<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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
FORCENERGY INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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:
<PAGE> 2
FORCENERGY INC
3838 NORTH CAUSEWAY BLVD.
THREE LAKEWAY CENTER, SUITE 2300
METAIRIE, LOUISIANA 70002
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY, JUNE 7, 2000
To the Stockholders of Forcenergy Inc:
The 2000 Annual Meeting of Stockholders of Forcenergy Inc will be held
at the Doubletree Hotel Lakeside, Lakeshore Room, 3838 North Causeway Blvd.,
Metairie, Louisiana 70002, at 3:30 P.M., Central Daylight Time, on Wednesday,
June 7, 2000 for the following purposes:
(1) To elect eight members of the Board of Directors to serve
until the 2001 Annual Meeting of Stockholders and until their
successors are duly elected and have qualified;
(2) To ratify the Board of Director's appointment of
PricewaterhouseCoopers LLP as the independent accountants of
the Company for the year ending December 31, 2000; and
(3) 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 17, 2000 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 delivery 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/ Richard G. Zepernick, Jr.
-------------------------------------
Richard G. Zepernick, Jr.
President and Chief Executive Officer
Metairie, Louisiana
April 29, 2000
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.
<PAGE> 3
April 29, 2000
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 7, 2000
-----------
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Forcenergy Inc, a Delaware
corporation (the "Company"), for use at the 2000 Annual Meeting of Stockholders
of the Company to be held on Wednesday, June 7, 2000, and at any postponement or
adjournment thereof (the "Annual Meeting"). This Proxy Statement and the
enclosed form of proxy will first be sent to stockholders on or about April 29,
2000.
The cost of preparing and 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, by facsimile or by telephone. Employees and
directors of the Company may be utilized in connection with this solicitation
without extra compensation. 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 is made by the stockholder will be voted (i) "FOR" the
election to the Board of Directors of the nominees named herein and (ii) "FOR"
the ratification of the appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company for the year ending December 31, 2000. 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 17, 2000 are
entitled to notice of and to vote at the Annual Meeting. As of April 17, 2000,
the issued and outstanding voting securities of the Company consisted of
24,000,000 shares of common stock, par value $0.01 per share each of which is
entitled to one vote and 40,000 shares of 14% Series A Cumulative Preferred
Stock, par value $0.01 per share (the "Preferred Stock"), each of which is
entitled to one vote (the common stock and Preferred Stock collectively, the
"Securities"). Holders of the Securities will vote together as one class on all
matters being voted upon at this Annual Meeting.
QUORUM AND VOTING
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding Securities 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.
Securities 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 the election of Directors scheduled to
come before the Annual Meeting require the approval of a majority of the votes
cast at the Annual Meeting. Many Forcenergy stockholders own shares in "street
name," which means that brokers are actually the record owners entitled to vote
the shares. When a broker does not have voting instructions and withholds its
vote on one of these matters, it is called a "broker non-vote." Broker non-votes
count towards a quorum, but do not
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<PAGE> 4
affect the outcome of a proposal. If you abstain, your shares will also count
towards a quorum. However, abstentions will not affect the outcome of the
election of directors, but will be treated as votes cast against the other
items.
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 until their earlier resignation or
removal. Messrs. Michael F. Bennet, B. James Ford, Clifford P. Hickey, Stephen
A. Kaplan, Gregory P. Pipkin, Stig Wennerstrom and Richard G. Zepernick, Jr. are
currently directors of the Company. Messrs. Bennet, Ford, Hickey, Kaplan and
Pipkin joined the Board of Directors on February 15, 2000, the effective date of
the Company's Plan of Reorganization. Mr. Zepernick was appointed to the Board
upon being elected President and Chief Executive Officer effective April 3,
2000. Mr. Forrest E. Hoglund is hereby being nominated for election to the Board
of Directors for the first time. Mr. Eric Forss, a director of the Company since
June 1994, resigned from the Board of Directors on February 16, 2000 to pursue
other personal interests. Messrs. Bruce L. Burnham and Robert Issal, currently
directors of the Company have not been nominated for re-election to the Board.
Eight 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 to replace such unavailable nominee. 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.
MICHAEL F. BENNET, age 35, has served as a director of the Company
since February 15, 2000. Mr. Bennet is a Vice President of Anschutz Investment
Company ("Anschutz"), a privately held investment company. Prior to joining
Anschutz in 1997, Mr. Bennet served as counsel to the Deputy Attorney General of
the United States. Mr. Bennet also practiced law with the Washington, D.C. firm
of Wilmer, Cutler & Pickering and was personal assistant to Ohio Governor
Richard F. Celeste.
B. JAMES FORD, age 31, has served as a director of the Company since
February 15, 2000. Mr. Ford is a Vice President of Oaktree Capital Management,
LLC ("Oaktree"), a private investment management firm with in excess of $12
billion under management, and a member of the Principal Activities Group. Prior
to joining Oaktree in June 1996, Mr. Ford was a consultant with McKinsey & Co.
and a member of the Paine Webber Incorporated Investment Banking Department.
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<PAGE> 5
CLIFFORD P. HICKEY, age 40, has served as a director of the Company
since February 15, 2000. Mr. Hickey is a Vice President of Anschutz. Prior to
joining Anschutz in July 1999, Mr. Hickey was a Director in the Prudential
Securities Energy Investment Banking Group and Vice President and Manager of the
Denver office of Enron Capital & Trade Resources, a subsidiary of Enron Corp.
Mr. Hickey also spent several years with Bankers Trust Company and Amoco
Production Company.
