pre14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Soliciting Material Pursuant to §240.14a-12 |
CANARGO ENERGY CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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TABLE OF CONTENTS
CANARGO ENERGY CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 5, 2007
The Board of Directors of CanArgo Energy Corporation, a Delaware Corporation (the
Company), hereby gives notice that the Annual Meeting of stockholders of the Company will be held
on June 5, 2007 at 10.30 a.m. Eastern Standard Time at 16th Floor, 101 Federal, Boston,
MA 02110, U.S.A. for the following purposes, as more fully described in the accompanying Proxy
Statement:
1. To elect directors to hold office until the next Annual Meeting of stockholders or until
their successors are elected and qualified.
2. To approve the adoption of an amendment to the Companys Certificate of Incorporation to
increase the number of shares of Common Stock that the Company will have authority to issue from
375,000,000 to 500,000,000 shares.
3. To transact such other business as may properly come before the meeting or any adjournments
or postponements thereof.
Only stockholders of record at the close of business on April 23, 2007 will be entitled to
notice of, and to vote at, such meeting or any adjournments or postponements thereof. All holders
of record of shares of the Companys Common Stock at close of business on the record date are
entitled to vote at the meeting by sending in the proxy voting form by the specified deadline.
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BY ORDER OF THE BOARD OF DIRECTORS |
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Liz Landles |
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Corporate Secretary |
St. Peter Port
Guernsey, British Isles
2007
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL
PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES OR AUTHORISE THE INDIVIDUALS NAMED IN YOUR PROXY CARD TO VOTE YOUR
SHARES BY CALLING THE TELEPHONE NUMBER OR USING THE INTERNET BY THE DEADLNE AS DESCRIBED IN THE
INSTRUCTIONS INCLUDED WITH YOUR PROXY CARD. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE
MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN IF YOU HAVE
PREVIOUSLY SENT IN YOUR PROXY CARD.
CANARGO ENERGY CORPORATION
P.O. Box 291, St Peter Port, Guernsey, GY1 3RR, British Isles
PROXY STATEMENT
2007 ANNUAL MEETING OF STOCKHOLDERS
CanArgo Energy Corporation (the Company) is furnishing this Proxy Statement and the enclosed
proxy in connection with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of stockholders to be held on June 5, 2007 at 16th Floor, 101 Federal,
Boston, MA 02110, U.S.A. and at any adjournments or postponements thereof (the Annual Meeting).
The Proxy Statement and the enclosed proxy are first being sent to stockholders on or about May 4, 2007
Only holders of the Companys Common Stock as of the close of business on April 23, 2007 (the
Record Date) are entitled to vote at the Annual Meeting. Stockholders who hold shares of the
Company in street name may vote at the Annual Meeting only if they hold a valid proxy from their
broker. As of the Record Date, there were 238,487,390 shares of Common Stock outstanding. A
majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting must be
present in person or by proxy in order for there to be a quorum at the meeting. Stockholders of
record who are present at the meeting in person or by proxy and who abstain from voting, including
brokers holding customers shares of record who cause abstentions to be recorded at the meeting and
broker non-votes, will be included in the number of stockholders present at the meeting for
purposes of determining whether a quorum is present.
Registration and seating will begin at 10.00 a.m. All stockholders attending the meeting will
be asked to present valid picture identification, such as a drivers license or passport. Cameras,
recording devices and other electronic devices will not be permitted at the meeting.
Each stockholder of record is entitled to one vote at the Annual Meeting for each share of
Common Stock held by such stockholder on the Record Date. Stockholders do not have cumulative
voting rights. Stockholders may vote their shares by using the proxy card enclosed with this Proxy
Statement. All proxy cards received by the Company which are properly signed and have not been
revoked will be voted in accordance with the instructions contained in the proxy cards. If a signed
proxy card is received which does not specify a vote or an abstention and is not revoked prior to
exercise, the shares represented by that proxy card will be voted as recommended by the Board of
Directors as follows:
FOR the election of the director nominees.
FOR the approval of the amendment to the Companys Certificate of Incorporation.
The Company does not anticipate, as of the date hereof, of any matters to be voted upon at the
Annual Meeting other than those stated in this Proxy Statement and the accompanying Notice of
Annual Meeting of stockholders. If any other matters are properly brought before the Annual
Meeting, to the extent allowed under Delaware Law, the enclosed proxy card gives discretionary
authority to the persons named as proxies to vote the shares represented by the proxy card in their
discretion.
Under Delaware law and the Companys Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws, if a quorum exists at the meeting, the affirmative vote of a plurality
of the votes cast at the meeting is required for the election of directors. A properly executed
proxy marked Withhold authority with respect to the election of one or more directors will not be
voted with respect to the director or directors indicated, although it will be counted for purposes
of determining whether there is a quorum. Furthermore, with respect to the amendment of the
Companys Certificate of Incorporation, the affirmative vote of a majority of the issued and
outstanding shares of the Companys Common Stock is required for approval of the proposal and an
abstention will result in a vote against the proposal. For each other item, the affirmative vote
of the holders of a majority of the shares represented in
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person or by proxy and entitled to vote on the item will be required for approval. A properly
executed proxy marked Abstain with respect to any such matter will not be voted, although it will
be counted for purposes of determining whether there is a quorum. Accordingly, with respect to
Proposal 2 an abstention will have the effect of a negative vote.
The Company requests that brokerage firms, bank nominees and other institutions that act as
nominees or fiduciaries for owners of Common Stock, forward this Proxy Statement and proxies to
persons for whom they hold shares and obtain authorization for the execution of proxies. If shares
are held in the name of a brokerage firm, bank or nominee, only the brokerage firm, bank or nominee
can sign a proxy with respect to stockholders shares. Accordingly, such stockholder will not be
able to vote their shares in person should they attend the meeting. Instead, the stockholder
should contact the person responsible for their account and give instructions for a proxy
representing their shares to be signed and voted as directed.
For shares held in street name through a broker, bank or other nominee, the broker, bank or
nominee may not be permitted to exercise voting discretion with respect to some of the matters to
be acted upon. Thus, if stockholders do not give their broker or nominee specific instructions,
their shares may not be voted on those matters and will not be counted in determining the number of
shares necessary for approval. Shares represented by such broker non-votes will, however, be
counted in determining whether there is a quorum.
A stockholder of record may revoke a proxy at any time before it is voted at the Annual
Meeting by (a) delivering a proxy revocation or another duly executed proxy bearing a later date to
the Corporate Secretary of the Company or (b) attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not revoke a proxy unless the stockholder actually votes in
person at the meeting.
The proxy card accompanying this Proxy Statement is solicited by the Board of Directors of the
Company. The Company will pay all of the costs of soliciting proxies. In addition to solicitation
by mail, officers, directors and employees of the Company may solicit proxies personally, or by
telephone, without receiving additional compensation. The Company has retained Gambit H & K AS in
Norway to assist in the solicitation of proxies in connection with the Annual Meeting. The Company
will pay the firms customary fees, expected to total approximately $10,000 plus expenses. The
Company, if requested, will also pay brokers, banks and other fiduciaries who hold shares of Common
Stock for beneficial owners for their reasonable out-of-pocket expenses of forwarding these
materials to stockholders.
The Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2006 is
enclosed with this Proxy Statement for each stockholder.
PROPOSAL 1 ELECTION OF DIRECTORS
The current term of office of all of the Companys directors expires at the 2007 Annual
Meeting. A majority of the independent directors has nominated all five persons to be elected
directors at the annual meeting to hold office until the next annual meeting of stockholders and
until the election of their respective successors. All of the nominees are currently serving as
directors and have indicated that they are willing and able to serve as directors.
Directors are elected by a plurality of votes cast at the meeting; any shares not voted (by
abstention, broker non-vote, or otherwise) have no impact on the vote. If you do not wish your
shares to be voted for a particular nominee, you may so indicate in the space provided on the proxy
form or withhold authority. All proxies received by the Board of Directors will be voted FOR the
nominees listed below if no direction to the contrary is given. Each of the nominees has consented
to serve if elected. In the event that any nominee is unable or declines to serve, the proxies
will be voted for the election of any alternate nominee who is designated by the Board of
Directors.
The nominees for director are Dr. David Robson, Vincent McDonnell, Michael Ayre, Russ Hammond
and Nils Trulsvik.
Biographical information regarding each nominee is set forth in the section entitled
Directors, Executive Officers and Corporate Governance - Management of the Company below.
2
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL (Proposal 1)
PROPOSAL 2 INCREASE OF AUTHORISED SHARE CAPITAL
The Board of Directors has unanimously adopted a resolution authorizing an amendment to the
Companys Certificate of Incorporation (the Certificate) to increase the total number of the
Companys authorized shares of Common Stock from 375,000,000 shares to 500,000,000 shares, par
value $0.10. The proposed amendment is subject to approval by the Companys stockholders.
The Common Stock, including the additional shares proposed for authorization, do not have
pre-emptive or similar rights, which means that current stockholders do not have a prior right to
purchase any new issue of capital stock of the Company in order to maintain their proportionate
ownership thereof. Thus, the issuance of additional shares of Common Stock might dilute, under
certain circumstances, the ownership and voting rights of stockholders. Each of the additional
authorized shares of Common Stock will have the same rights and privileges as the currently
authorized Common Stock.
The proposed amendment will modify the first sentence of paragraph (a) of Article Four of the
Certificate to read as follows:
(a) The total number of shares of all classes of stock which the Corporation shall
have authority to issue is five hundred and five million (505,000,000), consisting of:
(1) Five million (5,000,000) shares of Preferred Stock, par value ten cents ($0.10)
per share (the Preferred Stock);
(2) Five hundred million (500,000,000) shares of Common Stock, par value ten cents
($0.10) per share (the Common Stock).
The Company is currently authorized to issue 380,000,000 shares of capital stock, of which
375,000,000 are designated as Common Stock and 5,000,000 shares are designated as Preferred Stock.
The proposed amendment would increase the total number of shares of authorized capital stock to
505,000,000 shares and the number of shares of Common Stock authorized to 500,000,000. The
authorized shares of Common Stock were last increased by the stockholders at the Annual General
Meeting in May 2006, when the number of shares was increased from 300,000,000 to 375,000,000
shares.
