SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LOUIS DREYFUS NATURAL GAS CORP.
(Name of Registrant as Specified in its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement if Other Than Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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___________________.
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[ ] Fee paid previously with preliminary materials.
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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.
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LOUIS DREYFUS NATURAL GAS CORP.
14000 QUAIL SPRINGS PARKWAY
SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 1998
TO THE SHAREHOLDERS OF LOUIS DREYFUS NATURAL GAS CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Louis
Dreyfus Natural Gas Corp., an Oklahoma corporation (the "Company"), will be held
on Tuesday, May 19, 1998 at 9:00 a.m. at the Company's principal corporate
office, 14000 Quail Springs Parkway, Suite 600, Oklahoma City, Oklahoma, for the
following purposes:
1. To elect ten directors for the ensuing year and until their successors
are duly elected and qualified.
2. To ratify the selection of Ernst & Young LLP as independent auditors
of the Company for the year ending December 31, 1998.
3. To transact such other business as may come before the meeting or any
adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The meeting may be adjourned from time to
time and, at any reconvened meeting, action with respect to the matters
specified in this Notice may be taken without further notice to the
shareholders, unless required by applicable law or the Bylaws of the Company.
Only shareholders of record at the close of business on April 6, 1998 are
entitled to notice of, and to vote at, the meeting. A list of such shareholders
will be available at the meeting and at the Company's principal corporate
office, 14000 Quail Springs Parkway, Suite 600, Oklahoma City, Oklahoma 73134
for ten days before the meeting. All shareholders are cordially invited to
attend the meeting in person. Whether or not you expect to attend the meeting,
please complete, date, sign and return the enclosed proxy as promptly as
possible in order to ensure your representation at the meeting. A return
envelope (which is postage prepaid if mailed in the United States) is enclosed
for that purpose. Even if you have given your proxy, you may still vote in
person if you attend the meeting. Please note, however, that if your shares are
held of record by a broker, bank or other nominee and you wish to vote at the
meeting, you must bring to the meeting a proxy issued in your name by the record
holder.
BY ORDER OF THE BOARD OF DIRECTORS
Kevin R. White, Secretary
Oklahoma City, Oklahoma
April 10, 1998
LOUIS DREYFUS NATURAL GAS CORP.
14000 QUAIL SPRINGS PARKWAY
SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 19, 1998
The following information is furnished in connection with the Annual
Meeting of Shareholders (the "Annual Meeting") of Louis Dreyfus Natural Gas
Corp., an Oklahoma corporation (the "Company"), to be held on Tuesday, May 19,
1998 at 9:00 a.m. at the Company's principal corporate office, 14000 Quail
Springs Parkway, Suite 600, Oklahoma City, Oklahoma. This Proxy Statement will
be mailed on or about April 15, 1998 to holders of record of Common Stock as of
the record date.
The record date and time for determining shareholders entitled to vote at
the Annual Meeting have been fixed at the close of business on April 6, 1998. On
that date, the Company had outstanding 40,109,508 shares of Common Stock. Each
outstanding share of Common Stock is entitled to one vote.
The enclosed proxy for the Annual Meeting is being solicited by the
Company's Board of Directors. The Company will bear the entire cost of such
solicitation of proxies, including preparation, assembly, printing and mailing
of this proxy statement, the proxy and any additional information furnished to
shareholders. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries and custodians holding in their names shares of
Common Stock beneficially owned by others to forward to such beneficial owners.
The Company may reimburse persons representing beneficial owners of Common Stock
for their costs of forwarding solicitation materials to such beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone,
telegram or personal solicitation by directors, officers or other regular
employees of the Company. No additional compensation will be paid to directors,
officers or other regular employees for such services.
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal corporate office, 14000
Quail Springs Parkway, Suite 600, Oklahoma City, Oklahoma 73134, a written
notice of revocation or a duly executed proxy bearing a later date, or it may be
revoked by attending the Annual Meeting and voting in person. Attendance at the
Annual Meeting will not, by itself, revoke a proxy.
Shares represented by valid proxies will be voted, unless otherwise
directed in the proxy, FOR the election of the director nominees and FOR the
ratification of the selection of Ernst & Young LLP as independent auditors of
the Company for the year ending December 31, 1998. As
to any other business which may properly come before the Annual Meeting,
shares represented by proxies will be voted in accordance with the
recommendations of the Board of Directors, although the Company does not
presently know of any other such business.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of eleven members.
John J. Hogan, Jr., a director of the Company, has determined not to stand for
re-election at the Annual Meeting, and the remaining ten members of the Board of
Directors have been nominated for re-election. The Company anticipates that it
will fill the vacancy in Board of Directors resulting from Mr. Hogan's
departure, and the Company has commenced the process of identifying suitable
candidates. However, a candidate has not been selected at this time, and the
vacancy will not be filled at the Annual Meeting. Proxies cannot be voted for a
greater number of nominees than the number of nominees named herein.
Each nominee, if elected, will hold office until the next annual meeting of
shareholders and until his successor is duly elected and qualified, or until his
earlier death, resignation or removal. Each nominee has agreed to serve if
elected, and the Company has no reason to believe that any nominee will be
unable to serve. Should any of the nominees named below cease to be a nominee
at or prior to the Annual Meeting, the shares represented by the enclosed proxy
will be voted in favor of the remainder of the nominees named below and for such
substitute nominees, if any, as may be designated by the Board of Directors and
nominated by either of the proxies named in the enclosed proxy.
NOMINEES
The nominees for the position of director of the Company are as follows.
NAME AGE PRINCIPAL OCCUPATION
---- --- --------------------
Mark E. Andrews, III 47 Vice Chairman of the Board of the
Company
Richard E. Bross 49 Executive Vice President - Land and
Operations of the Company
Daniel R. Finn, Jr. 54 President of Louis Dreyfus Energy Corp.
