<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
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Cabot Oil & Gas Corporation
(Name of Registrant as Specified in Its Charter)
Lisa A. Machesney, Secretary
Cabot Oil & Gas Corporation
15375 Memorial Drive
Houston, TX 77210-4544
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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/ / 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 registrations 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:
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(4) Date filed:
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
{CABOT OIL & GAS CORPORATION}
April 15, 1994
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Cabot Oil & Gas Corporation to be held on Friday, May 20, 1994 at 10:00 a.m.
at the Ritz-Carlton, Houston, Texas.
Whether or not you plan to attend the Annual Meeting, it is important
that your shares be represented. Please complete, sign, date and mail the
enclosed proxy card in the postage-paid envelope provided.
Sincerely,
/s/ JOHN H. LOLLAR
---------------------------
JOHN H. LOLLAR
Chairman of the Board,
Chief Executive Officer and
President
<PAGE> 3
CABOT OIL & GAS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1994
The Annual Meeting of Stockholders of Cabot Oil & Gas Corporation (the
"Company"), a Delaware corporation, will be held in The Colonnade Salon, The
Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas 77027, on Friday, May 20,
1994 at 10:00 a.m., for the following purposes:
1. To elect three persons to the Board of Directors of the
Company.
2. To adopt the 1994 Long-Term Incentive Plan and to approve
performance criteria adopted thereunder.
3. To adopt the 1994 Nonemployee Director Stock Option Plan.
4. To ratify the appointment of the firm of Coopers &
Lybrand, independent certified public accountants, as auditors of the
Company for its 1994 fiscal year.
5. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 21,
1994, are entitled to receive notice of and to vote at the Annual Meeting. The
transfer books of the Company will not be closed.
Stockholders who do not expect to be present at the Annual Meeting are
urged to complete, date, sign and return the accompanying proxy in the
enclosed, self-addressed envelope requiring no postage if mailed in the United
States. You may still vote in person if you do attend the Annual Meeting.
It is important that your shares be voted at the Annual Meeting.
Please exercise your right to vote and return a completed form of proxy at your
earliest convenience.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ LISA A. MACHESNEY
----------------------------------
LISA A. MACHESNEY
Secretary
Houston, Texas
April 15, 1994
<PAGE> 4
CABOT OIL & GAS CORPORATION
15375 Memorial Drive
Houston, Texas 77079
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1994
GENERAL INFORMATION
Your proxy in the form enclosed is solicited on behalf of the Board of
Directors of Cabot Oil & Gas Corporation (the "Company") for the 1994 Annual
Meeting of Stockholders or any adjournment thereof (the "Annual Meeting"). You
may revoke it at any time prior to its use by a written communication to Ms.
Lisa A. Machesney, Secretary of the Company, or by a duly executed proxy
bearing a later date.
Stockholders attending the Annual Meeting may vote their shares in
person even though they have already executed a proxy. Properly executed
proxies not revoked will be voted in accordance with the specifications thereon
at the Annual Meeting and at any adjournment thereof. Proxies on which no
voting instructions are indicated will be voted for the election of the
nominees for directors, for adoption of the 1994 Long-Term Incentive Plan, for
adoption of the 1994 Nonemployee Director Stock Option Plan, for ratification
of the appointment of Coopers & Lybrand, independent certified public
accountants, as auditors of the Company for its 1994 fiscal year and in the
best judgment of the proxy holders on any other matter that may properly come
before the Annual Meeting.
Only stockholders of record as of the close of business on March 21,
1994, are entitled to vote at the Annual Meeting. As of that date, the Company
had outstanding and entitled to vote 20,585,013 shares of Class A Common Stock,
par value $.10 per share ("Common Stock"). Each share of Common Stock is
entitled to one vote. There is no provision for cumulative voting. A quorum
for the consideration of business at the Annual Meeting consists of a majority
of all outstanding shares of Common Stock entitled to vote at the Annual
Meeting.
In accordance with Delaware law, a stockholder entitled to vote for
the election of directors can withhold authority to vote for all nominees for
directors or can withhold authority to vote for certain nominees for directors.
Abstentions from proposals are treated as votes against the particular
proposal. Broker non-votes on proposals are treated as shares as to which
voting power has been withheld by the beneficial holders of those shares and,
therefore, as shares not entitled to vote on the proposal as to which there is
the broker non-vote.
PROPOSAL I.
ELECTION OF DIRECTORS
At the Annual Meeting, Henry O. Boswell, William R. Esler and Charles
P. Siess, Jr. will be nominated for election to the class of directors whose
term expires in 1997. Messrs. Boswell, Esler and Siess are currently directors
of the Company whose terms expire at the Annual Meeting. Mr. Boswell was
elected to the Board of Directors on July 29, 1991 by the Board of Directors.
Mr. Esler was elected to the Board of Directors on July 22, 1992 by the Board
of Directors. Mr. Siess was appointed to the Board of Directors as of December
14, 1989 in the Company's Certificate of Incorporation. Mr. Philip J.
Burguieres, a member of the Board of Directors since May 20, 1993, resigned
effective March 6, 1994, for personal reasons.
<PAGE> 5
It is the intention of the persons named in the enclosed form of proxy
to vote such proxies for the election of the nominees listed herein. The Board
of Directors expects that each of the three nominees will be available for
election but, in the event that any of the nominees are not so available at the
time of the Annual Meeting, proxies received will be voted for substitute
nominees to be designated by the Board of Directors or, in the event no such
designation is made by the Board, proxies will be voted for a lesser number of
nominees. In no event will the proxies be voted for more than the number of
nominees set forth below.
CERTAIN INFORMATION REGARDING NOMINEES AND DIRECTORS
Set forth below, as of March 1, 1994, for each director that will
continue to serve after the Annual Meeting and for each nominee for election as
a director of the Company, is information regarding his age, position(s) with
the Company, membership on committees of the Board of Directors, the period
during which he has served as a director and term of office, any family
relationship with any other director or executive officer of the Company, his
business experience during the past five years, and other directorships
currently held by him.
SAMUEL W. BODMAN
Age: 55
Committee Membership: Compensation, Nominations
Director Since: 1989
Term of Office Expires: 1996
Business Experience:
Cabot Corporation:
Chairman of the Board - October 1988 to present
President - February 1991 to present,
January 1987 to October 1988
Chief Executive Officer - February 1988 to present
Other Directorships:
Cabot Corporation
American Oil and Gas Corporation
John Hancock Mutual Life Insurance Company
Westvaco Corporation
HENRY O. BOSWELL
Age: 64
Committee Membership: Audit, Compensation
Director Since: 1991
Term of Office Expires: 1994 (Nominee for Election)
Business Experience:
Amoco Production Company
Retired President - 1983 to October 1987
Amoco Corporation
Director - 1983 to October 1987
Amoco Canada Petroleum Ltd.
Chairman of the Board - 1983 to October 1987
Other Directorships:
ServiceMaster Management Corporation
ServiceMaster Consumer Services, Inc.
Rowan Companies, Inc.
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<PAGE> 6
JOHN G.L. CABOT
Age: 59
Committee Memberships: Nominations, Safety and Environmental Affairs
Director Since: 1989
Term of Office Expires: 1995
Business Experience:
Cabot Corporation:
Chief Financial Officer - October 1992 to present
Vice Chairman of the Board - October 1988 to present
Executive Vice President - January 1985 to October 1988
Other Directorships:
Cabot Corporation
Eaton Vance Corp.
WILLIAM R. ESLER
Age: 67
Committee Membership: Audit, Safety and Environmental Affairs
Director Since: 1992
Term of Office Expires: 1994 (Nominee for Election)
Business Experience:
Southwestern Public Service Company
Retired - March 1991
Chairman of the Board and Chief Executive Officer - July 1989 to
March 1991
President and Chief Executive Officer - January 1989 to
July 1989
President and Chief Operating Officer - 1985 to July 1989 Director -
1985 to 1992
Utility Engineering Corporation
Chairman of the Board - 1989 to 1991
WILLIAM H. KNOELL
Age: 69
Committee Membership: Audit, Safety and Environmental Affairs
Director Since: 1990
Term of Office Expires: 1995
Business Experience:
Cyclops Industries, Inc.
Retired - September 1989
President - 1972 to September 1989
Chief Executive Officer - 1973 to September 1989
Chairman of the Board - 1987 to September 1989
Other Directorships:
DQE
Duquesne Light Company
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<PAGE> 7
JOHN H. LOLLAR
Age: 55
Director Since: 1992
Term of Office Expires: 1996
Business Experience:
Cabot Oil & Gas Corporation
Chairman of the Board and
Chief Executive Officer - January 1993 to present
President and Chief Operating Officer - October 1992 to present
Transco Exploration and Production Company
President and Chief Operating Officer - 1982 to 1992
CARL M. MUELLER
Age: 73
Committee Membership: Compensation, Safety and Environmental Affairs
Director Since: 1990
Term of Office Expires: 1996
Business Experience:
Bankers Trust New York Corporation and Bankers Trust Company
Retired - June 1985
Vice Chairman of the Board - 1977 to June 1985
Other Directorships:
Teltrend, Inc.
AEA Investors, Inc.
BT Capital Corporation
PLI Investors Inc.
C. WAYNE NANCE
Age: 62
Committee Memberships: Compensation, Nominations
Director Since: 1992
Term of Office Expires: 1995
Business Experience:
C. Wayne Nance & Associates, Inc. (petroleum consulting and investments)
President - July 1989 to present
The Mitchell Group
Senior Vice President - July 1989 to Present
Tenneco Oil Company
Retired - July 1989
President - March 1987 to July 1989
Other Directorships:
Matador Petroleum Corporation
D.I. Industries Inc.
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<PAGE> 8
CHARLES P. SIESS, JR.
Age: 67
Committee Memberships: Audit, Safety and Environmental Affairs
Director Since: 1989
Term of Office Expires: 1994 (Nominee for Election)
Business Experience:
Bridas S.A.P.I.C. Oil Exploration
Consultant - October 1993 to present
Acting General Manager - February 1993 to October 1993
Cabot Oil & Gas Corporation
Retired - December 1992
Chairman of the Board and Chief Executive Officer - December 1989 to
December 1992
President and Chief Operating Officer - February 1992 to October 1992
Other Directorships:
Cabot Corporation
CAMCO, Inc.
Rowan Companies, Inc.
INFORMATION ON THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held seven meetings during the year ended
December 31, 1993. The Board of Directors has four standing committees: the
Audit Committee, the Compensation Committee, the Nominations Committee and the
Safety and Environmental Affairs Committee. Membership on each committee is
listed above. All standing committees are composed entirely of nonemployee
directors.
The Audit Committee annually recommends the independent public
accountants to be appointed by the Board of Directors as auditor of the Company
and its subsidiaries; the committee also reviews the arrangements for and the
results of the auditor's examination of the Company's books and records,
internal accounting control procedures, and the activities and recommendations
of the Company's internal auditors. It reports to the Board of Directors on
Audit Committee activities and makes such investigations as it deems
appropriate. The Audit Committee held three meetings during 1993.