As of April 23, 2007, 238,487,390 shares of Common Stock were issued and outstanding, no
shares of capital stock were held by the Company as treasury stock and no shares of Preferred Stock
were issued and outstanding. In relation to the 136,512,610 currently authorized but unissued
shares of Common Stock, an aggregate of 95,655,214 shares have been reserved for future issuance:
45,270 shares in connection with the exchange of Exchangeable Shares previously issued by the
Company in connection with an acquisition; 9,276,000 shares of Common Stock upon exercise of
outstanding stock options granted under certain stock option plans; 26,800,000 shares issuable upon
exercise of outstanding warrants; up to 8,568,667 reserved for issuance under our existing option
plans; and up to 50,965,277 shares reserved for issuance in connection with certain existing
contractual arrangements.
If the proposed amendment is adopted, it will become effective upon filing of the proposed
amendment with the Delaware Secretary of States office.
The Board of Directors believes that it is advisable and in the best interests of the Company
to have available additional authorized but unissued shares of Common Stock in an amount adequate
to provide for the future business needs of the Company and to take advantage of future corporate
opportunities. The increase in authorized Common Stock will not have any immediate effect on the
rights of existing stockholders. However, the additional shares will be available for issuance
from time to time by the Company, at the discretion of the Board of Directors, without further
authorization by vote of the stockholders unless applicable law or regulation or stock exchange
requirements otherwise require such authorization. These shares may be issued for any proper
corporate purpose including, without limitation, acquiring other businesses in exchange for shares
of Common Stock; entering into
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joint venture arrangements with other companies in which Common Stock or the right to acquire
Common Stock are part of the consideration; stock splits or stock dividends; raising capital
through the sale of Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock; and attracting and retaining valuable employees and consultants by the issuance of
additional stock, stock options or use of stock-based plans.
Although the Company may engage in the foregoing actions in the future, except for the
issuance of additional stock options under the Companys 2004 Long Term Stock Incentive Plan, and
the possible sale of shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock to raise additional capital, no such actions involving the issuance
of additional shares of Common Stock are pending as of the date hereof. The Board of Directors
would intend to use any funds raised from any such possible issuances to finance principally the
Companys existing and proposed activities in the Republic of Georgia, the Caucasus, the Black Sea
region and South West Asia.
If the proposed amendment is approved, the Board of Directors would be able to authorize the
issuance of shares of Common Stock without the necessity, and related costs and delays, of either
calling a special stockholders meeting or waiting for the next regularly scheduled meeting of
stockholders in order to increase the authorized shares of Common Stock.
The issuance of the additional shares of Common Stock could have the effect of diluting
earnings per share and book value per share, which could adversely affect the Companys existing
stockholders. Issuing additional shares of Common Stock may also have the effect of delaying or
preventing a change of control of the Company. The Companys authorized but unissued Common Stock
could be issued in one or more transactions that would make more difficult or costly, and less
likely, a takeover of the Company. The proposed amendment to the Certificate is not being
recommended in response to any specific effort of which the Company is aware to obtain control of
the Company and the Board of directors has no present intention to use the additional shares of
Common Stock in order to impede a takeover attempt.
The affirmative vote of a majority of the issued and outstanding shares of Common Stock of the
Company entitled to vote at the Annual Meeting is required for approval of this amendment to the
Certificate to increase the Companys authorized shares of Common Stock. An abstention will,
accordingly, result in a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOUR OF THIS PROPOSAL
(Proposal 2)
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Management of the Company
The members of the Board of Directors and the Executive Officers of the Company are identified
below:
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Positions Held |
David Robson |
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Chairman of the Board and Chief Executive Officer |
Vincent McDonnell |
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President, Chief Operating Officer, Chief |
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Commercial Officer and Director |
Jeffrey Wilkins |
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Chief Financial Officer |
Liz Landles |
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Corporate Secretary and Executive Vice President |
Michael Ayre (1) |
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Director |
Russ Hammond (1) (2) |
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Director |
Nils Trulsvik (1) (2) |
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Director |
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
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Executive Officers and Directors
Dr. David Robson, a resident of Guernsey, was elected a Director, Chairman of the Board and
Chief Executive Officer of the Company on July 15, 1998 and subsequently President and Chief
Executive Officer, being reappointed Chairman on November 21, 2002. He has also served as a
Director, Chairman of the Board and Chief Executive Officer of the Companys subsidiary, CanArgo
Oil & Gas Inc., since July 1997, as President of CanArgo Oil & Gas Inc.s subsidiary, Ninotsminda
Oil Company Ltd, since 1996, and as Chairman and Managing Director and sole owner of Vazon Energy
Limited, a company which provides consulting services to the energy industry, since March 1997.
From April 1992 until July 1993, Dr. Robson was General Manager of JP Kenny/Intershelf Oil & Gas
Resources, from July 1993 until December 1993, Operations Director of JP Kenny Exploration and
Production Limited (JP Kenny), from December 1993 until November 1994, Managing Director, JP
Kenny, and from November 1994 until March 1997, Dr. Robson was Chief Executive Officer of the
London Stock Exchange listed company, JKX Oil & Gas plc. Prior to this he was employed in technical
and commercial positions in Britoil plc, Hamilton Oil and Mobil. In June 2003 Dr. Robson was
awarded with the Order of Honour for services to the Georgian hydrocarbon extraction industry. He
holds a B.Sc. (Hons) degree in Geology, a Ph.D. in Geochemistry and an MBA.
Vincent McDonnell, a resident of the United Kingdom, was elected a Director of the Company on
May 2, 2003. He served the Company as Chief Financial Officer from September 23, 2002 to May 6,
2005, since May 6, 2005 has held the position of Chief Operating Officer and since August 1, 2006
has held the position of President. Prior thereto, he served the Company as Chief Commercial
Officer from April 2001 and Commercial Manager from December 2000. Prior to joining the Company, he
was an independent oil and gas consultant from May 1999 until October 2000. From 1994 until April
1999, Mr. McDonnell served as Commercial Manager of JKX Oil & Gas plc. Prior to 1994, Mr. McDonnell
worked in various business, commercial and technical roles with a number of companies, including
Mobil and Britoil plc. He holds a B.Sc (Hons.) degree in Geology, a M.Sc. degree in Geophysics and
an MBA.
Jeffrey Wilkins, a resident of the United Kingdom, was appointed Chief Financial Officer on
August 1, 2006. Mr. Wilkins had served as the Companys Financial Controller from April 2001 until
his appointment as the Companys Chief Financial Officer. Prior to his appointment as the Companys
Financial Controller, he held various European finance positions for Fisher-Rosemount, part of
Emerson Electric Company between 1995 and 1999 and then up to joining the Company was European
Financial Accountant for Dialog, a business of The Thomson Corporation. Mr. Wilkins is a Chartered
Management Accountant with a joint degree in Economics and Politics from the University of Bath.
Liz Landles, a resident of Guernsey, was appointed Corporate Secretary on August 1, 2002,
having served as Assistant Corporate Secretary of the Company since December 2000. Mrs. Landles
also acts as the Companys Administration Manager and is responsible for organising the Companys
administrative activities. Mrs. Landles has worked for the Company since October 1997, principally
in an administrative role and as a Director of some of the Companys subsidiaries. She was
appointed as Executive Vice President in November 2005. She holds an Advanced Diploma of Business
Administration and is a Fellow of The Institute of Business Administration (FInstBA).
Michael Ayre, a resident of Guernsey, was elected a Director of the Company on March 5, 2004.
He is currently Managing Director of Mees Pierson Reads, a trust management and financial advisory
company. He was previously employed from 1983 to 1987 in the London office of Touche Ross & Co (now
Deloitte), and the Guernsey office from 1981 to 1983 of Peat Marwick Mitchell (now KPMG). Mr. Ayre
is a member of the Chartered Association of Certified Accountants and the Chartered Institute of
Taxation. He was formerly a non-employee director of Woolwich Guernsey Limited and is currently a
non-employee director of the Guernsey subsidiaries of Unigestion, a Swiss fund management group.
Russ Hammond, a resident of the United Kingdom, was elected a Director of the Company on July
15, 1998. He has also served as a Director of the Companys subsidiary, CanArgo Oil & Gas Inc.,
since June 1997. Although retired, Mr. Hammond has over the past five years been an investment
advisor to Provincial Securities Limited, a private investment company. Mr. Hammond has been
Chairman of Terrenex Acquisition Corporation, an oil and gas and joint venture company, since 1992
and a Non Executive Director of Questerre Energy Inc., an oil and gas exploration and production
company, since 2000. In June 2003 Mr. Hammond was awarded with the Order of Honour for services to
the Georgian hydrocarbon extraction industry.
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Nils Trulsvik, a resident of Norway, was elected a Director of the Company on August 17, 1994.
He served the Company as President and Chief Executive Officer from February 1997 to July 1998 and
from November 1994 to March 1995; and as Executive Vice President from March 1995 to February 1997
and from September 1994 until November 1994. Mr. Trulsvik served as the Chief Executive Officer of
Force Petroleum Limited from January 1999 to May 2005. Since May 2005 Mr. Trulsvik has been
Managing Director of Interoil Exploration & Production ASA, an oil and gas exploration and
production company operating principally in South America. Mr. Trulsvik is a petroleum
explorationist with extensive experience in petroleum exploration and development throughout the
world. Prior to joining the Company, he held various positions with Nopec a.s., a Norwegian
petroleum consultant group of companies of which he was a founder, including Managing Director from
1987 to 1993 and Special Advisor from 1993 to August 1994.
The current term of office of all of the Companys directors expires at the 2007 Annual
Meeting. A majority of the independent directors has nominated all five persons to be elected
directors at the Annual Meeting to hold office until the Annual Meeting of stockholders in 2008 and
until their successors are elected and qualified. All directors will hold office until the Annual
Meeting of stockholders at which their terms expire and the election and qualification of their
successors.
There are no family relationships among any of the Companys directors or executive officers.
Director Nomination
General. The Board does not have a nominating committee. The functions of the nominating
committee are performed by a majority of the independent directors who consider candidates for
Board membership suggested by Board members, as well as management and stockholders and make
recommendations for the Boards selection. The Board may also retain a third-party executive search
firm from time to time if it believes such engagement is advisable in order to identify suitable
candidates.
Stockholder Nominees. A stockholder who wishes to recommend a prospective nominee for the
Board should notify any independent director in writing with whatever supporting material the
stockholder considers appropriate, including (a) all information relating to such nominee that is
required to be disclosed pursuant to Regulation 14A under the Securities Exchange Act of 1934
(including such persons written consent to being named in the Proxy Statement as a nominee and to
serving as a director (if elected)); (b) the names and addresses of the stockholders making the
nomination and the number of shares of the Companys Common Stock which are owned beneficially and
of record by such stockholders; and (c) appropriate biographical information and a statement as to
the qualification of the nominee. A stockholder nomination should be submitted in the timeframe
described in the Bylaws of the Company.
