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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12
FORCENERGY INC
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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FORCENERGY INC
FORCENERGY CENTER
2730 SW 3RD AVENUE, SUITE 800
MIAMI, FLORIDA 33129-2356
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, MAY 14, 1998
To the Stockholders of Forcenergy Inc:
The 1998 Annual Meeting of Stockholders of Forcenergy Inc (the
"Company") will be held at the Northern Trust Bank of Florida at 700 Brickell
Avenue, 9th Floor Boardroom, Miami, Florida at 3:30 P.M., Eastern Daylight Time,
on Thursday, May 14, 1998 for the following purposes:
(1) To elect five members of the Board of Directors to serve until the 1999
Annual Meeting of stockholders and until their successors are duly
elected and have qualified.
(2) To consider and act upon a proposal to amend the Forcenergy Inc 1995
Stock Incentive Plan to increase the number of shares authorized for
issuance from 4,000,000 to 6,000,000 shares.
(3) To ratify the Board of Director's appointment of Coopers & Lybrand
L.L.P. as the independent accountants of the Company for the year
ending December 31, 1998.
(4) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on April 3, 1998 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you are
planning to attend the meeting, you are urged to complete, date and sign the
enclosed proxy card and return it promptly. The giving of such proxy does not
preclude you from voting in person if you attend the meeting.
By Order of the Board of Directors
By: /s/ Stig Wennerstrom
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Stig Wennerstrom
Chairman, President and
Chief Executive Officer
Miami, Florida
April 17, 1998
YOUR VOTE IS IMPORTANT
TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. NO ADDITIONAL
POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
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April 17, 1998
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
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INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Forcenergy Inc (the
"Company") for use at the 1998 Annual Meeting of Stockholders of the Company to
be held on Thursday, May 14, 1998, and at any adjournment thereof (the "Annual
Meeting"). This Proxy Statement and the enclosed form of proxy will first be
sent to stockholders on or about April 20, 1998.
The cost of soliciting proxies will be borne by the Company.
Solicitation of proxies is being made by the Company through the mail and may
also be made in person or by telephone. Employees and directors of the Company
may be utilized in connection with such solicitation and will not receive any
compensation therefor. The Company will also request brokers and nominees to
forward soliciting materials to the beneficial owners of the Common Stock held
of record by such persons and will reimburse them for their reasonable
forwarding expenses.
PROXIES
The shares represented by any proxy in the enclosed form, if such proxy
is properly executed and is received by the Company prior to or at the Annual
Meeting, will be voted in accordance with the directions made thereon. Proxies
on which no direction has been made by the stockholder will be voted (i) "FOR"
the election to the Board of Directors of the nominees named herein, (ii) "FOR"
the proposal to amend the Forcenergy Inc 1995 Stock Incentive Plan to increase
the number of shares authorized for issuance from 4,000,000 to 6,000,000 shares,
and (iii) "FOR" the ratification of the appointment of Coopers & Lybrand L.L.P.
as independent accountants of the Company for the year ending December 31, 1998.
Any stockholder giving a proxy has the power to revoke it at any time before it
is voted, either in person at the Annual Meeting or by written notice to the
President of the Company or by delivery of a later-dated proxy.
VOTING SECURITIES
Stockholders of record at the close of business on April 3, 1998 are
entitled to notice of and to vote at the Annual Meeting. As of April 3, 1998,
the issued and outstanding voting securities of the Company consisted of
24,485,541 shares of common stock, par value $0.01 per share (the "Common
Stock"), each of which is entitled to one vote.
QUORUM AND VOTING
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting is necessary to constitute a quorum. No matters are
expected to come before the Annual Meeting other than those referred to in this
Proxy Statement. If any other matter should properly come before the Annual
Meeting, the persons named in the accompanying proxy intend to vote such proxies
in accordance with their best business judgment.
Shares of Common Stock represented by a properly dated, signed and
returned proxy will be counted as present at the Annual Meeting for purposes of
determining a quorum, without regard to whether the proxy is marked as casting a
vote or abstaining. Directors will be elected by a plurality of the votes cast
at the Annual Meeting. All matters other than election of Directors scheduled to
come before the Annual Meeting require the approval of a majority of the votes
cast at the Annual Meeting. Therefore, abstentions and broker non-votes will
have no effect on the outcome of the vote on any of the proposals presented.
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BOARD OF DIRECTORS
The Certificate of Incorporation of the Company provides for all
directors to be elected at the Annual Meeting and to serve until the next annual
meeting of stockholders. Members of the Board of Directors are elected each year
for annual terms at the Company's annual meeting and serve until their
successors are duly elected and qualified or their earlier resignation or
removal. Messrs. Eric Forss, Robert Issal, Stig Wennerstrom, Bruce L. Burnham
and William F. Wallace are currently directors of the Company. Mr. Wallace has
not been nominated for re-election. Mr. Antony T. F. Lundy has been nominated to
replace Mr. Wallace. Five Directors will be elected at the annual meeting.
Proxies cannot be voted for a greater number of persons than the number of
nominees named. The election of directors requires the favorable vote of the
holders of a plurality of the shares of Common Stock present and voting, in
person or by proxy, at the Annual Meeting. Stockholders may not cumulate their
votes in the election of directors. Unless authority to vote for the election of
directors is withheld as to any or all nominees, all shares represented by
proxies will be voted for the election of the nominees listed. If authority to
vote for the election of directors is withheld as to any but not all of the
nominees listed, all shares represented by such proxies will be voted for the
election of the nominees as to whom authority is not withheld. If a nominee
becomes unavailable for any reason before the election, the shares represented
by proxies will be voted for such person, if any, as may be nominated by the
Board of Directors. However, the Board of Directors has no reason to believe
that any nominee will be unavailable. Any vacancy occurring between annual
meetings may be filled by the Board of Directors. A director elected to fill a
vacancy shall hold office until the next annual meeting of stockholders.
Vacancies resulting from an increase in the number of directors may be filled by
the Board of Directors. Any such director would serve for a term expiring at the
next annual meeting of stockholders of the Company.
NOMINEES FOR ELECTION
The following sets forth certain information with respect to each
nominee for election as a director. The information as to age, principal
occupation and directorships held has been furnished by each such nominee.
Stig Wennerstrom, age 55, has been President and Chief Executive
Officer and a director of the Company since its inception in September 1993. In
March 1998 Mr. Wennerstrom was chosen to serve as Chairman of the Board of
Directors of the Company. From 1982 until the formation of the Company, Mr.