FORREST E. HOGLUND, age 65, served as Chairman of the Board of EOG
Resources, Inc. (formerly known as Enron Oil & Gas Company) from September 1987
until his retirement in August 1999, and served as its Chief Executive Officer
from September 1987 until September 1998. From May 1990 until December 1996, he
also served as President of Enron Oil & Gas Company. Mr. Hoglund is also
Chairman of the Board of Visitors of the M.D. Andersen Cancer Foundation.
STEPHEN A. KAPLAN, age 41, has served as a director of the Company
since February 15, 2000. Mr. Kaplan is a principal of Oaktree. At Oaktree, Mr.
Kaplan manages the Principal Activities Group that invests in controlling and
minority positions in both private and public companies. Prior to joining
Oaktree in June 1995, Mr. Kaplan was a Managing Director of Trust Company of the
West, where he managed a $400 million private investment fund. Prior to joining
Trust Company of the West in 1993, Mr. Kaplan was a partner in the law firm of
Gibson, Dunn & Crutcher. Mr. Kaplan serves as a director of numerous private and
public companies including KinderCare Learning Centers, Inc., Cherokee
International, Inc., CollaGenex Pharmaceuticals, Inc., Acorn Products, Inc. and
BioPure Corporation.
GREGORY P. PIPKIN, age 40, has served as a director of the Company
since February 15, 2000. Mr. Pipkin is a Managing Director of Lehman Brothers,
Inc. He has been an investment banker since 1984. From September 1982 to July
1984, Mr. Pipkin was a Technical Examiner at the Texas Railroad Commission. From
May 1981 to August 1982, Mr. Pipkin was a petroleum engineer for ARCO. Mr.
Pipkin is also a director of Spring Holdings, a privately held exploration and
production company
STIG WENNERSTROM, age 57, has been a director of the Company since its
inception in September 1993 and has served as Chairman of the Board of Directors
of the Company since March 1998. Mr. Wennerstrom also served as President and
Chief Executive Officer from the September 1993 inception until April 2000.
Mr. Wennerstrom is the original founder of the Company through the Company's
predecessors where he also served as President and Chief Executive Officer from
1982 to September 1993.
RICHARD G. ZEPERNICK, JR., age 39. Prior to joining the Company on
April 3, 2000 as President and Chief Executive Officer, Mr. Zepernick served as
Senior Vice President for the Gulf of Mexico for Ocean Energy, Inc. Subsequent
to Ocean's merger with United Meridian, Inc. in March 1998 and prior to Ocean
Energy, Inc's merger with Seagull Energy in March 1999, Mr. Zepernick served as
Executive Vice President of North America for Ocean Energy. From 1994 until
Ocean's merger with United Meridian, Mr. Zepernick served as Executive Vice
President and Chief Operating Officer of Ocean Energy and was a member of the
Board of Directors.
COMMITTEES
The Company's Board of Directors has established Executive, Audit and
Compensation Committees. The Executive Committee consisted during 1999 of
Messrs. Wennerstrom, Forss and Issal. The Audit Committee consisted during 1999
of Messrs. Issal and Burnham, both of whom are non-employee Directors of the
Company. The Compensation Committee consisted during 1999 of Messrs. Issal and
Burnham, both of whom are non-employee Directors of the Company.
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<PAGE> 6
Subsequent to the expansion and re-designation of the Board on February
15, 2000, the effective date of the Company's Plan of Reorganization, the
following committees were established and members elected:
THE EXECUTIVE COMMITTEE, at its discretion, may exercise, during
periods between meetings of the full Board of Directors, all powers of the Board
in the management and business of the Company, subject to limitations imposed by
the Bylaws, Certificate of Incorporation, resolutions establishing said
committee or applicable law.
MEMBERS - Messrs. Bennet, Ford, Pipkin, Wennerstrom and Zepernick
THE AUDIT COMMITTEE, in performing its function, 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.
MEMBERS - Messrs. Burnham and Issal
THE COMPENSATION COMMITTEE administers the employee stock and option
plans 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.
MEMBERS - Messrs. Bennet, Ford, Pipkin and Wennerstrom.
MEETINGS
During the year ended December 31, 1999, the Board of Directors held
three regular and eight telephonic meetings, the Audit Committee held one
separate meeting, the Compensation Committee held two separate telephonic
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 to Directors are in line with that paid by comparable
companies. The fees are an annual retainer of $10,000 per year, $5,000 per
regular meeting attended and $500 per telephonic meeting attended, with a
maximum of $40,000 per Director per year. 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 have previously been
made under the Company's 1995 Stock Incentive Plan, and following the
reorganization have been and will be made under the 1999 Stock Plan. Each
Director is typically awarded an initial grant of 5,000 shares upon becoming a
member of the Board and additional annual grants of 5,000 shares upon each
re-election to the Board. The entire Board of Directors has the authority to
increase or decrease those amounts, or to grant additional option shares to
specific Directors in recognition of individual performance.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are currently Mr. Zepernick (see
"Nominees for Election to the Board of Directors") and those officers listed
below.
J. RUSSELL PORTER, age 38, is Executive Vice President of the Company.
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 53, 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
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<PAGE> 7
Corporation, most recently serving as Unocal's General Manager for Health,
Environmental and Safety Support 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 43, is Vice President - Gulf of Mexico and
Geoscience, with responsibility for all operations in the Gulf of Mexico and for
technical overview of company-wide geoscience. Mr. Gerdes also oversees the
technical evaluation of all drilling prospects and all acquisitions and new
ventures. Prior to his promotion to his current position in March 2000, Mr.