Process for Identifying and Evaluating Nominees. Once the independent directors have
identified a prospective nominee, the Board makes an initial determination as to whether to conduct
a full evaluation of the candidate. This initial determination is based on the information provided
to the Board with the recommendation of the prospective candidate, as well as the Boards own
knowledge of the prospective candidate, which may be supplemented by inquiries to the person making
the recommendation or others. The preliminary determination is based primarily on the need for
additional Board members to fill vacancies or to expand the size of the Board and the likelihood
that the prospective nominee can satisfy the evaluation factors described below. If the Board
determines, in consultation with the independent directors and other Board members as appropriate,
that additional consideration is warranted, it may request a third-party search firm to gather
additional information about the prospective nominees background and experience and to report its
findings to the Board. The Board then evaluates the prospective nominee against the following
standards and qualifications, including:
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the extent to which the prospective nominee contributes to the range of talent, skill
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the prospective nominees ability to dedicate sufficient time, energy and attention to
the diligent performance of his or her duties, including the prospective nominees service
on other public company boards; |
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the prospective nominees standards of integrity, commitment and independence of thought
and judgment; and |
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the extent to which the prospective nominee helps the Board reflect the diversity of the
Companys stockholders, employees, customers and communities in which the Company operates. |
The Board also considers such other relevant factors as it deems appropriate, including the
current composition of the Board, the balance of management and independent directors, the need for
Audit Committee and technical expertise and the evaluations of other prospective nominees. In
connection with this evaluation, the Board determines whether to interview the prospective nominee,
and if warranted, one or more members of the Board, and others, including members of management, as
appropriate. After completing this evaluation and interview, the Board determines the nominees
after considering the recommendations and views of the directors and others as appropriate. The
Board has adopted resolutions addressing the nominations process and such related matters as may be
required under U.S. federal securities laws and the rules of The American Stock Exchange, Inc (the
AMEX) and the Oslo Stock Exchange. A copy of the resolutions is available on the Companys
website (www.canargo.com).
To date, the Company has never received a proposal from a stockholder to nominate a director.
Although the Company has not adopted a formal policy with respect to stockholder nominees, the
directors expect that the evaluation process for a stockholder nominee would be similar to the
process outlined above.
Process for Determining which Directors are Considered Independent. On April 21, 2004, the
Companys Common Stock began trading on the AMEX. In connection with its Common Stock listing, the
Company became subject to the listing standards adopted by the AMEX. The full text of the AMEX
requirements can be found on its website (www.amex.com).
Pursuant to AMEX and Securities and Exchange Commission (SEC) requirements, the Board
undertook its annual review of director independence in March 2007. During this review, the Board
considered transactions and relationships between each director or any member of his immediate
family and the Company and its subsidiaries and affiliates, including those reported under Certain
Relationships and Related Transactions below. The Board also examined transactions and
relationships between directors or their affiliates and members of the Companys senior management
or their affiliates. As provided in the AMEX and SEC requirements, the purpose of this review was
to determine whether any such relationships or transactions were inconsistent with a determination
that the director is independent.
As a result of this review, the Board affirmatively determined that, other than David Robson
and Vincent McDonnell, all of the directors nominated for election at the Annual Meeting are
independent of the Company and its management under the standards set forth in the requirements of
the AMEX and the SEC. In addition, as further required by the AMEX listing standards, the Board
has made an affirmative determination as to each independent director that no material
relationships exist between any non-employee director and the Company which, in the opinion of the
Board, would interfere with the exercise of their independent judgment. David Robson and Vincent
McDonnell are considered inside directors because of their role as senior executives of the
Company. We provide additional information regarding Mr. Hammond under Certain Relationships and
Related Transactions below.
Board Nominees for the 2007 Annual Meeting. Each of the nominees listed in this Proxy
Statement are current directors standing for re-election.
Communications with Directors
Stockholders and other parties interested in communicating directly with the non-employee
directors as a group may do so by writing to: Nils Trulsvik c/o Corporate Secretary, CanArgo Energy
Corporation, P.O. Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles in an envelope marked
Confidential. The Corporate Secretary of the
7
Company will promptly forward to Mr. Trulsvik all such correspondence. In addition, if you wish to
communicate generally with the Board you may do so by writing to: Corporate Secretary, CanArgo
Energy Corporation, P.O. Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles. The Corporate
Secretary of the Company reviews all such non-confidential correspondence and regularly forwards to
the Board a summary of all correspondence as well as copies of all correspondence that, in the
opinion of the Corporate Secretary, deals with the functions of the Board or its Committees or that
she otherwise determines requires their attention. Directors may at any time review a log of all
correspondence received by the Company that is addressed to members of the Board and request copies
of any such non-confidential correspondence.
Any shareholder may submit at any time a good faith complaint regarding any questionable
accounting, internal controls or auditing matters concerning the Company. All such complaints are
immediately brought to the attention of the Company and handled in accordance with procedures
established by the Audit Committee with respect to such matters. Confidential, anonymous reports
may be made by writing to the Chair of the Audit Committee, c/o Corporate Secretary, CanArgo Energy
Corporation, P.O. Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles, in an envelope marked
Confidential.
The Company has a policy of encouraging all directors to attend the annual stockholder
meetings.
The Company operates a whistleblowing policy for its employees allowing them to submit at
anytime a good faith complaint regarding any questionable accounting, internal controls or auditing
matters concerning the Company without fear of dismissal or retaliation of any kind. Any employee
with concerns regarding accounting or compliance matters may report their concerns on a
confidential or anonymous basis to the Companys Audit Committee Chairman by calling an independent
Hot Line established by the Company and administered by an independent third-party provider for
that purpose.
Director Compensation
The Company uses a combination of cash and stock-based incentive compensation to attract and
retain qualified candidates to serve on the Board. In setting director compensation, the Company
considers the significant amount of time that Directors expend in fulfilling their duties to the
Company as well as the skill-level required by the Company of members of the Board.
Cash Compensation Paid to Board Members
In 2006 the Company paid directors fees to the non-employee directors (in UK Pounds Sterling)
on an adjusted quarterly basis at a rate of $97,905 per year plus $1,958 for each meeting of the
Audit Committee that they attend (using an exchange rate of £1 = $1.9581 as at December 31, 2006
(as quoted on www.oanda.com). The Company also reimburses ordinary out-of-pocket expenses
for attending Board and Committee meetings. Directors who are also employees of the Company receive
no additional compensation for service as a director. The Company does not provide retirement
benefits to directors under any current program.
Director Summary Compensation Table
The following table shows the compensation paid to all persons who were non-employee
directors, including their respective affiliates, during the fiscal year ended December 31, 2006:
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
|
Feed Earned |
|
|
|
|
|
|
|
|
or Paid in |
|
Option |
|
All Other |
|
|
|
|
Cash |
|
Awards |
|
Compensation |
|
Total |
Name |
|
($) |
|
($) |
|
($) |
|
($) |
Nils Trulsvik |
|
|
105,737 |
|
|
|
|
|
|
|
|
|
|
|
105,737 |
|
Russ Hammond |
|
|
105,737 |
|
|
|
|
|
|
|
|
|
|
|
105,737 |
|
Michael Ayre |
|
|
105,737 |
|
|
|
|
|
|
|
|
|
|
|
105,737 |
|
Compensation Committee Interlocks and Insider Participation
During 2006, the Companys Compensation Committee consisted of Nils Trulsvik and Russ Hammond,
both currently non-employee directors. See the Section entitled BOARD MEETINGS AND
COMMITTEESCompensation Committee below.
Code of Business Conduct and Ethics
The Company has adopted a written Code of Business Conduct and Ethics, which sets forth the
Companys standards of expected business conduct and which is applicable to all employees,
including the Chief Executive Officer, the principal Financial Officer, principal accounting
officer or controller, and persons performing similar functions (each a Principal Officer), as
well as the directors of the Company. This Code of Business Conduct and Ethics is filed as Exhibit
14.1 to the Companys Annual Report on Form 10-K for the fiscal year ended 2004, filed with the
Securities and Exchange Commission. A copy of the Companys Code of Business Conduct and Ethics is
available on the Companys website (www.canargo.com). The Company intends to post
amendments to or waivers from its Code of Business Conduct and Ethics (to the extent applicable to
or affecting any Principal Officer or director) at this location on its website.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
David Robson, Liz Landles and Richard Battey (Chief Financial Officer up to July 31, 2006),
each provide (and with respect to Mr. Battey provided) all of their services to the Company through
Vazon Energy Limited, a corporation organized under the laws of the Bailiwick of Guernsey, of which
Dr. Robson is the sole owner and Chairman and Managing Director. See Executive Compensation
Employment Agreements and other Arrangements below for a description of Vazon Energy Limiteds
agreements with the Company.
Mr. Russ Hammond, a non-employee director of the Company, is also an Investment Advisor to
Provincial Securities Limited who became a minority shareholder in the Norio and North Kumisi
(Block XIc) Production Sharing Agreement through a farm-in agreement to the Norio MK72
well. On September 4, 2003 the Company concluded a deal to purchase Provincial Securities Limiteds
minority interest in CanArgo Norio Ltd by a share swap for shares in the Company. The purchase was
achieved by issuing 6 million restricted shares of Common Stock in the Company to the minority
interest holders in CanArgo Norio Ltd. Of the interests in CanArgo Norio Ltd, Provincial Securities
Limited owned 4% and received 2,234,719 shares of the Companys Common Stock.
Provincial Securities Limited also had an interest in Tethys Petroleum Limited (Tethys), a
Guernsey company, established to develop potential projects in Kazakhstan, in which the Company had
a minority interest until June 2005 when the Company acquired the remaining 55% interest in Tethys
which it did not own. Pursuant to this transaction, Provincial Securities Limited received
5,500,000 shares of the Companys Common Stock in exchange for its interest in Tethys. Mr. Hammond
did not receive any compensation in connection with these transactions and
9
disclaims any beneficial
ownership of Provincial Securities Limited or of any shares of the Companys common stock owned by
Provincial Securities Limited. Mr. Julian Hammond, Mr. Hammonds son, is employed as a
Vice-President of Tethys Petroleum Limited, currently a subsidiary of the Company, at an annual
salary of £96,000 Pounds Sterling (£) and has been awarded an aggregate of 190,000 options to
purchase shares of Common Stock under the Companys Stock Option Plans at a weighted average
exercise price of $0.82. Mr. Hammond disclaims ownership of his sons shares.
