unable to serve (which is
not now anticipated by the Company), proxies will be voted for a substitute
designated by the Board of Directors.
<PAGE> 4
Pursuant to the Company's Amended Code of Regulations, written notice
of other qualifying nominations for election to the Board of Directors which
shareholders may wish to make must have been received by the Secretary of the
Company no later than March 1, 1995. As no notice of such other nominations
was received, no other nominations for election to the Board of Directors may
be made by shareholders at the meeting.
NOMINEES--TERMS TO EXPIRE IN 1998
HENRY S. BELDEN IV
Mr. Belden, age 55, is Chairman of the Board and Chief Executive
Officer of the Company. He has been Chairman and Chief Executive Officer of
The Canton Oil & Gas Company, a wholly-owned subsidiary and predecessor of the
Company, since 1982. Mr. Belden has been in the continuous employ of The
Canton Oil & Gas Company since 1969 and, after serving in various operational
and managerial capacities, including Supervisor of Exploration and Development,
Production Superintendent and Assistant Treasurer, was named President in 1982.
Prior to 1969, he was employed by Ashland Oil & Refining Co., Halliburton
Services, Inc. and several well completion contractors. Mr. Belden began in
the oil and gas business in 1955 as a roustabout for The Canton Oil & Gas
Company and as a lease agent for independent oil and gas lease brokers and
petroleum companies. Mr. Belden is a director of Phoenix Packaging Corporation,
a member of the Executive Committee and Board of Trustees of the Ohio Oil & Gas
Association and a member of the Society National Bank Board of
Directors--Canton District. He has served as a director of the Company since
1991.
MAX L. MARDICK
Mr. Mardick, age 60, is President and Chief Operating Officer of the
Company. He has been President and Chief Operating Officer of The Canton Oil &
Gas Company since 1990, having previously served as its Executive Vice
President and Chief Operating Officer from 1988 to 1990. Prior to joining The
Canton Oil & Gas Company in 1988, Mr. Mardick was employed by The Shell Oil
Company for over thirty years and has been engaged in or closely associated
with drilling and producing operations and engineering and exploration activity
throughout his career. From 1977 to 1980, he was in charge of Shell's Michigan
drilling and production operations. From 1980 until 1986, he served as
Production Manager of the Rocky Mountain, Onshore and Eastern Divisions, after
which he was Manager-Property Acquisitions/Business Development for Shell's
Exploration and Production organization. Mr. Mardick has been a director of
the Company since 1992.
GEORGE M. SMART
Mr. Smart, age 49, is President and Chairman of the Board of Phoenix
Packaging Corporation, a manufacturer of easy-opening lids. From 1978 to 1993,
he was President and Chief Executive Officer of Central States Can Company, and
from 1989 to 1992, he was an Executive Vice President of Van Dorn Company, the
parent company of Central States. He is also a director of the Ohio Edison
Company and Commercial Intertech Corp. Mr. Smart has served as a director of
the Company since 1992.
2
<PAGE> 5
JOSEPH M. VITALE
Mr. Vitale, age 53, is Senior Vice President Legal, General Counsel and
Secretary of the Company. He has been Senior Vice President Legal of The
Canton Oil & Gas Company since 1989 and has served as its General Counsel since
1974. Mr. Vitale has supervised all legal matters affecting The Canton Oil &
Gas Company since joining the organization in 1972. He has been a director of
the Company since 1991.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1996
THEODORE V. BOYD
Mr. Boyd, age 52, has been Chairman of the Beaverkettle Company, a
Canton-based broadcasting company, since November 1978. He is also a general
partner of the Willmoll Development Company and a member of the District
Marketing Board for Society National Bank. Mr. Boyd has served as a director
of the Company since 1992.
DAVID P. QUINT
Mr. Quint, age 44, is Managing Director of Rauscher Pierce & Clark,
Inc., an investment banking firm in which the Company is a minority
shareholder. Until 1993 he was Senior Vice President International of the
Company and had served as Vice President International of The Canton Oil & Gas
Company from 1982 to 1993, in which capacities he was principally responsible
for marketing and structuring foreign investment in the Company and its
predecessors.