Gerdes was Vice President - Geoscience since 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 52, 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 47, 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. Mr. Grady was Director of Finance
for Southdown Environmental Systems, Inc. from January 1991 until joining the
Company.
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: (1) motivate
executives toward effective long-term management of Company operations and
growth; (2) reward effective, efficient ongoing management of Company
operations; and (3) provide the ability to attract and retain executives through
competitive salary levels and benefit programs.
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. Mr.
Wennerstrom's compensation for 1999 was limited to that provided for in this
employment agreement.
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 based on performance
and to 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, the performance of the
executive officers and the performance of the Company were considered in the
determination of bonuses for 1999. No performance-based cash bonuses were paid
to the executive officers for 1999 other than the bonus contractually mandated
under Mr. Wennerstrom's employment agreement.
SUCCESS BONUSES. During the pendency of the bankruptcy process, the
Compensation Committee determined that a bonus program was necessary to: (1)
encourage all employees, including the executive officers, to remain with the
Company as it worked to reorganized its capital structure; and (2) to
incentivize all employees to accomplish the
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reorganization within a fixed period of time. A plan ("Success Bonus Program")
was developed by the Company and approved by the Board. The Success Bonus
Program was also approved by the Bankruptcy Court on July 27, 1999. The
requirements for qualification for the bonuses to executives of the Company have
been met. Under the terms of the Success Bonus Program, 50% of the bonuses
earned were paid in February 2000 and 50% will be paid in August 2000.
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, the plan under which all 1999 option grants were made. The
Compensation Committee administers the Company's option plans 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.
Grants of options to executive officers during 1999 were made based
upon individual efforts and performance. A substantial component of executive
compensation historically has been paid in the form of stock options. As a
result of declining stock prices within the industry, and more dramatically, the
Company's stock price, the Board of Directors determined that it was in the best
interests of the Company to reprice all options that had no value to the
employees at the time to an exercise price 20% above the market value on the
date repriced. The repricing was necessary to avoid losing valuable employees
during an extended weak equity market to other industry peers or to more
market-favored industries.
Pursuant to the Company's Plan of Reorganization all options previously
granted under the 1995 Stock Incentive Plan, including all options repriced
during 1999, were cancelled. Under the terms of the Plan of Reorganization,
effective February 15, 2000, each employee received a new grant under the 1999
Stock Plan equivalent to approximately 36.8% of the number of option shares he
or she previously held under the 1995 Stock Incentive Plan at an exercise price
of $10.00 per share.
COMPENSATION COMMITTEE
Robert Issal
Bruce L. Burnham
(Compensation Committee
prior to February 15, 2000
effective date of the Company's
Plan of Reorganization)
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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, 1999 for each of the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company ("Named Officers"). Mr. Richard G. Zepernick, Jr., who was
elected President and Chief Executive Officer effective April 3, 2000, received
no compensation from the Company during 1999.
<TABLE>
<CAPTION>
Long Term
Compensation
---------------------
Annual Compensation(1) Securities Underlying
----------------------- Stock Options All Other
Name, Age & Position Year Salary Bonus (Number of Shares) Compensation
- -------------------- ---- ------- ------ -------------------- ------------
<S> <C> <C> <C> <C> <C>
Stig Wennerstrom (57)
Chairman, President & Chief 1999 $609,600 $150,000 -0- $462,565(2)(7)
Executive Officer 1998 600,000 150,000 -0- 89,566(2)
1997 566,664 500,000 300,000 89,374(2)
J. Russell Porter (38) 1999 350,000 -0- -0- 192,700(3)(7)
Executive Vice President 1998 350,000 -0- 0- 5,000(3)
1997 300,000 225,000 150,000 5,063(3)
Thomas F. Getten (52)
Vice President, General 1999 300,000 -0- -0- 55,000(3)(7)
Counsel & Secretary 1998 300,000 -0- 50,000 5,300(3)
1997 270,000 100,000 150,000 90,385(4)
E. Joseph Grady (47)
Vice President, Treasurer 1999 300,000 -0- -0- 155,300(3)(7)
& Chief Financial Officer 1998 295,000 -0- -0- 5,300(3)
1997 240,000 85,000 50,000 60,070(5)
Gary E. Carlson (53)
Vice President - Exploration 1999 275,000 -0- -0- 142,500(3)(7)
Production (Alaska 1998 275,000 -0- -0- 5,300(3)
Division(6) 1997 229,167 -0- 175,000 4,750(3)
</TABLE>
(1) Amounts exclude perquisites and other personal benefits because such
compensation, if any, is included in All Other Compensation.
(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 1997 through 1999. Also includes
employer matching contributions of $4,750, $5,000 and $5,000 under the
Company's 401(k) Plan for 1997, 1998 and 1999, respectively, and other
non-cash benefits of $13,251, $13,193 and $6,392 received in 1997, 1998
and 1999, respectively.
(3) Represents primarily employer matching contributions under the
Company's 401(k) Plan.
(4) Includes $85,600 in relocation reimbursement and $4,750 in employer
matching contributions under the Company's 401(k) Plan.
(5) Includes $55,320 in relocation reimbursement and $4,750 in employer
matching contributions under the Company's 401(k) Plan.
(6) Mr. Carlson joined the Company in his current position in March 1997.
(7) Includes cash payments payable to each officer under the
bankruptcy-approved Success Bonus Program. Bonuses payable to the Named
Officers are: Mr. Wennerstrom ($379,800); Mr. Porter ($187,500); Mr.