Wennerstrom was the President and Chief Executive Officer of the Company's
predecessors.
Bruce L. Burnham, age 63, has served as a director of the Company since
1996. Mr. Burnham has served as President of The Burnham Group, a privately-held
consulting and marketing firm formed by Mr. Burnham shortly after retiring from
Dayton's Department Stores in 1984. From 1981 to 1984, Mr. Burnham served as
Chairman and Chief Executive Officer of Dayton's Department Stores in
Minneapolis, Minnesota. From 1979 to 1980, Mr. Burnham was President and Chief
Executive Officer of Bonwit Teller in New York City. From 1978 to 1979, Mr.
Burnham was President and Chief Operating Officer of Jordan Marsh. He serves on
the Board of Directors of Paxson Communications Corporation, Financial Benefit
Group, Inc. and J.B. Rudolph, Inc.
Eric Forss, age 31, has been a director of the Company since June 1994.
Mr. Forss was President of Forcenergy AB, a Swedish public corporation ("FAB")
from May 1991 to March 1998. Prior to serving as President of FAB, Mr. Forss was
Vice President of FAB from May 1990 through April 1991. Mr. Forss served on the
Board of Directors of FAB from May 1994 to March 1998.
Robert Issal, age 51, served as Chairman of the Board of Directors of
the Company from May 1994 until March 1998 and has been a director since the
Company's inception in September 1993. In March 1998 Mr. Issal was chosen to
serve as Vice Chairman of the Board of Directors of the Company. Mr. Issal
served as Chairman of FAB from May 1994 to March 1998 and served as Vice
Chairman of FAB from April 1992 to April 1994. Mr. Issal served as President and
Chief Executive Officer of Forsheda AB, a Swedish public company, from 1988
through 1991. From 1991 through 1994, Mr. Issal was the Chairman and President
of Abstracta Group. From 1994 until its dissolution in March 1998, Mr. Issal
served as Chairman and President of Rejmyre Belysning AB Sweden, a Swedish
lighting manufacturer.
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Antony T.F. Lundy, age 37, is a managing director of Donaldson, Lufkin
& Jenrette Securities Corporation, which he first joined in 1983. During 1988
and 1989 Mr. Lundy served as Vice President - Mergers and Acquisitions for
Castle & Cooke, Inc.
COMMITTEES
The Company's Board of Directors has established Executive, Audit and
Compensation Committees. The Executive Committee consisted during the year of
Messrs. Wennerstrom, Forss and Issal. The Audit Committee presently consists of
Messrs. Issal, Burnham and Wallace, all of whom are currently non-employee
Directors of the Company. The Compensation Committee consisted during the year
of Messrs. Issal and Burnham, both of whom are non-employee Directors of the
Company.
The Audit Committee in performing its functions meets with
representatives of the Company's independent accountants and with
representatives of senior management. The Audit Committee reviews the general
scope of audit coverages, the fees charged by the independent accountants,
matters relating to the Company's internal control systems, and other matters
related to audit functions. In addition to formal Audit Committee meetings,
detailed financial reviews are presented to the full Board at each quarterly
board meeting.
The Compensation Committee administers the Forcenergy Inc 1995 Stock
Incentive Plan, and in this capacity approves all option grants or awards to
Company employees, including executive officers, under such plans. In addition,
the Compensation Committee determines the compensation of the Company's Chief
Executive Officer and its other executive officers, and establishes policies
dealing with various compensation and employee benefit matters for the Company.
MEETINGS
During the year ended December 31, 1997, the Board of Directors held
eleven meetings, the Audit Committee held one meeting, the Compensation
Committee held two meetings and the Executive Committee held no meetings. Each
member of the Board attended at least 75% of the total number of meetings of the
Board and the total number of meetings held by all committees of the Board on
which he served.
COMPENSATION ARRANGEMENTS FOR MEMBERS OF THE BOARD OF DIRECTORS
Fees paid Directors are in line with that paid by comparable companies.
The fees are $10,000 per year and $3,000 per meeting attended, capped at $25,000
per Director per year. In addition, a Chairman's fee of $3,000 per month was
adopted in March 1997. These fees are not paid to Directors who are employees of
the Company. The Company also compensates Directors through the issuance of
periodic stock option grants. These grants are made under the Company's Stock
Option Plan primarily on a formula basis. (See "Forcenergy Inc 1995 Stock
Incentive Plan").
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are Stig Wennerstrom, President
and Chief Executive Officer and those officers listed below. Biographical
information on Mr. Wennerstrom is included under the caption "Nominees for
Election".
J. Russell Porter, age 36, is Executive Vice President. Prior to his
promotion to Executive Vice President in July 1997, Mr. Porter served as Vice
President - Corporate Development from October 1995 to June 1997 and as Vice
President - Financial Planning & Analysis from April 1994 to October 1995. From
January 1992 until joining the Company, Mr. Porter held the position of Vice
President in the Natural Resources Group of Internationale Nederlanden (U.S.)
Capital Corporation in New York. From July 1990 to December 1991, Mr. Porter was
an Associate in the Energy Group of Manufacturers Hanover and Chemical Bank.
Gary Carlson, age 51, is Vice President - Alaska Division and has
responsibility for all Alaskan operations. Prior to joining the Company in March
1997, Mr. Carlson held various positions during a tenure of 29 years with Unocal
Corporation, most recently serving as Unocal's General Manager for Health,
Environmental and Safety Support
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from 1995 until joining the Company. Mr. Carlson also served as President and
Managing Director of Unocal Indonesia from 1992 to 1995 and as Managing Director
for Unocal Netherlands N.V. from 1989 to 1992.
Robert G. Gerdes, age 41, is Vice President - Geoscience with
responsibility for technical overview of company-wide geoscience, as well as
technical evaluation of acquisitions and new ventures. Prior to his promotion to
Vice President - Geoscience in October 1997, Mr. Gerdes served as Geologist and
Evaluations Manager from January 1994 to October 1997. Mr. Gerdes worked as an
independent consulting geologist from September 1993 until joining the Company
in January 1994. Mr. Gerdes served as Senior Geologist - Corporate Staff for
Graham Resources from August 1987 to September 1993. Prior to joining Graham
Resources, Mr. Gerdes held various geological positions with Crescent
Exploration Company and Unocal Corporation.