The Compensation Committee determines the salaries, bonuses and other
remuneration of the Company's officers who are also directors, reviews and
approves the salaries, bonuses and other remuneration of all other executive
officers, and determines the aggregate amount of bonuses and other incentives
to be paid pursuant to the Company's incentive compensation program. It
administers the Company's Annual Target Cash Incentive Plan, Incentive Stock
Option Plan and supplemental retirement plans, including the adoption of the
rules and regulations therefor and the determination of awards. It will also
administer the 1994 Long-Term Incentive Plan, upon stockholder approval. See
Proposal II. Approval of 1994 Long-Term Incentive Plan below. It also makes
recommendations to the Board of Directors with respect to the Company's
compensation policy. The Compensation Committee held eight meetings during
1993.
The Nominations Committee considers and proposes nominees for
membership on the Board of Directors, including nominations made by
stockholders, reviews the composition of the Board of Directors and makes
recommendations to the Board of Directors concerning corporate governance. Any
stockholder desiring to make a nomination to the Board of Directors should
submit such nomination for consideration by the Nominations Committee,
including such nominee's qualifications, to Ms. Lisa A. Machesney, Secretary,
Cabot Oil & Gas Corporation, 15375 Memorial Drive, Houston, Texas 77079. The
Nominations Committee held one meeting during 1993.
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<PAGE> 9
The Safety and Environmental Affairs Committee reviews the Company's
safety and environmental management programs and major hazard analyses. It
also reviews the nature of and extent of Company spending from time to time for
safety and environmental compliance. It further consults with outside and
internal advisors of the Company regarding the management of the Company's
safety and environmental programs. The Safety and Environmental Affairs
Committee held two meetings during 1993.
All directors attended 75% or more of the meetings of the Board of
Directors and of the committees held while they were members during 1993.
DIRECTOR'S COMPENSATION
Directors who are not employees of the Company were compensated during
1993 by the payment quarterly of a cash fee of $3,000, plus $1,000 for
attendance by them at each Board meeting and $500 for attendance at each
meeting of a committee of which they are a member. Committee chairmen
received an additional fee of $250 per quarter. Directors are further
compensated $500 for attendance at business meetings when so requested by the
Chairman of the Board of Directors.
Nonemployee directors also received nondiscretionary automatic grants
of nonqualified options to purchase 10,000 shares of the Common Stock at a
price equal to 100% of the fair market value on the date first elected to the
Board of Directors under the 1990 Nonemployee Director Stock Option Plan.
Messrs. Bodman, Cabot and Siess (nonemployee directors who did not receive an
option under the 1990 Nonemployee Director Stock Option Plan) each received a
nondiscretionary automatic grant of nonqualified options to purchase 10,000
shares of Common Stock under the 1994 Nonemployee Director Stock Option Plan,
subject to stockholder approval of the plan, on December 17, 1993, the date the
plan was approved by the Board of Directors, at a price of $20.125 per share.
Beginning with the Annual Meeting and subject to stockholder approval of the
1994 Nonemployee Director Stock Option Plan, nonemployee directors will also
receive a nondiscretionary automatic grant of a nonqualified option to purchase
an additional 5,000 shares of Common Stock upon reelection to a new term of
office. See Proposal III. Approval of 1994 Nonemployee Director Stock Option
Plan below. Directors who are employees of the Company receive no additional
compensation for their duties as directors. All directors were also reimbursed
for travel expenses incurred for attending all Board and committee meetings.
PROPOSAL II.
APPROVAL OF 1994 LONG-TERM INCENTIVE PLAN
The Board of Directors has adopted, subject to stockholder approval,
the 1994 Long-Term Incentive Plan of Cabot Oil & Gas Corporation (the "1994
Incentive Plan"). A copy of the 1994 Incentive Plan is attached hereto as
Exhibit A and is incorporated herein by reference. The 1994 Incentive Plan is
intended as an incentive to retain key executives and other selected employees
of the Company and to reward them for making contributions to the success of
the Company.
Pursuant to the 1994 Incentive Plan, employees of the Company,
including officers and directors who are employees, will be eligible to receive
awards consisting of (i) stock options, (ii) stock appreciation rights, (iii)
restricted or nonrestricted stock awards, (iv) cash awards or (v) any
combination of the foregoing. An aggregate of 1,500,000 shares of Common Stock
have been reserved for issuance pursuant to the 1994 Incentive Plan. The
Company's Incentive Stock Option Plan (the "Incentive Plan"), adopted in
January 1990 in connection with the Company's initial public offering, provides
for options with respect to a total of 1,000,000 shares of Common Stock. As of
December 31, 1993, options to purchase a total of 597,525 shares were
outstanding under the Incentive Plan, and 123,835 shares had been issued upon
exercise of options granted under the Incentive Plan.
The 1994 Incentive Plan will be administered by the Compensation
Committee of the Board of Directors. Subject to the provisions of the 1994
Incentive Plan, the Compensation Committee is authorized to determine the type
or types of awards made to each participant and the terms, conditions and
limitations applicable to each
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<PAGE> 10
award. In addition, the Compensation Committee has the power to interpret the
1994 Incentive Plan, to adopt such rules and regulations as it may deem
necessary or appropriate in keeping with the objectives of the 1994 Incentive
Plan, to extend the exercisability of awards, to accelerate the vesting or
exercisability of awards, to eliminate or make less restrictive any
restrictions of awards, to waive any restrictions or other provisions of awards
of the 1994 Incentive Plan or to otherwise amend or modify awards. The
Compensation Committee may also provide for loans from the Company to permit
the exercise or purchase of awards and may provide for procedures to permit the
exercise or purchase of awards by use of the proceeds to be received from the
sale of Common Stock issuable pursuant to an award.
Options are rights to purchase a specified number of shares of Common
Stock at a price fixed at the time the option is granted. Options granted
pursuant to the 1994 Incentive Plan will become exercisable on such date or
dates as may be established by the Compensation Committee and may either be
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code or non-qualified stock options. The exercise price of options
granted under the Incentive Plan will be an amount not less than the fair
market value of the Common Stock at the time of grant (or, if greater, the par
value thereof). The 1994 Incentive Plan provides that stock options will never
be repriced or reissued at a different exercise price in exchange for existing
options. The exercise price must be paid in full in cash at the time an option
is exercised or, if permitted by the Compensation Committee, by means of
tendering Common Stock or surrendering another award. For purposes of
satisfying the requirements of Section 162(m) of the Internal Revenue Code, in
any calendar year no participant may be granted stock options to purchase or
stock appreciation rights for more than 15% of the total number of shares
initially available for award under the 1994 Incentive Plan.
Stock appreciation rights are rights to receive, without payment to the
Company, cash or shares of Common Stock with a value determined by reference to
the difference between the exercise or "strike" price of the stock appreciation
right and the fair market value or other specified valuation of the Common
Stock at the time of exercise. A stock award is an award of shares of Common
Stock or units denominated in shares of Common Stock that may be subject to
conditions established by the Compensation Committee and may include a
restriction against transfer as well as a repurchase option exercisable by the
Company upon the occurrence of conditions fixed by the Compensation Committee.
During any period of restriction, the employee may have the right to vote and
receive dividends on the shares covered by the restricted stock awards. A cash
award may be denominated in cash with the amount of payment subject to future
service and other restrictions and conditions as may be established by the
Compensation Committee, including continuous service with the Company,
achievement of specific business objectives, increases in specified indices,
attaining specified growth rates and other comparable measures of performance.
Unless otherwise determined by the Compensation Committee, awards under
the 1994 Incentive Plan that constitute derivative securities are not
transferable except by will and by the laws of descent and distribution or
pursuant to a qualified domestic relations order. The 1994 Incentive Plan
allows for the satisfaction of a participant's tax withholding in respect of an
award by the withholding of shares of Common Stock issuable pursuant to the
award or the delivery by the participant of previously owned shares of Common
Stock, in either case valued at the fair market value thereof. On April 5,
1994, the last reported sales price of the Common Stock on the New York Stock
Exchange was $19.25 per share.
The Compensation Committee has adopted performance share provisions
under the 1994 Incentive Plan pursuant to which the Compensation Committee may,
subject to stockholder approval, grant awards of performance shares (a form of
stock award under the 1994 Incentive Plan). Each grant of performance shares
has a three-year performance period, which runs from July 1 of the initial year
of the performance period to June 30 of the third succeeding year. Grants of
performance shares may be made prior to the commencement of the relevant
performance period to members of the executive management group of the Company
selected by the Compensation Committee. Currently, there are approximately
eight individuals who would qualify for performance share awards. No
participant may be granted more than 25,000 performance shares for any given
performance period.
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<PAGE> 11
Each performance share represents the right to receive, after the end
of the performance period, from 0 to 150% of a share of Common Stock, based on
the Company's performance. The performance criteria that determines the number
of shares of Common Stock of the Company issued per performance share is the
relative total shareholder return on the Company's Common Stock as compared to
the total shareholder return on the common equity of each company in a
comparator group. For this purpose, total shareholder return is expressed as a
percentage equal to common stock price appreciation as averaged for the first
and last month of the performance period plus dividends (on a cumulative
reinvested basis). The comparator group consists of Anadarko Petroleum
Corporation, Apache Corporation, Burlington Resources, Inc. (Meridian Oil),
Devon Energy Corporation, Enron Oil & Gas Company, The Louisiana Land and
Exploration Company, Noble Affiliates, Inc., Oryx Energy Company, Parker &
Parsley Petroleum Company, Plains Petroleum Company, Santa Fe Energy Resources,
Inc. and Seagull Energy Corporation. If any member of the comparator group
ceases to have publicly traded common stock, it will be removed from the
comparator group.
After the end of each performance period, the Company will issue shares
of Common Stock in respect of each performance share award for such period
based on the relative ranking of the Company versus the comparator group for
total shareholder return during the performance period using the following
scale:
<TABLE>
<CAPTION>
Company Relative Percent Performance
Placement Shares
---------------- -------------------
<S> <C>
1 (highest) 150%
2 140%
3 130%
4 120%
5 110%
6 100%
7 75%
8 50%
9 25%
10 0%
11 0%
12 0%
13 (lowest) 0%
</TABLE>
If a participant is not an employee on the last day of the relevant
performance period, no shares of Common Stock shall be issued in respect of the
participant's performance share award unless otherwise determined by the
Compensation Committee. Prior to the issuance of shares of Common Stock in
respect of a performance share award, the participant will have no right to vote
or receive dividends on such shares. Each award of performance shares may not
be assigned or transferred except by will or the laws of descent and
distribution. In the event the Company ceases to have publicly traded common
stock as a result of a business combination or other extraordinary transaction,
the performance period for each outstanding performance share award shall be
terminated effective upon the date of such cessation.
It is the Company's intention to grant stock options and performance
shares pursuant to the 1994 Incentive Plan upon approval by the stockholders.
However, as of the date of this Proxy Statement, the benefits or amounts that
will be received by the participants under the 1994 Incentive Plan had not been
determined.
The performance share provisions are intended to constitute "qualified
performance based compensation" as defined under Section 162(m) of the Internal
Revenue Code, with the effect that the deduction disallowance of Section 162(m)
should not be applicable to compensation paid to covered employees under the
performance share provisions.
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<PAGE> 12
In the event of a stock split, stock dividend, combination or
reclassification or certain other corporate transactions, the Compensation
Committee is authorized to make appropriate adjustments to the exercise price
and number of shares subject to awards granted under the 1994 Incentive Plan.
