<PAGE>
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities and 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 240.14a-11(c) or 240.14a-12
- -----
MAGNUM HUNTER 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):
X $125 per Exchange Act Rules 0-11 (c) (1)(ii), 14a-6(i)1,or 14a-6(i)2.
- ----
$500 per each party to the controversy pursuant to Exchange Act Rule 14a-6
- ----(i)3.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
- ----
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined:
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
(5) Total fee paid:
- -------------------------------------------------------------------------------
Fee paid previously with preliminary materials.
- ----
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- -------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Magnum Hunter Resources, Inc.
600 East Las Colinas Boulevard
Suite 1200
Irving, Texas 75039
Notice of Annual Meeting of Shareholders
on August 26, 1997
Dear Shareholder:
The Annual Meeting of Shareholders (the "Meeting") of Magnum Hunter
Resources, Inc. will be held at the Cigna Tower, 600 East Las Colinas Boulevard,
Suite 1200, Irving, Texas, on Tuesday, August 26, 1997, at 10:00 A.M., Central
Time, for the following purposes:
(1) The election of six (6) Directors to serve until the 1998 Annual
Meeting or until their respective successors are duly elected and
qualified;
(2) To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors to examine the accounts of the
Company for the fiscal year ending December 31, 1997; and
(3) Transacting such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed July 6, 1997 as the record date (the
"Record Date") for the determination of stockholders entitled to notice of, and
to vote at, the Meeting and any adjournment or postponement thereof. Only
holders of record of Magnum Hunter Resources, Inc. (the "Company") Common Stock,
par value $.002 per share, at the close of business on the Record Date are
entitled to vote on all matters coming before the Meeting or any adjournment or
postponement thereof. A complete list of stockholders entitled to vote at the
Meeting will be maintained in the Company's offices at 600 East Las Colinas
Boulevard, Suite 1200, Irving, Texas, for ten days prior to the Meeting.
Your vote is important. The voting stock of the Company should be
represented as fully as possible at the Annual Meeting. The enclosed proxy is
solicited by the Board of Directors of the Company. Whether or not you plan to
attend the meeting in person, please mark, execute, date and return the enclosed
proxy in the envelope provided, which requires no postage if mailed within the
United States. The return of the enclosed proxy will not affect your right to
vote in person if you do attend the meeting.
By Order of the Board of Directors
[GRAPHIC OMITTED]
/s/ Gary C. Evans
-----------------------------------
Irving, Texas Gary C. Evans
July 21, 1997 President
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING, YOU ARE URGED TO SIGN,
DATE AND MAIL THE ENCLOSED PROXY CARD PROMPTLY. IF YOU ATTEND THE MEETING, YOU
CAN VOTE EITHER IN PERSON OR BY YOUR PROXY.
<PAGE>
Magnum Hunter Resources, Inc.
600 East Las Colinas Boulevard, Suite 1200
Irving, Texas 75039
PROXY STATEMENT
The proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the Company's Annual
Meeting of Shareholders which will be held on Tuesday, August 26, 1997, at 10:00
A.M., Central Time at the Company's address indicated above. This proxy
statement, the foregoing notice and the enclosed proxy are being sent to
shareholders on or about July 21, 1997.
The Board of Directors does not intend to bring any matter before the
meeting except as specifically indicated in the notice and does not know of
anyone else who intends to do so. If any other matters properly come before the
meeting, however, the persons named in the enclosed proxy, or their duly
constituted substitutes acting at the meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment in such matters. If the
enclosed proxy is properly executed and returned prior to voting at the meeting,
the shares represented thereby will be voted in accordance with the instructions
marked thereon. In the absence of instructions, the shares will be voted "FOR"
the nominees of the Board of Directors in the election of six directors and
"FOR" the remaining proposal(s).
Any proxy may be revoked at any time prior to its exercise by notifying
the Secretary of the Company in writing, by delivering a duly executed proxy
bearing a later date or by attending the meeting and voting in person.
