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 (Amendment No.__)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
COMSTOCK RESOURCES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] 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 amount on which 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 offering fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of the filing.
1)Amount previously paid:
2)Form, Schedule or Registration Statement No.:
3)Filing Party:
4)Date Filed:
COMSTOCK RESOURCES, INC.
5005 LBJ Freeway
Suite 1000
Dallas, Texas 75244
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 11, 1998
To the Stockholders of Comstock Resources, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Comstock
Resources, Inc. will be held at the Westin Hotel at the Galleria, 13340 Dallas
Parkway, Dallas, Texas, on May 11, 1998 at 4:00 p.m., Dallas time, for the
following purposes:
1. To elect two Class A directors to serve terms of three years and until
their successors are duly elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP as independent public
accountants for 1998; and
3. To transact such other business as may properly come before the
meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on April 9, 1998 as
the record date for determining the stockholders entitled to notice and to vote
at the meeting or any adjournment thereof. A list of such stockholders will be
open to examination of any stockholder at the Company's offices at 5005 LBJ
Freeway, Suite 1000, Dallas, Texas, 75244, during ordinary business hours, for a
period of at least ten days prior to the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ROLAND O. BURNS
------------------
ROLAND O. BURNS
SECRETARY
Dallas, Texas,
April 13, 1998
IMPORTANT
TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE.
NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
MEETING AND WISH TO VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
COMSTOCK RESOURCES, INC.
5005 LBJ Freeway
Suite 1000
Dallas, Texas 75244
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 11, 1998
The Board of Directors of Comstock Resources, Inc., a Nevada corporation
(the "Company"), hereby solicits your proxy in the form enclosed for use at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held at the Westin
Hotel at the Galleria, 13340 Dallas Parkway, Dallas, Texas at 4:00 P.M., Dallas
time, on May 11, 1998, or at any adjournment thereof. The expenses of this
solicitation will be borne by the Company. Proxies may be solicited by mail,
personal interview, telegram and telephone by directors, officers, employees and
agents of the Company without compensation.
This Proxy Statement and the accompanying form of proxy are being mailed to
stockholders on or about April 13, 1998. The principal executive office of the
Company is located at 5005 LBJ Freeway, Suite 1000, Dallas, Texas 75244,
telephone (972) 701-2000.
Only stockholders of record at the close of business on April 9, 1998 are
entitled to notice and to vote at the Annual Meeting. On that date, there were
24,218,863 shares of the Company's common stock, $.50 par value (the "Common
Stock"), outstanding. Included in the total outstanding shares are 22,796 shares
reserved for conversion of shares which have not been tendered for exchange
subsequent to the Company's reincorporation in Nevada in 1981. Such shares are
not eligible to vote at the Annual Meeting. Accordingly, the aggregate shares
entitled to vote at the meeting are 24,196,067. Each share is entitled to one
vote.
You are encouraged to attend the Annual Meeting and vote in person.
Execution of the enclosed proxy will not in any way affect your right to do so.
A stockholder may revoke a proxy at any time prior to the voting thereof by
filing with the Secretary of the Company, prior to the stockholder vote, a
written revocation or duly executed form of proxy bearing a later date, or by
voting in person at the Annual Meeting.
Attendance at the Annual Meeting, either in person or by proxy, by the
record holders of a majority of the outstanding shares of the Common Stock
constitutes a quorum. Cumulative voting is not permitted.
1
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL HOLDERS
The following table sets forth certain information, as of April 9, 1998,
with respect to the beneficial ownership of Common Stock by (i) each executive
officer of the Company named in the Summary Compensation Table set forth in this
Proxy Statement, (ii) each director and each nominee for director of the
Company, (iii) all directors and executive officers of the Company as a group
and (iv) each person known by the Company to be the beneficial owner of 5% or
more of the Common Stock.