Peter G. Gerry 52 Managing Director of Sycamore Management
Corporation
2
Gerard Louis-Dreyfus 65 Chairman, President and Chief Executive
Officer of S.A. Louis Dreyfus et Cie
Mark E. Monroe 43 President and Chief Executive Officer of
the Company
John H. Moore 72 Petroleum Consultant
James R. Paul 63 Retired, Former President and Chief
Executive Officer of The Coastal
Corporation
Simon B. Rich, Jr. 53 Vice Chairman, President and Chief
Executive Officer of Louis Dreyfus
Holding Company Inc.
Ernest F. Steiner 56 Executive Vice President and Chief
Financial Officer of Louis Dreyfus
Corporation and Louis Dreyfus Holding
Company Inc.
The following is a brief description of the business background of each of
the nominees:
MARK E. ANDREWS, III is Vice Chairman of the Board of Directors of the
Company and was first elected as a director of the Company in October 1997
following the Company's acquisition of American Exploration Company. Mr.
Andrews served as Chairman of the Board and Chief Executive Officer of American
Exploration Company from 1983 until its acquisition by the Company. He is also
a director of IVAX Corporation. Mr. Andrews holds a B.A. in Economics from
Harvard College and an M.B.A. from Harvard Business School.
RICHARD E. BROSS is Executive Vice President - Land and Operations of the
Company and was first elected as a director of the Company in September 1993.
Mr. Bross joined the Company in 1991 and served as its President until September
1993. Prior to joining the Company, Mr. Bross served in various capacities at
Argent Energy, Inc. (previously named Woods Petroleum Corporation) from 1977
until 1991, culminating with his appointment as Executive Vice President and
Chief Operating Officer in September 1990. Mr. Bross joined Argent Energy, Inc.
in 1977 after working for Gulf Oil Corporation for seven years in various
engineering functions. Mr. Bross holds a B.S. degree in Mechanical Engineering
from the University of Missouri and an M.B.A. from Oklahoma City University.
DANIEL R. FINN, JR. has been a director of the Company since 1990. Mr. Finn
is President of Louis Dreyfus Energy Corp., an indirect subsidiary of S.A. Louis
Dreyfus et Cie engaged in natural gas trading and crude oil and petroleum
product trading and marketing. Mr. Finn has been employed by S.A. Louis Dreyfus
et Cie or its subsidiaries since 1972, serving in various capacities, including
Chief Executive Officer of Duke/Louis Dreyfus LLC, Vice President of worldwide
wheat merchandising and Senior Vice President of worldwide grain merchandising.
In addition, Mr. Finn
3
is a director of Louis Dreyfus Corporation and Louis Dreyfus Holding Company
Inc., subsidiaries of S.A. Louis Dreyfus et Cie. Mr. Finn holds a B.A. in
Economics from Fairfield University and an M.B.A. in Finance from
Northwestern University.
PETER G. GERRY was first elected as a director of the Company in October
1997 following the Company's acquisition of American Exploration Company. Mr.
Gerry, a former director of American Exploration Company, is Managing Director
of Sycamore Management Corporation, an investment management firm, and is a
former President of Citicorp Venture Capital Ltd. and director of Pond Hill
Homes, Ltd. Mr. Gerry holds a B.A. in Economics from Harvard College and an
M.B.A. from Harvard Business School.
GERARD LOUIS-DREYFUS has been a director of the Company since September
1993. Mr. Louis-Dreyfus is the Chairman, President and Chief Executive Officer
of S.A. Louis Dreyfus et Cie, the parent company of the Louis Dreyfus worldwide
organization of companies. S.A. Louis Dreyfus et Cie is privately owned by
family members and has been in business for over 140 years. The principal
activities of the Louis Dreyfus group include the international merchandising
and exporting of various commodities, ownership and management of ocean vessels,
real estate ownership, development and management, manufacturing, natural gas
trading and crude oil and petroleum product marketing. Mr. Louis-Dreyfus is the
great-grandson of the founder. Mr. Louis-Dreyfus is a graduate of Duke
University and Duke University School of Law. Upon graduation he joined the firm
of Dewey Ballantine, New York, until 1965 when he joined S.A. Louis Dreyfus et
Cie.
MARK E. MONROE is President and Chief Executive Officer of the Company and
has been a director of the Company since 1986. Mr. Monroe joined the Company in
1980, which was then known as Bogert Oil Company and which was later acquired by
S.A. Louis Dreyfus et Cie, and served as Vice President and Chief Financial
Officer of the Company until April 1991. From April 1991 until September 1993,
Mr. Monroe served as a Vice President of Louis Dreyfus Energy Corp., an indirect
subsidiary of S.A. Louis Dreyfus et Cie, engaged in oil and natural gas trading
and marketing. Mr. Monroe rejoined the Company in September 1993 and served as
Chief Operating Officer until his election to his present position in August
1996. Mr. Monroe holds a B.B.A. degree from the University of Texas and is a
Certified Public Accountant.
JOHN H. MOORE was first elected as a director of the Company in October
1997 following the Company's acquisition of American Exploration Company. Mr.
Moore, a former director of American Exploration Company, is a petroleum
consultant and was Chairman of the Board and Chief Executive Officer of Ladd
Petroleum Corporation from 1986 to 1988. He is also a former director of First
Interstate Bank of Denver and a former director of General Atlantic Resources.
Mr. Moore holds B.S. and M.E. degrees from the University of Oklahoma.
JAMES R. PAUL was first elected to the Board of Directors of the Company in
February 1994. Mr. Paul retired in January 1994 from The Coastal Corporation
after twenty years of service in various executive capacities, including
President and Chief Executive Officer from 1989, and a director from 1981, until
his retirement. Mr. Paul holds a B.S. in Business Administration from Wichita
State University.