Getten
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<PAGE> 10
($150,000); Mr. Grady ($150,000) and Mr. Carlson ($137,500). Fifty
percent (50%) of these bonuses were paid to the Named Officers in
February 2000 and fifty percent (50%) are payable in August 2000.
EMPLOYMENT AGREEMENTS 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 served as President
and Chief Executive Officer of the Company.
Under the Employment Agreement, Mr. Wennerstrom was entitled to an
annual salary and fixed bonus. Mr. Wennerstrom received a fixed annual salary of
$566,664 and $600,000 for 1997 and 1998, respectively. For years subsequent to
1998, Mr. Wennerstrom's salary was fixed at $600,000, subject to annual cost of
living increases. In addition, Mr. Wennerstrom was entitled to receive a
$150,000 bonus for 1997 and for each subsequent year, provided that the Company
may have required him to return this bonus, or a portion thereof, for any year
in which the Company failed to attain pre-determined cash flow targets. The
Employment Agreement also provided that the Company 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 extended to
December 31, 1998, automatically renewed annually thereafter until December 31,
2001 for "rolling" three-year periods that could be terminated upon 36 months'
prior notice, provided that the term could be ended upon 12 months' notice given
after January 1, 2002.
The Employment Agreement was subject to early termination by the
Company for cause or upon the death or incapacity of Mr. Wennerstrom. The
Employment Agreement was also subject to early termination by Mr. Wennerstrom
for cause. If the Employment Agreement was terminated without cause by the
Company or with cause by Mr. Wennerstrom (including certain changes in control
of the Company), the Company was obligated to pay Mr. Wennerstrom a termination
fee of three times the amount of Mr. Wennerstrom's annual includible
compensation.
As of February 15, 2000, the effective date of the Plan of
Reorganization, Mr. Wennerstrom executed a new employment agreement with the
Company providing for a base salary of $759,600 per annum for an initial term of
two years, renewable from year to year for additional one-year periods if the
Company gives notice to Mr. Wennerstrom at least 120 days prior to the scheduled
termination of the employment term. The new employment agreement provides that
if Mr. Wennerstrom is terminated without cause by the Company, the Company would
be obligated to pay Mr. Wennerstrom a severance payment equal to two years base
salary and 50% of Mr. Wennerstrom's employee stock options would vest and remain
exercisable for one year from the date of termination.
As of April 3, 2000, the Company entered into an employment agreement
with Richard G. Zepernick, Jr. pursuant to which Mr. Zepernick shall serve as
Chief Executive Officer of the Company. The agreement provides for benefits
substantially similar to the employment agreement signed by Mr. Wennerstrom as
of February 15, 2000, but with a base salary of $350,000. Mr. Zepernick was also
granted options under the 1999 Stock Plan to purchase 300,000 shares of common
stock at exercise prices of $10.00 per share (240,000 shares) and at $15.00 per
share (60,000 shares).
OTHER. On March 1999, the Company entered into amended employment
agreements with J. Russell Porter, E. Joseph Grady, Thomas F. Getten, Gary E.
Carlson, Robert G. Gerdes and Mark Yelverton. Generally, the employment
agreements provided that if an executive was terminated without cause by the
Company, the Company would be obligated to pay such executive a severance
payment equal to two years base salary and 50% of the Executive's unvested
employee stock options would vest and remain exercisable for one year from the
date of termination. As of February 15, 2000, each of such executive officers
signed new employment agreements with the Company that provide benefits
substantially similar to the employment agreement signed by Mr. Wennerstrom as
of February 15, 2000. Salaries provided for in the agreements were the same as
the salaries received by such officers during 1999. Mr. Yelverton resigned from
the Company on March 21, 2000 to pursue other interests.
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
-8-
<PAGE> 11
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 "1995 Stock Plan"). The 1995 Stock
Plan was intended to provide officers and key employees with an opportunity to
acquire a proprietary interest in the Company, to provide additional incentives
that reward employees based on the profitable growth of the Company and to aid
the Company in attracting and retaining outstanding personnel. The 1995 Stock
Plan provided 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 1995 Stock Plan permitted awards of up to an aggregate
of 6,000,000 shares of Common Stock. As of December 31, 1999, 6,000,000 shares
of Common Stock had an aggregate market value of approximately $3 million. As of
December 31, 1999, options covering up to an aggregate of 3,599,133 shares of
Common Stock were outstanding under the 1995 Stock Plan. The number of, and in
some cases, types of, shares covered by the 1995 Stock Plan were subject to
adjustments in the event of stock dividends, stock splits and certain other
events.
All employees and Directors of the Company were eligible to participate
in the 1995 Stock Plan. The Compensation Committee has the power to determine
which employees receive awards under the plans 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 1995
Stock Plan. This limitation is applied so that compensation realized from awards
under the option plan will qualify as "performance based" compensation for
purposes of Section 162(m) of the Code. Incentive stock options granted under
the 1995 Stock Plan could not 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 could not 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 had the
authority to determine how the exercise price of options would be paid.
Upon initial appointment to the Board, a non-employee Director
typically received 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 would receive options to buy 5,000 shares of Common Stock, vesting six
months after such annual meeting. All of these options were exercisable at the
fair market value of Common Stock on the date of grant, and expire 10 years
after grant. The Board of Directors also had the authority to grant options on a
discretionary basis to individual directors in recognition of individual
performance.