Transactions with affiliates or other related parties including management of affiliates are
to be undertaken on the same basis as third party arms-length transactions. Transactions with
affiliates and other related parties are reviewed and voted on by the Board with any potential
related parties absent from such discussions or votes.
The Company is in the process of reviewing its policy with respect to the review, approval or
ratification of related person transactions and to date a formal policy has not been adopted by the
Board. However, the Company follows the rules adopted by the AMEX in respect of related party
transactions and is annually required to review related person transactions. Further, on an annual
basis, each Director and executive officer is obligated to complete a Director and Officer
Questionnaire which requires disclosure of any transaction with the Company in which the Director
and executive officer, or any member of his or her immediate family, have a direct or indirect
material interest.
BOARD MEETINGS AND COMMITTEES
During fiscal 2006, the Companys Board of Directors met three times either at face to face
board meetings or by telephone conference call. The Board of Directors has standing Audit and
Compensation Committees. The Audit Committee met four times, and the Compensation Committee met two
times during fiscal 2006. Each member of the Board attended 75% or more of the Board meetings, and
each member of the Board who served on either the Audit or Compensation Committee attended at least
75% of the Committee meetings.
Audit Committee. The Audit Committee is currently comprised of Messrs. Ayre, Hammond and
Trulsvik. All of the members of the Audit Committee are independent within the meaning of SEC
regulations and the listing standards of the AMEX. Mr. Ayre, the Chairman of the Committee, is
qualified as an audit committee financial expert within the meaning of SEC regulations and the
Board has determined, in the exercise of its business judgment, that he has accounting and related
financial management expertise within the meaning of the listing standards of the AMEX. The Audit
Committee, among other responsibilities, recommends the hiring of our independent auditors, reviews
the functions of management and our independent auditors pertaining to our audits and the
preparation of our financial statements and performs such other related duties and functions as are
deemed appropriate by the Audit Committee.
Compensation Committee. The Compensation Committee currently consists of Messrs. Trulsvik
(Chairman) and Hammond. The Board has determined that all members of the Compensation Committee are
independent directors under the AMEX Listing Standards and the SEC Regulations. The Compensation
Committee administers the
Companys benefit plans, reviews and administers all compensation arrangements for executive
officers, and establishes and reviews general policies relating to the compensation and benefits of
our officers and employees.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Committee
The Compensation Committee has two members and met two times during fiscal year 2006. The
Compensation Committee is comprised solely of non-employee Directors, all of whom the Board has
determined are independent pursuant to AMEX rules. A charter for the compensation committee has
been compiled although this charter is currently subject to internal review and has not been
formally adopted by the Board in the last three fiscal years.
10
The Compensation Committee is responsible for setting and administering policies that govern
the Companys executive compensation programs, including stock compensation plans, although these
policies are in the process of internal review and have not been formally adopted by the Board. The
Compensation Committees responsibilities include, among other duties, the responsibility to:
|
|
|
establish the base salary, incentive compensation and any other compensation for the
Companys elected and appointed executive officers; |
|
|
|
|
exercise oversight with respect to and to supervise the compensation scheme for the
other employees of the company; |
|
|
|
|
administer and grant awards under any stock option plan adopted by the Board; |
|
|
|
|
administer and grant awards under the Corporations securities compensation plan
adopted August 16, 1995 by a predecessor by merger to this Corporation; |
|
|
|
|
recommend to this Board any additional compensation, retirement or other employee benefit plan; and |
|
|
|
|
perform other functions or duties deemed appropriate by the Board. |
Compensation decisions for all four executive officers of the Company, which includes the
Chairman of the Board and Chief Executive Officer, are made by the Compensation Committee.
The agenda for meetings of the Committee is determined by the Chairman of the
Compensation Committee with the assistance of the Chairman of the Board and Chief Executive
Officer. Compensation Committee meetings are regularly attended by the Chairman of the Board and
Chief Executive Officer. The Compensation Committees Chairman reports the Committees
recommendations on executive compensation to the Board. The Chairman of the Board and Chief
Executive Officer may be delegated authority to fulfill certain administrative duties regarding the
compensation programs. The Compensation Committee, under its proposed charter, has authority to
retain, approve fees for and terminate advisors, consultants and agents as it deems necessary to
assist in the fulfillment of its responsibilities although during fiscal year 2006 it did not seek
external assistance.
Role of Executive Officers in Compensation Decisions
The Compensation Committee makes all compensation decisions for all executive officers of the
Company and approves recommendations regarding both equity and non-equity compensation. The
Chairman of the Board and Chief Executive Officer regularly attends meetings of the Compensation
Committee. The Chairman of the Board and Chief Executive Officer annually reviews the performance
of each executive officer (other than the Chairman of Board and Chief Executive Officer whose
performance is reviewed by the Committee). The conclusions reached and recommendations based on
these reviews, including with respect to salary adjustments and annual award amounts are presented
to the Committee. The Committee can exercise its discretion in adopting or modifying any
recommendations or awards to executive officers.
Overview of Compensation Program
The Compensation Committee of the Board of Directors has responsibility for establishing,
implementing and continually monitoring adherence with the Companys compensation philosophy. The
Committee ensures that the total compensation paid to the executive officers of the Company is
fair, reasonable and competitive.
Throughout this Proxy Statement, the individuals who served as the Companys Chairman of the
Board and Chief Executive Officer, Chief Operating Officer and President, and Chief Financial
Officer during fiscal year 2006, as well as the other individual included in the Summary
Compensation Table on page 15, are referred to as the named officers.
Compensation Philosophy and Objectives
The philosophy of the Compensation Committee is to approve compensation programs intended to:
|
|
|
Attract and retain talented executive officers and key employees by providing total
compensation competitive with that of other executives employed by companies of similar
size, complexity and lines of business;
|
11
|
|
|
Motivate executives and key employees to achieve strong financial and operational
performance; |
|
|
|
|
Emphasize performance-based compensation, which balances rewards for short-term and
long-term results; |
|
|
|
|
Reward individual performance; |
|
|
|
|
Link the interests of executives with shareholders by providing a significant portion
of total pay in the form of stock incentives; and |
|
|
|
|
Encourage long-term commitment to the Company. |
Setting Executive Compensation
Based on the foregoing objectives, the Compensation Committee has structured the Companys
annual and long-term incentive based executive compensation to motivate executives to achieve
business goals set by the Company. In furtherance of this, the Compensation Committee reviews data
from annual reports and proxy statements issued by competitors to assess the Companys competitive
position with respect to the following three components of executive compensation:
|
|
|
base salary; |
|
|
|
|
short-term incentives; and |
|
|
|
|
long-term incentives. |
In making compensation decisions, the Committee reviews each element of total compensation
against a peer group of publicly traded oil and gas companies. This peer group, which is
periodically reviewed and updated by the Compensation Committee, consists of companies that the
Committee believes are of similar stature to CanArgo Energy Corporation in terms of
geographical operating environment and industry profile. The information derived from the peer
group provides an indication of what executives might command from companies operating in a
similar environment to that of CanArgo Energy Corporation. The companies comprising the peer group
are as follows:
|
o |
|
JKX Oil and Gas plc |
|
|
o |
|
Revus Energy AS |
|
|
o |
|
Lundin Petroleum |
|
|
The Compensation Committee does not target a specific percentile in the range of comparative
data for each individual executive or for each component of compensation. Instead, the
Compensation Committee structures a total compensation package in view of the comparative data and
such other factors specific to the executive, including level of responsibility, prior experience
and expectations of future performance. The Compensation Committee uses peer group data and also
information contained from a review of a wider selection of publicly available annual reports for
oil and gas companies to test for reasonableness and competitiveness of its compensation package
as a whole, but exercises subjective judgment in allocating compensation among executives and
within each individuals total compensation package. |
2006 Compensation Committee Activity
The Compensation Committee met two times during fiscal year 2006. The Chairman of the Board
and Chief Executive Officer attended both meetings to provide his recommendations in respect of
various elements of compensation to named officers reporting to him. During 2006, the Compensation
Committee reviewed and recommended, for each named officer, the level of compensation for each
individual executive compensation component. The Compensation Committee did not adopt any new
compensation plans or programs during the year nor did it introduce any new compensation policies
during the year. The Company is in the process of developing its
12
general compensation policies and to date no general policy has been adopted by the Board.
However, terms and conditions relating to each named officer are contained in their specific
service agreements. All named officer service agreements are publicly available through previous
SEC filings.
2006 Executive Compensation Components
For the fiscal year ended December 31, 2006, the principal components of compensation for
named officers were:
|
|
|
base salary; |
|
|
|
|
long-term incentive compensation; and |
|
|
|
|
other personal benefits. |
Base Salary
Base salaries for executives were determined based upon job responsibilities, level of
experience, individual performance, comparisons to the salaries of executives in similar positions
obtained from competitive data from the peer group and also information contained from a review of
a wider selection of publicly available annual reports for oil and gas companies. The goal for the
base pay component is to compensate executives at a level which approximates the median salaries
of individuals in comparable positions with comparable companies in the oil and gas industry. The
Compensation Committee approves all salary increases for executive officers.
Long-Term Incentive Compensation
The Compensation Committee has structured long-term incentive compensation to provide for an
appropriate balance between rewarding performance and encouraging employee retention. Long-term
incentives are granted primarily in the form of stock options. The purpose of stock options is to
align compensation directly with increases in shareholder value. The number of options granted is
determined by reviewing competitive data from the peer group and also information contained from a
review of a wider selection of publicly available annual reports for oil and gas companies to
determine the compensation made to other executives and management employees in comparable
positions with comparable companies in the oil and gas sector. In determining the number of
options to be awarded, the Compensation Committee also considers the grant recipients qualitative
and quantitative performance, the size of stock option awards in the past, and expectations of the
grant recipients future performance.