Thomas F. Getten, age 50, is Vice President, General Counsel and
Secretary. Prior to joining the Company in January 1997, Mr. Getten was in
private law practice in New Orleans. From January 1996 until joining the
Company, Mr. Getten was a partner with Nesser, King & LeBlanc, a New Orleans law
firm, and from May 1974 until December 1995, Mr. Getten was a partner and
stockholder with Liskow & Lewis, also a New Orleans law firm.
E. Joseph Grady, age 45, is Vice President, Treasurer and Chief
Financial Officer. From 1980 until joining the Company in October 1995, Mr.
Grady held various financial management positions with Southdown, Inc. and its
subsidiaries, including Pelto Oil Company from 1980 through 1989, serving as
Vice President - Finance during 1988 and 1989. Most recently Mr. Grady was
Director of Finance for Southdown Environmental Systems, Inc. from January 1991
until joining the Company.
Percy A. Payne, age 56, is Vice President - Gulf of Mexico Division and
has responsibility for all Gulf of Mexico and Gulf coast operations. Prior to
joining the Company in August 1996, Mr. Payne served as President of Payne
Energy Associates, Inc., a privately held consulting group formed by Mr. Payne
in September 1994 serving the international oil industry. Prior to establishing
his consulting business, Mr. Payne held various positions during a tenure of 27
years with Shell Oil Company USA, most recently serving as Vice President of
Pecten International, Shell Oil Company USA's international subsidiary. Mr.
Payne also served as General Manager of Operations for the lower 48 states
(excluding California) and Alaska for Shell Western E&P from April 1986 to
September 1991.
Neil M. Sullivan, age 55, is Vice President - Onshore Exploration,
Houston Division. Prior to joining the Company in October 1997, Mr. Sullivan
served as President of New Ventures Associates and its predecessor company,
Bluebonnet Petroleum, from 1987 to September 1997. Previously, Mr. Sullivan held
executive positions as Vice President of Gulf Coast Exploration at Valero Energy
Corporation from October 1985 to October 1987 and Vice President of Southern
Region Exploration for Anadarko Petroleum Corp. from February 1980 to August
1982. Mr. Sullivan was also employed by Conoco, Inc. and Texaco, Inc. in various
positions dating to 1970.
Mark Yelverton, age 42, is Vice President - International Operations
and is responsible for all international operational activities. Mr. Yelverton
joined the Company in April 1997 and served as Manager - International
Operations, until his promotion to his current position in October 1997. Before
joining the Company, Mr. Yelverton served in various positions, culminating in
an appointment as Director General for Phibro Energy (White Nights Joint
Enterprise, Russia) from 1991 to 1997. Prior to joining Phibro, Mr. Yelverton
was employed by Chevron Corporation serving in various petroleum engineering and
geological positions.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee believes that its policies are reflected in
the Company's executive compensation program which aims to: (i) motivate
executives toward effective long-term management of Company operations; (ii)
reward effective, efficient ongoing management of Company operations; and (iii)
provide the ability to attract and retain executives through salary levels and
benefit programs which are competitive.
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EXECUTIVE COMPENSATION. The Company's executive compensation program
includes, separately or through any combination, base salary, annual incentives
and various stock and stock option programs.
BASE SALARY AND ANNUAL INCENTIVES. The Company's policy, as implemented
by the Compensation Committee, is to compensate executives to reflect
performance and be competitive in the market. The Compensation Committee
considers the executive's individual performance and that of the Company as a
whole along with other relevant factors in setting compensation, including
discretionary bonuses. The Compensation Committee considers the scope of each
executive's responsibilities in selecting the performance measures to apply to
that executive's compensation, and does not apply any specific weight to any
particular measure of performance. These criteria and the performance of the
executive officers were considered in the granting of cash bonuses for 1997.
STOCK OPTIONS. The Company believes that stock options are important in
motivating executives to increase long term shareholder value because the
options focus executive attention on stock price as a measure of performance and
align the executive's financial interests with those of the Company's
stockholders. Accordingly, prior to the Company's Initial Public Offering in
1995, the Company adopted, with stockholder approval, the Forcenergy Inc 1995
Stock Incentive Plan. (See "Forcenergy Inc 1995 Stock Incentive Plan") The
Compensation Committee administers the Forcenergy Inc 1995 Stock Incentive Plan
and grants options to employees based on the performance of the employee and the
Company and other relevant factors. Since the options vest over a number of
years, they enhance the Company's ability to retain option holders and motivate
them to take a long-term view of the Company's interests in their decisions. As
an additional measure to enhance the Company-wide focus on increasing value for
stockholders, the Company has adopted the 1997 Stock Price Performance Incentive
Plan for Employees of Forcenergy Inc (the "$60 a Share Plan"), under which all
employees, including the executive officers, participate. (See "1997 Stock Price
Performance Incentive Plan for Employees of the Company")
All of the executive officers of the Company were granted options to
purchase shares of Common Stock under the Forcenergy Inc 1995 Stock Incentive
Plan at various times during 1997, based primarily on the efforts and
performance of those officers in accomplishing Company growth, or for newly
elected officers, upon promotion or joining the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Wennerstrom entered into an
employment agreement with the Company as President and Chief Executive Officer
for an initial term of three years effective September 14, 1993. See "Employment
Agreement of Certain Executive Officers". In May 1995, the Company amended this
employment agreement in connection with the Initial Public Offering and in
recognition of the Company's rapid growth in financial performance. In addition
to the stock options granted to Mr. Wennerstrom in 1997 and the elements of
compensation required by his employment agreement, the Compensation Committee
awarded Mr. Wennerstrom a $350,000 performance-related cash bonus in March 1998.
This bonus was awarded in recognition of Mr. Wennerstrom's performance in
increasing the Company's reserves, revenues and cash flow in 1997.