VOTING SECURITIES AND SECURITY OWNERSHIP
Voting Securities
At the close of business on July 6, 1997, the record date fixed for the
determination of shareholders entitled to notice of and to vote at the meeting,
there were outstanding 13,608,098 shares of the Company's Common Stock, $.002
par value (the "Common Stock"). At the close of business on the record date,
holders of the Company's Common Stock will be entitled to one vote per share on
all proper business brought before the Meeting. The presence at the Meeting, in
person or by proxy, of the holders of a majority of such outstanding shares will
constitute a quorum. All matters brought before the Meeting will be decided by a
majority of the shares represented in person or by proxy. Shareholders do not
have cumulative voting rights in the election of directors. Abstentions will
have the effect of a vote against a proposal. Non-votes will have no effect on
the voting of any of the proposals.
1
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of May 31, 1997,
regarding the share ownership of the Company by (i) each person known to the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock of the Company, (ii) each director, (iii) the Company's Chief
Executive Officer and the two other most highly compensated executive officers
of the Company, and (iv) all directors and executive officers of the Company, as
a group. None of the directors or executive officers named below owned, as of
May 31, 1997, any shares of the Company's Series A Preferred Stock or its TCW
Preferred Stock. The business address of each officer and director listed below
is: c/o Magnum Hunter Resources, Inc., 600 East Las Colinas Blvd., Suite 1200,
Irving, Texas 75039.
<TABLE>
<CAPTION>
<S> <C> <C>
Common Stock
Beneficially Owned
Percent of
Name Number of Shares Class(1)
Directors and Executive Officers
Gary C. Evans................................................ 1,653,060 (2) 12.1%
Matthew C. Lutz.............................................. 145,460 1.1
Gerald W. Bolfing............................................ 323,144 2.4
Oscar C. Lindemann........................................... 1,185 *
John H. Trescot, Jr.......................................... 20,837 *
James E. Upfield............................................. 29,268 *
Richard R. Frazier........................................... 47,745 *
------------------- ---------------
All directors and executive officers as a group
(8 persons)............................................... 2,220,699 16.3%
Beneficial owners of 5% or more (excluding persons
named above)
TCW Group, Inc.
865 South Figueroa Street
Los Angeles, CA 90017........................................ 1,702,127 (3) 11.1%
- -----------
</TABLE>
* Less than 1%
(1) The number of shares outstanding was calculated in accordance with Rule
13d-3(d) promulgated under the Exchange Act.
(2) Includes 17,024 shares held in the name of Jacquelyn Evelyn
Enterprises, Inc., a corporation whose sole shareholder is Mr. Evans'
wife. Mr. Evans disclaims any ownership in such securities other than
those in which he has an economic interest.
(3) Consists of shares attributable to shares of Common Stock issuable upon
conversion of 1,000,000 shares of the Company's TCW Preferred Stock.
2
<PAGE>
I. ELECTION OF DIRECTORS
Identification of the Directors to be Elected
At the meeting, the shareholders will elect six directors to hold
office until the next annual meeting of shareholders and until their successors
are duly elected and qualified. Unless contrary instructions are given, the
shares represented by the enclosed proxy will be voted "FOR" the election of the
Board of Directors' nominees listed below.
The Board of Directors believes that the nominees are willing to serve
as directors. If a nominee at the time of his election is unable or unwilling to
serve or is otherwise unavailable for election, and as a result another nominee
is designated, the persons named in the enclosed proxy or their substitute(s)
will have discretion and authority to vote or to refrain from voting for the
nominee in accordance with their judgment.
The nominees for election as directors, together with certain
information about them, are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Positions
Name Age Term Served With Company
Gary C. Evans.................... 40 Dec. 1995 Director, President, Chief Executive Officer
and Chief Financial Officer
Matthew C. Lutz.................. 63 Dec. 1995 Chairman and Executive Vice President of
Exploration and Business Development
Gerald W. Bolfing................ 68 Dec. 1995 Director
Oscar C. Lindemann............... 75 Dec. 1995 Director
John H. Trescot, Jr. . . . . . 72 June 1997 Director
James E. Upfield................. 77 Dec. 1995 Director
</TABLE>
See "Security Ownership of Management" for information regarding security
ownership of the nominees for director.