During 2006, stock options were awarded to two named officers from the Companys 2004 Long
Term Stock Incentive Plan (2004 Plan). See the additional information regarding such grants
appearing elsewhere in this Proxy Statement. No stock options were awarded to the Chairman of the
Board and Chief Executive Officer. Stock options are granted at a price determined by the
Committee, but not less than 100% of the fair market value of the stock on the date of the grant
of the option. The Committee determined the price of granted options during the year at a 5%
premium to the average price calculated over three days of the AMEXs closing price of the
Companys Common Stock prior to the date of grant. The Committee did not and has never granted
options with an exercise price that is less than the closing price of the Companys Common Stock
on the grant date. Options granted by the Committee during 2006 have a term of 7 years from date
of issue and vest 1/3 for each year over 3 years beginning immediately. Vesting and exercise
rights cease three months after termination of employment except in the case of death, retirement
or permanent disability.
Other Personal Benefits:
The Company provided named officers with the following other personal benefits that the
Company and the Committee believe are reasonable and consistent with its overall compensation
program to better enable the Company to attract and retain superior employees for key positions.
The Committee periodically reviews the levels of other personal benefits provided to named
officers.
13
For each of the named officers, including the Chairman of the Board and Chief Executive
Officer, the Company makes a monthly contribution of 9% of base salary to the named officers
individual personal pension plans, schemes or arrangements. Additionally, each named officer is
provided with life assurance with death coverage of four times their annual salary, permanent
health, critical illness; income protection and family healthcare insurance. The Company does not
maintain or sponsor any Company pension plans.
During 2006, one named officer received a one off payment in respect of a disturbance
allowance to reflect the unusual time located away from the executive officers home residence.
Tax and Accounting Implications
Compliance with Section 162(m) of the Internal Revenue Code
Under Section 162(m) of the United States Internal Revenue Code of 1986, as amended, the
Company may not deduct annual compensation in excess of $1 million paid to certain employees;
generally its Chief Executive Officer and its four other most highly compensated executive
officers, unless that compensation qualifies as performance-based compensation. While the
Compensation Committee intends to structure performance-related awards in a way that will preserve
the maximum deductibility of compensation awards, the Compensation Committee may from time to time
approve awards which would vest upon the passage of time or other compensation which would not
result in qualification of those awards as performance-based compensation. It is not anticipated
that compensation realized by any executive officer under the Companys plans and programs now in
effect will result in a material loss of tax deductions.
Accounting for Stock-Based Compensation
For the year ended December 31, 2006 the Company accounted for its stock option program in
accordance with the requirements of FASB 123 (Revised).
COMPENSATION COMMITTEE REPORT
The Report of the Compensation Committee does not constitute soliciting material and should
not be deemed filed or incorporated by reference into any other Company filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically
incorporates this Report by reference therein.
The Compensation Committee of the Board of Directors acts on behalf of the Board to establish
and oversee the Companys executive compensation program in a manner that serves the interests of
the Company and its stockholders.
The Compensation Committee of the Company has reviewed and discussed the Compensation
Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on
such review and discussions, the Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy Statement.
|
|
|
|
|
THE COMPENSATION COMMITTEE |
|
|
|
|
|
Nils Trulsvik, Chairman |
|
|
|
|
|
Russ Hammond |
14
SUMMARY COMPENSATION TABLE
The following table summarizes the total compensation paid or earned for services rendered to
the Company and its subsidiaries by each of the named executive officers for the fiscal year ended
December 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
|
(c) |
|
|
(d) |
|
|
(e) |
|
|
(f) |
|
|
|
|
|
|
|
|
|
|
|
Option |
|
|
All Other |
|
|
|
|
Name and Principal |
|
|
|
|
|
Salary |
|
|
Awards |
|
|
Compensation |
|
|
Total |
|
Position |
|
Year |
|
|
($) (1) |
|
|
($) (2) |
|
|
($) (3) |
|
|
($) |
|
|
David Robson |
|
|
2006 |
|
|
|
440,572 |
|
|
|
283,943 |
|
|
|
39,651 |
|
|
|
764,166 |
|
Chairman of the Board, Chief
Executive Officer and Director
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent McDonnell |
|
|
2006 |
|
|
|
352,457 |
|
|
|
339,310 |
|
|
|
73,782 |
|
|
|
765,550 |
|
President, Chief Operating Officer, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4 |
) |
|
|
|
|
Chief Commercial Officer and Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liz Landles |
|
|
2006 |
|
|
|
205,600 |
|
|
|
93,017 |
|
|
|
18,504 |
|
|
|
317,121 |
|
Corporate Secretary and
Executive Vice President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Wilkins (5) |
|
|
2006 |
|
|
|
97,905 |
|
|
|
135,345 |
|
|
|
9,947 |
|
|
|
243,198 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Battey (5) |
|
|
2006 |
|
|
|
137,067 |
|
|
|
167,916 |
|
|
|
13,990 |
|
|
|
318,973 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Salaries are set and payments are made to the Companys executive officers in Pounds
Sterling (£). Columns (c) and (d) reflect these amounts converted into U.S. dollars at an exchange
rate of £1= $1.9581 on December 31, 2006 as reported on www.oanda.com. |
|
(2) |
|
The amounts in column (d) reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended December 31, 2006, in accordance with FAS 123(Revised)
of awards pursuant to the Stock Option Program and thus include amounts from awards granted in and
prior to 2006. Assumptions used in the calculation of this amount for fiscal years ended December
31, 2004, 2005 and 2006 are included in footnote 23 to the Companys Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 15, 2007. |
|
(3) |
|
The amounts shown in column (e) reflect for each named executive officer: |
|
|
|
the Companys contribution of 9% of basic salary to their personal pension schemes; |
|
|
|
|
permanent health insurance (including family healthcare insurance) premiums; |
|
|
|
|
life assurance premiums; |
|
|
|
|
critical illness premiums; |
|
|
|
|
income protection premiums. |
15
|
|
|
(4) |
|
Vincent McDonnell, President, Director, Chief Operating Officer and Chief Commercial Officer,
received a one-time disturbance allowance of $39,162 for spending additional time based in Georgia
on the Companys operations at the request of the Board. |
|
(5) |
|
Effective August 1, 2006, Mr. Jeffrey Wilkins replaced Mr. Richard Battey as Chief Financial
Officer of the Company. The amounts shown in column (c) for Mr. Jeffrey Wilkins and Mr. Richard
Battey represent payments made to each of them by the Company in their respective capacities as
Chief Financial Officer of the Company. |
Grants of Plan Based Awards
Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
Number of |
|
Securities |
|
|
|
|
|
|
Securities |
|
Underlying |
|
|
|
|
|
|
Underlying |
|
Unexercised |
|
Option |
|
|
|
|
Unexercised |
|
Options (#) |
|
Exercise |
|
Option |
Name and |
|
Options (#) |
|
Unexercisable |
|
Price |
|
Expiration |
Principal Position |
|
Exercisable |
|
(1) |
|
($) |
|
Date |
|
David Robson |
|
|
200,000 |
|
|
|
100,000 |
|
|
|
1.00 |
|
|
|
7/26/2012 |
|
Chairman of the Board, Chief |
|
|
1,500,000 |
|
|
|
|
|
|
|
0.65 |
|
|
|
9/23/2011 |
|
Executive Officer and Director |
|
|
1,000,000 |
|
|
|
|
|
|
|
0.10 |
|
|
|
3/4/2008 |
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent McDonnell |
|
|
50,000 |
|
|
|
100,000 |
|
|
|
1.00 |
|
|
|
8/14/2013 |
|
President, Chief Operating Officer, |
|
|
200,000 |
|
|
|
100,000 |
|
|
|
1.42 |
|
|
|
11/30/2012 |
|
Chief Commercial Officer and Director |
|
|
140,000 |
|
|
|
70,000 |
|
|
|
1.00 |
|
|
|
7/26/2012 |
|
|
|
|
900,000 |
|
|
|
|
|
|
|
0.65 |
|
|
|
9/23/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liz Landles |
|
|
60,000 |
|
|
|
30,000 |
|
|
|
1.00 |
|
|
|
7/26/2012 |
|
Corporate Secretary and |
|
|
510,000 |
|
|
|
|
|
|
|
0.65 |
|
|
|
9/23/2011 |
|
Executive Vice President |
|
|
100,000 |
|
|
|
|
|
|
|
0.10 |
|
|
|
3/4/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Wilkins |
|
|
50,000 |
|
|
|
100,000 |
|
|
|
1.00 |
|
|
|
8/14/2013 |
|
Chief Financial Officer |
|
|
40,000 |
|
|
|
20,000 |
|
|
|
0.88 |
|
|
|
5/5/2012 |
|
|
|
|
84,000 |
|
|
|
42,000 |
|
|
|
1.20 |
|
|
|
1/9/2012 |
|
|
|
|
30,000 |
|
|
|
|
|
|
|
0.95 |
|
|
|
11/23/2011 |
|
|
|
|
60,000 |
|
|
|
|
|
|
|
0.65 |
|
|
|
9/23/2011 |
|
|
|
|
35,000 |
|
|
|
|
|
|
|
0.60 |
|
|
|
8/1/2009 |
|
|
|
|
55,000 |
|
|
|
|
|
|
|
0.60 |
|
|
|
8/1/2009 |
|
|
|
|
24,000 |
|
|
|
|
|
|
|
0.69 |
|
|
|
3/4/2008 |
|
|
|
|
20,000 |
|
|
|
|
|
|
|
0.14 |
|
|
|
9/18/2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Battey |
|
|
45,000 |
|
|
|
|
|
|
|
1.00 |
|
|
|
7/26/2012 |
|
Chief Financial Officer |
|
|
310,000 |
|
|
|
|
|
|
|
0.88 |
|
|
|
5/5/2012 |
|
16
|
|
|
(1) |
|
All options listed above have a term of 7 years from date of issue and vest 1/3 for each
year, with the first 1/3 vesting immediately. |
Option Exercises
Stock options exercised by the Companys named executive officers during the fiscal year ended
December 31, 2006 were as follows:
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
|
Number of |
|
|
|
|
Shares Acquired |
|
Value Realised |
Name and |
|
on Exercise |
|
on Exercise |
Principal Position |
|
(#) |
|
($) |
|
David Robson |
|
|
|
|
|
|
|
|
Chairman of the Board, Chief
Executive Officer and Director
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent McDonnell |
|
|
|
|
|
|
|
|
President, Chief Operating Officer,
Chief Commercial Officer and
Director |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liz Landles |
|
|
|
|
|
|
|
|
Corporate Secretary and
Executive Vice President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Wilkins |
|
|
|
|
|
|
|
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Battey |
|
|
200,000 |
|
|
|
60,848 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
Pension Benefits
The Company makes a contribution of 9% of the executive officers basic salary to their
individual personal pension schemes. The Company does not maintain or sponsor a Company pension
plan for directors, executives, officers or employees.