4
SIMON B. RICH, JR. has been a director of the Company since 1990 and has
served as Chairman of the Board of Directors since August 1996. Mr. Rich is Vice
Chairman, President and Chief Executive Officer of Louis Dreyfus Holding Company
Inc., a subsidiary of S. A. Louis Dreyfus et Cie. From October 1996 until June
1997, Mr. Rich served as Managing Director and Chief Operating Officer of
Duke/Louis Dreyfus LLC. From September 1993 until August 1996, Mr. Rich served
as President and Chief Executive Officer of the Company. From 1990 to 1993, Mr.
Rich served as Executive Vice President of Louis Dreyfus Energy Corp. From 1986
to 1990, Mr. Rich served as Executive Vice President-Development and Strategic
Planning of S.A. Louis Dreyfus et Cie. Mr. Rich holds a B.A. in Economics from
Duke University.
ERNEST F. STEINER has been a director of the Company since October 1997.
Mr. Steiner is a director of S.A. Louis Dreyfus et Cie and the Chief Financial
Officer of the Louis Dreyfus group. He is also Executive Vice President of
Louis Dreyfus Holding Company Inc. and Louis Dreyfus Corporation, subsidiaries
of S.A. Louis Dreyfus et Cie, and has been employed by Louis Dreyfus Corporation
or other subsidiaries of S.A. Louis Dreyfus et Cie since 1972. Mr. Steiner is
also a director of Louis Dreyfus Citrus S.A. Mr. Steiner holds a B.S. in Hotel
and Restaurant Administration and Electrical Engineering from Cornell
University.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
NAMED NOMINEES.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has an Executive Committee, a Compensation Committee
and an Audit Committee.
The Executive Committee may exercise all of the powers of the Board of
Directors, except to the extent limited by resolution of the Board of Directors,
the Company's Bylaws and by applicable law. The Executive Committee, which
during 1997 consisted of Messrs. Louis-Dreyfus, Rich, Monroe and Finn, and
commencing in October 1997 also Mr. Andrews, did not hold any meetings but acted
by unanimous consent without a meeting once during 1997.
The Compensation Committee establishes general compensation policies,
reviews and makes specific recommendations to the Board of Directors concerning
salaries and incentive compensation for executive officers of the Company and,
until December 1996, administered the Company's Stock Option Plan. The Stock
Option Plan has been administered by the full Board of Directors since December
1996. The Compensation Committee, which during 1997 consisted of Messrs. Finn
and Hogan, and commencing in October 1997 also Messrs. Moore and Paul, met twice
and acted by unanimous consent without a meeting once during 1997.
The Audit Committee is responsible to the Board of Directors for
establishing and reviewing internal and external audits of the Company and
meeting with representatives of the Company's independent auditors to receive
the results of their audits. The Audit Committee met once during 1997. Mr.
Paul was a member of the Audit Committee throughout 1997. James T. Rodgers,
III, a former director of the Company, was a member of the Audit Committee until
his resignation from
5
the Board of Directors in October 1997. Messrs. Gerry and Moore joined the
Audit Committee in October 1997.
The Board of Directors does not have a nominating committee. The entire
Board performs this function and evaluates and recommends nominees for election
to the Board of Directors. Although there is no formal procedure for
shareholders to recommend nominees for the Board of Directors, the Board will
consider such recommendations if submitted in writing addressed to the Secretary
of the Company.
During the year ended December 31, 1997, the Board of Directors held five
meetings and acted by unanimous consent without a meeting three times. During
1997, all incumbent directors of the Company attended at least 75% of the
aggregate of all meetings of the Board of Directors and committees on which they
served, except Mr. Paul who attended 70% of all such meetings.
COMPENSATION OF DIRECTORS
Each non-employee director, other than the Chairman and Gerard
Louis-Dreyfus, receives an annual retainer of $20,000 and a fee of $1,000 for
each meeting of the Board of Directors or committee thereof attended and is
reimbursed for certain expenses in connection with attendance at such
meetings. The Chairman of the Board of Directors receives an annual retainer
of $56,250, but does not receive additional fees for meetings attended. Under
the Company's Stock Option Plan approved by the shareholders, each
non-employee director receives, while serving as a director, option grants to
purchase 2,000 shares of Common Stock as of the date of each annual meeting
of shareholders. Any new non-employee director will receive under the
Company's Stock Option Plan an initial option grant to purchase 6,000 shares
of Common Stock upon election to the Board of Directors and, while serving as
a director, will receive additional option grants to purchase 2,000 shares of
Common Stock as of the date of each subsequent annual meeting of shareholders.
AGREEMENTS FOR THE NOMINATION AND ELECTION OF CERTAIN DIRECTORS
In connection with the Company's acquisition of American Exploration
Company, the Company agreed to cause the nomination of Mark E. Andrews, III,
Peter G. Gerry and John H. Moore, each former directors of American Exploration
Company, for re-election to the Board of Directors of the Company at the Annual
Meeting, and certain indirectly wholly-owned subsidiaries of S.A. Louis Dreyfus
et Cie holding of record approximately 50% of the outstanding Common Stock of
the Company agreed to vote in favor of such re-election.
6
PROPOSAL TWO
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1998 and has further
directed that management submit the selection of the independent auditors for
ratification by the shareholders at the Annual Meeting. Ernst & Young LLP has
audited the Company's consolidated financial statements since 1992.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions.
Shareholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. If the shareholders fail to ratify the selection, the Board will
reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if the Board determines
that such a change would be in the best interests of the Company and its
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF
THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1998.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
NAME AGE POSITION
---- --- --------
Mark E. Monroe 43 President and Chief Executive Officer
Mark E. Andrews, III 47 Vice Chairman of the Board
Jeffrey A. Bonney 41 Executive Vice President and Chief
Financial Officer
Richard E. Bross 49 Executive Vice President - Land and
Operations
Ronnie K. Irani 41 Executive Vice President - Engineering and
Exploration
7
Kevin R. White 40 Executive Vice President - Corporate
Development and Strategic Planning and
Secretary
The executive officers of the Company are elected by the Board of Directors
and serve at its discretion. The following is a brief description of the
business background of each of the executive officers who are not also directors
of the Company. For descriptions of the business background of Mark E. Monroe,
Richard E. Bross and Mark E. Andrews, III, each a director of the Company, see
"Election of Directors - Nominees."