RAYMOND D. SAUNDERS
Mr. Saunders, age 68, served as Executive Vice President and director
of Witco Corporation from 1986 until his retirement in 1991. First employed by
Continental Carbon Company, a Witco subsidiary, in 1947, Mr. Saunders was named
Corporate Vice President of Witco and General Manager of its International
Division in 1964 and became Vice President and General Manager of its
Kendall/Amalie Division in 1973. Mr. Saunders has served as a director of the
Company since 1992.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1997
RONALD E. HUFF
Mr. Huff, age 40, is Senior Vice President and Chief Financial Officer
of the Company. Since 1989 he has been Senior Vice President and Chief
Financial Officer of The Canton Oil & Gas Company, having previously served as
its Senior Controller from 1986 to 1989. From 1983 to 1986, Mr. Huff was
employed by Towner Petroleum Company in various capacities including Vice
President and Chief Accounting Officer. From 1980 to 1983, he served as
Manager of Financial Accounting for Sonat Exploration Company prior to which he
was Corporate Accounting Supervisor for Transco Companies, Inc. Mr. Huff has
been a director of the Company since 1991.
3
<PAGE> 6
GARY R. PETERSEN
Mr. Petersen, age 48, is a co-founder and partner of EnCap Investments
L.C., which serves as an institutional funds manager and a financial
intermediary to the energy industry. Prior to establishing that firm in 1987,
Mr. Petersen was Senior Vice President and Manager of the Corporate Finance
Division of the Energy Banking Group of Republic Bank Corporation in Houston,
Texas. He is a director of Nuevo Energy Company and a member of the American
Petroleum Institute, Independent Petroleum Association of America and the Texas
Mid-Continent Oil and Gas Association. Mr. Petersen has served as a director
of the Company since 1992.
PAUL R. BISHOP
Mr. Bishop, age 51, has been Chairman, President and Chief Executive
Officer of H-P Products, Inc., a manufacturer of central vacuum systems and
fabricated tubing and fittings, since 1977. He is a member of the Board of
Directors of Society National Bank and The Hawk Group of Companies, and
currently serves on the Budget Committee of the United States Olympic
Committee. Mr. Bishop has served as a director of the Company since 1994.
INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation
Committee. It does not have a Nominating Committee.
The Audit Committee, which consists of Theodore V. Boyd, George M.
Smart, Gary R. Petersen and Paul R. Bishop held three meetings in 1994. Its
functions are to review the plan and results of the annual audit by the
Company's independent accountants, to review the adequacy of the Company's
system of internal controls, to monitor related party transactions and to
recommend to the directors a firm of accountants to serve as the Company's
auditors.
The Compensation Committee consists of George M. Smart, Raymond D.
Saunders and Gary R. Petersen. The functions of the Compensation Committee are
to review and approve senior executive base and bonus compensation and to
administer the Company's Stock Option Plan. The Compensation Committee met
twice in 1994.
The Board of Directors held four meetings during 1994 and each director
attended at least 75% of the total number of meetings of the Board and
Committees on which he served.
Directors who are not officers or employees of the Company receive an
annual retainer of $15,000 plus $500 per Board and Committee meeting attended.
Under the Company's Non-Employee Director Stock Option Plan, approved
by shareholders at the 1994 Annual Meeting, stock options with respect to 2,000
shares of Common Stock of the Company were awarded to each of the non-employee
directors on May 28, 1994. Stock options for 2,000 shares will be granted to
non-employee directors following the 1995 Annual Meeting and each annual
meeting thereafter until the Plan expires in 2002. All non-employee directors
participate in the Plan on a non-discretionary basis. A maximum of 120,000
shares have been reserved for issuance under the Plan. The per share exercise
price of each option granted under the Plan will be 100% of the fair market
value of a share of Common Stock on the date such option is granted.
4
<PAGE> 7
<TABLE>
EXECUTIVE COMPENSATION
The following table shows the annual and long-term compensation for
services in all capacities to the Company during the fiscal years ended
December 31, 1994, 1993 and 1992 of the Company's Chief Executive Officer and
its other four most highly compensated executive officers.
<CAPTION>
Long-Term All Other
Annual Compensation Compensation Awards Compensation
--------------------------------------- ----------------------- --------------
Restricted No. of Shares
Name and Other Annual Stock Underlying
Principal Position Year Salary Bonus Compensation Awards Options/SARs
------------------ ---- ------ ----- ------------ ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Henry S. Belden IV 1994 $299,038 $39,720 $ -0- $ -0- 33,000 $15,165(3)
Chairman of the 1993 275,000 2,610 -0- -0- 35,000 28,623
Board and Chief 1992 254,808 34,437 -0- -0- -0- 7,436
Executive Officer
Max L. Mardick 1994 206,438 28,421 -0- -0- 20,000 9,419(4)
President and Chief 1993 175,000 13,252 -0- -0- 20,000 19,930
Operating Officer 1992 175,000 15,250 -0- 55,000(1) -0- 5,982
Ronald E. Huff 1994 157,354 17,608 -0- -0- 15,000 8,125(4)
Senior Vice 1993 151,500 10,315 -0- -0- 15,000 16,464
President and Chief 1992 151,485 15,250 -0- 55,000(1) -0- 5,512
Financial Officer
Joseph M. Vitale 1994 150,577 17,495 -0- -0- 15,000 7,615(4)
Senior Vice 1993 145,000 10,122 -0- -0- 15,000 15,601
President Legal, 1992 145,000 15,250 -0- 55,000(1) -0- 4,509
General Counsel
and Secretary
Ronald L. Clements 1994 151,731 22,514 5,000 -0- 15,000 7,892(4)
Senoir Vice 1993 150,000 10,287 5,000 -0- -0- 15,359
President of 1992 140,000 22,625 -0- 27,500(2) -0- 4,986
Exploration and
Production
<FN>
_________________________
(1) Market value at date of grant of 10,000 shares of restricted
Common Stock on May 12, 1992, which vests at the rate of 25% per year.