COMPENSATION COMMITTEE
Robert Issal
Bruce L. Burnham
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SUMMARY COMPENSATION TABLE
The following table sets forth information concerning cash and non-cash
compensation paid or accrued for services in all capacities to the Company
during the three years ended December 31, 1997 for each of the six most highly
compensated executive officers of the Company ("Named Officers"):
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
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ANNUAL COMPENSATION(1) SECURITIES UNDERLYING
------------------------ STOCK OPTIONS ALL OTHER
NAME, POSITION & AGE YEAR SALARY BONUS (NUMBER OF SHARES) COMPENSATION
- -------------------- ---- ------ -------- --------------------- ------------
<S> <C> <C> <C> <C> <C>
Stig Wennerstrom (55) 1997 $566,664 $500,000 300,000 $89,374(2)
Chairman, President & Chief 1996 533,333 500,000 334,839 91,344(2)
Executive Officer 1995 600,000 -0- 492,943 73,683(2)
J. Russell Porter (36) 1997 300,300 225,000 150,000 4,763(8)
Executive Vice President(3) 1996 225,300 125,000 75,000 1,692(8)
1995 194,800 50,000 75,000 2,310(8)
Thomas F. Getten (50) 1997 270,000 100,000 150,000 90,385(5)
Vice President, General
Counsel & Secretary(4)
E. Joseph Grady (45) 1997 240,000 85,000 50,000 20,070(7)
Vice President, Treasurer 1996 203,333 75,000 120,000 1,979(8)
& Chief Financial Officer(6) 1995 34,846 -0- 75,000 -0-
Percy A. Payne (56) 1997 250,000 50,000 50,000 4,840(8)
Vice President - Gulf of 1996 89,231 -0- 125,000 250(8)
Mexico Division(9)
Gary W. Loveless (55) 1997 182,062 -0- 100,000(11) 734,000(11)
Vice President - Onshore
Exploration (Houston
Division)(10)
</TABLE>
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(1) Amounts exclude perquisites and other personal benefits because such
compensation did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus reported for each executive officer.
(2) Includes $71,373 in annual premiums paid by the Company for life
insurance policies on the life of, and payable to a beneficiary
selected by, Mr. Wennerstrom for 1995 through 1997. Also includes
employer matching contributions of $2,310, $2,375 and $4,750 under the
Company's 401(k) Plan for 1995, 1996 and 1997, respectively, and for
other non-cash benefits of $17,596 received in 1996 and $13,251 in
1997.
(3) Mr. Porter joined the Company in April 1994 as Vice President -
Financial Planning and Analysis, was promoted to Vice President -
Corporate Development in November 1995 and was promoted to his current
position in July 1997.
(4) Mr. Getten joined the Company in his current position in January 1997.
(5) Includes $85,600 in relocation reimbursement. Also includes $4,750 in
employer matching contributions under the Company's 401(k) Plan.
(6) Mr. Grady joined the Company in his current position in October 1995.
(7) Includes $15,300 in relocation reimbursement. Also includes $4,750 in
employer matching contributions under the Company's 401(k) Plan.
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(8) Includes employer matching contributions under the Company's 401(k)
Plan.
(9) Mr. Payne joined the Company in his current position in August 1996.
(10) Mr. Loveless, former President of Great Western Resources, Inc.
("GWR"), joined the Company in January 1997 subsequent to the Company's
acquisition of GWR. Mr. Loveless resigned from the Company in October
1997. All options granted Mr. Loveless when he joined the Company were
canceled upon his resignation.
(11) Mr. Loveless was paid $609,000 by the Company in February 1997 pursuant
to the terms of an employment agreement Mr. Loveless had with GWR. Mr.
Loveless was paid $125,000 by the Company in October 1997 as a
severance payment.
EMPLOYMENT AGREEMENT OF CERTAIN EXECUTIVE OFFICERS
CHIEF EXECUTIVE OFFICER. In connection with the formation of the
Company, Mr. Wennerstrom and the Company entered into an employment agreement
effective as of September 14, 1993, and amended as of May 18, 1995 (the
"Employment Agreement") pursuant to which Mr. Wennerstrom serves as President
and Chief Executive Officer of the Company.
Under the Employment Agreement, Mr. Wennerstrom is entitled to an
annual salary and fixed bonus. Mr. Wennerstrom received an annual salary of
$600,000, $533,333 and $566,664 for 1995, 1996 and 1997, respectively. Mr.
Wennerstrom's salary is subject to annual cost of living increases. In addition,
Mr. Wennerstrom was entitled to receive a $150,000 bonus for each of 1996 and
1997 and for each subsequent year, provided that the Company may require him to
return this bonus, or a portion thereof, for any year in which the Company fails
to attain pre-determined cash flow targets. The Employment Agreement also
provides that the Company will maintain certain life insurance policies on the
life of Mr. Wennerstrom, payable to a beneficiary selected by Mr. Wennerstrom.
The term of the Employment Agreement extends to December 31, 1998 and thereafter
until December 31, 2001 for "rolling" three-year periods that can be terminated
upon 36 months' prior notice, provided that the term can be ended upon 12
months' notice given after January 1, 2002.
The Employment Agreement is subject to early termination by the Company
for cause or upon the death or incapacity of Mr. Wennerstrom. The Employment
Agreement is subject to early termination by Mr. Wennerstrom for cause. If the
Employment Agreement is terminated without cause by the Company or with cause
(including certain changes in control of the Company) by Mr. Wennerstrom, the
Company is obligated to pay Mr. Wennerstrom a termination fee of three times the
amount of Mr. Wennerstrom's annual includible compensation.
OTHER. The Company entered into employment agreements with J. Russell
Porter, E. Joseph Grady and Thomas F. Getten. These employment agreements are
for "rolling" periods of one year, provided that the automatic annual renewal
can be terminated upon 60 days written notice. If the employment agreement is
terminated without cause by the Company or in the event of certain changes in
control of the Company, the Company is obligated to pay such officers a
severance payment provided for in such employment agreement equal to one year
base salary for Messrs. Porter, Getten and Grady in the event of termination
without cause and in the case of certain changes in control one year salary for
Messrs. Getten and Grady and two years salary and bonus for Mr. Porter.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Company is subject to U.S. tax legislation enacted in 1993 that
could limit the deductibility of certain compensation payments to its executive
officers. The Company believes that any compensation realized in connection with
the exercise of stock options granted by the Company will continue to be
deductible as performance-based compensation. The Compensation Committee will
continue to monitor the impact of this legislation on the Company's compensation
policies.
FORCENERGY INC 1995 STOCK INCENTIVE PLAN
In May 1997, pursuant to a vote of the Company's stockholders, the
Company's three existing stock option plans were consolidated to form the
Forcenergy Inc 1995 Stock Incentive Plan (the "Stock Option Plan"). The Stock
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Option Plan is intended to provide officers and key employees with an
opportunity to acquire a proprietary interest in the Company and additional
incentive and reward opportunities based on the profitable growth of the Company
and to aid the Company in attracting and retaining outstanding personnel. The
Stock Option Plan provides for the granting of options (either incentive stock
options within the meaning of Section 422(b) of the Internal Revenue Code of
1986, as amended ("Code"), or non-qualified stock options), restricted stock
awards, stock appreciation rights, performance awards, and phantom stock awards,
or any combination thereof.