Potential Payments Upon Termination or Change of Control
The tables below reflect the amount of compensation to each of the named executive officers of
the Company in the event of termination of such executives employment. The amount of compensation
payable to each named executive officer upon voluntary termination, retirement, involuntary
not-for-cause termination, for cause
17
termination, termination following a change of control and in
the event of disability or death of the executive is shown below. The amounts shown assume that
such termination was effective as of December 31, 2006, and thus includes amounts earned through
such time and are estimates of the amounts which would be paid out to the executives upon their
termination. The actual amounts to be paid out can only be determined at the time of executives
separation from the Company.
Payments Made Upon Termination
Regardless of the manner in which a named executive officers employment terminates, he may be
entitled to receive amounts earned during his term of employment under the terms of the Companys
stock based compensation plans.
Payments Made Upon Retirement
In the event of the retirement of a named executive officer, he or she may be entitled to
receive amounts earned during his term of employment under the terms of the Companys stock based
compensation plans
Payments Made Upon Death or Disability
In the event of the death or disability of a named executive officer, in addition to the
benefits listed under the headings Payments Made Upon Termination and Payments Made Upon
Retirement above, the named executive officer will receive benefits under the Companys life
insurance plan, critical illness cover or income protection plan, as appropriate.
Payments Made Upon Change of Control
As our directors and executive officers have all received awards under our 2004 Long-Term
Incentive Plan (the 2004 Plan), all options issued under the 2004 Plan contain provisions whereby
the award recipient may put back those option shares for cash, equal to the intrinsic value of the
option shares on the date of exercise, to the Company in the event of a change of control, as
defined in the 2004 Plan. The following table presents the 2004 Plan options held by our directors
and executive officers and their intrinsic value as of December 31, 2006, which amounts are
reflected in Column (f) of the succeeding Table for the named officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intrinsic Value of 2004 Plan |
|
|
2004 Plan Options Exercisable as |
|
Options Exercisable as of |
|
|
of December 31, 2006 |
|
December 31, 2006 |
Dr. David Robson |
|
|
1,700,000 |
|
|
$ |
1,579,000 |
|
Vincent McDonnell |
|
|
1,290,000 |
|
|
$ |
1,030,800 |
|
Liz Landles |
|
|
570,000 |
|
|
$ |
531,900 |
|
Richard Battey |
|
|
355,000 |
|
|
$ |
257,300 |
|
Jeffrey Wilkins |
|
|
264,000 |
|
|
$ |
174,180 |
|
Michael Ayre |
|
|
305,000 |
|
|
$ |
278,350 |
|
Nils Trulsvik |
|
|
305,000 |
|
|
$ |
278,350 |
|
Russ Hammond |
|
|
305,000 |
|
|
$ |
278,350 |
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) |
|
(h) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
|
|
|
For Good |
|
|
|
|
|
|
|
|
|
|
|
|
Not For |
|
|
|
|
|
Reason |
|
|
|
|
|
|
|
|
Voluntary |
|
Cause |
|
For Cause |
|
Termination |
|
|
|
|
|
|
Executive Benefits and |
|
Termination |
|
Termination |
|
Termination |
|
(Change in |
|
|
|
|
Name and |
|
Payments Upon |
|
on 12/31/2006 |
|
on 12/31/2006 |
|
on 12/31/2006 |
|
Control) on |
|
Disability on |
|
Death on |
Principal Position |
|
Separation |
|
($) |
|
($) |
|
($) |
|
12/31/2006 ($) |
|
12/31/2006 ($) |
|
12/31/2006 ($) |
|
David Robson |
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman of the Board,
Chief |
|
Notice Period (1) |
|
|
240,112 |
|
|
|
240,112 |
|
|
|
240,112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer and
Director |
|
Stock Options |
|
|
3,099,000 |
|
|
|
3,099,000 |
|
|
|
3,099,000 |
|
|
|
1,520,000 |
|
|
|
3,099,000 |
|
|
|
3,099,000 |
|
(Principal Executive
Officer) |
|
Cash Election |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,579,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits & Perquisites |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Protection (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,360,548 |
|
|
|
|
|
|
|
Critical Illness (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,762,287 |
|
|
|
|
|
|
|
Life Assurance (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,762,287 |
|
|
|
Cash Severance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
480,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent McDonnell |
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, Chief
Operating Officer, |
|
Notice Period (1) |
|
|
192,089 |
|
|
|
192,089 |
|
|
|
192,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Commercial
Officer and |
|
Stock Options |
|
|
1,030,800 |
|
|
|
1,030,800 |
|
|
|
1,030,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Director |
|
Cash Election |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,030,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits & Perquisites |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Protection (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,511,251 |
|
|
|
|
|
|
|
Critical Illness (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
939,886 |
|
|
|
|
|
|
|
Life Assurance (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
939,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liz Landles |
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Secretary and |
|
Notice Period (1) |
|
|
56,026 |
|
|
|
56,026 |
|
|
|
56,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
|
Stock Options |
|
|
683,900 |
|
|
|
683,900 |
|
|
|
683,900 |
|
|
|
152,000 |
|
|
|
|
|
|
|
|
|
|
|
Cash Election |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
531,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits & Perquisites |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Protection (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
981,432 |
|
|
|
|
|
|
|
Critical Illness (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
822,401 |
|
|
|
|
|
|
|
Life Assurance (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
822,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Wilkins |
|
Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer |
|
Notice Period (1) |
|
|
128,060 |
|
|
|
128,060 |
|
|
|
128,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
|
317,972 |
|
|
|
317,972 |
|
|
|
317,972 |
|
|
|
143,792 |
|
|
|
|
|
|
|
|
|
|
|
Cash Election |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
174,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits & Perquisites |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Protection (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Critical Illness (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
783,239 |
|
|
|
|
|
|
|
Life Assurance (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
783,239 |
|
(1) |
|
Notice periods are as follows 6 months for Dr. David Robson, Mr. Vincent McDonnell and
Mr. Jeffrey Wilkins and 3 months for Mrs. Liz Landles. |
(2) |
|
Reflects the estimated lump-sum present value of all future amounts payable to the
executive officer under the Companys Income Protection Plan until the executive officer
reaches the age of 60. |
(3) |
|
Reflects the estimated amount payable to the executive officer under the Companys
Critical Illness Plan. |
(4) |
|
Reflects the estimated amount payable to the executive officers beneficiaries under
the Companys Life Assurance Plan. |
19
Employment Agreements and other Arrangements
Management Services Agreement between CanArgo Energy Corporation and Vazon Energy Limited in
relation to the provision of services by Dr. David Robson
Dr. David Robson serves as Chairman and Chief Executive Officer of the Company pursuant to an
agreement with Vazon Energy Limited (Vazon) of which Dr. Robson is the sole owner, Chairman and
Managing Director. Dr. Robson through Vazon has signed a comprehensive Management Services
Agreement with a rolling six-month termination notice period and a two-year non-competition clause
effective from the date of termination of the agreement.
Under the terms of the Management Services Agreement, Dr. Robson received during 2006 a base
salary of £225,000 which was payable on a monthly basis. Dr. Robson is further entitled to a
discretionary cash bonus payable at the discretion of the Compensation Committee (or failing that
the Companys Board). The Management Services Agreement does not contain any provisions in relation
to stock options.
The Management Services Agreement became effective on June 30, 2000 and may be terminated by
either party upon 6 months written notice. Other grounds for termination are the liquidation or
dissolution of the Company, mutual agreement of the parties to terminate and the occurrence of an
Event of Default as defined in the Management Services Agreement. In the event of a change of
control of the Company, the Company must give Dr. Robson not less than 12 months written notice to
terminate the Management Services Agreement. The Management Services Agreement contains a covenant,
under which Dr. Robson will not, for a period of two years
following the termination of the agreement, directly or indirectly induce any consultant of the
Company to terminate their employment, hire by direct approach any consultant of the Company, or in
any way interfere with the relationship of the Company and any consultant, agent or representative.
Furthermore, Dr. Robson is prohibited from directly or indirectly soliciting, diverting or
attempting to divert business or related business from the Company for a period of two years from
the date of termination of the Management Services Agreement.
Under the terms of the agreement, Dr. Robson has a duty not to disclose any confidential
information of the Company and he must use such information solely for the benefit of the Company.
Dr. Robson has a contractual obligation under this agreement to disclose and deliver to the Company
for its exclusive use and benefit any inventions as a direct result of work performed for the
Company.
In terms of benefits, the Company makes a monthly contribution of 9% of base salary for Dr.
Robsons pension provision. Dr. Robson is also provided with life assurance with death coverage of
up to four times his base salary (excluding any bonus), permanent health insurance and family
healthcare insurance.
The Management Services Agreement does not contain any gross-up provisions for excess
parachute payments, severance provisions or provisions requiring Dr. Robsons nomination to the
Board of the Company.
Service Agreement between CanArgo Energy Corporation and Vincent McDonnell
Vincent McDonnell serves as Chief Operating Officer of the Company pursuant to a Service
Agreement dated December 1, 2000. The Service Agreement became effective on December 1, 2000 and
may be terminated by either party upon 6 months written notice. The Company is entitled to make a
payment to Mr. McDonnell in lieu of notice. The Service Agreement contains garden leave
provisions, which give the Company the contractual option to demand that an employee does not
attend the workplace during their notice period although they continue to be paid by the company.
Under the terms of the Service Agreement, Mr. McDonnell received during 2006 a base salary of
£180,000 which was payable on a monthly basis. The Service Agreement does not contain any
provisions in relation to bonus payments and entitled Mr. McDonnell to a one-time grant of 100,000
share options when it when it was originally signed in 2000.
The Service Agreement contains a restrictive covenant, under which Mr. McDonnell will not
during his employment or for a period of 12 months following the termination of his employment
(without the prior written consent of the Company) directly or indirectly compete with the Company
in the Restricted Area (as defined in the
20
Service Agreement), solicit or induce any critical
employee of the Company to terminate their employment, employ or otherwise engage any critical
employee in any competing business with the Company or solicit or induce any government body or
agency or any third party in the Restricted Area to cease to deal with the Company.
Under the terms of the Service Agreement, Mr. McDonnell has a duty not to disclose any
confidential information of the Company and must use such information solely for the benefit of the
Company. Mr. McDonnell has a contractual obligation under his Service Agreement to disclose and
deliver to the Company for its exclusive use and benefit any inventions as a direct result of work
performed for the Company.