The market value of 10,000 shares of unrestricted Common Stock at
December 31, 1994 was $137,500.
(2) Market value at date of grant of 5,000 shares of restricted Common
Stock on May 12, 1992, which vests at the rate of 25% per year. The
market value of 5,000 shares of unrestricted Common Stock on December
31, 1994 was $68,750.
(3) Includes $5,422 as the portion of the total premium paid by the Company
in 1994 under a split-dollar insurance plan that is attributable to
term life insurance coverage for Mr. Belden and $9,743 in contributions
of cash and Common Stock to the Company's 401(k) Profit Sharing Plan
for his account.
(4) Represents contributions of cash and Common Stock to the Company's
401(k) Profit Sharing Plan for the account of the named executive
officers.
</TABLE>
5
<PAGE> 8
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
- - ------------------------------------------------------------------------
% of Total
Options/SARs
Options/ Granted to
SARs Employees in Exercise or Expiration Grant Date
Name Granted (1) Fiscal Year Base Price Date Present Value (2)
---- --------- ------------ ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Henry S. Belden IV 33,000 18.0% $12.375 5/27/04 $210,210
Max L. Mardick 20,000 10.9 12.375 5/27/04 127,400
Ronald E. Huff 15,000 8.2 12.375 5/27/04 95,550
Joseph M. Vitale 15,000 8.2 12.375 5/27/04 95,550
Ronald L. Clements 15,000 8.2 12.375 5/27/04 95,550
<FN>
_________________________
(1) Options granted are exercisable starting 12 months after the date
of grant, with 25% of the shares covered thereby becoming
exercisable at that time and an additional 25% becoming exercisable on
each successive anniversary date. The options were granted for a term
of ten years, subject to earlier termination on cessation of
employment.
(2) This is a hypothetical valuation using the Black-Scholes option
pricing model. The Company's use of this model should not be
considered as an endorsement of its accuracy at valuing options.
All stock option valuation methods, including the Black-Scholes model,
require a prediction about the future movement of the stock price.
Since all options are granted at an exercise price equal to the market
value of the Company's Common Stock on the date of grant, no value will
be realized if there is no appreciation in the market price of the
stock.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at FY-End Options/SARs at FY-End (1)
----------------------- ---------------------------
Shares
Acquired
on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Henry S. Belden IV -0- -0- 8,750 59,250 $32,813 $143,813
Max L. Mardick -0- -0- 5,000 35,000 18,750 83,750
Ronald E. Huff -0- -0- 3,750 26,250 14,063 62,813
Joseph M. Vitale -0- -0- 3,750 26,250 14,063 62,813
Ronald L. Clements -0- -0- -0- 15,000 -0- 20,625
<FN>
_________________________
(1) Values are calculated as the difference between the exercise price
of the options and the market value of the Company's Common Stock as of
December 31, 1994.
</TABLE>
6
<PAGE> 9
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company has an employment contract with Henry S. Belden IV which
provides for the continuation of his employment as Chairman and Chief Executive
Officer at an annual salary of $275,000 (subject to increase from time to time
by the Board of Directors) for a term of five years. The term is automatically
extended for an additional one-year period at the end of each full year of his
employment until he attains age 65, unless terminated by either party, in which
event the contract will terminate upon the earlier of the expiration of the
five-year term then in effect or his attaining age 65. The obligations of the
Company thereunder will terminate upon the death or total and permanent
disability of Mr. Belden or upon the termination of his employment for "cause"
(as defined therein). If the Board of Directors fails to re-elect him to the
offices of Chairman and Chief Executive Officer at any time during the term of
his employment, or if there is a substantial and adverse change in the
conditions or place of his employment or a significant reduction in
compensation or benefits in excess of such reductions applicable to senior
executives of the Company generally, Mr. Belden may elect to terminate his
employment and receive a lump sum payment equal to five times his total
compensation during the immediately preceding calendar year.