Shares Beneficially
Owned
-------------------
Name(1) Number(2) Percent
------- --------- -------
M. Jay Allison ........................................ 1,268,204 5.0%
President, Chief Executive Officer and
Chairman of the Board Directors
Roland O. Burns ....................................... 275,250 1.1%
Senior Vice President, Chief Financial
Officer, Secretary and Treasurer
Richard S. Hickok ..................................... 114,135 (3) *
Director
Franklin B. Leonard ................................... 147,950 (4) *
Director
Cecil E. Martin, Jr ................................... 328,985 (5) 1.4%
Director
James L. Menke ........................................ 80,500 *
Vice President of Operations
Richard G. Powers .................................... 58,500 *
Vice President of Land
David W. Sledge ....................................... 40,153 *
Director
Michael W. Taylor .................................... 29,000 *
Vice President of Corporate Development
All Executive Officers and Directors
as a Group (11 Persons) .......................... 2,405,027 9.2%
Prudential Insurance Company of America ............... 1,513,400 (6) 6.3%
751 Broad Street
Newark, New Jersey 07102
- -----------------
* Indicates less than one percent.
(1) Unless otherwise noted, the address of each beneficial owner is c/o
Comstock Resources, Inc., 5005 LBJ Freeway, Suite 1000, Dallas, Texas
75244.
(2) Includes shares issuable pursuant to stock options which are presently
exercisable or exercisable within 60 days in the following amounts:
Mr. Allison--1,080,000 shares; Mr. Burns--240,000 shares; Mr.
Hickok--56,000 shares; Mr. Leonard--65,000 shares; Mr. Martin--56,000
shares; Mr. Menke--80,500 shares; Mr. Powers--58,500 shares; Mr.
Sledge--30,000 shares; Mr. Taylor--29,000 shares; and all executive
officers and directors -- 1,798,875.
(3) Includes 32,572 shares held by a corporation owned 90% by Mr. Hickok's
wife and 10% by Mr. Hickok's children.
(4) Includes 45,771 shares held by a trust for the benefit of Mr.
Leonard's wife.
(5) Includes 135,632 shares and options to purchase 42,875 shares held by
Mr. Martin's wife individually or as trustee on behalf of family
trusts.
(6) Ownership based on Schedule 13G filing dated February 13, 1998.
812,300 shares of the reported ownership have shared voting and
investment power.
2
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of five members
comprised of three classes (Class A, B, and C). Directors are elected in classes
to serve terms of three years. The Class A directors, whose term expires at the
Annual Meeting, are Franklin B. Leonard and Cecil E. Martin, Jr. The Class B
directors, whose term expires in 1999, are M. Jay Allison and David W. Sledge.
The Class C director, whose term expires in 2000, is Richard S. Hickok. At the
Annual Meeting, two Class A directors will be elected, each for a term of three
years beginning in 1998 and until their successors are duly elected and
qualified. The Board of Directors has nominated Franklin B. Leonard and Cecil E.
Martin, Jr. to serve as the Class A directors. Further information with respect
to the nominees and the other directors continuing in office is set forth below.
Nominees for Three-Year Terms
FRANLKIN B. LEONARD, (70) Director
Mr. Leonard has been a director of the Company since 1960. From 1961 to
1994, Mr. Leonard served as President of Crossley Surveys, Inc., a New York
based company which conducted statistical surveys. Mr. Leonard's family's
involvement in the Company spans four generations dating back to the 1880's when
Mr. Leonard's great grandfather was a significant shareholder of the Company.
Mr. Leonard also served as a director of Glen Ridge Savings and Loan Association
from 1968 to 1990. Mr. Leonard holds a B.S. degree from Yale University.
CECIL E. MARTIN, JR., (56) Director
Mr. Martin has been a director of the Company since 1988. Mr. Martin has
been a significant investor in the Company since 1987. From 1973 to 1991 he
served as Chairman of a public accounting firm in Richmond, Virginia. Mr. Martin
also serves as a director for Ten-Key, Inc. Mr. Martin holds a B.B.A. degree
from Old Dominion University and is a Certified Public Accountant.