The Stock Option Plan is administered by the Compensation Committee,
which is composed of at least two Directors who are "outside directors" within
the meaning of Section 162(m) of the Code and "non-employee directors" within
the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Stock Option Plan permits awards covering up to an
aggregate of 4,000,000 shares of Common Stock. As of December 31, 1997,
4,000,000 shares of Common Stock had an aggregate market value of $104.75
million. The number of, and in some cases, types of, shares covered by the Stock
Option Plan are subject to adjustments in the event of stock dividends, stock
splits and certain other events. As of December 31, 1997, options covering up to
an aggregate of 3,625,002 shares of Common Stock were outstanding under the
Stock Option Plan, and 145,799 options were available for future grants after
December 31, 1997.
All employees and Directors of the Company are eligible to participate
in the Stock Option Plan. The Compensation Committee has the power to determine
which employees receive awards under the Stock Option Plan and the terms of each
award, except that awards to non-employee Directors are made upon unanimous
consent of the entire Board of Directors.
No more than 500,000 shares of Common Stock, subject to adjustments,
may be subject to grants to any one employee in any one year under the Stock
Option Plan. This limitation will be applied so that compensation realized from
awards under the Stock Option Plan will qualify as "performance based"
compensation for purposes of Section 162(m) of the Code.
Upon initial appointment to the Board, a non-employee Director
typically receives options to buy 5,000 shares of Common Stock, vesting annually
over three years subject to their continued service as a Director. Upon their
re-election to the Board at subsequent annual meetings of stockholders, these
Directors receive options to buy 1,000 shares of Common Stock, vesting in six
months after such annual meeting. All of these options are exercisable at the
fair market value of Common Stock at the date of grant, and expire 10 years
after grant. Incentive stock options granted under the Stock Option Plan cannot
be exercisable at less than the fair market value of Common Stock on the date of
grant (subject to adjustments), nor for more than 10 years after grant, provided
that options granted to a holder of securities representing more than 10% of the
total combined voting power of all classes of the Company's stock or of its
subsidiary cannot be exercisable at less than 110% of the fair market value of
Common Stock at the date of grant (subject to adjustments) or for longer than
five years from grant. The Committee can determine how the exercise price of
options will be paid. The Board of Directors may grant options on a
discretionary basis to individual directors.
The Committee has the authority, in its discretion, to amend the Stock
Option Plan, unless approval of the Company's stockholders is required for the
Stock Option Plan to meet the stockholder approval requirements of Sections 422
and 162(m) of the Code. Therefore, the Company's stockholders would need to
approve any amendment that is "material" for purposes of Section 162(m) or
required by Section 422, including any amendment (a) increasing the number of
shares available in the aggregate for awards, (b) increasing the number of
shares that may be granted to an employee, or (c) changing eligibility
requirements for participation in the Stock Option Plan.
No grants of Restricted Stock Awards, Stock Appreciation Rights,
Performance Awards or Phantom Stock Awards have been made under the Stock Option
Plan. See "Stock Option Grants in 1997".
PROPOSAL TO EXPAND THE FORCENERGY INC 1995 STOCK INCENTIVE PLAN
The Company has experienced significant growth in the last two years,
including the employment of many experienced, highly qualified professionals. To
attract and retain these professionals, the Company has utilized the Stock
Option Plan as a major component of its compensation structure for such
employees. Because the Stock Option
-8-
<PAGE> 11
Plan has been an important incentive utilized in building the staff, only
145,799 shares of Common Stock remain available for future option grants.
Therefore, in order for the Company to be able to continue to use this tool to
attract and retain high quality personnel in a highly competitive market, the
Company proposes to expand the Stock Option Plan to provide for the grant of
options to purchase up to an aggregate of 6,000,000 shares of Common Stock, as
compared to the 4,000,000 shares currently authorized. Accordingly, the Board of
Directors recommends that stockholders vote "FOR" the proposal to amend the
Stock Option Plan to increase the number of shares authorized for issuance from
4,000,000 to 6,000,000 shares.
401(K) PLAN
The Company has adopted a 401(k) Profit Sharing Plan (the "401(k)
Plan") for its employees. Under the 401(k) Plan, eligible employees are
permitted to defer receipt of up to 15% of their cash compensation (subject to
certain limitations imposed under the Code). The 401(k) Plan provides that a
discretionary match of employee deferrals may be made by the Company in cash.
Pursuant to the 401(k) Plan, the Company has currently elected to match $.50 for
each $1.00 contributed by the employee through salary deferral, said deferral
not to exceed 5% of an employee's salary, subject to limitations imposed by the
Internal Revenue Service. The amounts held under the 401(k) Plan are invested
among various investment funds maintained under the 401(k) Plan in accordance
with the directions of each participant. Salary deferral contributions under the
401(k) Plan are 100% vested. Matching contributions vest immediately upon a
participants attainment of a minimum of one year of service with the Company.
Participants or their beneficiaries are entitled to payment of vested benefits
upon termination of employment.
EMPLOYEE STOCK PURCHASE PLAN
The Company has adopted the Forcenergy Gas Exploration, Inc. Employee
Stock Purchase Plan (the "Stock Purchase Plan"), which permits all Company
employees (other than the Chief Executive Officer) who work full time (or part
time for at least 20 hours per week and more than five months per year) to
acquire Common Stock at a minor discount from its fair market value through
payroll deductions. Up to 100,000 shares of Common Stock have been authorized
for purchase under the Stock Purchase Plan.
For each six-month period beginning on January 1 or July 1 during the
term of the Stock Purchase Plan, unless the Board determines otherwise, the
Company will offer to each eligible employee the opportunity to purchase Common
Stock. Employees may elect to participate prior to the start of a period and may
elect to have from two to ten percent of their compensation withheld. The Stock
Purchase Plan allows withdrawals, termination and changes in the level of
participation. The purchase price will be 85% of the lesser of the fair market
value of Common Stock on (i) the first day of the period or (ii) the last day of
the period. No employee may purchase Common Stock under the Stock Purchase Plan
valued at more than $25,000 (or such other maximum as may be prescribed from
time to time under the Code) for each calendar year in accordance with the
provisions of the Code.
Employees have purchased 44,415 shares under the Stock Purchase Plan as
of December 31, 1997.