Principal Occupations of Nominees for Director and Other Officers of the Company
and its Subsidiaries
Gary C. Evans has served as President, Chief Executive Officer and a
director of the Company since December 31, 1995 and Chairman and Chief Executive
Officer of all of the Company's subsidiaries since their formation or
acquisition. He has served as Chief Financial Officer since January 1997. He
acted as Chairman, President and Chief Executive Officer of Hunter Resources,
Inc. ("Hunter") from September 1992 until October 1996. Previously, he was
President and Chief Operating Officer of Hunter from December 1990 to September
1992. From 1985 to 1990, Mr. Evans was Chairman, President and Chief Executive
Officer of Sunbelt Energy, Inc. and its subsidiaries, which were merged with
Hunter. From 1981 to 1985, Mr. Evans was associated with the Mercantile Bank of
Canada where he held various positions including Vice President and Manager of
the Energy Division of the Southwestern United States. From 1978 to 1981, he
served in various capacities with National Bank of Commerce (now BancTexas,
N.A.) including Credit Manager and Credit Officer. Mr. Evans serves on the Board
of Directors of Karts International Incorporated, an OTC traded company, and
Digital Communications Technology Corporation, an American Stock Exchange listed
company.
Matthew C. Lutz became Chairman as of March 31, 1997 after having
served as Vice Chairman of the Company since December 31, 1995. Mr. Lutz has
also served as Executive Vice President of Exploration and Business Development
since December 31, 1995. Mr. Lutz held similar positions with Hunter from
September
3
<PAGE>
1993 until October 1996. From 1984 through 1992, Mr. Lutz was Senior Vice
President of Exploration and on the Board of Directors of Enserch Exploration,
Inc. with responsibility for such company's worldwide oil and gas exploration
and development program. Prior to joining Enserch, Mr. Lutz spent 28 years with
Getty Oil Company. He advanced through several technical, supervisory and
managerial positions which gave him various responsibilities including
exploration, production, lease acquisition, administration and financial
planning.
Gerald W. Bolfing has been a director of the Company since December 31,
1995. Mr. Bolfing was appointed a director of Hunter in August 1993. He is an
investor in the oil and gas business and a past officer of one of Hunter's
former subsidiaries. From 1962 to 1980, Mr. Bolfing was a partner in Bolfing
Food Stores in Waco, Texas. During this time, he also joined American Service
Company in Atlanta, Georgia from 1964 to 1965, and was active with Cable
Advertising Systems, Inc. of Kerrville, Texas from 1978 to 1981. He joined a
Hunter subsidiary in the well servicing business in 1981 where he remained
active until its divestiture in 1992. Mr. Bolfing is on the board of directors
of Capital Marketing Corporation of Hurst, Texas.
Oscar C. Lindemann has served as a director of the Company since
December 31, 1995. Mr. Lindemann was previously a director of Hunter, having
been appointed in November 1995. Mr. Lindemann has over 40 years experience in
the financial industry. Mr. Lindemann began his banking career with the Texas
Bank and Trust in Dallas, Texas in 1951. He served the bank until 1977 in many
capacities, including Chief Executive Officer and Chairman of the Board. Since
leaving Texas Bank and Trust, he has served as Vice Chairman of both the United
National Bank and the National Bank of Commerce, also in Dallas. Mr. Lindemann
has also served as a consultant to the banking industry. He retired from
commercial banking in 1987. Mr. Lindemann is a former President of the Texas
Bankers Association, and a former state representative to the American Bankers
Association. He was a Founding Director and Board Member of VISA, and a member
of the Reserve City Bankers Association. He has served as an instructor at both
the Southwestern Graduate School of Banking at S.M.U. and the School of Banking
of the South at L.S.U. He has also served as a faculty member for four years in
the College of Business Administration at the University of Texas in Austin
teaching various banking subjects.
John W. Trescot, Jr. has served as a director of the Company since June 5,
1997. For the last five years, Mr. Trescot has been a principal of AWA
Management Corporation, a professional consulting firm, specializing in oil,
timber, pulp and paper, and financial management. Early in his career, Mr.