Directors Continuing in Office
M. JAY ALLISON, (42) President, Chief Executive Officer and Chairman of the
Board of Directors
Mr. Allison has been a director of the Company since 1987, and President
and Chief Executive Officer of the Company since 1988. Mr. Allison was elected
Chairman of the Board of Directors in 1997. From 1987 to 1988, Mr. Allison
served as Vice President and Secretary of the Company. From 1981 to 1987, he was
a practicing oil and gas attorney with the firm of Lynch, Chappell & Alsup in
Midland, Texas. In 1983, Mr. Allison co-founded a private independent oil and
gas company, Midwood Petroleum, Inc., which was active in the acquisition and
development of oil and gas properties from 1983 to 1987. He received B.B.A.,
M.S. and J.D. degrees from Baylor University in 1978, 1980 and 1981,
respectively.
3
RICHARD S. HICKOK, (72) Director
Mr. Hickok has been a director of the Company since 1987. From 1948 to
1983, he was employed by the international accounting firm of Main Hurdman where
he retired as Chairman. From 1978 to 1980, Mr. Hickok served as a Trustee of the
Financial Accounting Foundation and has extensive involvement serving on various
committees of the American Institute of Certified Public Accountants. He
currently serves as a director of Marsh & McLennan Company, Inc. and
Projectavision, Inc. Mr. Hickok holds a B.S. degree from the Wharton School of
the University of Pennsylvania.
DAVID W. SLEDGE, (41) Director
Mr. Sledge was elected to the Board of Directors of the Company in 1996.
Mr. Sledge served as President of Gene Sledge Drilling Corporation, a privately
held contract drilling company based in Midland, Texas until its sale in October
1996. Mr. Sledge served Gene Sledge Drilling Corporation in various capacities
from 1979 to 1996. Mr. Sledge is a past director of the International
Association of Drilling Contractors and is a past chairman of the Permian Basin
chapter of this association. He received a B.B.A. degree from Baylor University
in 1979.
There are no family relationships among any of the officers or directors of
the Company.
Meetings of the Board of Directors and Committees
During 1997, the Board of Directors held seven meetings, and each Director
participated in all of the meetings. The Company's Executive Committee is
authorized to act and acts during the intervals between the meetings of the
Board of Directors and has all of the powers and authority of the Board of
Directors in the management of the business and affairs of the Company, except
the power to declare dividends; to adopt, amend or repeal bylaws; to adopt an
agreement of merger or consolidation; to sell substantially all of the Company's
assets; to recommend a dissolution of the Company to the stockholders; or to
authorize the issuance of stock of the Company. The Executive Committee consists
of M. Jay Allison as Chairman, and Cecil E. Martin, Jr. and Richard S. Hickok as
members. The Executive Committee did not meet in 1997.
The Company's Audit Committee has responsibility for recommending retention
or change of the Company's independent auditors, reviewing with management and
the independent auditors the Company's financial statements, accounting and
financial policies and practices, audit scope and adequacy of the Company's
internal control structure. The Audit Committee consists of Richard S. Hickok as
Chairman, and Franklin B. Leonard and David W. Sledge as members. The Audit
Committee held two meetings during 1997 at which all members were present. In
addition, the Company's Senior Vice President, as well as the Company's
independent public accountants, consult regularly with the Audit Committee on an
informal basis to discuss various accounting related issues.
The Company's Compensation Committee reviews and recommends to the Board of
Directors the compensation and promotion of officers of the Company, the terms
of any proposed employee benefit arrangements and the making of awards under
such arrangements. The Compensation Committee consists of Cecil E. Martin, Jr.,
as Chairman, Franklin B. Leonard and David W. Sledge as members. The
Compensation Committee held two meetings during 1997 at which all members were
present.
The Company has not established a formal nominating committee and presently
the full Board of Directors considers director nominations.