The Board of Directors has the right to amend, modify, suspend or
terminate the 1994 Incentive Plan, except that (a) without the consent of the
affected participant, no amendment or alteration shall be made that would impair
the rights of a participant under any award theretofore granted and (b) no
amendment or alteration shall be effective prior to approval by the Company's
stockholders to the extent such approval is then required pursuant to Rule 16b-3
(or any successor provision) under the Securities Exchange Act of 1934 (the
"Exchange Act") in order to preserve the applicability of any exemption provided
by such rule to any award then outstanding (unless the holder of such award
consents) or to the extent stockholder approval is otherwise required by
applicable legal requirements.
Certain Federal Income Tax Consequences The following discussion of tax
considerations relating to options describes only certain U.S. federal income
tax matters. The discussion is general in nature and does not take in to
account a number of considerations which may apply in light of the particular
circumstances of an optionee.
Some of the options issuable under the 1994 Incentive Plan may
constitute "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code, while other options granted under the 1994 Incentive Plan
will be non-qualified stock options. The Internal Revenue Code provides for tax
treatment of stock options qualifying as incentive stock options that may be
more favorable to employees than the tax treatment accorded non-qualified stock
options. Generally, upon the exercise of an incentive stock option, the
optionee will recognize no income for U.S. federal income tax purposes. The
difference between the exercise price of the incentive stock option and the fair
market value of the stock at the time of exercise is an item of tax preference
that may require payment of an alternative minimum tax. On the sale of shares
acquired by exercise of an incentive stock option (assuming that the sale does
not occur within two years of the date of grant of the option or within one year
from the date of exercise), any gain will be taxed to the optionee as long-term
capital gain. In contrast, upon the exercise of a non-qualified option, the
optionee recognizes taxable income (subject to withholding) in an amount equal
to the difference between the then fair market value of the shares on the date
of exercise and the exercise price. Upon any sale of such shares by the
optionee, any difference between the sale price and the fair market value of the
shares on the date of exercise of the non-qualified option will be treated
generally as capital gain or loss. No deduction is available to the employer
corporation upon the grant or exercise of an incentive stock option (although a
deduction may be available if the employee sells the shares so purchased before
the applicable holding period expires), whereas upon exercise of a non-qualified
stock option, the employer corporation is entitled to a deduction in an amount
equal to the income recognized by the employee. Except with respect to death,
an optionee has three months after termination of employment in which to
exercise an incentive stock option and retain favorable tax treatment at
exercise. An option exercised more than three months after an optionee's
termination of employment other than upon death cannot qualify for the tax
treatment accorded incentive stock options. Such option would be treated as a
non-qualified stock option instead. Based on the provisions of the 1994
Incentive Plan, the Company expects that the 1994 Incentive Plan will comply
with the requirements of Section 162(m) of the Internal Revenue Code, provided
that the grant is made by a qualified compensation committee.
Approval of the 1994 Incentive Plan and the performance share provisions
adopted thereunder will require the affirmative vote of a majority of the shares
of Common Stock voting on the proposal. For this purpose, abstentions will be
counted as votes against and broker non-votes will not be treated as voting on
the proposal. The persons named on the accompanying proxy will vote in
accordance with the choice specified thereon, or, if no choice is properly
indicated, in favor of the approval of the 1994 Incentive Plan and the
performance share provisions.
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<PAGE> 13
PROPOSAL III.
APPROVAL OF 1994 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder approval, the
1994 Nonemployee Director Stock Option Plan of Cabot Oil & Gas Corporation (the
"1994 Nonemployee Director Plan"). A copy of the 1994 Nonemployee Director Plan
is attached hereto as Exhibit B and is incorporated herein by reference. The
1994 Nonemployee Director Plan is intended as an incentive to attract and retain
as independent directors of the Company persons of training, experience and
ability, to encourage the sense of proprietorship of such persons and to
stimulate their active interest in the development and financial success of the
Company.
Under the 1994 Nonemployee Director Plan, each director of the Company
who is not an employee of the Company is automatically granted an option to
purchase 10,000 shares of Common Stock on the date such person first becomes a
nonemployee director. In addition, each current nonemployee director who did
not receive an option under the 1990 Nonemployee Director Stock Option Plan
(Messrs. Bodman, Cabot and Siess) was granted (subject to stockholder approval
of the 1994 Nonemployee Director Plan) an option to purchase 10,000 shares of
Common Stock on December 17, 1993, the date the plan was approved by the Board
of Directors. Thereafter, upon reelection to a new term of office, each
nonemployee director will be automatically granted an option to purchase an
additional 5,000 shares of Common Stock. Each option permits the optionee to
purchase shares of Common Stock at an exercise price per share equal to 100% of
the fair market value of a share of Common Stock on the date the option is
granted. The exercise price of the options is payable in cash or in shares of
Common Stock or any combination thereof. An optionee may also exercise an
option using the proceeds to be received from the sale of Common Stock issuable
pursuant to the option. The nonemployee directors named above have been granted
options under the 1994 Nonemployee Director Plan at an exercise price of $20.125
per share. The 1994 Nonemployee Director Plan provides for the granting of
options to purchase an aggregate of not more than 100,000 shares of Common
Stock. On April 5, 1994, the last reported sales price of the Common Stock on
the New York Stock Exchange was $19.25 per share.
Options granted under the 1994 Nonemployee Director Plan will be
exercisable, on a cumulative basis, with respect to 33 1/3% of the total number
of shares of Common Stock subject to the option as of the first, second and
third anniversaries of the date of the grant of such option. In the event of a
"change in control" of the Company (as defined in the 1994 Nonemployee Director
Plan), any unvested portion of the options will immediately become exercisable
in full. Options granted under the 1994 Nonemployee Director Plan will
terminate upon the earliest of: (a) five years from the date of the grant of
the option; (b) one year after the optionee ceases to be a director of the
Company by reason of death, disability or mandatory retirement of the optionee;
or (c) three months after the optionee ceases to be a director of the Company
for any reason other than death, disability or mandatory retirement. In the
event of cessation of services of a director because of death, disability or
mandatory retirement, any unmatured installments of the option shall be
accelerated, effective as of the date of cessation of service.
In the event of a stock split, stock dividend, combination or
reclassification or certain other corporate transactions, the Board of Directors
is authorized to make appropriate adjustments to the exercise price and number
of shares subject to options under the 1994 Nonemployee Director Plan.
The Board of Directors has the right to amend, alter or discontinue the
1994 Nonemployee Director Plan, except that (a) without the consent of the
affected optionee, no amendment or alteration shall be made that would impair
the rights of an optionee under any option theretofore granted, (b) no amendment
or alteration shall be effective prior to approval by the Company's stockholders
to the extent such approval is then required pursuant to Rule 16b-3 (or any
successor provision) under the Exchange Act in order to preserve the
applicability of any exemption provided by such rule to any option then
outstanding (unless the holder of such option consents) or to the extent
stockholder approval is otherwise required by applicable legal requirements and
(c) the 1994 Nonemployee Director Plan shall not be amended more than once every
six months to the extent such limitation is required by Rule 16b-3(c)(2)(ii) (or
any successor provision) under the Exchange Act as then in effect.
-10-
<PAGE> 14
Options under the 1994 Nonemployee Director Plan are intended to be
non-qualified options for federal income tax purposes. See Proposal II.
Approval of 1994 Long-Term Incentive Plan --Certain Federal Income Tax
Consequences for a description of the federal income tax consequences of
non-qualified options.
Approval of the 1994 Nonemployee Director Plan will require the
affirmative vote of a majority of the shares of Common Stock voting on the
proposal. For this purpose, abstentions will be counted as votes against and
broker non-votes will not be treated as voting on the proposal. The persons
named on the accompanying proxy will vote in accordance with the choice
specified thereon, or, if no choice is properly indicated, in favor of the
approval of the 1994 Nonemployee Director Plan.
PROPOSAL IV.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon recommendation by the Audit Committee, has
approved and recommended the appointment of Coopers & Lybrand, independent
public accountants, as auditors to examine the Company's financial statements
for 1994. Coopers & Lybrand has served as auditors for the Company and its
predecessors for many years. Neither such firm nor any of its associates has
any relationship with the Company except in their capacity as auditors. The
persons named in the accompanying proxy will vote in accordance with the choice
specified thereon, or, if no choice is properly indicated, in favor of the
designation of Coopers & Lybrand as auditors of the Company.
A representative of Coopers & Lybrand is expected to attend the Annual
Meeting and to be available to respond to appropriate questions raised during
the Meeting. The representative will also have an opportunity to make a
statement during the meeting if the representative so desires.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes annual and long-term compensation paid to
the Company's Chief Executive Officer and the Company's four most highly
compensated executive officers other than the Chief Executive Officer who were
serving as of December 31, 1993 for all services rendered to the Company and its
subsidiaries during each of the last three completed fiscal years.
-11-
<PAGE> 15
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ------------
----------------------------------- Awards
Other ---------- All Other
Annual Securities Compen-
Name and Bonus Compen- Underlying sation
Principal Salary ($) sation ($) Options ($)
Position Year ($) 1/ 2/ 3/ (#) 3/ 15/
--------- ---- ------ ----- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
J. H. Lollar 1993 350,000 120,000 5,764 28,000 8,994
Chairman of the 1992 86,558 275,000 4/ 835 60,000 3,462
Board and CEO 1991 0 0 0
J. U. Clarke 1993 85,228 200,000 5/ 561 30,000 3,000
Executive Vice 1992 0 0 0 0 0
President, Chief 1991 0 0 0
Financial Officer
J. M. Trimble 1993 142,000 50,000 1,740 6/ 7,000 12/ 7,280
Vice President- 1992 142,000 32,000 16,421 7/ 13,400 5,680
Business 1991 136,000 24,650 0
Development
H. B. Whitehead 1993 144,500 45,000 44,310 8/ 8,000 13/ 7,380
Vice President- 1992 137,000 32,000 12,079 9/ 13,400 5,480
Regional Manager 1991 125,000 35,250 0
C. P. Cook 1993 147,750 35,000 11,174 10/ 7,000 14/ 7,510
Vice President - 1992 143,000 32,000 28,648 11/ 13,400 5,720
Regional Manager 1991 137,000 28,550 0
</TABLE>
See Footnotes on Page 13
-12-
<PAGE> 16
- ----------
1/ 1991 and 1992 fiscal year bonuses have been allocated between the
calendar years. The 1993 fiscal year bonus corresponds to the 1993
calendar year.
2/ Unless otherwise indicated, the amount in this column represents premiums
paid on and a tax gross-up for imputed income on executive term life
insurance.
3/ Information in this column is not presented for 1991 in accordance with
the transitional provisions of the Commission's rules on executive
compensation.
4/ Includes $250,000 bonus paid upon commencement of employment with the
Company in October 1992.
5/ Includes $150,000 bonus paid upon commencement of employment with the
Company in August 1993.
6/ Represents $668 for premiums paid on and a tax gross-up for imputed
income on executive term life insurance and $1,072 tax gross-up for
relocation expenses.
7/ Represents $659 for premiums paid on and a tax gross-up for imputed
income on executive term life insurance, $11,833 (the equivalent of one
month's salary) as a relocation allowance and $3,929 tax gross-up for
relocation expenses.
8/ Represents $400 for premiums paid on and a tax gross-up for imputed
income on executive term life insurance and $43,910 tax gross-up for
relocation expenses.
9/ Represents $662 for premiums paid on and a tax gross-up for imputed
income on executive term life insurance and $11,417 (the equivalent of
one month's salary) as a relocation allowance.