JEFFREY A. BONNEY is Executive Vice President and Chief Financial Officer
of the Company. Mr. Bonney joined the Company in November 1993. From April
1990 to November 1993, Mr. Bonney was the Vice President and Controller of
Hadson Energy Resources Corporation, an international oil and gas concern.
Prior thereto, Mr. Bonney held various management positions with other
independent oil and gas companies. He began his career as an auditor with
Deloitte, Haskins & Sells in 1978. Mr. Bonney is a Certified Public Accountant
and holds a B.S. in Accounting from Oklahoma Christian University.
RONNIE K. IRANI is Executive Vice President - Engineering and Exploration
of the Company. He joined the Company in March 1991 from Argent Energy, Inc.
(previously named Woods Petroleum Corporation) where he had worked for the
previous 12 years. At Argent Energy, Inc., Mr. Irani held the title of Manager
of Reservoir Engineering. Mr. Irani holds a B.S. in Chemistry from Bombay
University, India, a B.S. and M.S. in Petroleum Engineering from the University
of Oklahoma and an M.B.A. from Oklahoma City University.
KEVIN R. WHITE is Executive Vice President - Corporate Development and
Strategic Planning and Secretary of the Company. Mr. White joined the Company in
1983, which was then known as Bogert Oil Company, and served in various
management capacities prior to appointment to his present position. From 1981
until 1982, Mr. White was employed as an auditor with Arthur Andersen & Co. and
Ernst & Young. Mr. White is a Certified Public Accountant and holds B.S. and
M.S. degrees in Accounting from Oklahoma State University.
8
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation
received by the chief executive officer of the Company and the four other mostly
highly compensated executive officers of the Company during 1997. Such
individuals are hereinafter referred to as the "named executive officers."
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSA-
ANNUAL COMPENSATION TION(1)
------------------- -------
SECURITIES ALL OTHER
UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) TION(2)
--------------------------- ---- ------ ----- ---------- -------
Mark E. Monroe 1997 $272,115 $300,000 100,000 $12,388
President and Chief Executive 1996 250,000 260,000 20,000 11,869
Officer 1995 250,000 250,000 40,000 11,784
Jeffrey A. Bonney 1997 $114,540 $85,000 40,000 $12,388
Executive Vice President and 1996 111,000 75,000 20,000 11,420
Chief Financial Officer 1995 111,000 60,000 15,000 10,316
Richard E. Bross 1997 $178,000 $100,000 40,000 $12,388
Executive Vice President - Land 1996 178,000 85,000 20,000 11,869
and Operations 1995 178,000 60,000 10,000 11,784
Ronnie K. Irani 1997 $174,425 $150,000 65,000 $12,388
Executive Vice President - 1996 164,600 140,000 20,000 11,869
Engineering and Exploration 1995 134,800 120,000 25,000 11,579
Kevin R. White 1997 $134,425 $90,000 40,000 $12,388
Executive Vice President - 1996 130,000 85,000 20,000 11,869
Corporate Development and 1995 130,000 75,000 15,000 11,661
Strategic Planning
- ------------------
(1) As of December 31, 1997, certain of the named executive officers also held
awards expressed in units that were equivalent to one share of Common Stock
of the Company for each unit. The unit awards were granted in 1994
pursuant to the Louis Dreyfus Deferred Compensation Stock Equivalent Plan
(the "SEP") sponsored by an affiliate of S.A. Louis Dreyfus et Cie. The
total number of units awarded to each of the named executive officers was
as follows: Mark E. Monroe - 20,000 units; Richard E. Bross - 15,000 units;
Ronnie K. Irani - 15,000 units; and Kevin R. White - 5,000 units. Units
awarded pursuant to the SEP were payable solely in cash after termination
of employment with the Louis Dreyfus group of companies, subject to
forfeiture for termination due to cause and to forfeiture for competitive
post-termination activities. The amount payable in respect of each unit
was equal to the average prices (as defined in the SEP) of one share of
Common Stock on the New York Stock Exchange over all trading days in
December of the year of, or preceding, termination. The dollar value of
the units for each of the named executive officers holding awards as of
December 31, 1997 calculated pursuant to the SEP based on the average
prices of the Common Stock over all trading days in
9
December 1997 was as follows: Mark E. Monroe - $387,600; Richard E.
Bross - $290,700; Ronnie K. Irani - $290,700; and Kevin R. White -
$96,900. The awards were fully vested as of December 31, 1997. In 1998,
the named executive officers holding unit awards agreed to terminate
their participation in the SEP and in exchange received awards of
restricted Common Stock from the Company consisting of a number of
shares of Common Stock equal to the number of units forfeited upon
termination of participation in the SEP. The shares of restricted stock
are held by the Louis Dreyfus Natural Gas Corp. Deferred Stock Award
Trust (the "Trust") and will be delivered to the named executive
officers after termination of employment with the Company or upon a
Change in Control (as defined in the Trust Agreement) of the Company,
subject to forfeiture in the event of termination for cause or certain
competitive post-termination activities. The named executive officers
have the right to direct the voting of the restricted shares held in the
Trust. If any cash dividends are received with respect to the shares
while held by the Trust, the dividends will be invested in an interest
bearing account and the dividends and interest will be paid to the named
executive officers when the shares are delivered.
(2) All Other Compensation consists of (i) employer contributions to the
Company's 401(k) plan on behalf of each of the named executive officers to
match pre-tax elective deferral contributions (included under Salary) made
by each of the named executive officers to such plan and (ii) certain
employer discretionary profit sharing contributions allowed by such plan.