The Company has severance agreements with Messrs. Mardick, Huff and
Vitale which entitle each of them to receive lump sum severance payments
ranging from 100% to 200% of his respective "base amount" within the meaning of
Section 280G of the Internal Revenue Code (generally, his average annual total
compensation during the five-year period immediately preceding the year of
termination) in the event of the termination of his employment other than for
"cause" (as defined therein) or his resignation in response to a substantial
reduction in responsibilities, authority, position, compensation or location of
his place of work within three years following a change of control of the
Company.
The employment contract and severance agreements described above were
initially entered into by The Canton Oil & Gas Company in 1991 and assumed by
the Company in connection with the consolidation of the oil and gas properties
of Belden & Blake Energy Company and Belden & Blake International Limited with
a group of assets and companies owned by Henry S. Belden IV, including The
Canton Oil & Gas Company.
CERTAIN TRANSACTIONS
Rauscher Pierce & Clark, Inc., a corporation in which the Company has a
minority interest, was indebted to the Company in the amount of $629,329 at
December 31, 1994 for interest free advances made by the Company during 1994
and prior years. The largest amount of such indebtedness outstanding at any
time during 1994 was $655,432. David P. Quint, a director of the Company, is
the Managing Director of Rauscher Pierce & Clark, Inc.
In 1989, a subsidiary of the Company began leasing office space in
London, England, from Henry S. Belden, IV, the Company's Chairman and Chief
Executive Officer. The lease is for a term of six months subject to renewal
for successive six-month periods at the option of the lessee. Lease payments
for 1994 totaled $61,284 with $12,670 paid by the Company's subsidiary and
$48,614 paid by Rauscher Pierce & Clark, Inc. Effective January 1, 1995, the
entire lease obligation was assumed by Rauscher Pierce & Clark, Inc.
7
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, the Compensation Committee of the Board of Directors
consisted of George M. Smart, Raymond D. Saunders and Gary R. Petersen. All of
the persons who served on the Compensation Committee in 1994 are outside
directors.
Henry S. Belden IV, the Chairman and Chief Executive Officer of the
Company, is a director of Phoenix Packaging Corporation of which Mr. Smart is
President and Chairman of the Board.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
establishing and administering the Company's executive compensation programs.
The Committee has furnished the following report on Executive Compensation.
The Compensation Committee oversees all compensation programs for
senior management and reviews and approves plans and programs for all other
employees to ensure that such plans and programs are competitive and will serve
their primary function of attracting and retaining those employees who will
contribute significantly to the growth and profitability of the Company. The
Committee reviews management recommendations and ultimately determines salary
levels and short-term and long-term incentive awards for executive officers and
other employees at or above certain salary grade levels.
Executive officer compensation at the Company includes four components:
(1) base salary, (2) short-term performance incentives, (3) long-term
incentives, and (4) benefits.
The Company uses external salary surveys to assign a salary range to
each executive position. Salary range mid-points are targeted to be at the
50th percentile compared to industry competitors, so that positions are placed
in salary ranges with mid-points that approximate pay practices of competitors.
The Committee reviews and approves all salary changes for executive officers at
or above certain salary grade levels. Approval of individual salary changes
are based on the executive's performance, his position in the assigned salary
range and the Company's salary budget and competitive pay practices. In 1994
the salaries of executive officers generally were adjusted to reflect general
levels of wage and price inflation and, in the case of officers having base
salaries that were below current market levels, were additionally modified to
bring their salaries more in line with the competitive market rates for their
positions. This approach gives each officer the opportunity to exceed market
level compensation through incentive pay and reflects the Committee's
philosophy that as an executive's level of responsibility increases, a greater
portion of potential compensation opportunity should be based on performance
incentives.
Short-term performance incentives consisted of (i) profit sharing
awards and (ii) bonuses to executive officers under an executive incentive
program.
8
<PAGE> 11
In order to provide an incentive for all employees to focus on
profitability, the Committee recommended and the full Board of Directors
approved in early 1993 an incentive program under which a fixed percentage of
the Company's pre-tax income would be set aside for profit sharing awards to
all employees. Pursuant to that program, profit sharing awards were made to
all employees in 1994 aggregating $340,000, of which half was paid in cash to
the employees and half, consisting of Company Common Stock, was contributed to
the Company's 401(k) Plan for their respective accounts. The profit sharing
awards were allocated to all full-time employees of the Company, including the
named executive officers, on the basis of salary, and are included in the
amounts shown in the "Bonus" and "All Other Compensation" columns in the
Summary Compensation Table.