Trescot held various positions in woodlands, and pulp and paper, advancing to
the position of Senior Vice President, Southern Operations at Hudson Pulp &
Paper Corp. (now part of Georgia Pacific Corp). Later Mr. Trescot became Vice
President of The Charter Company, a multi-billion dollar corporation with
operations in oil, communications and insurance. In 1979, Mr. Trescot became the
Chief Executive Officer of "Jari", a pulp, timber, rice and kaolin operation in
the Amazon Basin of Brazil owned by Mr. D.K. Ludwig. In 1981, Mr. Trescot became
the Chief Executive Officer of TOT Drilling Corp., a contract drilling company
drilling in West Texas and New Mexico.
James E. Upfield has served as a director of the Company since December
31, 1995. Mr. Upfield was appointed a director of Hunter in August 1992. Mr.
Upfield is Chairman of Temtex Industries, Inc. based in Dallas, Texas, a public
company that produces consumer hard goods and building materials. In 1969, Mr.
Upfield served on a select Presidential Committee serving postal operations of
the United States of America. He later accepted the responsibility for the
Dallas region, which encompassed Texas and Louisiana. From 1959 to 1967, Mr.
Upfield was President of Baifield Industries, Inc. ("Baifield") and its
predecessor, a company he founded in 1949 which merged with Baifield in 1963.
Baifield was engaged in prime government contracts for military systems and
sub-systems in the production of high-strength, light-weight metal products.
4
<PAGE>
In 1967, Baifield was acquired by Automatic Sprinkler Corporation of America,
where Mr. Upfield remained until resigning in 1968 to pursue other business
opportunities.
Richard R. Frazier has been President of Magnum Hunter Production, Inc.
and Chief Operating Officer of Magnum Hunter Production, Inc. and Gruy Petroleum
Management Co. ("Gruy") since January 1994. From 1977 to 1993, Mr. Frazier was
with Edisto Resources Corporation in Dallas, serving as Executive Vice President
Exploration and Production from 1983 to 1993, where he had overall
responsibility for its property acquisition, exploration, drilling, production,
gas marketing and engineering functions. From 1972 to 1976, Mr. Frazier served
as District Production Superintendent and Petroleum Engineer with HNG Oil
Company (now Enron Oil & Gas Company) in Midland, Texas. Mr. Frazier's initial
employment, from 1968 to 1971, was with Amerada Hess Corporation as a petroleum
engineer involved in numerous projects in Oklahoma and Texas. Mr. Frazier
graduated in 1970 from University of Tulsa with a Bachelor of Science Degree in
Petroleum Engineering. He is a registered Professional Engineer in Texas and a
member of Society of Petroleum Engineers and many other professional
organizations.
R. Renn Rothrock, Jr. has been President of both Hunter Gas Gathering, Inc.
and Gruy and Executive Vice President of Magnum Hunter Production, Inc. since
January 1994. He served as Executive Vice President and Chief Operating Officer
of Gruy from May 1988 until January 1994. Mr. Rothrock was Executive Vice
President and General Manager of Gruy Engineering Corporation from 1986 until
May 1988. Over his 28-year career, Mr. Rothrock has also served as a reservoir
engineer and operations research engineer at Skelly Oil Company and as an area
engineer at Amerada Petroleum Corporation; the Engineering Editor of Petroleum
Engineer International Magazine; Vice President and Energy Manager of the First
National Bank of Mobile, Alabama; Executive Vice President of Energy Assets
International Corporation, a public company that financed oil and gas ventures;
and the producer and operator of his own gas gathering and transportation
system. Mr. Rothrock earned a B.S. degree in Petroleum Engineering and an M.S.
degree in Engineering from the University of Oklahoma. He is a member of the
Society of Professional Engineers, the National Society of Professional
Engineers, the National Academy of Forensic Engineers and the Texas Society of
Professional Engineers. Mr. Rothrock is a registered Professional Engineer in
Texas and Oklahoma.