The following table contains information concerning the grant of stock
options during the year ended December 31, 1997 under the Company's Stock Option
Plan to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------
% OF
TOTAL
OPTIONS
GRANTED
TO
OPTIONS EMPLOYEES EXERCISE OR GRANT DATE
GRANTED IN FISCAL BASE PRICE EXPIRATION PRESENT
NAME (#)(1) YEAR ($/SH)(2) DATE VALUE(3)
---- ------ ---- --------- ---- --------
Mark E. Monroe 100,000 12.4% $23.156 10/14/07 $1,291,000
Jeffrey A. Bonney 40,000 5.0% $23.156 10/14/07 $ 516,400
Richard E. Bross 40,000 5.0% $23.156 10/14/07 $ 516,400
Ronnie K. Irani 65,000 8.1% $23.156 10/14/07 $ 839,150
Kevin R. White 40,000 5.0% $23.156 10/14/07 $ 516,400
- -------------------
(1) All options granted to the named executive officers during 1997 were
granted under the Company's Stock Option Plan. The exercise price of such
options is equal to 100% of the price per share of the Common Stock on the
date of grant. The options become exercisable at the rate of 20% per year
commencing one year after the date of grant so long as the optionee remains
employed by the Company, and will become immediately exercisable in the
event of death of an optionee or in the event of a Change in Control of the
Company (as defined in the Stock Option Plan) unless the Compensation
Committee expressly determines otherwise. The options expire if not
exercised 10 years after the date of grant.
(2) Exercise price of options must be paid in cash, by tender of shares of
Common Stock (valued at fair market value at the date of exercise), by
surrender of a portion of the option, or by a combination of such means of
payment.
(3) Grant Date Present Value is based on application of the Black-Scholes
option pricing model. The actual value, if any, realized will depend on
the excess of the stock price over the exercise price on the date the
option is
10
exercised. There is no assurance that the value realized will be
at or near the value estimated by the Black-Scholes model. The estimated
values under that model are based on the following assumptions: (i)
annualized price volatility of the Company's Common Stock of 32% calculated
over the period commencing on November 12, 1993 and ending on the option
grant date (October 14, 1997); (ii) a risk-free rate of return equal to the
10 year United States Treasury Bond rate at the option grant date (October
14, 1997) of 5.71%; (iii) a dividend yield of 0%; and (iv) exercise of all
options at the expiration date of 10 years from date of grant (October 14,
2007).
The following table provides information with respect to the named
executive officers concerning the exercise of options during the year ended
December 31, 1997 and unexercised options held as of December 31, 1997.
OPTION EXERCISES AND YEAR-END VALUE TABLE
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997(1)
------------------------------ ------------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Mark E. Monroe - - 125,000 135,000 $190,000 $163,750
Jeffrey A. Bonney - - 23,750 66,250 $ 58,750 $101,250
Richard E. Bross - - 75,000 60,000 $ 90,938 $ 88,750
Ronnie K. Irani - - 67,500 92,500 $118,125 $126,250
Kevin R. White - - 37,500 62,500 $ 75,938 $101,250
- --------------------
(1) Value of unexercised in-the-money options at December 31, 1997 is
calculated based on the market price per share of Common Stock of $18.6875
per share on December 31, 1997 less the option exercise price.
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into agreements with the named executive officers
providing for the payment of certain severance benefits upon involuntary
termination of such persons, other than for cause, within two years after a
Change in Control (as defined in such agreements) of the Company, including
constructive termination as a result of certain changes in duties or reduction
of compensation. The agreements are intended to promote the retention of the
named executive officers by providing them with an extra measure of financial
security in the event of a Change in Control of the Company. In the event of
involuntary termination within two years after a Change in Control, the
agreements provide that the named executive officer will receive a lump sum
severance payment equal to two times the named executive officer's annual
compensation. For this purpose, annual compensation is defined as (i) the named
executive officer's annual salary immediately prior to the date on which a
Change in Control occurs plus (ii) the average annual bonus received by the
named executive officer over the three years immediately prior to the Change in
Control or such lesser period as the named executive officer has been employed
by the Company prior to the Change in
11
Control. The agreements will remain in effect until March 31, 2000, at which
time the Company will have the right to determine in its discretion whether
to continue the agreements, terminate the agreements or offer the named
executive officers different agreements. No amounts will be payable by the
Company under the agreements unless a Change in Control occurs and such
Change in Control is followed within two years by the involuntary termination
of the named executive officer.
SHAREHOLDER RETURN PERFORMANCE
Set forth below is a line graph comparing the percentage change in the
cumulative total shareholder returns on the Company's Common Stock against
the cumulative total shareholder returns of the S&P 500 Index and the Dow
Jones Oil Secondary Index (the "Indices") for the period between November 12,
1993 (the date of the initial public offering of the Company's Common Stock)
and December 31, 1997. The line graph assumes a $100 investment in the
Company's Common Stock on November 12, 1993 and $100 of value in the Indices
as of October 31, 1993, and that any dividends were reinvested. The graph is
presented in accordance with the requirements of the Securities and Exchange
Commission.
CUMULATIVE TOTAL RETURN
------------------------------------------------------
11/93 12/93 12/94 12/95 12/96 12/97
LOUIS DREYFUS NATURAL GAS CORP. 100 89 71 84 95 104
S & P 500 100 100 102 140 172 230
DOW JONES OIL, SECONDARY 100 93 90 104 128 137
12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Daniel R.
Finn, Jr., John J. Hogan, Jr., John H. Moore and James R. Paul. Until October
1997, Mr. Hogan was Of Counsel to the law firm of Dewey Ballantine, New York,
New York which provided legal services to the Company during 1997 and continues
to do so. Mr. Finn serves, and Mr. Hogan has in the past served, as a director
and/or executive officer of various subsidiaries of S.A. Louis Dreyfus et Cie.