The Company also has an executive incentive program designed to
recognize the contributions of senior executives to the over-all performance of
the Company. At the end of each fiscal year, the Committee is presented with
management's recommendations for executive incentive bonus awards. The
Committee then reviews the recommendations and based upon its assessment of the
Company's performance makes a determination as to the acceptance or
modification of such recommendations. In determining the amount of the
executive incentive bonus pool for 1994, the Committee's judgment was based on
its assessment of the Company's overall performance rather than any formula or
weighting of any particular performance measures. Some of the specific factors
considered by the Committee included (i) the 14% increase in revenue, the 19%
increase in net income and the 67% increase in cash flow, (ii) the substantial
additions to the Company's proved oil and gas reserves, and (iii) the
successful completion and integration of several strategic acquisitions. The
Committee's decisions concerning the 1994 executive incentive bonuses to
individual executive officers, including the Chief Executive Officer, were made
in light of each executive officer's level of responsibility, performance,
current salary and prior year bonus. Executive incentive bonus awards for 1994
totaled $165,428, of which half was paid in cash and half was paid in Company
Common Stock. Bonus awards to the named executive officers are included in the
amounts shown in the "Bonus" column in the Summary Compensation Table.
Stock options are the principal long-term performance incentive. The
primary purposes of long-term incentives are to retain and reward key employees
and link management compensation with the financial interests of shareholders.
To achieve these objectives, the Committee is currently using stock options
whose ultimate value to the executive is tied entirely to the value of the
Company's stock. The issuance of stock options at 100% of fair market value of
the stock at the date of grant insures that executives will receive a benefit
only when the Company's stock price increases above the option price.
Under the terms of the Company's Stock Option Plan, the Compensation
Committee alone determines the executives to whom options are to be granted,
the number of shares covered by each option, the years in which the options
will vest and become exercisable and other terms and conditions of the options.
In May 1994, the Committee, acting on the recommendation of an independent
compensation consulting firm, granted stock options to certain senior executive
officers of the Company under the Stock Option Plan. Each of these options is
a nonstatutory stock option with an option exercise price of $12.375 per share,
which is equal to 100% of the fair market value of the Company's Common Stock
on the date of grant. The options become exercisable in one-fourth increments
beginning one year after the date of grant and have a term of ten years. The
aggregate total of the option awards was determined by the Committee after
reviewing the consulting firm's assessment of market competitive grant levels.
The stock options granted to each executive were based on a percentage of each
executive's salary and the market price of the Company's Common Stock on the
date of grant.
9
<PAGE> 12
In fixing the 1994 base salary of Henry S. Belden IV, Chairman and
Chief Executive Officer, the Committee reviewed the Company's positive
financial performance during 1993 with respect to revenue growth, expense
control, net income and cash flow. In view of those positive performance
factors and the fact that the Chief Executive Officer's annual salary rate had
not changed since March 1992 and to establish a base salary within the range of
base salaries of peer group companies, the Committee decided that the Chief
Executive Officer merited a 9% increase in salary.
Profit sharing awards to Mr. Belden or for his account and the grant of
stock options to him were made on the same basis as described above for other
executive officers. In determining Mr. Belden's bonus for 1994, the Committee
considered, in addition to the Company's strong financial performance during
1994 with respect to revenue growth, net income and cash flow, the achievement
under his leadership of net reserve additions which increased proved gas
reserves by 30% and proved oil reserves by 16% over 1993; the 24% increase in
oil and gas production over the previous year and the successful
accomplishments of the Company's acquisition program.
COMPENSATION COMMITTEE
George M. Smart, Chairman
Raymond D. Saunders
Gary R. Petersen
10
<PAGE> 13
PERFORMANCE GRAPH
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
cumulative total return of the Standard & Poor's Domestic Oil Index and the
NASDAQ Composite Index for the period March 31, 1992 through December 31, 1994.
Trading in the Company's Common Stock commenced on March 31, 1992.
COMPARISON OF CUMULATIVE TOTAL RETURNS
March 31, 1992 - December 31, 1994
<TABLE>
<CAPTION>
Belden & S&P
Blake Domestic NASDAQ
Corporation Oil Index Market Index
----------- --------- ------------
(Dollars)
<S> <C> <C> <C>
Mar '92 100.00 100.00 100.00
Dec '92 190.91 110.87 106.08
Dec '93 190.91 116.81 127.25
Dec '94 250.00 122.57 133.60
</TABLE>
Assumes $100 invested on March 31, 1992 and reinvestment of any dividends.