10/ Represents $1,145 for premiums paid on and a tax gross-up for imputed
income on executive term life insurance and $10,029 tax gross-up for
relocation expenses.
11/ Represents $1,732 for premiums paid on and a tax gross-up for imputed
income on executive term life insurance, $11,916 (the equivalent of one
month's salary) as a relocation allowance and $15,000 tax gross-up for
relocation expenses.
12/ No restricted stock awards were made during the years reported. However,
in connection with the Company's initial public offering, Mr. Trimble
purchased 12,500 shares of restricted stock in February 1990, all of
which are still held. The market value (net of the purchase price) of
such shares at December 31, 1993 was $164,063.
13/ No restricted stock awards were made during the years reported. However,
in connection with the Company's initial public offering, Mr. Whitehead
purchased 3,125 shares of restricted stock in February 1990, all of which
are still held. The market value (net of the purchase price) of such
shares at December 31, 1993 was $41,016.
14/ No restricted stock awards were made during the years reported. However,
in connection with the Company's initial public offering, Mr. Cook
purchased 12,500 shares of restricted stock in February 1990, all of
which are still held. The market value (net of the purchase price) of
such shares at December 31, 1993 was $164,063.
15/ The amount in this column represents the Company's contribution to the
401(k) plan on behalf of the named executive officer.
-13-
<PAGE> 17
OPTION GRANTS IN LAST FISCAL YEAR
Set forth below is supplemental information relating to the Company's
grants of options during 1993 to the executive officers named in the preceding
Summary Compensation Table, including the relative size of each grant, and each
grant's exercise price and expiration date. Also included is information
relating to the potential realizable value of the options granted, based upon
assumed annualized stock value appreciation rates. Neither the option values
reflected in the table nor the assumptions utilized in arriving at the values
should be considered indicative of future stock performance.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------
Percent of Potential Realizable
Number of Total Value at Assumed Annual
Securities Options Rates
Underlying Granted to Exercise of Stock Price Appreciation
Options Employees of for Option Term
Granted in Base Price Expiration ---------------------------
Name (#)1/ Fiscal Year ($/Sh) 2/ Date 3/ 5% ($) 10% ($)
---- ----------- ----------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
J. H. Lollar 28,000 4/ 17.8% $22.75 May 20, 2003 $400,609 6/ $1,015,187 7/
J. U. Clarke 30,000 5/ 19.1% 26.00 August 16, 2003 490,542 8/ 1,243,086 9/
J. M. Trimble 7,000 4/ 4.5% 22.75 May 20, 2003 100,152 6/ 253,797 7/
H. B. Whitehead 8,000 4/ 5.1% 22.75 May 20, 2003 114,460 6/ 290,053 7/
C. P. Cook 7,000 4/ 4.5% 22.75 May 20, 2003 $100,152 6/ 253,797 7/
</TABLE>
- ----------
1/ There were no adjustments or amendments during 1993 to the exercise price
of stock options previously awarded to any of the named executive
officers.
2/ Based on the average of the high and low trading price per share of the
Company's common stock on the date of grant, as reported on The New York
Stock Exchange, Inc. Composite Transactions Reporting System.
3/ The options permit the exercise price to be paid in cash or by tendering
shares of Common Stock. The options permit the withholding of shares, at
the discretion of the Compensation Committee, to satisfy tax obligations.
4/ 20% of option became exercisable on the date of grant (May 20, 1993) and
the remaining 80% of such option becomes exercisable in 20% increments on
each of the next four anniversary dates of the date of grant.
5/ 25% of option becomes exercisable on the first anniversary of the date of
grant (August 16, 1994) and the remaining 75% becomes exercisable in 25%
increments on each of the next three anniversaries of such date.
6/ The stock price required to produce this value is $37.06 and would produce
a corresponding $294,556,038 increase in total stockholder value based
upon 20,583,930 shares of Common Stock outstanding on March 1, 1994.
7/ The stock price required to produce this value is $59.01 and would produce
a corresponding $746,373,302 increase in total stockholder value based
upon 20,583,930 shares of Common Stock outstanding on March 1, 1994.
8/ The stock price required to produce this value is $42.35 and would produce
a corresponding $336,547,256 increase in total stockholder value based
upon 20,583,930 shares of Common Stock outstanding on March 1, 1994.
9/ The stock price required to produce this value is $67.44 and would produce
a corresponding $852,998,059 increase in total stockholder value based
upon 20,583,930 shares of Common Stock outstanding on March 1, 1994.
-14-
<PAGE> 18
AGGREGATED FY-END OPTION VALUES
Set forth below is supplemental information relating to the number and
intrinsic value of stock options held at December 31, 1993 ("FY- End"), by the
executive officers named in the preceding Summary Compensation Table. Year-end
values are based arbitrarily on the Company's stock price at December 31, 1993,
do not reflect the actual amounts, if any, which may be realized upon the future
exercise of remaining stock options, and should not be considered indicative of
future stock performance. No options were exercised by the individuals named in
the table during 1993.
AGGREGATED FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at FY-End (#) Options at FY-End ($)
--------------------- ---------------------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable 1/
---- ------------- ----------------
<S> <C> <C>
J. H. Lollar 5,600/82,400 $0/$236,100
J. U. Clarke 0/30,000 $0/$0
J. M. Trimble 18,760/16,640 $102,210/$78,315
H. B. Whitehead 16,560/16,840 $90,210/$75,315
C. P. Cook 18,760/16,640 $102,210/$78,315
</TABLE>
- --------
1/ A stock option is considered to be "in-the-money" if the price of the
related stock is higher than the exercise price of the option. Based on
the closing market price of $21.125 per share of the Common Stock as
reported on the New York Stock Exchange, Inc. Composite Transaction
Reporting System for December 31, 1993.
-15-
<PAGE> 19
PENSION PLAN TABLE
Company employees are covered by the Company's Pension Plan (the
"Pension Plan"), a noncontributory defined benefit pension plan that provides
benefits based generally upon the employee's compensation levels during the last
years of employment. In addition, the Company has entered into agreements to
supplement the benefits payable to certain officers to the extent benefits under
the Pension Plan are limited by provisions of the Internal Revenue Code or
ERISA. The following table sets forth estimated annual benefits payable for
eligible employees (including executive officers) who retire at age 65 (normal
retirement age) under the Pension Plan (and, where applicable, such supplemental
agreements) for specified earnings and years of service classification. Amounts
shown are for employees (including all persons listed in the Summary
Compensation Table) who were not "grandfathered" under the Pension Plan (based
on years of service and age) as of September 30, 1988.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------------
REMUNERATION 15 20 25 30 35
------------ ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
125,000 26,762 35,683 44,603 53,524 62,445
150,000 32,387 43,183 53,978 64,774 75,570
175,000 38,012 50,683 63,353 76,024 88,695
200,000 43,637 58,183 72,728 87,274 101,820
225,000 49,262 65,683 82,103 98,524 114,945
250,000 54,887 73,183 91,478 109,774 128,070
275,000 60,512 80,683 100,853 121,024 141,195
300,000 66,137 88,183 110,228 132,274 154,320
400,000 88,637 118,183 147,728 177,274 206,820
450,000 99,887 133,183 166,478 199,774 233,070
500,000 111,137 148,183 185,228 222,274 259,320
600,000 133,637 178,183 222,728 267,274 311,820
</TABLE>
Compensation under the Pension Plan generally consists of base salary
and any short-term incentive payments. The Pension Plan provides for full
vesting after five years of service. Benefits are payable for the life of the
employee on a single-life annuity basis and are not subject to any deductions
for Social Security or other offset amounts. Covered compensation under the
Pension Plan in 1993 for the executive officers named in the Summary
Compensation Table above is the amounts under the "Salary" and "Bonus" columns
set forth in such table. The Company provides Mr. Lollar supplemental pension
benefits by granting one month's additional service credit for each month of
actual service. For purposes of the Pension Plan, including Mr. Lollar's
supplemental pension benefits, Messrs. Lollar, Clarke, Trimble, Whitehead and
Cook had 2.33, .33, 10.67, 13.25 and 9.00 years of credited service,
respectively, as of December 31, 1993.
-16-
<PAGE> 20
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee of the Company's Board of Directors
("Committee") is comprised of four independent, non-employee directors. The
Committee has responsibility for determining the salaries, incentive
compensation and other remuneration of the officers of the Company who are also
directors and for reviewing and approving the salaries, incentive compensation
and other remuneration of all other executive officers of the Company. The
Committee also approves the design of the Company's compensation and benefit
plans.
The foundation of the executive compensation program is based on
principles designed to align compensation with business strategy, to create
value for the stockholders and to support a performance-based culture throughout
the Company. Consistent with these principles, the Committee's compensation
policy for executive officers, including the executive officers named in the
foregoing tables, is to:
[ ] Tie total executive compensation to the performance of the
Company, providing both reward and penalty based on individual
performance and the Company's performance compared to its peers.
[ ] Comprise a significant amount of compensation as long-term,
at-risk pay to focus management on the long-term interests of the
stockholders.
[ ] Tie the at-risk components of pay primarily to equity-based
opportunities to encourage a personal proprietary interest in the
Company and to align executives' interests with those of
stockholders. This promotes a continuing focus on building
profitability and stockholder value.
[ ] Enhance the Company's ability to attract, retain and encourage the
development of exceptionally knowledgeable and experienced
executives upon whom, in large part, the successful operation and
management of the Company depends.
The Committee also believes that executive compensation should be
subject to objective scrutiny. Consequently, the Committee retains the services
of an independent consultant, who on an annual basis evaluates the compensation
programs and practices for the Company's executive officers against a
competitive industry peer group.
COMPONENTS OF COMPENSATION
The Committee relates total compensation levels for the Company's senior
executives to the compensation paid to executives of a peer group of companies.
This peer group consists of companies that are in the same industry and are
considered by the Committee to be direct competitors for investment dollars in
the energy sector of the market. The Committee reviews and approves the
selection of the peer companies used for compensation comparison purposes.
Currently, the peer group is made up of the twelve companies listed in the
description of performance shares under Proposal II. Approval of 1994 Long-Term
Incentive Plan.
The companies chosen for the peer comparator group used for compensation
purposes generally are not the same companies which comprise the Dow Jones
Secondary Oils Index in the Performance Graph included in this proxy statement.
The Committee believes that the Company's most direct competitors for executive
talent are not necessarily all of the companies included in the Dow Jones
Secondary Oils Index used for comparing stockholder returns.
The key elements of the Company's executive compensation program are
base salary, annual incentive bonus and long-term incentives. These key
elements are addressed separately below. In determining each
-17-
<PAGE> 21
component of compensation, the Committee considers competitive data from the
comparator group of companies for each component of pay and the value of the
total compensation package.
BASE SALARIES
The Compensation Committee reviews each executive's base salary
annually. Base salaries are targeted at market levels and are adjusted by the
Committee to recognize varying levels of responsibility, prior experience,
breadth of knowledge, internal equity issues and external pay practices. Base
salaries in 1993 for the executive officers named in the Summary Compensation
Table as a group were at, or near, the 50th percentile of the predicted
competitive market base salary for similar positions in the peer comparator
group. Increases to base salaries are driven primarily by individual
performance.
Mr. Lollar's 1993 base salary of $350,000 remained unchanged from his
initial base salary upon joining the Company in October 1992. Mr. Lollar's
base salary approximates the 50th percentile of the predicted competitive market
base salary for similar positions in the peer comparator group.