The 1995 Stock Plan was 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 Committee has the authority, in its discretion, to
amend the plan, unless approval of the Company's stockholders is required for
the 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 (1) increasing the number of shares
available in the aggregate for awards, (2) increasing the maximum number of
shares that may be granted to an employee, or (3) changing eligibility
requirements for participation in the plan.
No grants of Restricted Stock Awards, Stock Appreciation Rights,
Performance Awards or Phantom Stock Awards have been made under the 1995 Stock
Plan.
-9-
<PAGE> 12
On February 15, 2000, the effective date of the Plan of Reorganization,
and pursuant to the provisions of the Plan of Reorganization, the 1995 Stock
Incentive Plan and all options outstanding under that plan were cancelled. On
that same date, the 1999 Stock Plan provided for under the Plan of
Reorganization was adopted and options on approximately 1,328,000 shares of new
common stock were granted to employees and directors. Those options were granted
with a $10.00 per share exercise price, the assumed fair market value of a share
of new Company common stock under the Plan of Reorganization. Each former
optionholder under the 1995 Stock Plan received options under the 1999 Stock
Plan in the amount of approximately 36.8% of the number of option shares held
under the 1995 Stock Plan. The provisions of the 1999 Stock Plan are
substantially the same as those of the 1995 Stock Plan, except that the total
number of shares authorized for issuance under the 1999 Stock Plan is 3,000,000
shares.
EMPLOYEE STOCK PURCHASE PLAN
In 1995 the Company adopted the Forcenergy Gas Exploration, Inc.
Employee Stock Purchase Plan, which permits all Company employees 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. As of January 1, 1999, all 100,000 shares previously
authorized for sale under the Stock Purchase Plan had been sold. Pursuant to the
Company's Plan of Reorganization, the stock purchase plan was terminated and the
Forcenergy Inc 1999 Employee Stock Purchase Plan (the "1999 ESPP") was
established effective February 15, 2000, with substantially the same terms.
For each six-month period beginning on January 1 or July 1 during the
term of the 1999 ESPP, 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 1999 ESSP
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 (1) the first day of the period or (2) the last day of the period. No
employee may purchase Common Stock under the 1999 ESPP 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.
Up to 480,000 shares of Common Stock are currently authorized for
purchase under the 1999 ESPP.
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. During 1999 the Company paid approximately
$308,864.02 in matching contributions.
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"). All of the Company's employees would have been eligible to receive
bonuses of between 250% to 500% of annual salary in the Company's Common Stock
under the $60 a Share Plan, without being required to pay any purchase price, if
(1) the closing price of the Company's Common Stock had reached $60 a share ($50
a share for the 250% award) before January 1, 2000. The $60 a Share Plan expired
under its own terms on December 31, 1999 without any awards being earned or paid
thereunder.
STOCK OPTION GRANTS IN 1999
There were no option grants, nor option exercises by a Named Officer in
1999.
-10-
<PAGE> 13
OPTIONS REPRICED IN 1999
The following table sets forth information about the repricing of
options to purchase common stock held by all executive officers during 1999. All
options previously granted to all employees were repriced pursuant to a
Company-wide repricing approved by the Board of Directors effective February 1,
1999. All options were repriced with an exercise price of $1.275 per share, the
fair market value of the stock on that date ($1.0625 per share) plus 20%. The
number of options outstanding was reduced only for the executive officers. The
repriced options were granted with the same expiration date as the original
grant being repriced. The vesting period for the repriced options was extended
for one year by adding one year to the future vesting dates on the original
grants. Repriced options that replaced options that were already vested were not
exercisable for one year from the February 1, 1999 repricing date.
<TABLE>
<CAPTION>
Number of Number of
Securities Securities Original New
Underlying Underlying Exercise Exercise
Repriced Original Price Price Expiration
Name Options Options Per Share Per Share Date
---- ---------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Stig Wennerstrom 195,296 195,296 $14.51 $1.275 9/15/03
483,041 483,041 10.10 1.275 5/11/05
185,549 185,549 12.02 1.275 5/11/05
224,329 224,329 10.50 1.275 1/6/06
100,023 110,000 26.09 1.275 11/1/06
273,364 300,000 26.75 1.275 7/25/07
--------- ---------
1,461,602 1,498,215
========= =========
J. Russell Porter 42,277 42,277 14.51 1.275 5/11/04
25,000 25,000 10.10 1.275 5/11/05
17,954 17,954 12.02 1.275 5/11/05
6,892 6,892 14.51 1.275 5/11/05
31,214 31,214 12.02 1.275 5/11/05
50,000 50,000 10.00 1.275 8/31/05
50,000 50,000 14.13 1.275 6/13/06
22,733 25,000 26.88 1.275 11/1/06
136,682 150,000 26.75 1.275 7/25/07
--------- ---------
382,752 398,337
========= =========
Thomas F. Getten 131,170 150,000 29.88 1.275 1/27/07
50,000 50,000 21.50 1.275 1/22/08
--------- ---------
181,170 200,000
========= =========
E. Joseph Grady 75,000 75,000 10.00 1.275 10/23/05
25,000 25,000 14.13 1.275 6/13/06
75,000 75,000 20.88 1.275 9/06/06
18,186 20,000 26.88 1.275 11/1/06
45,561 50,000 26.75 1.275 7/25/07
--------- ---------
238,747 245,000
========= =========
Gary E. Carlson 115,769 125,000 25.81 1.275 3/3/07
45,561 50,000 26.75 1.275 7/25/07
--------- ---------
161,330 175,000
========= =========
Mark Yelverton 22,124 22,124 22.00 1.275 3/4/08
45,561 50,000 26.75 1.275 7/28/07
--------- ---------
67,685 72,124
========= =========
</TABLE>
-11-
<PAGE> 14
<TABLE>
<CAPTION>
Number of Number of
Securities Securities Original New
Underlying Underlying Exercise Exercise
Repriced Original Price Price Expiration
Name Options Options Per Share Per Share Date
---- ---------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Robert G. Gerdes 15,700 15,700 10.00 1.275 8/31/05
18,186 20,000 26.88 1.275 11/1/06
41,005 45,000 26.75 1.275 7/25/07
10,000 10,000 15.25 1.275 6/15/08
--------- ---------
84,891 90,700
========= =========
</TABLE>
UNEXERCISED OPTIONS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
Value of Unexercised
Number of Options(1) In-The-Money Options(2)
------------------------------ ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Stig Wennerstrom 1,361,579 100,023 $ -- $ --
J. Russell Porter 187,206 195,546 -- --
Thomas F. Getten -- 181,170 -- --
E. Joseph Grady 99,179 139,568 -- --
Gary E. Carlson -- 161,330 -- --
</TABLE>
- ----------
(1) Pursuant to the terms of the Company's Plan of Reorganization, all of
these options were cancelled as of February 15, 2000.