1997 STOCK PRICE PERFORMANCE INCENTIVE PLAN FOR EMPLOYEES OF THE COMPANY
Effective January 1, 1997, the Company adopted the 1997 Stock Price
Performance Incentive Plan for Employees of the Company (the "$60 a Share Plan"
or "Plan"). All of the Company's employees are eligible to receive awards of the
Company's Common Stock under the Plan without being required to pay any purchase
price if (1) the closing price of the Company's Common Stock reaches $60 a share
before January 1, 2000, and (2) the employee remains employed by the Company
through the date that the shares are actually distributed under the Plan. If the
Common Stock reaches $60 per share on any date (the "$60 Price Date") on or
before December 31, 1999, then all employees would receive Common Stock worth
500% of their annual base compensation, distributed in equal installments on the
first, second and third anniversaries of the $60 Price Date, if they are still
employed by the Company. For purposes of determining the value of Common Stock
to be distributed, the Common Stock will be valued at its closing price on the
$60 Price Date. The number of shares of Common Stock issuable will not be
affected by subsequent fluctuations in the stock price, and will not be at all
dependent upon the market price of Common Stock on the dates that Common Stock
is distributed to employees under the Plan.
-9-
<PAGE> 12
The Plan also provides for reduced compensation if the Common Stock
does not reach $60 a share during the plan period but does reach $50 a share
(but not $60) prior to December 31, 1999 (with December 31, 1999 representing
the "$50 Price Date"). In such case, all employees would receive Common Stock
worth 250% of their annual base compensation, distributed in equal installments
on December 31, 2000, 2001 and 2002. For purposes of determining the value of
the Common Stock to be distributed, the Common Stock will be valued at $50 a
share on the distribution dates.
Employees shall not have any rights to receive shares of Common Stock
under the $60 a Share Plan until the requirements of the Plan are met. Since
employees have no vested rights under the Plan, the interest of participants in
the Plan will not be transferable, except that employees could designate that
shares, when and if issued under the Plan, be delivered for the benefit of their
immediate families.
The Compensation Committee of the Company's Board of Directors
administers the Plan. The Compensation Committee has the discretion to reduce
the number of shares otherwise distributable under the Plan to employees hired
after January 1, 1997. This reduction would reflect the price of the Common
Stock at the time employment commenced and the period of time that the employee
worked until the $50 Price Date or $60 Price Date, as applicable. The
Compensation Committee has the sole and exclusive right to interpret and
administer the Plan, including determining the employees eligible to receive
awards under the Plan, calculating the employees' annual base pay and the number
of shares of Common Stock issuable and reducing the number of shares issuable to
particular employees. The Compensation Committee may also amend the Plan prior
to the $50 Price Date or $60 Price Date in its sole discretion, and may amend
the Plan after the $50 Price Date or $60 Price Date with the consent of any
employees that are adversely affected by a proposed change.
The Plan is intended to qualify under Section 162 (m) of the Code so
that the Company may deduct the value of the shares issuable under the Plan
regardless of the amount thereof. Therefore, changes to the Plan will require
stockholder approval if they are "material" for purposes of Section 162(m) of
the Code. "Material" changes would include an increase in the aggregate number
of shares issuable under the Plan or to a particular employee or a change in the
eligibility criteria for participation in the Plan.
The $60 a Share Plan does not provide for a maximum limitation on the
number of shares of Common Stock that may be awarded thereunder or to any
particular employee. However, based on the Company's payroll as of January 1,
1997, there would be an aggregate of approximately 499,000 shares of Common
Stock issuable under the Plan to existing employees if the $50 price target is
met, and approximately 832,000 shares issuable if the $60 price target is met
(based on a $50 or $60 a share value, as applicable). The Plan also provides for
awards of Common Stock to employees joining the Company after January 1, 1997.
The maximum value of shares issuable to any one employee is $3,500,000 (58,333
shares at the $60 value); there is no limitation on the aggregate number of
employees that the Company may hire and thereby make eligible to participate in
the Plan.
-10-
<PAGE> 13
STOCK OPTION GRANTS IN 1997
OPTION GRANTS TO NAMED OFFICERS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARs Stock PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION --------------------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
---- ---------- ------------ --------- ----------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stig Wennerstrom 300,000(2) 19.8% $26.750 2007 $5,046,879 $12,789,783
J. Russell Porter 150,000(3) 9.9% 26.750 2007 2,523,440 6,394,892
Thomas F. Getten 150,000(4) 9.9% 29.375 2007 2,771,067 7,022,428
E. Joseph Grady 50,000(3) 3.3% 26.750 2007 841,147 2,131,631
Gary W. Loveless 100,000(5) 6.6% 34.000 2007 0 0
Percy A. Payne 50,000(3) 3.3% 26.750 2007 841,147 2,131,631
</TABLE>
Mr. Stig Wennerstrom exercised options on 33,429 shares in July 1997. The value
realized by Mr. Wennerstrom upon exercise was approximately $399,967. Those were
the only options exercised by a Named Officer in 1997.
- ------------------
(1) Potential realizable value was reported net of the option exercise
price, but before taxes, associated with the exercise. These amounts
represent the theoretical realizable value on the option expiration
date, assuming that the stock price appreciates annually at the rates
shown from the date of grant through expiration. Actual values
realized, if any, on stock option exercises are dependent on the future
performance of the Common Stock and the officer's continued employment
throughout the vesting period. Accordingly, the amounts reflected in
this table may not necessarily be achieved. All options granted to the
Named Officers in 1997 reflected the market price of the common stock
on the date of grant.
(2) Mr. Wennerstrom was granted options to purchase 300,000 shares of
Common Stock on July 25, 1997 under the Stock Option Plan and those
options vest one year from the date of grant.
(3) Options were granted to the Named Officer on July 25, 1997 under the
Stock Option Plan and such options vest 33.33% on each of the third
through fifth anniversaries of the date of grant.
(4) Mr. Getten was granted options to purchase 150,000 shares of Common
Stock on January 27, 1997 under the Stock Option Plan in connection
with Mr. Getten joining the Company and those options vest 33.33% on
each of the third through fifth anniversaries of the date of grant.
(5) Mr. Loveless was granted options to purchase 100,000 Shares Of Common
Stock upon joining the Company in January 1997. The options were
canceled upon Mr. Loveless' resignation from the Company in October
1997.
UNEXERCISED OPTIONS AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF OPTIONS IN-THE-MONEY OPTIONS(1)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Stig Wennerstrom 1,048,662 449,553 $13,853,305 $2,346,113
J. Russell Porter 106,948 291,389 1,038,567 2,046,879
Thomas F. Getten 0 150,000 0 0
E. Joseph Grady 20,000 225,000 0 1,914,063
Percy A. Payne 10,000 175,000 0 726,563
</TABLE>
- ---------------
(1) Value based on the last trade on the New York Stock Exchange on
December 31, 1997 ($26.1875 per share), less the applicable exercise
price of the outstanding options.