ANNUAL INCENTIVE BONUS
The Annual Target Cash Incentive Plan promotes the Company's
pay-for-performance philosophy by providing executives with direct financial
incentives in the form of annual cash bonuses to achieve corporate business
goals and individual performance goals. Annual bonus opportunities allow the
Company to communicate specific goals that are of primary importance during the
coming year and motivate executives to achieve these goals.
A bonus pool is generated under the Annual Target Cash Incentive Plan
when the Company has met pre-determined performance goals which measure the
Company's success. These goals are approved by the Board of Directors each year
in conjunction with its approval of the Company's operating and capital spending
plans. Goals are set for finding costs, reserve additions, produced volumes,
operating cash flow, economic value added and other discretionary objectives.
If a bonus pool is generated based upon achievement of the established Company
goals, executives earn bonuses to the extent pre-established individual
performance goals are achieved.
Individual targets are set at market levels which are considered by the
Compensation Committee to be achievable, based upon corporate and individual
performance. Corporate performance in 1993 produced funding of the bonus pool
close to target levels and bonuses were awarded considering corporate and
individual performance.
Under the Annual Target Cash Incentive Plan, Mr. Lollar received a
$120,000 bonus in connection with the Company's overall 1993 performance under
Mr. Lollar's leadership. Mr. Lollar's bonus is below the median of annual
incentive compensation paid to other chief executives at the comparator
companies.
STOCK OPTIONS
Stock options are granted at an option price not less than the fair
market value of the Common Stock on the date of grant. Accordingly, stock
options have value only if the stock price appreciates from the date the options
are granted. This design focuses executives on the creation of stockholder
value over the long term and encourages equity ownership in the Company. In
1993 stock options were used as the primary long-term incentive vehicle.
The size of stock option grants is based primarily on competitive
practice and is generally targeted to be at the 50th percentile of option values
granted by the comparator companies. When determining the size of option grants
to executive officers, the Committee considers, but does not base its decision
upon, the amount of options previously granted and outstanding. The Committee's
objective is to deliver a competitive award
-18-
<PAGE> 22
opportunity based on the dollar value of the award granted. As a result, the
number of shares underlying stock option awards is dependent on the stock price
on the date of grant.
In 1993, Mr. Lollar received an option to purchase 28,000 shares of
Common Stock with an exercise price of $22.75 as detailed in the Option Grants
in Last Fiscal Year table on page 14. This was determined as set forth in the
previous paragraph. The Committee has determined that compensation
opportunities should remain competitive as long as total compensation fairly
reflects overall corporate and individual achievement. Mr. Lollar now owns
10,000 shares of the Company's Common Stock and with the 1993 grant holds
options to purchase an additional 88,000 shares. The Committee believes this
equity interest provides an appropriate link to the interests of the
stockholders.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Recently enacted Section 162(m) of the Internal Revenue Code generally
limits the corporate deduction for compensation paid to executive officers named
in the proxy statement to $1 million, unless certain requirements are met.
Compensation that meets the definition of "performance based compensation" will
be deductible in full. The Company's annual and long-term incentive plans have
historically required that certain performance criteria be met before producing
an award, or awards have been in the form of options to purchase stock of the
Company, thereby forging a stronger link between executive compensation and
stockholder value creation.
The Company's new 1994 Long-Term Incentive Plan is designed to comply
with the provisions of Section 162(m) so long as grants are made by a qualified
compensation committee. The performance share provisions under the Plan are
designed to constitute "performance based compensation" that will also comply
with these requirements. Options granted under the Company's Incentive Stock
Option Plan currently comply with the requirements under transition rules that
have been announced.
The Committee believes it is in the best interests of the Company at
present to retain discretionary judgment with respect to the annual incentive
bonus plan.
CONCLUSION
The Committee believes these executive compensation policies and
programs serve the interests of stockholders and the Company effectively. The
various pay vehicles offered are appropriately balanced to provide increased
motivation for executives to contribute to the Company's overall future
successes, thereby enhancing the value of the Company for the stockholders'
benefit. The Committee will continue to monitor the effectiveness of the
Company's total compensation program to meet the current needs of the Company.
Compensation Committee
Carl M. Mueller, Chairman
Samuel W. Bodman
Henry O. Boswell
C. Wayne Nance
-19-
<PAGE> 23
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
No member of the Compensation Committee was, during 1993, an officer or
employee of the Company or any of its subsidiaries, or formerly an officer of
the Company or any of its subsidiaries. During 1993, the Company had no
Compensation Committee interlocks.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT
Mr. H. Patrick Seale, former Vice President - Engineering, failed to
timely file a Form 4 disclosing one stock option exercise transaction that took
place within six months of his departure from the Company.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following graph compares the Common Stock ("COG") performance with
the performance of the Standard & Poors 500 Stock Index and the Dow Jones
Secondary Oils Index for the period February 1990 (the date of the Company's
initial public offering) through the end of 1993. The graph assumes that the
value of the investment in the Company's Common Stock and in each index was $100
on February 8, 1990 and that all dividends were reinvested.
<TABLE>
<CAPTION>
Feb 1990 Dec 1990 Dec 1991 Dec 1992 Dec 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Standard & Poors 500 100 103 133 144 158
COG 100 93 73 107 128
DJ Secondary Oils 100 85 84 84 94
</TABLE>
-20-
<PAGE> 24
BENEFICIAL OWNERSHIP OF OVER FIVE PERCENT OF COMMON STOCK
The following table reports beneficial ownership by holders of
more than five percent of the Common Stock. All ownership information is based
upon filings made by such persons with the Commission except as hereafter
described. On February 25, 1994, the Company and Washington Energy Company
("WECO") signed an agreement to merge a subsidiary of the Company and Washington
Energy Resources Company ("WERCO"), a subsidiary of WECO. The Company will
acquire the stock of WERCO in a tax-free exchange for total consideration of
approximately $180 Million, subject to certain adjustments. At the closing of
the transaction, the Company will issue to WECO 2,133,000 shares of Common Stock
and 1,134,000 shares of a 6% Convertible Redeemable Preferred Stock (the "6%
Preferred Stock") in exchange for the capital stock of WERCO. The 6% Preferred
Stock has a stated value of $50.00 per share and is convertible into 1,972,174
shares of the Company's Common Stock at $28.75 per share. WECO will be entitled
to 1.739 votes for each share of 6% Preferred Stock held and will vote together
with the holders of the Common Stock on all matters to be voted on by the
holders of the Common Stock, with certain exceptions when voting as a class is
required. After completion of the transaction, and assuming full conversion of
the 6% Preferred Stock, WECO will hold approximately 16% of the outstanding
Common Stock of the Company. Because of the size of WECO's investment in the
Company, after completion of the transaction, WECO will be entitled to nominate
two persons to serve on the Company's Board of Directors. The Company currently
anticipates that the transaction will close by the end of April 1994.
<TABLE>
<CAPTION>
Number of Shares
Name and Address of of Common Stock Percent of
Beneficial Owner Owned Class
------------------- ---------------- -----------
<S> <C> <C>
FMR Corp. 2,435,306 1/ 11.8%
82 Devonshire Street
Boston, MA 02109
Wellington Management Company 2,354,893 2/ 11.4%
75 State Street
Boston, MA 02109
The Prudential Insurance Company 1,368,210 3/ 6.6%
of America
751 Broad Street
Newark, N.J. 07102
The Windsor Funds, Inc. 1,325,000 4/ 6.4% 4/
Vanguard Group of Investment
Companies
Post Office Box 2600
Valley Forge, PA 19482
New South Capital Management, Inc. 1,067,145 5/ 5.2%
755 Crossover Lane, Suite 233
Memphis, TN 38117
</TABLE>
- -----------
1/ According to Amendment No. 3 to a Schedule 13G, dated February 11, 1994,
filed with the Commission by FMR Corp., a Massachusetts corporation, it
has sole voting power over 67,600 of these shares and sole dispositive
power over all of these shares.
2/ According to Amendment No. 4 to a Schedule 13G, dated February 10, 1994,
filed with the Commission by Wellington Management Company, a
Massachusetts corporation, it has shared voting power over 32,620 of these
shares and shared dispositive power over all of these shares. This amount
includes the shares beneficially owned by The Windsor Fund, Inc. See Note
(4) below.
3/ According to a Schedule 13G, dated January 31, 1994, filed with the
Commission by The Prudential Insurance Company of America, a New Jersey
corporation, it has shared voting and dispositive power over 762,850 of
these shares.
4/ According to Amendment No. 2 to a Schedule 13G, dated February 10, 1994,
filed with the Commission by The Windsor Funds, Inc., a Maryland
corporation, it has sole voting power and shared dispositive power over
these shares. Wellington Management Company shares beneficial ownership
over all of these shares with, and is the investment advisor to, The
Windsor Funds, Inc.
5/ According to a Schedule 13G, dated January 5, 1994, filed with the
Commission by New South Capital Management, Inc., a Tennessee corporation,
it has shared voting power over 60,000 of these shares and sole
dispositive power over all of these shares.
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<PAGE> 25
BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table reports, as of March 1, 1994, beneficial ownership of
Common Stock by each current director of the Company, by each executive officer
listed in the preceding Summary Compensation Table and by all directors and
executive officers as a group. Unless otherwise indicated, the persons below
have sole voting and investment power with respect to the shares of Common
Stock shown as beneficially owned by them. All ownership information is based
upon filings made by such persons with the Securities and Exchange Commission
(the "Commission").
<TABLE>
<CAPTION>
Number of Shares
of Common Percent of
Name of Beneficial Owner Stock Owned Class
- ------------------------ ---------------- ----------
<S> <C> <C>
Samuel W. Bodman . . . . . . . . . . . . . . . . 146,635 1/ *
Henry O. Boswell . . . . . . . . . . . . . . . . 11,500 2/ *
John G.L. Cabot . . . . . . . . . . . . . . . . . 262,957 3/ 1.3
William R. Esler . . . . . . . . . . . . . . . . 6,000 4/ *
William H. Knoell . . . . . . . . . . . . . . . . 11,000 5/ *
John H. Lollar . . . . . . . . . . . . . . . . . 15,600 6/ *
Carl M. Mueller . . . . . . . . . . . . . . . . . 14,187 7/ *
C. Wayne Nance . . . . . . . . . . . . . . . . . 5,000 8/ *
Charles P. Siess, Jr. . . . . . . . . . . . . . . 186,615 9/ *
John U. Clarke . . . . . . . . . . . . . . . . . 4,100 *
James M. Trimble . . . . . . . . . . . . . . . . 33,071 10/ *
H. Baird Whitehead . . . . . . . . . . . . . . . 21,072 11/ *
Curtis P. Cook . . . . . . . . . . . . . . . . . 31,344 12/ *
All directors and executive officers as a group
(19 individuals) . . . . . . . . . . . . . . . 780,652 13/ 3.8
</TABLE>
- ----------
* Represents less than 1% of the outstanding Common Stock.
1/ Includes 950 shares for which Mr. Bodman is the indirect owner as Trustee
of the Elizabeth L. Bodman Trust, as to which Mr. Bodman disclaims
beneficial ownership.
2/ Includes 7,500 shares purchasable upon the exercise of options within
sixty days.