(2) This calculated value is zero because it is based on the last trade on
the Nasdaq National Market on December 31, 1999 ($.5156 per share),
less the applicable exercise price ($1.275 per share) of the
outstanding options.
STOCK PERFORMANCE GRAPH
<TABLE>
<CAPTION>
08/02/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
<S> <C> <C> <C> <C> <C> <C>
FORCENERGY INC. 100.00 104.76 345.24 249.40 25.00 5.71
PEER GROUP INDEX 100.00 109.11 174.15 172.79 145.24 183.06
S&P 500 INDEX 100.00 110.78 136.21 181.66 233.57 282.72
</TABLE>
-12-
<PAGE> 15
The preceding graph compares total return of the Company's old 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.
*The peer group consists of Louis Dreyfus Natural Gas Company, Inc., Newfield
Exploration Company, PetroCorp, Inc. and Stone Energy Corp.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table is furnished as of April 17, 2000 to indicate
beneficial ownership of shares of the common stock and Preferred Stock by
persons owning more than 5% of the common stock or the Preferred Stock, all
executive officers and Directors individually and the executive officers and
Directors as a group. Holders of Preferred Stock are entitled to vote together
with holders of common stock on all matters. The information in the following
table is provided by such persons.
<TABLE>
<CAPTION>
Four and
Five Year Total Percent Percent
New Common New of Series A of
Common Stock Stock Subscription Common Common Preferred Preferred
Stock(1) Options(2) Warrants(3) Warrants(4) Stock Stock Stock Stock
-------- -------- ----------- ------------ ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
The Anschutz Corporation(5)(6) 6,018,708 -- -- 652,320 6,671,028 27.1% 14,496 36.2%
Lehman Brothers Holdings, Inc.(5) 4,368,298 -- -- -- 4,368,298 18.2 11,185 28.0
Oaktree Capital Management, LLC(5)(7) 4,675,568 -- -- 364,320 5,039,888 20.7 8,430 21.1
Stig Wennerstrom(5)(8) 18,309 530,866 6,341 450 555,966 2.3 10 *
Richard G. Zepernick, Jr.(5) -- -- -- -- -- * -- --
J. Russell Porter(5)(9) 216 -- 108 -- 324 * -- *
Gary Carlson(4)(10) 236 -- 118 -- 354 * -- *
Robert Gerdes(5)(11) 77 -- 38 -- 115 * -- *
Thomas F. Getten(5) 52 -- 26 -- 78 * -- *
E. Joseph Grady(5) 83 -- 42 -- 125 * -- *
Bruce L. Burnham(5) 877 -- 439 -- 1,316 * -- *
Robert Issal(5) 145 -- 73 -- 218 * -- *
Michael F. Bennet(5)(12) -- -- -- -- -- * -- --
B. James Ford(5)(7) -- -- -- -- -- * -- --
Clifford P. Hickey(5)(12) -- -- -- -- -- * -- --
Forrest E. Hoglund(5) -- -- -- -- -- * -- --
Stephen A. Kaplan(5)(7) -- -- -- -- -- * -- --
Gregory P. Pipkin(5)(13) 1 -- -- -- 1 * -- --
Directors and Officers,
total as a group 19,996 530,866 7,185 450 558,497 2.3% 10 *
* Less than 1%
</TABLE>
(1) The new common stock of Forcenergy was issued effective February 15,
2000 pursuant to the Company's Plan of Reorganization. Except as
otherwise noted, each stockholder has sole voting and investment power
with respect to the shares beneficially owned.
(2) Represents shares of common stock issuable pursuant to vested stock
options, or options that would be vest, within 60 days of the effective
date of this schedule, granted under the 1999 Stock Plan.
(3) Two issues of common stock warrants were issued to the
pre-reorganization shareholders under the Plan of Reorganization. Both
of the warrant issues are exercisable at any time. 50% of the warrants
reflected here expire on February 15, 2004 and
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<PAGE> 16
have an exercise price of $16.67 per share, and 50% expire on February
15, 2005 and have an exercise price of $20.83 per share.