The Company's Stock Option Plan is administered by the full Board of
Directors. During 1997, the Board of Directors approved the grant of stock
options to the named executive officers as described elsewhere herein and to
other employees of the Company. As members of the Board of Directors, Mark E.
Monroe and Richard E. Bross, each an executive officer of the Company,
participated in the deliberations of the Board of Directors with respect to such
option grants.
REPORT ON EXECUTIVE COMPENSATION
GENERAL. The Compensation Committee is primarily responsible for the
development and implementation of the Company's executive compensation programs.
The Committee makes recommendations to the Board of Directors of the Company
with respect to the various executive compensation plans which have been or may
be adopted by the Company, as well as the specific compensation levels of
executive officers. The Committee periodically reviews the Company's results of
operations and future plans in conjunction with meetings of the full Board of
Directors. The Committee seeks to ensure that the Company's executive officer
compensation programs support the objectives of the Company's long-term plan.
In general, in recommending levels of base salary, bonus and long-term
equity based compensation for the Company's executive officers, including the
Chief Executive Officer and the other named executive officers, the Committee
fosters the Company's long-range goals through the application of three key
criteria: first, through comparability to compensation levels of equivalent
officers in similarly situated companies in the oil and gas industry; second,
through review of the executive's individual contribution to such long-range
goals and to the Company as a whole; and third, through the executive's
contribution to the achievement of specific results, such as increases in
revenues, production, reserves, cash flow and net income. The Committee applies
the foregoing criteria subjectively, including the weight given the respective
criteria.
BASE SALARIES AND CASH BONUSES. Base salaries for the Company's executive
officers are based primarily on the level of salaries historically paid to the
Company's executive officers and are designed to be comparable to the general
level of salaries of executive officers in similarly situated companies.
Discretionary annual bonuses are paid based on the Committee's subjective
evaluation of the performance of the Company and of each executive officer in
the context of the criteria described above. Total bonuses authorized by the
Committee for the named executive officers for 1997 were $725,000. This amount
is approximately 15% lower than the bonuses awarded to the executive officers
named in last year's Proxy Statement. The difference is attributable in part to
the different composition of the named executive officers for 1997 compared to
1996. The Committee believes that the salaries and cash bonuses paid during
1997 to executive officers, including the
13
Chief Executive Officer, are reasonable when compared to the Company's
increases in revenues, production, reserves and cash flow in 1997 compared to
1996.
LONG-TERM EQUITY INCENTIVE COMPENSATION. The Company's Stock Option
Plan is administered by the full Board of Directors and is designed to
provide long-term equity based compensation to executive officers and
managers. During 1997, the Company retained independent compensation
consultants to review the Company's long-term compensation practices in
comparison with other comparable companies in the oil and gas industry and to
advise the Committee concerning the Company's long-term compensation
strategies. The consultants reported that the relative number of outstanding
stock options held by the Company's executive officers as a percentage of
shares outstanding was at approximately the 25th percentile of option levels
maintained by a peer group of 15 comparable companies in the oil and gas
industry. After consideration of the consultant's report and other factors,
the Board of Directors approved the grant of options to purchase a total of
285,000 shares of Common Stock under the Company's Stock Option Plan to the
named executive officers as indicated under "Executive Compensation and Other
Information -- Executive Compensation." The number of options granted to the
Chief Executive Officer and each of the other named executive officers was
established based on the Board's subjective judgment, but reflects the
Board's favorable evaluation of the performance of the Company and the named
executive officers during 1997 and the Board's desire to provide competitive
long-term equity incentive awards to these members of senior management at a
level that compares more favorably with the long-term equity incentive
compensation practices of the Company's competitors.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER. With respect to 1997, Mark
E. Monroe, President and Chief Executive Officer of the Company, was awarded
a bonus of $300,000. Mr. Monroe also was awarded options to purchase 100,000
shares of Common Stock under the Company Stock Option Plan. The bonus and
option awards reflected the Committee's and the Board's evaluation of Mr.
Monroe's leadership of the Company. During 1997, the Company (i) acquired
American Exploration Company, the largest acquisition in its history, (ii)
expanded its drilling program by approximately 50%, completing 311 productive
wells of 343 wells drilled (91%), and (iii) reported record revenues, cash
flows, production and year-end proved reserves.
SECTION 162(m). The Committee has not adopted a policy with respect to
qualification of executive compensation in excess of $1 million per
individual for deduction under Section 162(m) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder. The Committee currently
does not anticipate that the compensation of any executive officer during
1998 will exceed the limits on deductibility for 1998. In determining a
policy for future periods, the Committee would
14
expect to consider a number of factors, including the tax position of the
Company, the materiality of amounts likely to be involved and any potential
ramifications of the loss of flexibility to respond to unforeseeable changes
in circumstances.
Members of the Compensation Committee:
Daniel R. Finn, Jr.
John J. Hogan, Jr.
John H. Moore
James R. Paul
Other Members of the Board of Directors:
Mark E. Andrews, III
Richard E. Bross
Peter G. Gerry
Gerard Louis-Dreyfus
Mark E. Monroe
Simon B. Rich, Jr.
Ernest F. Steiner
15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 9, 1998 (except as otherwise
indicated) by (i) each director, (ii) each of the named executive officers,
(iii) all executive officers and directors of the Company as a group, and (iv)
all those known by the Company to be beneficial owners of more than five percent
of the Company's Common Stock.