3/ Includes 1,782 shares held by Mr. Cabot's spouse and 132,560 shares held
by various trusts in which Mr. Cabot serves as co-trustee, as to all of
which Mr. Cabot shares voting and investment power; Mr. Cabot disclaims
beneficial ownership of such shares.
4/ Includes 2,000 shares purchasable upon the exercise of options within
sixty days.
5/ Includes 10,000 shares purchasable upon the exercise of options within
sixty days.
6/ Includes 5,600 shares purchasable upon the exercise of options within
sixty days.
7/ Includes 10,000 shares purchasable upon the exercise of options within
sixty days and 237 shares held by Mr. Mueller's spouse as to which Mr.
Mueller disclaims beneficial ownership.
8/ Includes 5,000 shares purchasable upon the exercise of options within
sixty days.
9/ Includes 136,000 shares purchasable upon the exercise of options within
sixty days.
10/ Includes 1,811 shares held in the Company's Savings Investment Plan as to
which Mr. Trimble shares voting and investment power and 18,760 shares
purchasable upon the exercise of options within sixty days.
11/ Includes 1,308 shares held in the Company's Savings Investment Plan as to
which Mr. Whitehead shares voting and investment power and 16,560 shares
purchasable upon the exercise of options within sixty days.
12/ Includes 45 shares held in the Company's Savings Investment Plan as to
which Mr. Cook shares voting and investment power and 18,760 shares
purchasable upon the exercise of options within sixty days.
13/ Includes 6,249 shares held in the Company's Savings Investment Plan as to
which the executive officers share voting and investment power and 258,920
shares purchasable by the executive officers and directors upon the
exercise of options within sixty days. See also Notes 1-12 above.
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<PAGE> 26
FUTURE STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in the proxy statement
for the 1995 annual meeting of stockholders of the Company should be sent to Ms.
Lisa A. Machesney, Secretary, Cabot Oil & Gas Corporation, 15375 Memorial Drive,
Houston, Texas 77079 and must be received by December 16, 1994.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the enclosed form will be borne by the
Company. In addition to solicitation by mail, officers, employees or agents of
the Company may solicit proxies personally, by telephone, and by telegraph. The
Company may request banks and brokers or other similar agents or fiduciaries to
transmit the proxy material to the beneficial owners for their voting
instructions and will reimburse them for their expenses in so doing. Morrow &
Co., Inc. has been retained to assist the Company in the solicitation of proxies
at a fee estimated not to exceed $6,500.
MISCELLANEOUS
The Company's management does not know of any matters to be presented at
the Annual Meeting other than those set forth in the Notice of Annual Meeting of
Stockholders. However, if any other matters properly come before the Meeting,
the persons named in the enclosed proxy intend to vote the shares to which the
proxy relates on such matters in accordance with their best judgment unless
otherwise specified in the proxy.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ LISA A. MACHESNEY
----------------------------------
LISA A. MACHESNEY
Secretary
April 15, 1994
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<PAGE> 27
CABOT OIL & GAS CORPORATION
<PAGE> 28
EXHIBIT A
1994 LONG-TERM INCENTIVE PLAN
OF
CABOT OIL & GAS CORPORATION
1. Objectives. The Cabot Oil & Gas Corporation 1994
Long-Term Incentive Plan (the "Plan") is designed to retain key executives and
other selected employees and reward them for making major contributions to the
success of Cabot Oil & Gas Corporation, a Delaware corporation (the "Company"),
and its Subsidiaries (as hereinafter defined). These objectives are to be
accomplished by making awards under the Plan and thereby providing Participants
(as hereinafter defined) with a proprietary interest in the growth and
performance of the Company and its Subsidiaries.
2. Definitions. As used herein, the terms set forth
below shall have the following respective meanings:
"Award" means the grant of any form of stock option, stock
appreciation right, stock award or cash award, whether granted singly, in
combination or in tandem, to a Participant pursuant to any applicable terms,
conditions and limitations as the Committee may establish in order to fulfill
the objectives of the Plan.
"Award Agreement" means a written agreement between the
Company and a Participant that sets forth the terms, conditions and limitations
applicable to an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means such committee of the Board as is designated
by the Board to administer the Plan. The Committee shall be constituted to
permit the Plan to comply with Rule 16b-3.
"Common Stock" means the Class A Common Stock, par value $.10
per share, of the Company.
"Director" means an individual serving as a member of the
Board.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fair Market Value" means, as of a particular date, (i) if the
shares of Common Stock are listed on a national securities exchange, the
average between the highest and lowest sales price per share of Common Stock on
the consolidated transaction reporting system for the principal such national
securities exchange on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (ii) if the shares of Common Stock are not so listed but are quoted
in the NASDAQ National Market System, the average between the highest and
lowest sales price per share of Common Stock on the NASDAQ National Market
System on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported or
(iii) if the Common Stock is not so listed or quoted, the average between the
closing bid and asked price on that date, or, if there are no quotations
available for such date, on the last preceding date on which such quotations
shall be available,
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<PAGE> 29
as reported by NASDAQ, or, if not reported by NASDAQ, by the National
Quotation Bureau, Inc.
"Participant" means an employee of the Company or any of its
Subsidiaries to whom an Award has been made under this Plan.
"Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, or any successor rule.
"Subsidiary" means any corporation of which the Company
directly or indirectly owns shares representing more than 50% of the voting
power of all classes or series of capital stock of such corporation which have
the right to vote generally on matters submitted to a vote of the stockholders
of such corporation.
3. Eligibility. Employees of the Company and its
Subsidiaries are eligible for an Award under this Plan.
4. Common Stock Available for Awards. There shall be
available for Awards granted wholly or partly in Common Stock (including rights
or options which may be exercised for or settled in Common Stock) during the
term of this Plan an aggregate of 1,500,000 shares of Common Stock of which no
more than 600,000 shares will be used for Stock Awards. The Board of Directors
and the appropriate officers of the Company shall from time to time take
whatever actions are necessary to file required documents with governmental
authorities and stock exchanges and transaction reporting systems to make
shares of Common Stock available for issuance pursuant to Awards. Common Stock
related to Awards that are forfeited or terminated, expire unexercised, are
settled in cash in lieu of Stock or in a manner such that all or some of the
shares covered by an Award are not issued to a Participant, or are exchanged
for Awards that do not involve Common Stock, shall immediately become available
for Awards hereunder. The Committee may from time to time adopt and observe
such procedures concerning the counting of shares against the Plan maximum as
it may deem appropriate under Rule 16b-3.
5. Administration. This Plan shall be administered by
the Committee, which shall have full and exclusive power to interpret this Plan
and to adopt such rules, regulations and guidelines for carrying out this Plan
as it may deem necessary or proper, all of which powers shall be exercised in
the best interests of the Company and in keeping with the objectives of this
Plan. The Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan or an Award or
otherwise amend or modify an Award in any manner that is either (i) not adverse
to the Participant holding such Award or (ii) consented to by such Participant.
The Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the
Committee deems necessary or desirable to carry it into effect. Any decision
of the Committee in the interpretation and administration of this Plan shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned. No member of the Committee or officer of the
Company to whom it has delegated authority in accordance with the provisions of
Paragraph 6 of this Plan shall be liable for anything done or omitted to be
done by him or her, by any member of the Committee or by any officer of the
Company in connection with the performance of any duties under this Plan,
except for his or her own willful misconduct or as expressly provided by
statute. The Committee shall establish the vesting schedule, if any, for each
award. It is the intent of this Plan that any stock option grants will never
be repriced or reissued.
6. Delegation of Authority. The Committee may delegate
to the Chief Executive Officer and to other senior officers of the Company its
duties under this Plan pursuant to such conditions or limitations as the
Committee may establish, except that the Committee may not delegate to any
person the authority to grant Awards to, or take other action with respect to,
Participants who are subject to Section 16 of the Exchange Act.
A-2
<PAGE> 30
7. Awards. The Committee shall determine the type or
types of Awards to be made to each Participant under this Plan. Each Award
made hereunder shall be embodied in an Award Agreement, which shall contain
such terms, conditions, performance requirements and limitations
as shall be determined by the Committee in its sole discretion and shall be
signed by the Participant and by the Chief Executive Officer, the Chief
Operating Officer, or any Vice President of the Company for and on behalf of
the Company. Awards may consist of those listed in this Paragraph 7 and may be
granted singly, in combination or in tandem. Awards may also be made in
combination or in tandem with, in replacement of, or as alternatives to, grants
or rights under this Plan or any other employee plan of the Company or any of
its Subsidiaries, including the plan of any acquired entity. An Award may
provide for the granting or issuance of additional, replacement or alternative
Awards upon the occurrence of specified events, including the exercise of the
original Award. Notwithstanding anything herein to the contrary, no
Participant may be granted, during any calendar year, Awards consisting of
stock options or stock appreciation rights on more than 15% of the total number
of shares of Common Stock initially available for award under the Plan.
(a) Stock Option. An Award may consist of a right to
purchase a specified number of shares of Common Stock at a specified price that
is not less than the greater of (i) the Fair Market Value of the Common Stock
on the date of grant and (ii) the par value of the Common Stock on the date of
grant. A stock option may be in the form of an incentive stock option ("ISO")
which, in addition to being subject to applicable terms, conditions and
limitations established by the Committee, complies with Section 422 of the
Code.
(b) Stock Appreciation Right. An Award may consist of a
right to receive a payment, in cash or Common Stock, equal to the excess of the
Fair Market Value or other specified valuation of a specified number of shares
of Common Stock on the date the stock appreciation right ("SAR") is exercised
over a specified strike price as set forth in the applicable Award Agreement.
(c) Stock Award. An Award may consist of Common Stock or
may be denominated in units of Common Stock. All or part of any stock award
may be subject to conditions established by the Committee, and set forth in the
Award Agreement, which may include, but are not limited to, continuous service
with the Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attaining specified growth rates
and other comparable measurements of performance. Such Awards may be based on
Fair Market Value or other specified valuations. The certificates evidencing
shares of Common Stock issued in connection with a stock award shall contain
appropriate legends and restrictions describing the terms and conditions of the
restrictions applicable thereto.
(d) Cash Award. An Award may be denominated in cash with
the amount of the eventual payment subject to future service and such other
restrictions and conditions as may be established by the Committee, and set
forth in the Award Agreement, including, but not limited to, continuous service
with the Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attaining specified growth rates
and other comparable measurements of performance.
8. Payment of Awards.
(a) General. Payment of Awards may be made in the form
of cash or Common Stock or combinations thereof and may include such
restrictions as the Committee shall determine, including in the case of Common
Stock, restrictions on transfer and forfeiture provisions. As used herein,
"Restricted Stock" means Common Stock that is restricted or subject to
forfeiture provisions.
(b) Deferral. With the approval of the Committee,
payments may be deferred, either in the form of installments or a future lump
sum payment. The Committee may permit selected Participants to
A-3
<PAGE> 31
elect to defer payments of some or all types of Awards in accordance with
procedures established by the Committee. Any deferred payment, whether
elected by the Participant or specified by the Award Agreement or by the
Committee, may be forfeited if and to the extent that the Award Agreement
so provides.
(c) Dividends and Interest. Dividends or dividend
equivalent rights may be extended to and made part of any Award denominated in
Common Stock or units of Common Stock, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may also establish
rules and procedures for the crediting of interest on deferred cash payments
and dividend equivalents for deferred payment denominated in Common Stock or
units of Common Stock.