(4) Warrants for the purchase of common stock were issued to the purchasers
of the Company's Preferred Stock on March 20, 2000. Purchasers of the
Preferred Stock received warrants to purchase 45 shares of Common Stock
for each share of Preferred Stock acquired. These warrants have a
$10.00 per share exercise price and will expire on the earlier of (a)
ten years from the date of acquisition or (b) a date after March 20,
2004 upon notice of termination from the Company if the market price of
the common stock has exceeded 300% of the exercise price for a period
of 30 consecutive days. These warrants are referred to as the
"Subscription Warrants".
(5) The address of the Anschutz Corporation and of Messrs. Bennet and
Hickey is 555 17th Street, Suite 2400 Denver, Colorado 80207. The
address of Lehman Brothers and Mr. Pipkin is 7330 Chase Tower, 600
Travis Street, Houston, Texas 77002. The address of the OCM Principal
Opportunities Fund LLP and of Messrs. Ford and Kaplan is 330 S. Grand
Avenue, 28th Floor, Los Angeles, California 90071. The address of
Messrs. Wennerstrom, Porter, Getten and Grady is 2730 SW 3rd Avenue,
Suite 800, Miami, Florida 33129. The address of Mr. Carlson is 310 K
Street, Suite 700, Anchorage, Alaska 99501. The address of Messrs.
Zepernick and Gerdes is 3838 N. Causeway Boulevard, Lakeway Three,
Suite 2300, Metairie, Louisiana 77002. The address of Mr. Burnham is
10 Haig Point Circle, Hilton Head, SC 29938. The address of Mr. Issal
is Birger Jarlsgatan, 73-75, Box 19040, S-10432 Stockholm, Sweden. The
address of Mr. Hoglund is 333 Clay Street, Suite 1325, Houston, Texas
77002.
(6) Of the shares of common stock beneficially owned by The Anschutz
Corporation, 932 shares are owned by Anschutz Investment Company, a
wholly owned subsidiary of The Anschutz Corporation.
(7) Of the shares of common stock beneficially owned by Oaktree Capital
Management, LLC, 3,509,748 shares and 273,375 subscription warrants are
owned by OCM Principal Opportunities Fund, L.P. and 1,148,420 shares
and 89,595 subscription warrants are owned by OCM Opportunities Fund,
II, L.P., each of which Oaktree Capital Management, LLC is the general
partner. Messrs. Ford and Kaplan are principals of Oaktree Capital
Management, LLC., managers of the OCM Principal Opportunities Fund LLP
(the "Fund"), however, they disclaim beneficial ownership in the shares
owned by the Fund.
(8) Of the shares of common stock listed as beneficially owned by Mr.
Wennerstrom, 155 shares of new common stock are owned by each of his
children, Linda Wennerstrom and Henrik Wennerstrom, for which Mr.
Wennerstrom disclaims beneficial ownership.
(9) Of the shares of common stock listed as beneficially owned by Mr.
Porter, 39 shares of new common stock are owned by his wife, Deborah A.
Porter.
(10) Of the shares of common stock listed as beneficially owned by Mr.
Carlson, 155 shares of new common stock are owned in trust for his
children: Amanda Carlson (23 shares), Gary Carlson (93 shares) and
Rachael Carlson (39 shares).
(11) Of the shares of common stock listed as beneficially owned by Mr.
Gerdes, 39 shares of new common stock are owned by each of his
children, Julie Gerdes and Caroline Gerdes.
(12) Messrs. Bennet and Hickey are officers of The Anschutz Corporation,
however, they disclaim any beneficial ownership in the shares owned by
The Anschutz Corporation.
(13) Mr. Pipkin is a Managing Director with Lehman Brothers, Inc., manager
of Lehman Brothers Holdings, Inc. ("Holdings"), however, he disclaims
any beneficial ownership in the shares owned by Holdings.
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 leased its principal offices in Miami, Florida from an
affiliate of the family of Eric Forss (a director of the Company during 1999),
which owned the building until it was sold effective June 30, 1999. The terms of
the lease included current monthly payments of approximately $23,000. The
Company made payments to the Forss family under such lease of $292,000 in 1997,
$297,187 in 1998 and $141,671 in 1999. The Company believed that the lease terms
were comparable to those terms which could have been obtained from an
unaffiliated third party.
Effective April 3, 2000, Richard G. Zepernick, Jr. replaced Stig
Wennerstrom as President and Chief Executive Officer of the Company. Stig
Wennerstrom remains as Chairman of the Board of the Company. In connection
therewith, the Company agreed to pay Mr. Wennerstrom a severance payment equal
to 2.5 times a base salary rate of $775,800 per year, 75% of the options
granted Mr Wennerstrom under the Company's Plan of Reorganization would
automatically vest and the remaining 25% of such options would vest in equal
shares over
-14-
<PAGE> 17
a three-year period. All health insurance, life insurance and automobile
benefits previously afforded Mr. Wennerstrom will continue until one year after
the date Mr. Wennerstrom ceases to be a member of the Board of Directors. For a
period of not less than three years, the Company will supply Mr. Wennerstrom
with an office and full-time secretary. In consideration thereof, Mr.
Wennerstrom agreed that for a period of three years he will be reasonably
available to Mr. Zepernick for advice and consultation, for which Mr.
Wennerstrom will receive no compensation (except reimbursement for direct
out-of-pocket expenses).
The Company had a consulting arrangement with Wictor Forss, the former
Chairman of the Board of the Company, whereby Mr. Forss received $10,000 per
month in exchange for consulting services. The Company believed that Mr. Forss'
prior years of service to the Company as a Director enabled him to provide
business and financial advice to the Company at a reasonable cost. This
consulting arrangement with Wictor Forss terminated March 31, 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. As of December 31, 1999, the outstanding
principal and accrued interest balance under the promissory note was $97,816.