BENEFICIAL OWNERSHIP(1)
-----------------------
NUMBER PERCENTAGE
BENEFICIAL OWNER OF SHARES OF TOTAL
---------------- --------- --------
S.A. Louis Dreyfus et Cie (2) 20,710,000 51.6%
Mark E. Monroe (3) (4) 165,000 *
Jeffrey A. Bonney (3) 30,000 *
Richard E. Bross (3) (4) 92,000 *
Ronnie K. Irani (3) (4) 85,200 *
Kevin R. White (3) (4) 47,500 *
Simon B. Rich, Jr. (3) (5) 139,600 *
Mark E. Andrews, III (3)(6) 226,883 *
Daniel R. Finn, Jr. (3) 15,000 *
Peter G. Gerry (3) 6,810 *
John J. Hogan, Jr. (3) (7) 14,000 *
Gerard Louis-Dreyfus (3) 13,000 *
John H. Moore (3) 9,240 *
James R. Paul (3) 11,000 *
Ernest F. Steiner (3) 13,600 *
All executive officers and directors 838,833 2.1%
as a group (14 persons) (8)
- ------------------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal shareholders and applicable Schedules 13D or 13G filed with the
Securities and Exchange Commission. Unless otherwise indicated in the
footnotes to this table and subject to community property laws where
applicable, each of the shareholders named in this table has sole voting
and investment power with respect to the shares indicated as beneficially
16
owned. The percentage of ownership for each person is calculated in
accordance with rules of the Securities and Exchange Commission without
regard to shares of Common Stock issuable upon exercise of outstanding
stock options, except that any shares a person is deemed to own by having a
right to acquire by exercise of an option are considered outstanding solely
for purposes of calculating such person's percentage ownership.
(2) S.A. Louis Dreyfus et Cie, 87 Avenue de la Grande Armee, 75782 Paris,
France, shares voting and investment power over the shares indicated as
beneficially owned by it with its direct or indirect wholly-owned
subsidiaries Louis Dreyfus Holding Company Inc. ("LDHC") and Louis Dreyfus
Commercial Activities, Inc. ("LDCA"), and Louis Dreyfus Fashions Services,
Inc., 10 Westport Road, Wilton, Connecticut 06897-0810, and Louis Dreyfus
Natural Gas Holdings Corp. ("LDNGHC") and Louis Dreyfus Fashions Holdings
Corp. ("LDFHC"), 3411 Silverside Road, Suite 210E, Baynard Building,
Wilmington, Delaware 19810-4808. These shares are owned of record as
follows: LDNGHC - 11,000,000 shares; LDFHC - 9,000,000 shares; LDCA -
651,000 shares; and LDHC - 59,000 shares.
(3) Includes shares that the named individuals have the right to acquire by
exercise of stock options that are currently exercisable as follows:
Monroe - 125,000; Bonney - 27,500; Bross - 75,000; Irani - 67,500; White -
37,500; Rich - 127,000; Andrews - 53,330; Finn - 10,000; Gerry - 6,000;
Hogan - 10,000; Louis-Dreyfus - 10,000; Moore - 6,000; Paul - 10,000; and
Steiner - 6,000.
(4) Includes shares of Common Stock held for the benefit of named individuals
by the Louis Dreyfus Natural Gas Corp. Deferred Stock Award Trust in the
following amounts: Monroe - 20,000; Bross - 15,000; Irani - 15,000; and
White - 5,000. Under the terms of the trust agreement, the named
individuals do not currently have the power to dispose of such shares but
have sole power to direct the voting of such shares.
(5) Includes 200 shares held by Mr. Rich's son as to which Mr. Rich may be
deemed to have beneficial ownership.
(6) Includes 40,628 shares held directly or indirectly by Mr. Andrews' children
and a company of which Mr. Andrews' wife is a principal shareholder and a
director, and as to which he disclaims beneficial ownership.
(7) Includes 1,000 shares owned by Mr. Hogan's wife as custodian for two of
their children as to which Mr. Hogan disclaims beneficial ownership.
(8) Includes 570,830 shares that the directors and executive officers as a
group have a right to acquire by exercise of currently exercisable stock
options.
CERTAIN TRANSACTIONS
Prior to the completion of the Company's initial public offering in
November 1993, the Company was a wholly-owned subsidiary of S.A. Louis Dreyfus
et Cie. For purposes of the following discussion of certain transactions
involving the Company, unless the context requires otherwise, references to the
"Company" refer to the Company and its subsidiaries and predecessors and
references to "S.A. Louis Dreyfus et Cie" refer to S.A. Louis Dreyfus et Cie and
its subsidiaries (other than the Company and its subsidiaries and predecessors).
Pursuant to a Services Agreement between the Company and S.A. Louis Dreyfus
et Cie entered into in 1993, the Company has agreed to reimburse S.A. Louis
Dreyfus et Cie for a portion of the salaries of employees performing services
requested by the Company based on the amount of time expended ("Hourly
Charges"), overhead costs equal to 40% of Hourly Charges and all direct third
party costs incurred by S.A. Louis Dreyfus et Cie on behalf of the Company.
During 1997, the
17
Company paid to S.A. Louis Dreyfus et Cie $949,000 under the Services
Agreement primarily for insurance services provided by S.A. Louis Dreyfus et
Cie.
In 1993, the Company entered into a fixed-price sales contract with S.A.
Louis Dreyfus et Cie hedging 33 Bcf of the Company's natural gas production over
a five-year period beginning in 1996 at a weighted-average fixed price of $2.49
per Mcf.
During 1997, the Company used the commodity trading resources of S.A. Louis
Dreyfus et Cie when purchasing natural gas futures contracts on the New York
Mercantile Exchange. The Company reimburses S.A. Louis Dreyfus et Cie for
margin posted by it on behalf of the Company. The margin posted on the
Company's behalf under this arrangement at December 31, 1997 was $4.5 million.
The largest amount of margin posted at any time during 1997 was $5.5 million.
The terms of the transactions described above between the Company and S.A.
Louis Dreyfus et Cie and its subsidiaries were not established on an arms-length
basis and involved conflicts of interest. Nonetheless, the Company believes that
such transactions with S.A. Louis Dreyfus et Cie were on terms at least as
favorable to the Company as could have been obtained from unaffiliated third
parties. It is possible that S.A. Louis Dreyfus et Cie and the Company may
enter into material intercompany transactions from time to time in the future,
and the Company intends that the terms of any future transactions and agreements
between the Company and S.A. Louis Dreyfus et Cie will be at least as favorable
to the Company as could be obtained from unaffiliated third parties.