(d) Substitution of Awards. At the discretion of the
Committee, a Participant may be offered an election to substitute an Award for
another Award or Awards of the same or different type.
9. Stock Option Exercise. The price at which shares of
Common Stock may be purchased under a stock option shall be paid in full at the
time of exercise in cash or, if permitted by the Committee, by means of
tendering Common Stock or surrendering another Award, including Restricted
Stock, valued at Fair Market Value on the date of exercise, or any combination
thereof. The Committee shall determine acceptable methods for tendering Common
Stock or other Awards to exercise a stock option as it deems appropriate. If
permitted by the Committee, payment may be made by successive exercises by the
Participant. The Committee may provide for loans from the Company to permit
the exercise or purchase of Awards and may provide for procedures to permit the
exercise or purchase of Awards by use of the proceeds to be received from the
sale of Common Stock issuable pursuant to an Award. Unless otherwise provided
in the applicable Award Agreement, in the event shares of Restricted Stock are
tendered as consideration for the exercise of a stock option, a number of the
shares issued upon the exercise of the stock option, equal to the number of
shares of Restricted Stock used as consideration therefor, shall be subject to
the same restrictions as the Restricted Stock so submitted as well as any
additional restrictions that may be imposed by the Committee.
10. Tax Withholding. The Company shall have the right to
deduct applicable taxes from any Award payment and withhold, at the time of
delivery or vesting of cash or shares of Common Stock under this Plan, an
appropriate amount of cash or number of shares of Common Stock or a combination
thereof for payment of taxes required by law or to take such other action as
may be necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. The Committee may also permit withholding to be
satisfied by the transfer to the Company of shares of Common Stock theretofore
owned by the holder of the Award with respect to which withholding is required.
If shares of Common Stock are used to satisfy tax withholding, such shares
shall be valued based on the Fair Market Value when the tax withholding is
required to be made.
11. Amendment, Modification, Suspension or Termination.
The Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other
purpose permitted by law except that (i) no amendment or alteration that would
impair the rights of any Participant under any Award previously granted to such
Participant shall be made without such Participant's consent and (ii) no
amendment or alteration shall be effective prior to approval by the Company's
stockholders to the extent such approval is then required pursuant to Rule
16b-3 in order to preserve the applicability of any exemption provided by such
rule to any Award then outstanding (unless the holder of such Award consents)
or to the extent stockholder approval is otherwise required by applicable legal
requirements.
12. Termination of Employment. Upon the termination of
employment by a Participant, any unexercised, deferred or unpaid Awards shall
be treated as provided in the specific Award Agreement evidencing the Award.
In the event of such a termination, the Committee may, in its discretion,
provide for
A-4
<PAGE> 32
the extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award, waive any restriction or other provision of this Plan or
an Award or otherwise amend or modify the Award in any manner that is either
(i) not adverse to such Participant or (ii) consented to by such Participant.
13. Assignability. Unless otherwise determined by the
Committee and provided in the Award Agreement, no Award or any other benefit
under this Plan constituting a derivative security within the meaning of Rule
16a-1(c) under the Exchange Act shall be assignable or otherwise transferable
except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder. The
Committee may prescribe and include in applicable Award Agreements other
restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this Paragraph 13 shall be null and
void.
14. Adjustments.
(a) The existence of outstanding Awards shall not affect
in any manner the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock (whether or not such issue is prior to, on a parity with
or junior to the Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding of any kind, whether or not of a
character similar to that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock or declaration of a dividend payable in
shares of Common Stock or capital reorganization or reclassification or other
transaction involving an increase or reduction in the number of outstanding
shares of Common Stock, the Committee may adjust proportionally (i) the number
of shares of Common Stock reserved under this Plan and covered by outstanding
Awards denominated in Common Stock or units of Common Stock; (ii) the exercise
or other price in respect of such Awards; and (iii) the appropriate Fair Market
Value and other price determinations for such Awards. In the event of any
consolidation or merger of the Company with another corporation or entity or
the adoption by the Company of a plan of exchange affecting the Common Stock or
any distribution to holders of Common Stock of securities or property (other
than normal cash dividends or dividends payable in Common Stock), the Committee
shall make such adjustments or other provisions as it may deem equitable,
including adjustments to avoid fractional shares, to give proper effect to such
event. In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Committee
shall be authorized to issue or assume stock options, regardless of whether in
a transaction to which Section 424(a) of the Code applies, by means of
substitution of new options for previously issued options or an assumption of
previously issued options, or to make provision for the acceleration of the
exercisability of, or lapse of restrictions with respect to, Awards and the
termination of unexercised options in connection with such transaction.
15. Restrictions. No Common Stock or other form of
payment shall be issued with respect to any Award unless the Company shall be
satisfied based on the advice of its counsel that such issuance will be in
compliance with applicable federal and state securities laws. It is the intent
of the Company that this Plan comply with Rule 16b-3 with respect to persons
subject to Section 16 of the Exchange Act unless otherwise provided herein or
in an Award Agreement, that any ambiguities or inconsistencies in the
construction of this Plan be interpreted to give effect to such intention, and
that if any provision of this Plan is found not to be in compliance with Rule
16b-3, such provision shall be null and void to the extent required to permit
this Plan to comply with Rule 16b-3. Certificates evidencing shares of Common
Stock delivered under this Plan may be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the rules,
A-5
<PAGE> 33
regulations and other requirements of the Securities and Exchange Commission,
any securities exchange or transaction reporting system upon which the Common
Stock is then listed and any applicable federal and state securities law. The
Committee may cause a legend or legends to be placed upon any such certificates
to make appropriate reference to such restrictions.
16. Unfunded Plan. Insofar as it provides for Awards of
cash, Common Stock or rights thereto, this Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to cash, Common Stock or rights thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The Company shall
not be required to segregate any assets that may at any time be represented by
cash, Common Stock or rights thereto, nor shall this Plan be construed as
providing for such segregation, nor shall the Company nor the Board nor the
Committee be deemed to be a trustee of any cash, Common Stock or rights thereto
to be granted under this Plan. Any liability or obligation of the Company to
any Participant with respect to a grant of cash, Common Stock or rights thereto
under this Plan shall be based solely upon any contractual obligations that may
be created by this Plan and any Award Agreement, and no such liability or
obligation of the Company shall be deemed to be secured by any pledge or other
encumbrance on any property of the Company. Neither the Company nor the Board
nor the Committee shall be required to give any security or bond for the
performance of any obligation that may be created by this Plan.
17. Governing Law. This Plan and all determinations made
and actions taken pursuant hereto, to the extent not otherwise governed by
mandatory provisions of the Code or the securities laws of the United States,
shall be governed by and construed in accordance with the laws of the State of
Delaware.
18. Effective Date of Plan. This Plan shall be effective
as of the date (the "Effective Date") it is approved by the Board of Directors
of the Company. Notwithstanding the foregoing, the adoption of this Plan is
expressly conditioned upon the approval by the holders of a majority of shares
of Common Stock present, or represented, and entitled to vote at a meeting of
the Company's stockholders held on or before December 17, 1994. If the
stockholders of the Company should fail so to approve this Plan prior to such
date, this Plan shall terminate and cease to be of any further force or effect
and all grants of Awards hereunder shall be null and void.
A-6
<PAGE> 34
EXHIBIT B
1994 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
OF
CABOT OIL & GAS CORPORATION
1. Purpose of the Plan. This Nonemployee Director Stock
Option Plan (the "Plan") is intended as an incentive to retain and attract
persons of training, experience and ability to serve as independent directors
on the Board of Directors of Cabot Oil & Gas Corporation, a Delaware
corporation (the "Company"), to encourage the sense of proprietorship of such
persons and to stimulate the active interest of such persons in the development
and financial success of the Company. It is further intended that the options
granted pursuant to this Plan (the "Options") will be nonqualified options
within the meaning of Section 83 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. Stockholder Approval. All Options granted pursuant
to this Plan are subject to, and may not be exercised before, the approval of
this Plan by the affirmative vote of the holders of a majority of the
outstanding shares of the Class A Common Stock, par value $.10 per share (the
"Common Stock"), of the Company that are present, or represented, and entitled
to vote at a meeting of the Company's stockholders.
3. Designation of Participants; Automatic Grant of
Options. Each director of the Company who is not an employee of the Company or
any Subsidiary (as hereinafter defined) of the Company (any such director being
hereinafter referred to as a "Nonemployee Director") shall be granted Options
as described hereunder. Each Nonemployee Director who is a director as of the
Effective Date (as hereinafter defined) and who has not already received a
grant of options under the 1990 Nonemployee Director Stock Option Plan shall
automatically be granted Options to purchase 10,000 shares of Common Stock at
the Effective Date. Thereafter, each individual who becomes a Nonemployee
Director shall automatically be granted Options to purchase 10,000 shares of
Common Stock (subject to adjustment as provided in Paragraph 10) on the date
such person first becomes a Nonemployee Director. Furthermore, upon the
reelection to a new term of office on the Company's Board of Directors, each
Nonemployee Director shall automatically be granted Options to purchase an
additional 5,000 shares of Common Stock (subject to adjustment as provided in
Paragraph 10) on such date. Notwithstanding the foregoing, in the case of any
grant of Options made on a date subsequent to the Effective Date, such grant
shall only be made if the number of shares subject to future grant under this
Plan is sufficient to make all automatic grants required to be made pursuant to
this Plan on such date of grant. As used herein, the term "Subsidiary" of the
Company shall mean any corporation of which the Company directly or indirectly
owns shares representing more than 50% of the voting power of all classes or
series of capital stock of such corporation which have the right to vote
generally on matters submitted to a vote of the stockholders of such
corporation.
4. Option Agreement. Each Option granted hereunder
shall be embodied in a written option agreement ("Option Agreement"), which
shall be subject to the terms and conditions set forth herein and shall be
signed by the Optionee and by the Chief Executive Officer, the Chief Operating
Officer, or any Vice President of the Company for and on behalf of the Company.
5. Common Stock Reserved for the Plan. Subject to
adjustment as provided in Paragraph 10 hereof, a total of 100,000 shares of
Common Stock shall be reserved for issuance upon the exercise of Options
granted pursuant to this Plan. The shares subject to the Plan shall consist of
unissued shares
B-1
<PAGE> 35
or previously issued shares reacquired and held by the Company, or any parent
or subsidiary of the Company, in its treasury. The Board of Directors and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to execute, acknowledge, file and deliver any documents
required to be filed with or delivered to any governmental authority or any
stock exchange or transaction reporting system on which shares of Common Stock
are listed or quoted in order to make shares of Common Stock available for
issuance to an Optionee (as hereinafter defined) pursuant to this Plan. Common
Stock subject to Options that are forfeited or terminated or expire unexercised
in such a manner that all or some of the shares subject thereto are not issued
to an Optionee shall immediately become available for the granting of Options.
As used herein, the term "Optionee" shall mean any Nonemployee Director to whom
Options are granted hereunder.
6. Option Price.
(a) The purchase price of each share of Common Stock that
is subject to an Option granted pursuant to this Plan shall be 100% of the Fair
Market Value of such share of Common Stock on the date the Option is granted.