-11-
<PAGE> 14
STOCK PERFORMANCE GRAPH
The following graph compares total return of the Company's Common Stock
against the S&P 500 Index and a peer group index consisting of public
independent oil and gas companies.* The graph assumes that $100 was invested on
August 2, 1995 (the date of the closing of the Initial Public Offering) in the
Company's Common Stock, the S&P 500 Index and the peer group and that dividends
thereon were reinvested quarterly.
<TABLE>
<CAPTION>
08/02/95 09/30/95 12/31/95 03/31/96 06/30/96 09/30/96 12/31/96 03/31/97 06/30/97 09/30/97 12/31/97
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FORCENERGY INC 100.00 102.38 104.76 112.50 179.76 235.71 345.24 273.81 289.29 369.64 249.40
PEER GROUP INDEX 100.00 106.84 110.06 110.34 153.31 164.35 207.26 165.33 182.09 246.35 200.88
S&P 500 INDEX 100.00 104.48 110.78 116.72 121.96 125.73 136.21 139.86 164.28 176.59 181.66
</TABLE>
*The peer group consists of Ocean Energy Inc., Hugoton Energy Inc., Louis
Dreyfus Natural Gas Company, Inc., Newfield Exploration Company, PetroCorp, Inc.
and Stone Energy Corp.
-12-
<PAGE> 15
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table is furnished as of March 31, 1998 to indicate
beneficial ownership of shares of the Common Stock by persons owning more than
5% of the Common Stock and all executive officers and Directors individually and
the executive officers and Directors as a group. The information in the
following table is provided by such persons.
<TABLE>
<CAPTION>
PERCENT
COMMON VESTED OF
STOCK(1) OPTIONS(2) TOTAL COMMON STOCK
-------- ---------- ----- ------------
<S> <C> <C> <C> <C>
Dresdner Bank AG(7) 1,708,600 0 1,708,600 6.6%
Forsinvest AB(3)(8) 1,904,560 0 1,904,560 7.3%
Stridor Invest AB(3)(8) 21,436 0 21,436 *
Stig Wennerstrom(3)(4) 320,698 1,048,662 1,369,360 5.3%
J. Russell Porter(3)(5) 4,493 106,948 111,441 *
Gary Carlson(3)(6) 4,417 0 4,417 *
Robert Gerdes(3) 626 0 626 *
Thomas F. Getten(3) 906 0 906 *
E. Joseph Grady(3) 1,345 20,000 21,345 *
Percy A. Payne(3) 1,039 10,000 11,039 *
Neil Sullivan(3) 0 0 0 *
Mark Yelverton(3) 0 0 0 *
Bruce L. Burnham(3) 15,000 11,166 26,166 *
Eric Forss(3)(8) 1,942,180 31,000 1,973,180 7.6%
Robert Issal(3) 3,751 31,000 34,751 *
William F. Wallace(3) 3,071 11,166 14,237 *
Directors and Officers, total as 2,297,526 1,269,942 3,567,468 13.7%
a group
</TABLE>
* Less than 1%
- ------------------
(1) Except as otherwise noted, each stockholder has sole voting and
investment power with respect to the shares beneficially owned.
(2) Represent shares of Common Stock issuable pursuant to stock option
grants that are vested or that will be vested within 60 days of the
effective date of this schedule.
(3) The address of Forsinvest AB and Stridor Invest AB and Messrs. Forss
and Issal is Birger Jarlsgatan, 73-75, Box 19040, S-10432 Stockholm,
Sweden. The address of Messrs. Wennerstrom, Porter, Getten and Grady is
2730 SW 3rd Avenue, Suite 800, Miami, Florida 33129. The address of Mr.
Wallace is 30036 Snowbird Lane, Evergreen, Colorado 80439. The address
of Mr. Burnham is 10 Haig Point Circle, Hilton Head, SC 29938. The
address of Messrs. Gerdes, Payne and Yelverton is 3838 N. Causeway
Boulevard, Lakeway Three, Suite 2300, Metairie, Louisiana 77002. The
address of Mr. Sullivan is 1111 Bagby St., Suite 4850, Houston, Texas
77002. The address of Mr. Carlson is 310 K Street, Suite 700,
Anchorage, Alaska 99501.
(4) Of the shares listed as beneficially owned by Mr. Wennerstrom, 3,000
shares are owned by each of his children, Linda Wennerstrom and Henrik
Wennerstrom, for which Mr. Wennerstrom disclaims beneficial ownership.
(5) Of the shares beneficially owned by Mr. Porter, 1,000 shares are owned
by his wife, Deborah A. Porter.
(6) Of the shares beneficially owned by Mr. Carlson, 1,600 shares are owned
by his children: Nathan Carlson (300 shares), Amanda Carlson (300
shares), Gary Carlson (500 shares) and Rachael Carlson (500 shares). In
addition, 200 shares are owned in trust for Gary Carlson, Mr. Carlson's
son.
-13-
<PAGE> 16
(7) The address of Dresdner Bank AG is Jurgen-Ponto-Platz 1 60301
Frankfurt, Germany. Dresdner Bank AG is an international banking
organization headquartered in Frankfurt, Germany.
(8) In connection with the public tender offer hereinafter described (See
"Certain Relationships and Related Transactions"), Eric Forss,
Forsinvest AB and Stridor Invest AB acquired 1,942,180 shares of Common
Stock. Eric Forss is an owner, or empowered officer of, Forsinvest AB
and Stridor Invest AB. The shares of Common Stock held by Forsinvest AB
and Stridor Invest AB are also included in the holdings of Eric Forss.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is currently a party to or has engaged in the following
transactions with its directors, officers and principal stockholders.
The Company leases its principal offices in Miami, Florida from an
affiliate of the Forss family. The terms of the lease include current monthly
payments of approximately $23,000, expiring in October 2001. The Company made
payments under such lease of $280,000 in 1996 and $292,000 in 1997. The Company
believes that the lease terms are comparable to those terms which could be
obtained from an unaffiliated third party.
In connection with Mr. Wennerstrom's currently outstanding stock
options, the Company has granted certain piggyback registration rights and a put
option on the value of all such options and the Common Stock acquired through
the exercise of such options.