David S. Krueger has served as Vice President and Chief Accounting
Officer of the Company since January 1997. Mr. Krueger acted as Vice
President-Finance of Cimarron Gas Holding Co., a natural gas processing and
natural gas liquids marketing company in Tulsa, Oklahoma, from April 1992 until
January 1997. He served as Vice President/Controller of American Central Gas
Companies, Inc., a natural gas gathering, processing and marketing company from
May 1988 until April 1992. From 1974 to 1986, Mr. Krueger served in various
managerial capacities for Southland Energy Corporation. From 1971 to 1973, Mr.
Krueger was a staff accountant with Arthur Andersen LLP. Mr. Krueger, a
certified public accountant, graduated from the University of Arkansas with a
B.S./B.A. degree in Business Administration and earned his M.B.A. from the
University of Tulsa.
Morgan F. Johnston has served as Vice President and General Counsel
since April 1, 1997 and has served as the Company's Secretary since May 1, 1996.
Mr. Johnston was in private practice as a sole practitioner from May 1, 1996 to
April 1, 1997, specializing in corporate and securities law. From February 1994
to May 1996, Mr. Johnston served as general counsel for Millennia, Inc.
(formerly known as SOI Industries, Inc.) and Digital Communications Technology
Corporation, two American Stock Exchange listed companies. He also served as
general counsel to Halter Capital Corporation, a private consulting firm from
August 1991 to May 1996. For the two years prior to August 1, 1991 he was
securities counsel for Motel 6 L.P., a New York Stock Exchange listed company.
Mr. Johnston graduated cum laude from Texas Tech Law School in May, 1986 and is
licensed to practice law in the State of Texas.
5
<PAGE>
R. Douglas Cronk, age 50, has been Vice President of Operations for Magnum
Hunter Production, Inc. since May 1996, at which time the Company had acquired
from Mr. Cronk 100% of the capital stock of Rampart Petroleum, Inc. ("Rampart"),
based in Abilene, Texas. Rampart has been an active operating and exploration
company in the north central and west Texas region since 1983. Prior to the
formation of Rampart, Mr. Cronk was an independent oil and gas consultant in
Houston, Texas for approximately two years. From 1974 to 1981, Mr. Cronk held
various positions with subsidiaries of Deutsch Corporation of Tulsa, Oklahoma,
including Southland Drilling and Production where he became Vice President of
Drilling and Production. Mr. Cronk is a Chemical Engineer graduate from the
University of Tulsa.
Russell A. Talley, age 64, has been Executive Vice President and
Drilling Manager of Gruy Petroleum Management Co. since January 1991. From 1959
to 1970, Mr. Talley worked for Diamond Shamrock Oil & Gas Company in Amarillo,
Texas, where he had substantial responsibilities in drilling, production and
workover programs. From 1970 to 1985, Mr. Talley worked for Samedan Oil
Corporation in Houston, Texas, where he became the Manager of Offshore Drilling
and Production. He managed all domestic and Canadian drilling operations and
supervised international operations in Ecuador, the North Sea and Canada. From
1985 to 1987, Mr. Talley was Vice President of Operations for Seagull Energy E &
P, Inc. in Houston, where he was responsible for all onshore and offshore
drilling operations. In 1988 he established Texstar Energy Operators, Inc.,
which was acquired by Gruy in 1991.
Committees and Meetings of the Board of Directors
The full Board of Directors met or unanimously voted on resolutions
four times during fiscal year 1996. Each of the directors attended or acted upon
at least seventy-five percent of the aggregate number of Board of Director
meetings, consents, and Board of Director Committee meetings or consents held or
acted upon during fiscal year 1996.
Committees of the Board of Directors
The Board of Directors has two committees, an Audit Committee and a
Compensation Committee, each composed of at least two independent directors. The
Audit Committee, composed of Gerald W. Bolfing, Gary C. Evans and Oscar C.
Lindemann, recommends the annual appointment of the Company's auditors, with
whom the Audit Committee will review the scope of audit and non-audit
assignments and related fees, accounting principals used by the Company in
financial reporting, internal auditing procedures and the adequacy of the
Company's internal control procedures. The Compensation Committee, composed of
John H. Trescot, Jr., Gary C. Evans and James E. Upfield, will administer the
Company's Stock Option Plan and make recommendations to the Board of Directors
regarding compensation for the Company's executive officers. Each committee
meets once a year.