In terms of benefits, the Company will contribute 9% of Mr. McDonnells basic salary for his
personal pension provision. Mr. McDonnell is also provided with life assurance with death coverage
of four times his annual salary, permanent health insurance and family health care insurance. The
Service Agreement does not contain any gross-up provisions for excess parachute payments,
severance payments or provisions requiring Mr. McDonnells nomination to the Board of the Company.
Service Agreement between CanArgo Energy Corporation and Jeffrey Wilkins
Jeffrey Wilkins serves as Chief Financial Officer of the Company pursuant to a Service
Agreement dated August 22, 2006. The Service Agreement became effective on August 22, 2006 and may
be terminated by either party upon 6 months written notice. The Company is entitled to make a
payment to Mr. Wilkins in lieu of notice. The Service Agreement contains garden leave provisions,
which give the Company the contractual option to
demand that an employee does not attend the workplace during their notice period although they
continue to be paid by the company.
Under the terms of the Service Agreement, Mr. Wilkins received during 2006 a base salary of
£120,000 which was payable on a monthly basis commencing on August 1, 2006. The Service Agreement
does not contain any provisions in relation to bonus payments.
The Service Agreement contains a restrictive covenant, under which Mr. Wilkins will not during
his employment or for a period of 12 months following the termination of his employment (without
the prior written consent of the Company) directly or indirectly compete with the Company in the
Restricted Area (as defined in the Service Agreement), solicit or induce any critical employee of
the Company to terminate their employment, employ or otherwise engage any critical employee in any
competing business with the Company or solicit or induce any government body or agency or any third
party in the Restricted Area to cease to deal with the Company.
Under the terms of the Service Agreement, Mr. Wilkins has a duty not to disclose any
confidential information of the Company and must use such information solely for the benefit of the
Company. Mr. Wilkins has a contractual obligation under his Service Agreement to disclose and
deliver to the Company for its exclusive use and benefit any inventions as a direct result of work
performed for the Company.
In terms of benefits, the Company will contribute 9% of Mr. Wilkinss basic salary for his
personal pension provision. Mr. Wilkins is also provided with life assurance with death coverage of
four times his annual salary, permanent health insurance and family health care insurance.
The Service Agreement does not contain any gross-up provisions for excess parachute
payments, severance payments or provisions requiring Mr. Wilkinss nomination to the Board of the
Company.
Management Services Agreement between CanArgo Energy Corporation and Vazon Energy Limited in
relation to the provision of services by Liz Landles.
Liz Landles provides all of her services to the Company as Corporate Secretary through Vazon,
of which she is an employee pursuant to a Service Agreement dated February 18, 2004 between Mrs.
Landles and Vazon. Vazon provides management services to the Company in accordance with an
evergreen Management Services Agreement dated February 18, 2004. Mrs. Landles Service Agreement
became effective from January 1, 2004 is terminable upon three months prior notice unless sooner
terminated for cause. Pursuant to the Service Agreement,
21
Mrs. Landles receives a base salary of
£105,000 per year and the Company will make a monthly contribution of 9% of base salary for Mrs.
Landles personal pension provision. The Service Agreement does not contain any contractual bonus
provisions although Mrs. Landles will be eligible for bonuses at the discretion of the Compensation
Committee. Mrs. Landles will be provided with life assurance with death coverage of four times her
annual salary, permanent health insurance and family healthcare cover.
The Agreement contains customary confidentiality provisions. The Agreement does not contain
any gross-up provisions for excess parachute payments, severance provisions or provisions
requiring Mrs. Landles nomination to the Board of the Company.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL HOLDERS
The following table sets forth information regarding ownership of the Common Stock as of the
most recent practicable date or earlier date for information based on filings with the Securities
and Exchange Commission by (a) each person known to the Company to beneficially own more than 5% of
the outstanding shares of the Common Stock of the Company, (b) each director of the Company, (c)
the Companys Chief Executive Officer and each other executive officer named in the compensation
tables appearing later in this Proxy Statement and (d) all directors and executive officers as a
group. The information in this table is based solely on statements in filings with the Securities
and Exchange Commission or other reliable information. Unless otherwise indicated, each of these
shareholders has sole voting and investment power with respect to the shares beneficially owned.
22
Security Ownership of Certain Beneficial Owners
|
|
|
|
|
|
|
|
|
|
|
Amount and |
|
|
|
|
Nature of |
|
Percentage |
|
|
Beneficial |
|
of |
Security Ownership of Management |
|
Ownership |
|
Class (15) |
Name of Beneficial Owner |
|
|
|
|
|
|
|
|
Non- Employee Directors
Nils Trulsvik |
|
|
422,450 |
(1) |
|
|
* |
|
Russ Hammond |
|
|
430,000 |
(2) |
|
|
* |
|
Michael Ayre |
|
|
670,000 |
(3) |
|
|
* |
|
|
|
|
|
|
|
|
|
|
Named Executive Officers
|
|
|
|
|
|
|
|
|
|
David Robson |
|
|
3,257,760 |
(4) |
|
|
1.37 |
% |
Vincent McDonnell |
|
|
1,770,000 |
(5) |
|
|
* |
|
Liz Landles |
|
|
700,000 |
(6) |
|
|
* |
|
Jeffrey Wilkins |
|
|
600,000 |
(7) |
|
|
* |
|
|
|
|
|
|
|
|
|
|
All Directors and Executive Officers as a Group (7 persons) |
|
|
7,840,210 |
(8) |
|
|
3.29 |
% |
|
|
|
|
|
|
|
|
|
Security Ownership of More Than 5% Shareholders |
|
|
|
|
|
|
|
|
Persistency
P.O. Box 309
Ugland House
South Church Street
George Town
Cayman Islands
British West Indies |
|
|
27,756,600 |
(9) |
|
|
11.64 |
% |
|
|
|
|
|
|
|
|
|
Persistency Capital, LLC
850 7th Avenue
Suite 701
New York
New York 10019
U.S.A |
|
|
28,256,600 |
(10) |
|
|
11.85 |
% |
|
|
|
|
|
|
|
|
|
Andrew Morris
c/o Persistency Capital, LLC
850 7th Avenue
Suite 701
New York
New York 10019
U.S.A |
|
|
28,289,100 |
(11) |
|
|
11.86 |
% |
|
|
|
|
|
|
|
|
|
BlackRock, Inc. |
|
|
21,527,700 |
(12) |
|
|
9.03 |
% |
40 East 52nd Street
New York
NY 10022 |
|
|
|
|
|
|
|
|
Ingalls & Snyder LLC
61 Broadway
New York, NY 10006 |
|
|
24,213,144 |
(13) |
|
|
10.15 |
% |
|
|
|
|
|
|
|
|
|
Ingalls & Snyder Value Partners, L.P.
c/o Ingalls & Snyder LLC
61 Broadway
New York, NY 10006 |
|
|
15,555,556 |
(14) |
|
|
6.52 |
% |
23
|
|
|
* |
|
Less 1% |
|
(1) |
|
Includes 305,000 shares underlying presently exercisable options. |
|
(2) |
|
Includes 305,000 shares underlying presently exercisable options. Does not include 290,000 shares subject to
unexercised stock options awarded to Mr. Julian Hammond, an employee of the Company and Mr. Russ Hammonds son.
Mr. Hammond disclaims ownership of his sons shares. |
|
(3) |
|
Includes 555,000 shares underlying presently exercisable options. |
|
(4) |
|
Includes 2,700,000 shares underlying presently exercisable options. |
|
(5) |
|
Includes 1,290,000 shares underlying presently exercisable options. |
|
(6) |
|
Includes 670,000 shares underlying presently exercisable options. |
|
(7) |
|
Includes 398,000 shares underlying presently exercisable options. |
|
(8) |
|
Includes 6,223,000 shares underlying presently exercisable options held by directors and executive officers as a
group. |
|
(9) |
|
Security ownership information for the beneficial owner is taken from the Forms 13G dated February 14, 2007. |
|
(10) |
|
Security ownership information for the beneficial owner is taken from the Forms 13G dated February 14, 2007. |
|
(11) |
|
Security ownership information for the beneficial owner is taken from the Forms 13G dated February 14, 2007. |
|
(12) |
|
Security ownership information for the beneficial owner is taken from the Forms 13G dated February 14, 2007. |
|
(13) |
|
Security ownership information for the beneficial owner is taken from the Form 13G/A filed on February 13, 2006.
Figure includes 15,555,556 shares held by Ingalls & Snyder Value Partners, LP, an investment partnership managed
under an investment advisory contract by Ingalls & Snyder LLC. |
|
(14) |
|
Security ownership information for the beneficial owner is taken from the Form 13G/A file in February 13, 2007. |
|
(15) |
|
The Class represents common stock outstanding as at April 13, 2007. This excludes any convertible shares and
warrants attached to outstanding convertible loans at this date although these shares are included in Forms 13G
filed by convertible note-holders. |
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute soliciting material and should not
be deemed filed or incorporated by reference into any other Company filing under the Securities Act
of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically
incorporates this Report by reference therein.
The Audit Committee of the Board of Directors is responsible for the review and oversight of the
Companys performance with respect to its financial responsibilities and the integrity of the
Companys accounting and reporting practices. The Audit Committee, in its capacity as a Committee
of the Board of Directors, is also responsible for the appointment, compensation, retention and
oversight of the work of any registered public accounting firm engaged for the purpose of preparing
or issuing an audit report or performing other audit, review or attest services for the Company
(including resolution of disagreements between management and the auditor regarding financial
reporting), and each such registered public accounting firm must report directly to the Audit
Committee. The Board of Directors has determined that the members of the Audit Committee are
independent in accordance with American Stock Exchange listing standards and the SEC requirements
and are financially literate, as required by such requirements; as such qualification is
interpreted by the Board of Directors in its business judgment. The Audit Committee is composed of
three non-employee directors and operates and is governed under a written charter.
The Company, not the Audit Committee or the independent auditors, is responsible for the
preparation of its financial statements and its operating results and for the appropriate
safekeeping of the Companys assets. The independent auditors responsibility is to attest to the
fair presentation of the financial statements. The role of the Audit Committee is to be satisfied
that both the Company and the independent auditors discharge their respective responsibilities
effectively. However, no member of the Audit Committee is professionally engaged in the practice of
accounting or auditing of the Companys accounts, including with respect to auditor independence.
The Audit Committee relies, without independent verification, on the information provided to it and
on the representations made by management and the independent auditors.