The Company has a consulting arrangement with Wictor Forss, the former
Chairman of the Board of the Company, whereby Mr. Forss receives $10,000 per
month in exchange for consulting services. The Company believes that Mr. Forss'
prior years of service to the Company as a Director enable him to provide
business and financial advice to the Company at a reasonable cost. This
consulting arrangement with Wictor Forss will terminate in March 1999.
In July 1997 the Company loaned J. Russell Porter, its Executive Vice
President, $200,000 pursuant to the terms of a promissory note executed and
delivered by Mr. Porter to the Company. The promissory note bears interest at 9%
per annum and is payable upon demand. Mr. Porter granted the Company a security
interest in the stock options granted to him pursuant to the Stock Option Plan.
As of April 15, 1998 the outstanding principal balance under the promissory note
was $85,000.
On December 19, 1997, the Company made a public tender offer for all of
the outstanding shares of Forcenergy AB ("FAB"). FAB is a Swedish public company
that at the time of the tender offer owned 34% of the outstanding Common Stock
of the Company. Eric Forss, Director of the Company, was President of FAB and
directly or through indirect affiliations owned approximately 22% of the equity
interest and 52% of the voting interest in FAB. As of April 3, 1998, more than
99% of the outstanding common shares of FAB have been tendered in connection
with the tender offer. The Company issued approximately 7.9 million shares
pursuant to the tender offer. In connection with the tender offer, the Company
entered into an agreement with Eric Forss, Forsinvest AB and Stridor Invest AB
(collectively, the "Forss Affiliates"), in which the Forss Affiliates
unconditionally agreed to tender their FAB securities pursuant to the tender
offer. In connection with the exchange, the Forss Affiliates exchanged 1,000,000
FAB Series A shares and 2,224,633 FAB Series B shares for 1,940,846 shares of
Common Stock of the Company.
The Company has agreed to enter into a registration rights agreement
with the Forss Affiliates in order to give the Forss Affiliates the right on one
occasion to require the Company to register all or part of the shares of Common
Stock received by the Forss Affiliates in connection with the tender offer under
the Securities Act of 1933 as amended (the "Securities Act"), unless (i)
exemption for such proposed sale exists under the Securities Act or (ii) the
Company has given notice of its intention to file a registration statement. The
Company has also agreed to provide the Forss Affiliates with piggyback
registration rights in any offering by the Company of any of its securities to
the public except a registration statement on Forms S-4 or S-8. The Company has
agreed to bear the expenses of all such registrations.
-14-
<PAGE> 17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
Directors, its executive officers, and any persons holding more than ten percent
of the Company's Common Stock are required to report their initial ownership of
the Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange. Specific due
dates for these reports have been established and the Company is required to
disclose in this proxy statement any failure to file by these dates. Messrs.
Gerdes and Yelverton each filed a late Form 3 upon being made officers of the
Company. Mr. Sullivan filed a late Form 3 subsequent to joining the Company. All
other required filings were satisfied on a timely basis. In making these
disclosures, the Company has made written inquiries of its officers and
Directors and has relied solely on written statements of its Directors,
executive officers and stockholders and copies of the reports that they have
filed with the SEC. In 1997, the Company initiated procedures to assist officers
and Directors in meeting the filing requirements of Section 16(a).
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The stockholders will be asked to ratify the appointment of Coopers &
Lybrand L.L.P. as independent accountants of the Company for the year ending
December 31, 1998. Such ratification will require the favorable vote of the
holders of a majority of the shares of Common Stock present and voting, in
person or by proxy, at the Annual Meeting. The Board of Directors recommends
that stockholders vote "FOR" ratification of the appointment.
Representatives of Coopers & Lybrand L.L.P. will be present at the
Annual Meeting, will have the opportunity to make a statement, if they desire to
do so, and will be available to respond to appropriate questions.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
In order for stockholder proposals to be included in the Company's
proxy statement and proxy relating to the Company's 1999 Annual Meeting of
Stockholders, such proposals must be received by the Company at its principal
executive offices not later than December 31, 1998.
By Order of the Board of Directors
BY: /s/ Stig Wennerstrom
-----------------------------------
Stig Wennerstrom
Chairman, President and
Chief Executive Officer
-15-
<PAGE> 18
PROXY
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF FORCENERGY INC
Annual Meeting -- May 14, 1998
The undersigned hereby appoints Stig Wennerstrom, E. Joseph Grady, and Thomas F.
Getten, each of them, each with full power of substitution, the proxies of the
undersigned to attend the Annual Meeting of Stockholders of FORCENERGY INC (the
"Corporation") to be held at 3:30 P.M., Eastern Daylight Time, on May 14, 1998
at the Northern Trust Bank of Florida, 700 Brickell Avenue, 9th Floor Boardroom,
Miami, Florida, and any adjournments thereof, and to vote at said meeting and
any adjournments thereof all shares of stock of the Corporation standing in the
name of the undersigned, as instructed on the reverse side, and in their
judgment on any other business which may properly come before said meeting.
(TO BE CONTINUED AND SIGNED ON THE OTHER SIDE)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
FORCENERGY INC
May 14, 1998
Please Detach and Mail in the Envelope Provided
<TABLE>
<S> <C>
A [X] Please mark your
votes as in this
example.
FOR all
nominees
listed at WITHHOLD
right AUTHORITY FOR AGAINST ABSTAIN
1. ELECTION OF [ ] [ ] NOMINEES: Stig Wennerstrom 2. PROPOSAL TO INCREASE THE NUMBER [ ] [ ] [ ]
DIRECTORS Bruce L. Burnham OF SHARES COVERED BY THE
Eric Forss FORCENERGY INC 1995 STOCK
FORCENERGY INC.1995 STOCK Robert Issal INCENTIVE PLAN FROM 4,000,000
*(INSTRUCTIONS: To withhold authority Antony T.F. Lundy SHARES TO 6,000,000 SHARES.
to vote for any individual nominee, write
that nominee's name in the space provided FOR AGAINST ABSTAIN
below.) 3. PROPOSAL TO APPROVE THE ELECTION [ ] [ ] [ ]
OF COOPERS & LYBRAND L.L.P. AS
- ------------------------------------------ INDEPENDENT ACCOUNTANTS FOR THE
YEAR ENDING DECEMBER 31, 1998.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION
IS SPECIFIED, IT WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
SIGNATURE DATE SIGNATURE DATE
--------------------------------------- --------- --------------------------------------- ---------
IF HELD JOINTLY
NOTE: Stockholder(s) should sign above exactly as name(s) appears hereon. But minor discrepancies in such signatures shall not
invalidate their proxy. If more than one Stockholder, all should sign.
</TABLE>