11
<PAGE> 14
PROPOSAL TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE
UNDER THE COMPANY'S STOCK OPTION PLAN
On August 25, 1994, the Board of Directors, acting on the recommendation
of the Compensation Committee adopted an amendment to the Company's Stock
Option Plan (the "Plan"), subject to shareholder approval, to increase the
number of shares available for issuance under the Plan by 800,000 shares. At
the time the Plan was adopted in 1992, 270,000 shares of Common Stock were
authorized for issuance pursuant thereto. To date, stock options have been
granted with respect to all 270,000 shares and, as a result, no shares remain
available for issuance in connection with future grants.
The Board of Directors believes that stock options have proved to be an
important means of attracting, retaining and motivating the Company's officers
and key employees. Accordingly, the Board believes that it would be in the
best interests of the Company and the shareholders to increase the number of
shares available for the grant of stock options so as to permit the Company to
continue to offer these incentives in the future. The 800,000 shares for which
approval is sought represent approximately 11% of the Company's outstanding
shares of Common Stock at the date of this proxy statement.
SUMMARY OF THE PLAN
The Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee"), comprised exclusively of outside directors, none
of whom is eligible to participate in the Plan. The Plan provides for the
granting of non-qualified stock options ("NQSO's") and incentive stock options
("ISO's") to such full-time salaried employees (including officers and
directors if they are employees) as the Committee may determine. The Committee
has exclusive discretion to select the employees to whom options will be
granted, to determine the type, size and terms of each option granted and to
make all other determinations which it deems necessary or desirable in the
interpretation and administration of the Plan.
The type of options and the number of shares covered thereby that may be
granted in the future under the Plan, as well as the identity or number of
eligible employees who may be granted such options, are not determinable at
this time. Currently, there are 17 employees who are participants in the Plan.
The awards made under the Plan during 1994 are shown on the "Option/SAR Grants
in Last Fiscal Year" table on page 6.
The Plan provides that the option price of any ISO or NQSO shall not be
less than 100% of the fair market value of the underlying shares of Common
Stock on the date of grant. As a consequence, options benefit the recipient
only when a rising stock price benefits all shareholders. Payment of the
option price in cash must be made in full at the time of exercise.
The period of any option will be determined by the Committee, but no
option may be exercised earlier than one (1) year nor later than ten (10)
years after the date of grant. Options become exercisable at such times and
in such installments as the Committee shall determine.
Options are not transferable or assignable during the recipient's
lifetime, but upon the recipient's death may be exercised by the person to whom
such right passes by will or by the laws of descent and distribution.
12
<PAGE> 15
Each option granted under the Plan will terminate upon the cessation of
the recipient's employment with the Company or one of its subsidiaries, except
that for a period of three (3) months following such cessation of employment
(or twelve (12) months in the case of death or disability), the option may be
exercised to the extent it was exercisable on the date the recipient's
employment ceased.
Under the Plan, if there is any change in the outstanding shares of Common
Stock by reason of any stock split, stock dividend, recapitalization, merger or
other similar capital or corporate structure change, the Board of Directors may
direct that the appropriate changes be made in the number or kind of securities
that may be issued under the Plan and in the terms of any outstanding options.
The Plan will expire, if not sooner terminated, on September 30, 2001. The
Board of Directors may terminate or amend the Plan at any time, except that no
amendment may become effective without shareholder approval which would
increase the number of shares issuable under the Plan, change the class of
employees eligible to receive options, decrease the minimum price at which
options may be granted or materially increase the benefits to participants
accruing under the Plan.
FEDERAL INCOME TAX CONSEQUENCES
Under existing law and regulations, the grant of an ISO or a NQSO will not
result in income taxable to the employee or provide a deduction to the Company.
An employee to whom a NQSO is granted will recognize ordinary compensation
income upon the exercise of the option equal to the difference, if any, between
the option price and the fair market value, as of the date of exercise, of the
shares received. The tax basis of such shares to such employee will be equal
to the option price plus the amount of compensation income recognized on
exercise, and the employee's holding period for such shares will commence on
the date the option is exercised. The Company will generally be entitled to a
federal income tax deduction in respect of a NQSO in an amount equal to the
ordinary compensation income recognized by the employee.
An employee to whom an ISO is granted will not recognize income upon the
exercise of the option. If the shares received upon exercise of an ISO are
sold more than one year after the date of exercise and more than two years
after the date of grant, the employee will normally recognize a long-term
capital gain or loss equal to the difference between the sales price of such
shares and the option price. If the shares are sold prior to the expiration of
such period, the employee will recognize ordinary compensation income equal to
the amount by which the sales price exceeds the option price and the Company
will be entitled to a corresponding deduction for federal income tax purposes.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes cast at the meeting is
required to approve the amendment to the Plan. For this purpose, abstentions
and broker nonvotes shall not be counted. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE PROPOSAL TO AMEND THE COMPANY'S STOCK OPTION PLAN.