4
Compensation of Directors
The Company pays annual fees to directors who are not employees of the
Company and reimburses such directors for expenses in attending meetings. In
1997, the Company paid an annual fee of $21,000 to directors who chair
committees, and an annual fee of $18,000 to the remaining directors. The Company
also pays Mr. Martin for additional services provided to the Company under a
consulting agreement which provides for an annual payment of $18,000. Mr. Harold
R. Logan, the former chairman of the Board of Directors received $29,616 for
services until his retirement in May 1997. Beginning in 1998, the annual fee
paid to directors who chair committees was increased to $30,000 and the annual
fee to the remaining directors was increased to $25,000. Under a plan
established by the Board of Directors, each director can make an annual election
to receive his director and consulting fees in cash or in the equivalent number
of shares of Common Stock at the then current market price of Common Stock. In
January 1997, the Company issued 9,256 shares of Common Stock, at its then
current market value of $12.25 per share, to the non-employee directors, in full
payment of director fees and amounts due under consulting agreements aggregating
$125,616.
Under the Company's 1991 Long-term Incentive Plan, each non-employee director
receives on the date of initial election or appointment to the Board of
Directors options to acquire 10,000 shares of Common Stock. In addition, each
non-employee director receives at each annual meeting of stockholders, so long
as such person remains a director, options to acquire 10,000 shares of Common
Stock. The exercise price equals the fair market value on the date of grant.
Under Nevada law, directors will be elected by a plurality vote and the
persons receiving the greatest number of votes will be elected as the Class A
Directors.
Shares represented by proxies will be voted FOR the election of the Board
of Directors' nominees unless otherwise indicated on the proxy. If at the time
of the meeting, either of the nominees has become unavailable for any reason,
the persons entitled to vote the proxy shall vote for such substitute nominee or
nominees as they, in their discretion, may determine. The Company knows of no
reason why either nominee would be unavailable to serve.
5
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
earned during each of the Company's last three fiscal years by the Company's
Chief Executive Officer and the four other highest paid executive officers of
the Company.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
-------------------------------- ------------
Options
Name and Principal Position Year Salary Bonus Other(1)(2) Awards
- --------------------------- ---- ------ ----- ----------- ------
M. Jay Allison, 1997 $ 245,000 $ 450,000 $ 5,925 340,000
President and Chief 1996 245,000 350,000 3,919 1,165,000
Executive Officer 1995 245,000 155,000 2,782 50,000
Roland O. Burns, 1997 132,500 112,000 3,970 85,000
Senior Vice President and 1996 132,500 85,000 2,250 292,500
Chief Financial Officer 1995 128,000 40,000 1,680 22,500
James L. Menke, 1997 100,000 65,000 2,246 18,000
Vice President 1996 93,200 50,000 1,846 102,500
of Operations 1995 90,000 30,000 1,181 --
Richard G. Powers (3), 1997 90,000 50,000 1,797 20,000
Vice President of Land
Michael W. Taylor(3), 1997 93,000 90,000 2,056 45,000
Vice President of
Corporate Development
- --------------
(1) The value of all perquisites provided to each executive office by the
Company did not exceed the lesser of $50,000 or 10% of such officer's
salary and bonus for the year.
(2) Represents the Company's matching contributions under the Company's
401(k) Profit Sharing Plan and life insurance premiums paid by the
Company on the portion of keyman insurance benefits that would not be
payable to the Company.
(3) Mr. Powers and Mr. Taylor were elected as executive officers in
December 1997.
6
The following table sets forth certain information regarding stock options
granted during 1997 to the named executive officers of the Company.