6
<PAGE>
Executive Compensation
The following table contains information with respect to all cash
compensation paid or accrued by the Company during the past three fiscal years
to the Chief Executive Officer of the Company and the other most highly
compensated executive officer(s) of the Company. No other officer individually
received annual cash compensation exceeding $100,000 during the past three
years.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name, Other Number
Principal Annual Restricted Options LTP All Other
Position Year Salary Bonus Compensation Stock SARs Payouts Compensation
- -------- ---- ------ ----- ------------ ----- ---- ------- ------------
Gary C. Evans 1996 $150,000 $100,000 - - - - -
======== ========
President and CEO
Richard R. Frazier 1996 $ 98,350 $ 9,000 - - - - -
======== ========
President of Magnum
Hunter Production, Inc.
Lloyd T. Rochford 1995 $ 96,000 -0- $15,693 - - - -
======== === =======
Chairman, President
and CEO 1994 $ 60,000 -0- $25,244 - - - -
======== === =======
</TABLE>
From April 1992 through the first half of 1995, the Company provided Lloyd
T. Rochford with a vehicle and paid the insurance thereon. Such payments
amounted to approximately $18,421 and $8,870 for the fiscal years ended December
31, 1994 and 1995, respectively. Pursuant to a Letter Agreement dated July 21,
1995, Mr. Rochford continued to receive a salary of $8,000 per month until
December 31, 1996. Additionally Mr. Rochford was provided with the same benefits
as other employees including health insurance coverage.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Option/SAR Grants in Last Fiscal Year
(Individual Grants)
Percent of
Number of total
Securities options/SARs Exercise
Underlying granted to or base
Options/SARs employees in price Expiration
Name granted (#) fiscal year ($/Sh) date
(a) (b) (c) (d) (e)
Gary C. Evans 100,000 10% $4.50 12/5/2001
Matthew C. Lutz 85,000 9% $4.50 12/5/2001
Richard R. Frazier 75,000 8% $4.50 12/5/2001
</TABLE>
7
<PAGE>
Compensation of Directors
The Company has six individuals who serve as directors, four of which
are independent. Two of the directors receive compensation with respect to their
services in their capacities as executive officers of the Company and no
additional compensation has historically been paid for their services to the
Company as directors. The other four directors of the Company are not employees
of the Company and receive no compensation for their services as directors other
than as stated below. Two former directors received 5,000 shares of common
stock, valued at $3.50 per share, as compensation for their services in 1995.
For 1996, directors received $500 per meeting as compensation for their
services. Beginning July 1, 1997, independent directors will receive $1,000 per
meeting as compensation for their services. In addition, once per year
independent directors will be granted an option to acquire in the aggregate
10,000 shares of the Company's common stock at an exercise price equal to the
market price of the Company's common stock on the date of grant.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Both Mr. Evans and Mr. Lutz have employment agreements with the
Company. Mr. Evans' agreement terminates December 31, 1997 and continues
thereafter on a year to year basis and provides for a salary of $200,000 per
annum. Mr. Lutz's agreement terminates September 30, 1997 and continues
thereafter on a year to year basis and provides for a salary of $100,000 per
annum in addition to participation rights in certain exploration projects. Both
agreements provide that the same benefits supplied to other employees of the
Company shall be available to the employee. The employment agreements also
contain, among other things, covenants by the employee that in the event of
termination, he will not associate with a business that competes with the
Company for a period of one year after cessation of employment. The Company has
not entered into any contracts or arrangements with any named executive officer
which would provide such individual with a form of compensation resulting from
such individual's resignation, retirement or any other termination of such
executive officer's employment with the Company or its subsidiary, or from a
change-in-control of the Company or a change in the named executive officer's
responsibilities following a change-in-control.
II. INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of
Deloitte & Touche LLP as independent auditors of the Company for its fiscal year
to end December 31, 1997, and is submitting such selection to the Company's
shareholders for their ratification. The Board recommends that such appointment
be approved by the shareholders. The Company's independent auditors for its
fiscal year ended December 31, 1996 was Deloitte & Touche LLP. The affirmative
vote of a majority of the shares of common stock present or represented at the
meeting is necessary to ratify the appointment of Deloitte & Touche LLP. A
representative of Deloitte & Touche LLP is not expected to be present at the
meeting. If the foregoing proposal is not approved, or if Deloitte & Touche LLP
declines to act or otherwise becomes incapable of performing, or if its
appointment is otherwise discontinued, the Board of Directors will appoint other
independent accountants whose appointment for any period subsequent to fiscal
year 1996 will be subject to approval by the shareholders at the 1998 Annual
Meeting.
The Board of Directors recommends a vote FOR this proposal.
8
<PAGE>
SHAREHOLDERS PROPOSALS AND OTHER MATTERS
The management of Magnum Hunter Resources, Inc. is not aware of any
matters other than those set forth in this Proxy Statement which will be
presented for action at the meeting. If any other matters should properly come
before the meeting, the persons authorized under management's proxies shall vote
and act with respect thereto according to their best judgment.
Proposals of shareholders intended to be presented at the Annual
Meeting of Shareholders in 1998 must be received by the Company by March 21,
1998, in order to be considered for inclusion in the Company's proxy statement
and form of proxy relating to that meeting. The Company will bear the cost of
the solicitation of the Board of Directors' proxies for the meeting, including
the cost of preparing, assembling, and mailing proxy materials, the handling and
tabulation of proxies received and charges of brokerage houses and other
institutions, nominees and fiduciaries in forwarding such materials to
beneficial owners. In addition to the mailing of the proxy material, such
solicitation may be made in person or by telephone or telegraph by directors,
officers and regular employees of the Company, and no additional compensation
will be paid to such individuals.
9
<PAGE>
REVOCABLE PROXY
MAGNUM HUNTER RESOURCES, INC.
600 East Las Colinas Blvd., Suite 1200, Irving, Texas 75039
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary C. Evans and Matthew C. Lutz, or
either of them, with full power of substitution, proxies of the undersigned,
with all the powers that the undersigned would possess if personally present to
cast all votes that the undersigned would be entitled to vote at the Annual
Meeting of Stockholders of Magnum Hunter Resources, Inc. (the "Company") to be
held on Tuesday, August 26, 1997, at the Company's offices at 600 East Las
Colinas Blvd., Suite 1200, Irving, Texas at 10:00 a.m., Central Daylight Time,
and any and all adjournments or postponements thereof, with respect to the
following matters described in the accompanying Proxy Statement and, in their
discretion, on other matters which come before the meeting.
(1) The election of six (6) Directors to serve until the 1998
Annual Meeting or until their respective successors are duly
elected and qualified;
o FOR the nominees listed below o WITHHOLD AUTHORITY
(Except as indicated to the contrary below). to vote for the nominees
listed below.
Gary C. Evans Matthew C. Lutz
Gerald W. Bolfing Oscar C. Lindemann
John H. Trescot, Jr. James E. Upfield
Instructions: To withhold authority to vote for any individual nominee or
nominees, write their names here.
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(2) To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors to examine the accounts of the
Company for the fiscal year ending December 31, 1997;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Your Board of Directors unanimously recommends a vote FOR the directors set
forth above and FOR the proposal set forth above.
(Continued and to be signed on the reverse side)
<PAGE>
(Continued from other side)
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof. This Proxy will be
voted at the Annual Meeting or any adjournment or postponement
thereof as specified. If no specifications are made, this
Proxy will be voted FOR the election of directors and FOR the
other proposal as set forth above. This Proxy hereby revokes
all prior proxies given with respect to the shares of the
undersigned.
Date:________________________________, 1997
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(Signature)
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(Please print your name)
(Please sign name as fully and exactly as it appears opposite. When
signing in a fiduciary or representative capacity, please give full title as
such. When more than one owner, each owner should sign. Proxies executed by a
corporation should be signed in full corporate name by duly authorized officer.
If a partnership, please sign in partnership name by an authorized person.)
PLEASE MARK, SIGN, DATE AND MAIL TO THE COMPANY
AT THE ADDRESS STATED ON THE REVERSE SIDE.
<PAGE>