---
13
<PAGE> 16
NEW PLAN BENEFITS--STOCK OPTION PLAN
The employees to whom stock options may be granted in the future under the
Company's Stock Option Plan and the number of shares for which such options may
be granted are not determinable at this time. The following table sets forth
information regarding stock options granted under the Plan during 1994.
<TABLE>
<CAPTION>
Stock Options Granted During 1994
---------------------------------
Grant Date
Number Present
Name and Position of Shares Value (1)
- - ----------------- --------- ----------
<S> <C> <C>
Henry S. Belden IV 33,000 $ 210,210
Chairman and
Chief Executive Officer
Max L. Mardick 20,000 127,400
President and
Chief Operating Officer
Ronald E. Huff 15,000 95,550
Senior Vice President and
Chief Financial Officer
Joseph M. Vitale 15,000 95,550
Senior Vice President Legal and
Secretary
Ronald L. Clements 15,000 95,550
Senior Vice President of
Exploration and Production
Executive Officers as a group 158,000 1,006,460
(11 persons including those named above)
Non-executive officer employee group 25,000 159,250
Non-executive officer director group -0- -0-
- - -------------------------
<FN>
(1) This is a hypothetical valuation using the Black-Scholes option
pricing model. The Company's use of this model should not be considered as
an endorsement of its accuracy at valuing options. All stock option
valuation methods, including the Black-Scholes model, require a prediction
about the future movement of the stock price. Since all options are granted
at an exercise price equal to the market value of the Company's Common
Stock on the date of grant, no value will be realized if there is no
appreciation in the market price of the stock.
</TABLE>
14
<PAGE> 17
<TABLE>
OWNERSHIP OF VOTING SECURITIES
The following table sets forth information as of March 31, 1995 with
respect to each person known to the Company to be the beneficial owner of more
than five percent of any class of the Company's outstanding voting securities.
<CAPTION>
Title of Class Name and Address Number of Shares Percent of Class
- - -------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Common Stock Henry S. Belden IV 992,521 (1) 13.8%
5200 Stoneham Road
North Canton, Ohio
Common Stock Fidelity Management & 479,500 (2) 6.77%
Research Company
82 Devonshire Street
Boston, Massachusetts
Common Stock State Street Research & 572,800 (3) 8.09%
Management Company
One Financial Center
Boston, Massachusetts
Class II Serial Witco Corporation 24,000 (4) 100%
Preferred Stock New York, New York
- - -------------------------
<FN>
(1) Includes 25,750 shares subject to options exercisable within 60 days.
Mr. Belden has sole voting and investment power with respect to
the remainder of the shares listed.
(2) Has sole investment power but no voting power with respect to the
shares listed.
(3) Has sole investment power as to all the shares and sole voting power
as to 412,800 of such shares.
(4) Has sole voting and investment power with respect to the shares
listed.
</TABLE>
15
<PAGE> 18
The following table sets forth information as of March 31, 1995 with
respect to the shares of common stock of the Company beneficially owned by each
director, the chief executive officer and the four other most highly
compensated executive officers and all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Number of Percent
Name Shares (1)(2) of Class
---- ------------ --------
<S> <C> <C>
Henry S. Belden IV 992,521 13.8%
Paul R. Bishop 760 *
Theodore V. Boyd 3,035 *
Ronald E. Huff 24,394 *
Max L. Mardick 29,927 (3) *
Gary R. Petersen 2,480 *
David P. Quint 12,191 *
Raymond D. Saunders 2,808 (3) *
George M. Smart 4,220 *
Ronald L. Clements 14,567 *
Joseph M. Vitale 24,052 (3) *
All of the above and other executive 1,162,863 16.1%
officers as a group (17 persons)
<FN>
* Less than 1%
- - -----------------
(1) Each person has sole voting and investment power with respect to the
shares listed unless otherwise indicated.
(2) Includes shares subject to options exercisable within 60 days by Mr.
Belden as to 25,750 shares, Mr. Mardick as to 15,000 shares, Mr. Huff
as to 11,250 shares, Mr. Vitale as to 11,250 shares, Mr. Clements as
to 3,750 shares, Messrs. Boyd, Petersen, Saunders and Smart as to
1,980 shares, Mr. Quint as to 1,000 shares and Mr. Bishop as to 660
shares.
(3) Includes shares owned by the wives and/or children of Mr. Mardick as
to 9,863 shares, Mr. Saunders as to 828 shares and Mr. Vitale as to 18
shares and as to which each disclaims beneficial ownership.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who beneficially own more
than 10% of a registered class of the Company's equity securities to file
reports of beneficial ownership of the Company's securities and changes in such
beneficial ownership with the Securities and Exchange Commission. Such persons
are also required to furnish to the Company copies of all reports they file
pursuant to Section 16(a).