Option Grants
Potential Realizable
Value
At Assumed Annual
Number of Percent of Rates of Stock Price
Securities Total Options Appreciation for
Underlying Granted To Exercise or Option Term
Options Employees in Base Price Expiration -------------------------
Name Granted Fiscal Year Per Share Date 5% 10%
---- ----------- ------------- ----------- ---------- ----------- -----------
M. Jay Allison 140,000 24.3 $12.375 5/1/2003 $ 589,216 $ 1,336,729
200,000 34.6 $12.375 1/1/2007 1,364,537 3,360,921
--------- ----- ----------- -----------
340,000 58.9 $ 1,953,753 $ 4,697,650
--------- ----- ----------- -----------
Roland O. Burns 35,000 6.0 $12.375 5/1/2003 $ 147,304 $ 334,182
50,000 8.7 $12.375 1/1/2007 341,134 840,230
--------- ------ ----------- -----------
85,000 14.7 $ 488,438 $ 1,174,412
--------- ----- ----------- -----------
James L. Menke 8,000 1.4 $12.375 5/1/2003 $ 33,669 $ 76,385
10,000 1.7 $12.375 1/1/2007 68,227 168,046
--------- ------ ----------- -----------
18,000 2.1 $ 101,896 $ 244,431
--------- ------ ----------- -----------
Richard G. Powers 17,000 2.9 $12.375 5/1/2003 $ 71,548 $ 162,317
3,000 .5 $12.375 1/1/2007 20,468 50,414
--------- ------- ----------- -----------
20,000 3.4 $ 92,016 $ 212,731
--------- ------ ----------- -----------
Michael W. Taylor 6,000 1.0 $12.375 5/1/2003 $ 25,252 $ 57,288
14,000 2.4 $12.375 1/1/2005 70,530 164,365
25,000 4.4 $12.375 1/1/2007 170,567 420,115
--------- ------ ----------- -----------
45,000 7.8 $ 266,349 $ 641,768
--------- ------ ----------- -----------
7
The following table sets forth certain information with respect to the
value of the named executive officers option exercises in 1997 and unexercised
options at December 31, 1997.
Option Exercises/Options Held at Year End
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired on Value Options at Fiscal Year-End at Fiscal Year End(1)
Name Exercise Received Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
M. Jay Allison - - 780,000 1,140,000 $5,847,500 $750,000
Roland O. Burns - - 165,000 300,000 1,161,406 336,563
James L. Menke - - 62,500 68,000 390,781 46,875
Richard G. Powers - - 33,500 60,000 184,063 37,500
Michael W. Taylor 25,000 $116,688 5,000 135,000 4,688 84,375
(1) The last sale price for a share of Common Stock as reported by the New York
Stock Exchange of December 31, 1997 was $11.94 and the exercise prices of
the options in this table ranged from $2.00 to $12.375 per share.
Employment Agreements
Effective May 15, 1997, the Company entered into employment agreements with
M. Jay Allison, the President and Chief Executive Officer of the Company, and
Roland O. Burns, Senior Vice President, Chief Financial Officer, Secretary and
Treasurer of the Company. Under the agreements, the Company has agreed to employ
each of Mr. Allison and Mr. Burns for a period of 12 months at a minimum base
rate of $245,000, and $132,500 per annum, respectively. Each of the employment
agreements provides for the payment of severance benefits in an amount equal to
three times the sum of the existing annual base salary plus the annual bonus of
the employee upon (i) a change in control followed by (ii) the occurrence of
certain specified events, including the assignment of the employee to duties
inconsistent with his position immediately prior to the change in control, a
reduction in the employee's salary, requiring the employee to be relocated,
failure of a successor to the Company to assume the obligations of the Company
under the employment agreement, failure of the Company to re-elect the employee
to the offices held by him immediately prior to a change in control and a breach
by the Company (or any successor) of any provisions of the employment agreement.
The severance benefit payments are payable as a single cash payment within 30
days of the employee's termination of employment. As defined in the employment
agreements, a "change in control" is deemed to have taken place if, without the
approval or recommendation of a majority of the then existing Board of Directors
of the Company, (a) a third person causes or brings about the removal or
resignation of a majority of the then existing members of the Board or if a
third person causes or brings about an increase in the size of the Board such
that the then existing members of the Board thereafter represent a minority of
the total number of persons comprising the entire Board; (b) a third person,
including a group, becomes the beneficial owner of shares of any class of the
Company's stock having 20% or more of the total number of votes that may be cast
for the election of directors of the Company; or (c) the Company's stockholders
approve a merger or other business combination of the Company with or into
another corporation pursuant to which the Company will not survive or will
survive only as a subsidiary of another corporation, or the sale or other
disposition of all or substantially all of the assets of the Company, or any
combination of the foregoing.