Gerard Louis-Dreyfus, Simon B. Rich, Jr., Daniel R. Finn, Jr. and Ernest F.
Steiner, all directors of the Company, are also executive officers and/or
directors of S.A. Louis Dreyfus et Cie or various of its subsidiaries. See
"Election of Directors."
COMPLIANCE WITH SECTION 16 REPORTING REQUIREMENTS
Section 16(a) of the Securities and Exchange Act of 1934 requires directors
and executive officers of the Company and persons who beneficially own more than
10% of the Company's Common Stock to file reports of ownership and changes in
ownership of the Company's Common Stock with the Securities and Exchange
Commission. The Company is required to disclose delinquent filings of reports
by such persons.
Based on a review of the copies of such reports and amendments thereto
received by the Company, or written representations that no filings were
required, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers, directors and 10% shareholders were met
during 1997, except as described below. During 1997, Ernest F. Steiner was
delinquent in the filing of one Form 4 relating to one transaction. The
required Form 4 was promptly filed upon discovery of the delinquency.
18
VOTING
Directors will be elected by a plurality of the votes of the shares present
in person or represented by proxy at the Annual Meeting. The affirmative vote
of the holders of a majority of the shares of Common Stock that are represented
in person or by proxy at the Annual Meeting is required to ratify the selection
of Ernst & Young LLP as independent auditors of the Company for the year ending
December 31, 1998. All other matters properly brought before the Annual Meeting
will be decided by a majority of the votes cast on the matter, unless otherwise
required by law.
Shares represented by proxies that are marked "withhold authority" with
respect to the election of any one or more nominees for election as directors
and proxies that are marked "abstain" on the proposals to ratify the selection
of Ernst & Young LLP as independent auditors will be counted for the purpose of
determining the number of shares represented by proxy at the meeting. As a
result, proxies marked "abstain" with regard to the ratification of the
selection of Ernst & Young LLP as independent auditors will have the same effect
as if the shares represented thereby were voted against the proposal. However,
because directors are elected by a plurality rather than a majority of the
shares present in person or represented by proxy at the Annual Meeting, proxies
marked "withhold authority" with respect to any one or more nominee will not
affect the outcome of the nominee's election unless the nominee receives no
affirmative votes or unless other candidates are nominated for election as
directors.
Shares represented by limited proxies will be treated as represented at the
meeting only as to such matter or matters for which authority is granted in the
limited proxy. Shares represented by proxies returned by brokers where the
brokers' discretionary authority is limited by stock exchange rules will be
treated as represented at the Annual Meeting only as to such matter or matters
voted on in the proxies.
PROPOSALS OF SHAREHOLDERS
The Board of Directors will consider proposals of shareholders intended to
be presented for action at the Annual Meeting of Shareholders. According to the
rules of the Securities and Exchange Commission, such proposals shall be
included in the Company's Proxy Statement if they are received in a timely
manner and if certain other requirements are met. For a shareholder proposal to
be included in the Company's Proxy Statement relating to the 1998 Annual Meeting
of Shareholders, a written proposal complying with the requirements established
by the Securities and Exchange Commission must be received at the Company's
principal executive offices, located at 14000 Quail Springs Parkway, Suite 600,
Oklahoma City, Oklahoma 73134, no later than December 18, 1998.
19
OTHER MATTERS
Management does not know of any matters to be presented for action at the
Annual Meeting other than those listed in the Notice of Meeting and referred to
herein. If any other matters properly come before the Annual Meeting, it is
intended that the proxy solicited hereby will be voted in accordance with the
recommendations of the Board of Directors.
ANNUAL REPORT
The Company's Annual Report to Shareholders for the year ended December 31,
1997, including audited financial statements, is enclosed. No part of the
Annual Report to Shareholders is incorporated in this Proxy Statement or is
deemed to be a part of the material for the solicitation of proxies.
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997 IS AVAILABLE TO
SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY, 14000 QUAIL SPRINGS PARKWAY, SUITE 600, OKLAHOMA CITY, OKLAHOMA 73134.
20
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
LOUIS DREYFUS NATURAL GAS CORP.
14000 QUAIL SPRINGS PARKWAY
SUITE 600
OKLAHOMA CITY, OKLAHOMA 73134
The undersigned hereby appoints Kevin R. White and David B. Oshel as
proxies (the "Proxies"), each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated on the other
side, all of the shares of Common Stock of Louis Dreyfus Natural Gas Corp.
held of record by the undersigned on the record date at the Annual Meeting of
Shareholders to be held on May 19, 1998 or any reconvention thereof.
(CONTINUED, AND TO BE MARKED, DATED, AND SIGNED, ON THE OTHER SIDE)
Please mark
your votes as
WITHHELD indicated in this
FOR FOR ALL example
Item 1 - ELECTION OF DIRECTORS / / / / /X/
Nominees:
Mark E. Andrews, III Mark E. Monroe
Richard E. Bross John H. Moore
Peter G. Gerry James R. Paul
Daniel R. Finn, Jr. Simon B. Rich, Jr.
Gerald Louis-Dreyfus Ernest F. Steiner
WITHHELD FOR (Write nominee name(s) in the space provided):
-------------------------
Item 2 - RATIFICATION OF SELECTION OF FOR AGAINST ABSTAIN
INDEPENDENT ACCOUNTANTS
/ / / / / /
In their discretion, the Proxies are authorized to vote upon such other business as may
properly come before the meeting. If any other business is presented at the Annual
Meeting, this Proxy shall be voted in accordance with the recommendations of the Board.
As to Items 1 and 2, this Proxy will be voted as directed, but if no directions are
indicated, it will be voted FOR the nominees listed in Item 1 and FOR Item 2.
Signature(s) Date
-------------------------------------------------- -------------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing
as attorney, administrator, trustee or guardian, please give full title as such.