Based solely on a review of the copies of the forms filed pursuant to
Section 16(a) received by it, the Company believes that its directors,
executive officers and 10% shareholders have complied with all such filing
requirements.
16
<PAGE> 19
VOTE REQUIRED
The four nominees for election as directors at the Annual Meeting who
receive the greatest number of votes cast for the election of directors by the
holders of the Company's Common Stock and Class II Serial Preferred Stock,
voting together as one class, present in person or represented by proxy at the
meeting, a quorum being present, shall become directors. The affirmative vote
of a majority of the votes cast by the holders of the Company's Common Stock
and Class II Serial Preferred Stock, voting together as one class, present in
person or represented by proxy at the meeting, a quorum being present, on the
proposal to approve the amendment to the Stock Option Plan will be necessary to
approve the proposal. Under Ohio law and the Company's Amended Articles of
Incorporation, the total number of votes cast "for" or "against" will be
counted for purposes of determining the minimum number of affirmative votes
required for approval. An abstention from voting on the proposal by a
shareholder present in person or represented by proxy at the meeting or any
broker nonvote shall not be counted in such voting.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP is the independent auditor for the Company. A
representative of Ernst & Young LLP is expected to be present at the Annual
Meeting and will have the opportunity to make a statement and be available to
respond to appropriate questions at the meeting.
SUBMISSION OF SHAREHOLDER
PROPOSALS FOR THE 1996 ANNUAL MEETING
To be eligible for inclusion in the Company's proxy statement,
shareholder proposals for the 1996 Annual Meeting of Shareholders must be
received at the Company's corporate office, 5200 Stoneham Road, North Canton,
Ohio 44720 on or before December 22, 1995.
OTHER BUSINESS
It is not intended that any business other than that set forth in the
Notice of Annual Meeting and more specifically described in this Proxy
Statement will be brought before the meeting. If any other business should
properly come before the meeting, however, it is the intention of the persons
named in the enclosed form of proxy to vote such proxy in accordance with their
best judgment on such business and on any matters dealing with the conduct of
the meeting.
By order of the Board of Directors.
Joseph M. Vitale
Secretary
April 21, 1995
A copy of the Company's Annual Report on Form 10-K for 1994 as filed
with the Securities and Exchange Commission, including the financial statements
and schedules thereto, but without exhibits, will be sent to any shareholder,
without charge, upon written request directed to the Corporate Communications
Department, Belden & Blake Corporation, 5200 Stoneham Road, North Canton, Ohio
44720.
17
<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
FOR ALL
1. Election of / / / / NOMINEES: Henry S. Belden IV 2. Approval to an / / / / / /
Directors Max L. Mardick amendment to the
Each Nominee George M. Smart Company's Stock
is nominated Joseph M. Vitale Option Plan.
to serve a 3-year term.
(To withhold authority to vote for any individual nominee PRINT
that nominee's name on the space provided below.)
_______________________________________________________________
Change
of / /
Address
Attend
Meeting / /
SIGNATURE(S)_____________________________________________ DATE ____________
SIGNATURE(S)_____________________________________________ DATE ____________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
</TABLE>
-------------------------------------------------------------------------------
DETACH AND RETURN ABOVE
BELDEN & BLAKE CORPORATION
5200 Stoneham Road, North Canton, Ohio 44720
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- MAY 25, 1995
The signatory of this proxy hereby constitutes and appoints
Henry S. Belden IV, Joseph M. Vitale and Max L. Mardick, and each of
them, the attorneys and proxies of such signatory, with full power of
substitution and revocation, to attend the Annual Meeting of
Shareholders of Belden & Blake Corporation (the "Company") to be held
at the Sheraton Inn Canton, Belden Village, 4375 Metro Circle, N.W.,
Canton, Ohio, on May 25, 1995, at 2:30 p.m., Eastern Daylight Savings
Time, and any adjournment thereof, to vote all the shares of capital
stock of the Company which the signatory of this proxy may be entitled
to vote and to vote upon the matters described in Item 1 and Item 2 of
this proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR IN
ITEM 1 AND THE APPROVAL OF AN AMENDMENT TO THE COMPANY'S STOCK OPTION
PLAN IN ITEM 2, IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED. IN
THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
The signatory of this proxy hereby acknowledges receipt of a
copy of the Annual Report to Shareholders for the fiscal year ended
December 31, 1994, and the Notice of Meeting and Proxy Statement
accompanying this proxy, and hereby revokes any proxy or proxies
heretofore given.