8
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five years
ended December 31, 1997 with the cumulative return on the New York Stock
Exchange Index and index composed of all publicly traded oil and gas companies
within SIC Code 1311, consisting of 184 companies. The graph assumes that $100
was invested in each category on the last trading day of 1992 and that
dividends, if any, were reinvested.
Stock Performance Graph
[GRAPHIC OMITTED]
Value of $100 Investment:
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
The Company $163 $177 $300 $693 $637
New York Stock Exchange(1) 114 111 144 174 229
Public Oil & Gas Producers 119 125 137 183 185
- ---------------
(1) In prior years the Company selected the NASDAQ Stock Market Index
(U.S. Only) as its major market index. In December 1996, the Common
Stock was listed for trading on the New York Stock Exchange.
Accordingly, the Company no longer uses the NASDAQ Stock Market Index.
Beginning in 1997, the Company has chosen the New York Stock Exchange
index as its major market index.
9
Report of Compensation Committee on Executive Compensation
The duties of the Company's Compensation Committee's include the annual
review and approval of the Company's management compensation strategy, review
and determination of individual elements of compensation for the Company's
executive officers and oversight of the administration of the Company's 1991
Long-term Incentive Plan (the "Incentive Plan"). The Compensation Committee has
not established any specific criteria in determining executive compensation. The
goal of the Company's compensation arrangements is to attract, retain and reward
personnel critical to the long-term success of the Company. To achieve this
basic goal, the Compensation Committee sets annual base salaries for the Chief
Executive Officer and the other executive officers and awards discretionary cash
bonuses based on the Company's financial performance during the prior year, as
well as the Compensation Committee's subjective assessment of an individual's
own performance and ability in the position held by that person.
Base Salaries. The Company's compensation policy is for the Compensation
Committee to annually review and set executive base salaries, including that of
the President and Chief Executive Officer, within a competitive range given the
Company's growth strategy. Once generally established, base salaries are
adjusted within the competitive range on an individual basis based on past
performance. In 1997, the Compensation Committee did not increase the salaries
for Mr. Allison and Mr. Burns but did approve increases to base salaries to the
other named executive officers ranging from 5% to 33%.
Discretionary Cash Bonuses. The Compensation Committee granted cash bonuses of
$827,000 in the aggregate to the Company's seven executive officers for 1997,
including $450,000 to Mr. Allison, for their performance with respect to the
Company's achievements in 1997 including completing $221 million in property
acquisitions and the successful development and exploratory drilling program.
These achievements, in the opinion of the Committee, substantially enhanced the
long-term business and financial prospects of the Company. The amount of each
bonus was determined based upon the Compensation Committee's subjective
assessment of the contribution of each executive officer. With respect to Mr.
Allison, the Compensation Committee primarily considered his role and
performance in directing the Company's growth and results in 1997.
Incentive Plan Awards. The Compensation Committee believes that a significant
portion of executive compensation should be dependent on value created for the
Company's stockholders. Through the Incentive Plan, stock options are granted to
key management to align the interests of management with the interests of
stockholders in working to increase the value of the Company's Common Stock. On
October 27, 1997, the Compensation Committee granted options under the Incentive
Plan to purchase 577,000 shares of Common Stock, at an exercise price of $12.375
per share, to the Company's executive officers and certain other key members of
management. Of the options granted, options to purchase 542,000 shares of Common
Stock were granted to executive officers and options to purchase 35,000 shares
of Common Stock were granted to other key employees. Of the options granted to
executive officers, options to purchase 340,000 shares of Common Stock were
granted to Mr. Allison. Both the size of grants and the proportion relative to
the total number of option shares granted generally increased as a function of
the recipient's higher level of responsibility within the Company and individual
performance. The factors upon which the Committee granted options, including the
grants to Mr. Allison, were the same as those considered in awarding
discretionary cash bonuses.