(b) The Fair Market Value of a share of Common Stock on a
particular date shall be deemed to be (i) if the shares of Common Stock are
listed on a national securities exchange, the average of the highest and lowest
sales price per share of Common Stock on the principal such national securities
exchange on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported,
(ii) if the shares of Common Stock are not so listed but are quoted in the
NASDAQ National Market System, the average of the highest and lowest sales
price per share of Common Stock on the NASDAQ National Market System on that
date, or, if there shall have been no such sale so reported on that date, on
the last preceding date on which such a sale was so reported or (iii) if the
Common Stock is not so listed or quoted, the average of the closing bid and
asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be available,
as reported by NASDAQ, or, if not reported by NASDAQ, by the National Quotation
Bureau, Inc.
7. Option Period. Each Option granted pursuant to this
Plan shall terminate and be of no force and effect with respect to any shares of
Common Stock not purchased by the Optionee upon the earliest to occur of the
following: (a) the expiration of five years following the date upon which the
Option is granted; (b) the expiration of one year following the date upon which
the Optionee ceases to be a Nonemployee Director by reason of death,
disability or mandatory retirement; or (c) the expiration of three months
following the date on which the Optionee ceases to be a Nonemployee Director
for any reason other than death, disability or mandatory retirement.
8. Exercise of Options.
(a) Options granted pursuant to this Plan shall be
exercisable, on a cumulative basis, as follows: (i) with respect to 33 1/3% of
the total number of shares of Common Stock initially subject to any Option,
such Option shall be exercisable on the first anniversary of the date of grant;
and (ii) with respect to the remaining shares of Common Stock subject to any
Option, such Option shall be exercisable with respect to an additional 33 1/3%
of the total number of shares initially subject thereto as of the second and
third anniversaries of the date of the grant.
(b) An Option may be exercised solely by the Optionee
during his lifetime or after his death by the person or persons entitled
thereto under his will or the laws of descent and distribution.
(c) In the event that an Optionee ceases to serve as a
Nonemployee Director for any reason other than death, disability or mandatory
retirement, an Option granted to such Optionee may be exercised only to the
extent such Option was exercisable at the time he ceased to serve in such
capacity.
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<PAGE> 36
(d) In the event that an Optionee ceases to serve as a
Nonemployee Director by reason of death, disability or mandatory retirement, at
a time when an Option granted hereunder is still in force and unexpired under
the terms of Paragraph 7 hereof, each such unmatured Option shall be
accelerated. Such acceleration shall be effective as of the date of death,
disability or retirement, as appropriate, and each Option so accelerated shall
be exercisable in full for so long as it is still in force and unexpired under
the terms of Paragraph 7 hereof.
(e) The purchase price of the shares as to which an
Option is exercised shall be paid in full at the time of the exercise. Such
purchase price shall be payable in cash or by means of tendering theretofore
owned Common Stock which has been held by the Optionee for more than six
months, valued at Fair Market Value on the date of exercise, or any combination
thereof. An Optionee may also exercise an Option by use of the proceeds to be
received from the sale of Common Stock issuable pursuant to the Option. No
holder of an Option shall be, or have any of the rights or privileges of, a
stockholder of the Company in respect of any shares subject to any Option
unless and until certificates evidencing such shares shall have been issued by
the Company to such holder.
9. Assignability. No Option shall be assignable or
otherwise transferable except by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder. Any attempted assignment of an Option in violation of this
Paragraph 9 shall be null and void.
10. Adjustments.
(a) The existence of outstanding Options shall not affect
in any manner the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the capital stock of the Company or its business or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock (whether or not such issue is prior to, on a parity with
or junior to the Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding of any kind, whether or not of a
character similar to that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock or declaration of a dividend payable in
shares of Common Stock or capital reorganization or reclassification or other
transaction involving an increase or reduction in the number of outstanding
shares of Common Stock, the Board of Directors may adjust proportionally (i)
the number of shares of Common Stock reserved under these Options; and (ii) the
exercise price of such Options. In the event of any consolidation or merger of
the Company with another corporation or entity or the adoption by the Company
of a plan of exchange affecting the Common Stock or any distribution to holders
of Common Stock of securities or property (other than normal cash dividends or
dividends payable in Common Stock), the Board of Directors shall make such
adjustments or other provisions as it may deem equitable, including adjustments
to avoid fractional shares, to give proper effect to such event. In the event
of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board of Directors shall be
authorized to issue or assume stock options, regardless of whether in a
transaction to which Section 424(a) of the Code applies, by means of
substitution of new options for previously issued options or an assumption of
previously issued options, or to make provision for the acceleration of the
exercisability of, or lapse of restrictions with respect to, the termination of
unexercised options in connection with such transaction.
(c) An Option shall become fully exercisable upon a
Change in Control (as hereinafter defined) of the Company. For purposes of
this Plan, a "Change of Control" shall be conclusively deemed to have occurred
if (and only if) any of the following events shall have occurred: (a) there
shall have occurred an event required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A (or in response to any
B-3
<PAGE> 37
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the
Company is then subject to such reporting requirement; (b) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) shall have
become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding voting
securities without prior approval of at least two-thirds of the members of the
Board of Directors in office immediately prior to such person's attaining such
percentage interest; (c) the Company is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter or (d) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (including
for this purpose any new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors.
11. Purchase for Investment. Unless the Options and
shares of Common Stock covered by this Plan have been registered under the
Securities Act of 1933, as amended, each person exercising an Option under this
Plan may be required by the Company to give a representation in writing in form
and substance satisfactory to the Company to the effect that he is acquiring
such shares for his own account for investment and not with a view to, or for
sale in connection with, the distribution of such shares or any part thereof.
12. Taxes. The Company may make such provisions as it
may deem appropriate for the withholding of any taxes that it determines is
required in connection with any Options granted to any Optionee hereunder.
13. Amendments or Termination. The Board of Directors of
the Company may amend, alter or discontinue this Plan, except that (a) no
amendment or alteration that would impair the rights of any Optionee under any
Option that he has been granted shall be made without his consent, (b) no
amendment or alteration shall be effective prior to approval by the Company's
stockholders to the extent such approval is then required pursuant to Rule
16b-3 (or any successor provision) under the Exchange Act in order to preserve
the applicability of any exemption provided by such rule to any Option then
outstanding (unless the holder of such Option consents) or to the extent
stockholder approval is otherwise required by applicable legal requirements,
and (c) the Plan shall not be amended more than once every six months to the
extent such limitation is required by Rule 16b-3(c)(2)(ii) (or any successor
provision) under the Exchange Act as then in effect.
14. Government Regulations. This Plan, and the granting
and exercise of Options hereunder, and the obligation of the Company to sell
and deliver shares of Common Stock under such Options, shall be subject to all
applicable laws, rules and regulations, and to such approvals on the part of
any governmental agencies or national securities exchanges or transaction
reporting systems as may be required.
15. Governing Law. This Plan and all determinations made
and actions taken pursuant hereto, to the extent not otherwise governed by
mandatory provisions of the Code or the securities laws of the United States,
shall be governed by and construed in accordance with the laws of the State of
Delaware.
16. Effective Date of Plan. This Plan shall be effective
as of the date (the "Effective Date") it is approved by the Board of Directors
of the Company. Notwithstanding the foregoing, the adoption of this Plan is
expressly conditioned upon the approval by the holders of a majority of shares
of Common Stock present, or represented, and entitled to vote at a meeting of
the Company's stockholders held on or before December 17, 1994. If the
stockholders of the Company should fail so to approve this Plan prior to such
date, this Plan shall terminate and cease to be of any further force or effect
and all grants of options hereunder shall
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<PAGE> 38
be null and void.
17. Miscellaneous. The granting of any Option shall not
impose upon the Company, the Board of Directors of the Company or any other
directors of the Company any obligation to nominate any Optionee for election
as a director and the right of the stockholders of the Company to remove any
person as a director of the Company shall not be diminished or affected by
reason of the fact that an Option has been granted to such person.
B-5
<PAGE> 39
CABOT OIL & GAS CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned acknowledges receipt of the Notice of Annual Meeting
R of Stockholders and the Proxy Statement, each dated April 15, 1994, and
appoints Lisa A. Machesney and Molly S. Williams, or either of them,
O proxies for the undersigned, with power of substitution, to vote all of
the undersigned's shares of common stock of Cabot Oil & Gas Corporation at
X the Annual Meeting of Stockholders to be held at the Ritz-Carlton Hotel in
Houston, Texas at 10:00 a.m., on May 20, 1994, and at any adjournments or
Y postponements thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ITEMS 1, 2, 3 AND 4 AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT
TO ITEM 5.
THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
<PAGE> 40
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1, 2, 3 AND 4.
1. ELECTION OF DIRECTORS (check one box only):
NOMINEES: Henry O. Boswell, William R. Esler, and Charles P. Siess, Jr.
FOR WITHHELD
/ / / /
FOR except vote WITHHELD from the following nominee(s):
/ / ___________________________________________________
FOR AGAINST ABSTAIN
2. Adoption of the 1994 Long-Term Incentive Plan / / / / / /
and approval of the performance criteria
adopted thereunder.
3. Adoption of the 1994 Nonemployee Director / / / / / /
Stock Option Plan.
4. Ratification of appointment of Coopers & / / / / / /
Lybrand as the Company's independent
certified public accountants.
5. Such other business as may properly come before the meeting or any
adjournments or postponments thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please date this proxy and sign your name exactly as it appears herein. In the
case of one or more joint owners, each joint owner should sign. If signing as
executor, trustee, guardian, attorney, or in any other representative capacity
or as an officer of a corporation, please indicate your full title as such.
Signature: ____________________________________________ Date __________________
Signature: ____________________________________________ Date __________________
<PAGE> 41
CABOT OIL & GAS CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned acknowledges receipt of the Notice of Annual Meeting
R of Stockholders and the Proxy Statement, each dated April 15, 1994, and
appoints Fidelity Management Trust Company proxy for the undersigned, with
O power of substitution, to vote all of the undersigned's shares of common
stock of Cabot Oil & Gas Corporation held by Fidelity Management Trust
X Company as Trustee of The Cabot Oil & Gas Corporation Savings Investment
Plan at the Annual Meeting of Stockholders to be held at the Ritz-Carlton
Y Hotel in Houston, Texas at 10:00 a.m., on May 20, 1994, and at any
adjournments or postponements thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ITEMS 1, 2, 3 AND 4 AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT
TO ITEM 5.
THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
<PAGE> 42
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1, 2, 3 AND 4.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
1. ELECTION OF DIRECTORS (check one box only):
Nominees: Henry O. Boswell, William R. Esler, and Charles P. Siess, Jr.
FOR / / WITHHELD / /
/ / ________________________________________
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE
2. Adoption of the 1994 long-Term Incentive Plan and approval of the
performance criteria adopted thereunder.
FOR / / AGAINST / / ABSTAIN / /
3. Adoption of the 1994 Nonemployee Director Stock Option Plan.
FOR / / AGAINST / / ABSTAIN / /
4. Ratification of the appointment of Coopers & Lybrand as the Company's
independent certified public accountants.
FOR / / AGAINST / / ABSTAIN / /
5. Such other business as may properly come before the meeting or any
adjournment or postponement thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Signature: ______________________ Date: _________
Signature: ______________________ Date: _________
Please date this proxy and sign your name exactly
as it appears herein. In the case of one or more
joint owners, each joint owner should sign. If
signing as executor, trustee, guardian, attorney,
or in any other representative capacity or as an
officer of a corporation, please indicate your
full title as such.