Approximately $10,000 was repaid by Mr. Porter in April 2000 under an agreed
repayment plan.
The Company entered into a registration rights agreement with Eric
Forss and related entities during 1999 in order to give Eric Forss and such
entities a demand right to require the Company to register all or part of the
shares of Common Stock received by Eric Forss and such entities in connection
with a tender offer under the Securities Act of 1933 as amended (the "Securities
Act"). The registration rights agreement terminated under its own terms during
1999.
In connection with and as part of the Plan of Reorganization, certain
holders of the Company's Senior Subordinated Notes, including The Anschutz
Corporation, Lehman Brothers, Inc. and certain affiliates of Oaktree Capital
Management, LLC, received the right to nominate certain directors, In addition,
these parties agreed as part of the Plan of Reorganization to purchase their pro
rata share of, and to serve as standby purchasers for any unsubscribed
Subscription Warrants and shares of Preferred Stock. The distribution of these
securities, along with shares of common stock, were made under the Plan of
Reorganization principally in exchange for claims and partially for cash.
Distributions of the Subscription Warrants and Preferred Stock to these
significant stockholders in accordance with the Plan of Reorganization were
completed on March 20, 2000 at the same time as the issuances of such warrants
and shares to other holders of allowed claims who elected to participate.
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. 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. Mr. Carlson filed a late Form 4 for August
1999 in connection with a market sale of 2,600 shares of old common stock. Mr.
Getten filed a late Form 4 for December 1999, in connection with a market sale
of 300 shares of old common stock. 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.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The stockholders will be asked to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
year ending December 31, 2000. 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 PricewaterhouseCoopers LLP 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.
-15-
<PAGE> 18
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 2001 Annual Meeting of
Stockholders, such proposals must be received by the Company at its principal
executive offices not later than December 30, 2000. Shareholders can present
other proposals from the floor of the annual meeting only if, in general, the
corporate secretary receives proper notice and certain information not less than
60 days nor more than 90 days prior to the meeting. Any shareholder who wishes
to introduce a proposal should consult Forcenergy's certificate of
incorporation, bylaws and applicable proxy rules of the Securities and Exchange
Commission.
By Order of the Board of Directors
By: /s/ Richard G. Zepernick, Jr.
-------------------------------------
Richard G. Zepernick, Jr.
President and Chief Executive Officer
-16-
<PAGE> 19
PROXY
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
FORCENERGY INC
Annual Meeting -- June 7, 2000
The undersigned hereby appoints Richard G. Zepernick, Jr., E. Joseph
Grady, and Thomas F. Getten, each of them, each with full power of
substitution, the proxy of the undersigned to attend the Annual Meeting of
Stockholders of FORCENERGY INC (the "Company") to be held at 3:30 p.m.,
Central Daylight Time, on June 7, 2000 at the Doubletree Hotel, Lakeshore Room,
3838 North Causeway Boulevard, Metairie, Louisiana 70002, (Phone (504)
836-5255), and any adjournments thereof, and to vote at said meeting and any
adjournments thereof all shares of stock of the Company standing in the name of
the undersigned, as instructed on the reverse side, and in his judgment on any
other business which may properly come before said meeting.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE> 20
Please Detach and Mail in the Envelope Provided
<TABLE>
<S> <C>
A [X] Please mark your
votes as in this
example.
FOR
all nominees WITHHOLD FOR AGAINST ABSTAIN
listed at right AUTHORITY
1. Election of 2. Proposal to approve of the election [ ] [ ] [ ]
Directors [ ] [ ] of PricewaterhouseCoopers LLP as
independent public accountants for
the year ending December 31, 2000.
Nominees: Michael F. Bennet
B. James Ford
Clifford P. Hickey
Forrest E. Hoglund
Stephen A. Kaplan
Gregory P. Pipkin
Stig Wennerstrom
Richard G. Zepernick, Jr.
(INSTRUCTION: To withhold authority to vote for This proxy will be voted as directed, but if no direction is
any individual nominee, write that nominee's specified, or if you ABSTAIN, your vote will be counted for quorum
name in the space provided below.) purposes but will not be considered as a vote FOR or AGAINST
proposals 1 and 2.
- -----------------------------------------------------
PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED
ENVELOPE.
Signature___________________________________________________________________________________ Dated: __________________________
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>
<PAGE> 21
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
FORCENERGY INC
June 7, 2000
Please Detach and Mail in the Envelope Provided
<TABLE>
<S> <C>
A [X] Please mark your
votes as in this
example.
FOR
all nominees WITHHOLD FOR AGAINST ABSTAIN
listed at right AUTHORITY
1. Election of 2. Proposal to approve of the election [ ] [ ] [ ]
Directors [ ] [ ] of PricewaterhouseCoopers LLP as
independent public accountants for
the year ending December 31, 2000.
Nominees: Michael F. Bennet
B. James Ford
Clifford P. Hickey
Forrest E. Hoglund
Stephen A. Kaplan
Gregory P. Pipkin
Stig Wennerstrom
Richard G. Zepernick, Jr.
(INSTRUCTION: To withhold authority to vote for This proxy will be voted as directed, but if no direction is
any individual nominee, write that nominee's specified, or if you ABSTAIN, your vote will be counted for quorum
name in the space provided below.) purposes but will not be considered as a vote FOR or AGAINST
proposals 1 and 2.
- -----------------------------------------------------
PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED
ENVELOPE.
Signature___________________________________________________________________________________ Dated: __________________________
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>