The Compensation Committee
Cecil E. Martin, Jr., Chairman
Franklin B. Leonard
David W. Sledge
10
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as independent public accountants to audit the
consolidated financial statements of the Company for 1998. Stockholders are
being asked to ratify this appointment. Arthur Andersen LLP has served the
Company in this capacity since 1989. Representatives of Arthur Andersen LLP are
expected to be present at the Annual Meeting and will have the opportunity to
make a statement if they desire to do so, and will be available to respond to
appropriate questions.
The affirmative vote of the holders of a majority of the shares of Common
Stock present or represented and entitled to vote at the Annual Meeting is
necessary for ratification of the appointment of the independent accountants.
The Board of Directors recommends that stockholders vote FOR such
ratification. Proxies solicited by the Board of Directors will be so voted
unless stockholders specify otherwise in their proxies.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all proposals (but not on
the election of directors) and will be counted as present for purposes of the
item on which the abstention is noted. Under the rules of the New York Stock
Exchange, Inc. ("NYSE"), brokers who hold shares in street name for customers
have the authority to vote on certain items when they have not received
instructions from beneficial owners. Brokers that do not receive instructions
are entitled to vote on the election of directors and the ratification of
accountants. Under applicable Nevada law, a broker non-vote will have no effect
on the outcome of the election of directors or the ratification of accountants.
CERTAIN TRANSACTIONS
There were no transactions between the Company and its officers and
directors or principal stockholders during 1997.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder intends to present at the Company's annual
meeting of stockholders in 1999 must be received by the Company by December 11,
1998, in order to be eligible for inclusion in the proxy statement and form of
proxy relating to such meeting.
The Company's 1997 Annual Report to Stockholders (including its Annual
Report on Form 10-K for the fiscal year ended December 31, 1997) is being mailed
to stockholders of record together herewith.
11
OTHER BUSINESS
The Board of Directors is not aware of any matters other than those set
forth above which will be presented for action by the stockholders at the
meeting, but if any other matters should be presented, the persons named in the
proxy intend to vote such proxies in accordance with their best judgement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ROLAND O. BURNS
------------------
ROLAND O. BURNS
SECRETARY
Dallas, Texas
April 13, 1998
12
FORM OF PROXY
x PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
WITHHOLD AUTHORITY Nominees:
To vote for Franklin B. Leonard
FOR Nominees listed Richard S. Hickok
1. Election of
two (2) Class A
Directors (term
expires in 2001): ------ ------
(Instruction: To withhold authority to vote for the individual nominee, write
that nominee's name on the line below.)
- --------------------------
FOR AGAINST ABSTAIN
2. Proposal to ratify
the appointment of
Arthur Andersen LLP
independent accountants
for 1998 ------ ------ ------
3. In their discretion on such other matters which may properly come before
this meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
SIGNATURE(S) DATE:
---------------------------- --------------
NOTE: Please sign exactly as your name appears on this proxy. If your stock is
jointly owned, both parties must sign. Fiduciaries and representatives should so
indicate when signing, and when more than one is named, a majority should sign.
COMSTOCK RESOURCES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - MAY 11, 1998
The undersigned hereby appoints M. Jay Allison and Roland O. Burns, and each of
them with full power of substitution, attorneys, agents and proxies of the
undersigned to vote as directed on the reverse the shares of stock which the
undersigned would be entitled to vote, if personally present, at the Annual
Meeting of Stockholders of Comstock Resources, Inc. to be held Monday, May 11,
1998 at 4:00 p.m. Dallas time and any adjournment or adjournments thereof. The
undersigned hereby revokes any proxy or proxies heretofore given to vote upon or
act with respect to such shares of stock and hereby ratifies and confirms all
that said attorneys, their substitutes, or any of them, may lawfully do by
virtue hereof.
(To be Signed on Reverse Side.)