24
The Audit Committee held four meetings during the fiscal year 2006 which occurred prior to the
respective Form 10-Q Quarterly Reports and Form 10-K Annual Reports being filed with the SEC.
The meetings were designed, among other things, to facilitate and encourage communication among the
Audit Committee, the Company, and the Companys independent auditors, L J Soldinger Associates LLC.
The Audit Committee discussed with L J Soldinger Associates LLC the overall scope and plan for
their audit, and met with L J Soldinger Associates LLC, with management present. The Audit
Committee has reviewed and discussed the audited financial statements with management.
The Audit Committee has discussed with the independent auditors matters required to be discussed
with audit committees under standards of the Public Company Accounting Oversight Board (United
States), including, among other things, matters related to the conduct of the audit of the
Companys consolidated financial statements, the Companys internal accounting controls and the
matters required to be discussed by Auditing Standards AU380A Communication with Audit
Committees.
The Companys independent auditors have also provided to the Audit Committee the written
disclosures and the letter required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committee, and discussed their independence from the Company. The Audit
Committee has reviewed, among other things, the amount of fees paid to L J Soldinger Associates LLC
for audit and non-audit services.
In accordance with the rules of the SEC, the following chart outlines fees pertaining to the years
ended December 31, 2006 and December 31, 2005 by L J Soldinger Associates LLC:
|
|
|
|
|
|
|
|
|
SERVICES PERFORMED |
|
2006 |
|
|
2005 |
|
Audit Fees(1) |
|
$ |
977,000 |
|
|
$ |
1,107,000 |
|
|
Audit-Related Fees(2) |
|
$ |
34,000 |
|
|
$ |
68,000 |
|
|
Tax Fees(3) |
|
$ |
40,000 |
|
|
$ |
36,000 |
|
|
All Other Fees(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees |
|
$ |
1,051,000 |
|
|
$ |
1,211,000 |
|
|
|
|
|
|
|
|
|
|
|
NOTES TO PRECEEDING TABLE |
|
(1) |
|
Audit fees represent fees billed for professional services provided in connection with
the audit of our annual financial statements, reviews of our quarterly financial statements
and audit services provided in connection with statutory and regulatory filings for those
years. |
|
(2) |
|
Audit-related fees represent fees billed primarily for assurance and related services
reasonably related to the performance of the audit or reviews of our financial statements or
registration statements. |
|
(3) |
|
Tax fees principally represent fees billed for tax preparation, tax advice and tax
planning services. |
|
(4) |
|
All other fees principally would include fees billed for products and services provided
by the accountant, other than the services reported under the three captions above. |
The Audit Committee has concluded that the provision of the non-audit services listed above is
compatible with maintaining the independence of L J Soldinger Associates LLC.
Based on its review and these meetings, discussions and reports, and subject to the limitations on
its role and responsibilities referred to above and in the Audit Committee Charter, the Audit
Committee recommended to the
25
Board of Directors and the Board approved, that the Companys audited consolidated financial
statements for the fiscal year ended December 31, 2006 be included in the Companys Annual Report
on Form 10-K, for filing with the SEC.
THE AUDIT COMMITTEE
Michael Ayre, Chairman
Russ Hammond
Nils Trulsvik
The Audit Committee Report and the Compensation Committee Report on Executive Compensation
shall not be deemed to be soliciting material or to be filed with the Securities and Exchange
Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 and shall
not be deemed incorporated by reference into any filing made by the Company under the Securities
Act of 1933 or the Securities Exchange Act of 1934, notwithstanding any general statement contained
in any such filing incorporating this proxy statement by reference, except to the extent the
Company incorporates the Reports by specific reference.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934 and SEC Rules, the Companys
directors, executive officers and beneficial owners of more than 10% of any class of equity
security are required to file periodic reports of their initial ownership, and changes in that
ownership, with the Securities and Exchange Commission. Reporting persons are required by SEC
Regulations to furnish the Company with copies of all forms they file pursuant to Section 16(a).
Based solely on its review of copies of such reports received by the Company and written
representations of such reporting persons, the Company believes that during fiscal year 2006, all
of our directors and executive officers complied with such SEC filing requirements.
OTHER MATTERS
As of the time of preparation of this Proxy Statement, neither the Board of Directors nor
management intends to bring before the meeting any business other than the matters referred to in
the Notice of Annual Meeting and this Proxy Statement. If any other business should properly come
before the meeting, or any adjournment or postponement thereof, the persons named in the proxy will
vote on such matters according to their best judgment.
STOCKHOLDERS SHARING THE SAME ADDRESS
Householding of Proxy Materials. The Securities and Exchange Commission has adopted
rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for
proxy statements with respect to two or more stockholders sharing the same address by delivering a
single proxy statement addressed to those stockholders. This process, which is commonly referred to
as householding, potentially provides extra convenience for stockholders and cost savings for
companies. The Company and some brokers household proxy materials, delivering a single proxy
statement to multiple stockholders sharing an address unless contrary instructions have been
received from the affected stockholders. Once you have received notice from your broker or us that
they or we will be householding materials to your address, householding will continue until you are
notified otherwise or until you revoke your consent. If, at any time, you no longer wish to
participate in householding and would prefer to receive a separate proxy statement, or if you are
receiving multiple copies of the proxy statement and wish to receive only one, please notify your
broker if your shares are held in a brokerage account or us if you hold registered shares. You can
notify us by sending a written request to the Corporate Secretary, CanArgo Energy Corporation, P.O
Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles or by facsimile to +44 1481 729 982.
FORM 10-K ANNUAL REPORT
A copy of the Companys Annual Report on Form 10-K as filed with the Securities and Exchange
Commission (excluding exhibits) is being mailed together with this Proxy Statement. A copy of the
Exhibits may be requested by any person in writing by addressing the request to the Corporate
Secretary, CanArgo
26
Energy Corporation, P.O Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles and stating
that such person is a beneficial owner of Common Stock of the Company. A charge equal to the
reproduction cost of the exhibit will be made. We are subject to the information and reporting
requirements of the Securities Exchange Act of 1934 under which we file periodic reports, proxy
statements and other information with the SEC. Copies of the reports, proxy statements and other
information may be examined without charge at the Public Reference Branch of the SEC, 100 F Street,
NE., Room 1580, Washington, D.C. 20549, or on the Internet at
www.sec.gov. A copy of the Annual
Report on Form 10-K is also accessible by following the links to Investor Relations/Financial
Statements on the Companys website at
http://www.canargo.com.
The Companys Code of Business Conduct and Ethics, the Audit Committees Charter and the
Resolutions adopted by the Board of Directors regarding the nomination process are also all
accessible by following the links to Corporate Governance on the Companys website at
http://www.canargo.com. The Company will furnish copies of such documents without charge to any
person requesting such documents in writing addressed to the Corporate Secretary, CanArgo Energy
Corporation, P.O Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles and stating that such
person is a beneficial owner of Common Stock of the Company.
27
STOCKHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
Any stockholder intending to submit to the Company a proposal for inclusion in the Companys
Proxy Statement and proxy for the 2008 annual meeting must submit such proposal so that it is
received by the Company no later than October 31, 2007, and such proposal must otherwise comply
with Rule 14a-8 under the Exchange Act. Proposals should be sent to the Corporate Secretary,
CanArgo Energy Corporation, P.O. Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles. If a
stockholder intends to submit a proposal at next years Annual Meeting, which proposal is not
intended to be included in the Companys Proxy Statement and form of proxy relating to that
meeting, the stockholder must give appropriate notice to the Company not later than December 31,
2007. As to all such matters which the Company does not have notice on or prior to December 31,
2007, discretionary authority shall be granted to the persons designated in the Companys proxy
related to 2008 Annual Meeting to vote on such proposal.
By Order of the Board of Directors
Liz Landles
Corporate Secretary
St. Peter Port
Guernsey
British Isles
●, 2007
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL
PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES OR AUTHORISE THE INDIVIDUALS NAMED IN YOUR PROXY CARD TO VOTE YOUR
SHARES BY CALLING THE TELEPHONE NUMBER OR USING THE INTERNET BY THE DEADLNE AS DESCRIBED IN THE
INSTRUCTIONS INCLUDED WITH YOUR PROXY CARD. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE
MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN IF YOU HAVE
PREVIOUSLY SENT IN YOUR PROXY CARD.
28
CANARGO ENERGY CORPORATION
TBD
BOSTON, MA 02109
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting date. Have your proxy
card in hand when you access the web site and follow the instructions to obtain your
records and to create an electronic
voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by CanArgo Energy
Corporation in mailing proxy materials, you can consent to
receiving all future proxy statements, proxy cards and annual reports electronically via
e-mail or the Internet. To sign up for
electronic delivery, please follow the instructions above to vote
using the Internet and, when prompted, indicate that you agree to receive or access shareholder
communications electronically
in future years.
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions
up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy
card in hand when you call
and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to CanArgo Energy
Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
|
|
|
|
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
|
|
CANAG1
|
|
KEEP THIS PORTION FOR YOUR RECORDS |
|
|
|
|
|
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CANARGO ENERGY CORPORATION
(1) |
|
ELECTION OF DIRECTORS |
|
1. |
|
Michael Ayre |
|
2. |
|
Russ Hammond |
|
3. |
|
Vincent McDonnell |
|
4. |
|
David Robson |
|
5. |
|
Nils N. Trulsvik |
|
|
|
|
|
For |
|
Withhold |
|
For All |
All |
|
All |
|
Except |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
O
|
|
O
|
|
O |
|
|
|
|
|
To withhold authority to vote for any individual nominee, mark For All Except and write the
nominees name on the line below.
|
|
|
|
|
|
|
|
(2) |
TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED
COMMON SHARE CAPITAL FROM 375,000,000 SHARES OF COMMON STOCK TO 500,000,000 SHARES OF COMMON
STOCK
|
|
O
|
|
O
|
|
O |
IMPORTANT: please sign exactly as your name or names appear(s) on this proxy, and when signing as an attorney, executor, administrator,
trustee or guardian, give your full title as such. If the signatory is a corporation,
sign the full corporate name by duly authorized officer, or if a partnership,
sign in partnership name by authorized person.
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL
PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL ENSURE THE PRESENCE OF A QUORUM
AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH TO DO SO EVEN IF YOU
HAVE PREVIOUSLY SENT IN YOUR PROXY CARD.
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Yes |
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No |
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Please indicate if you plan to attend this meeting
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O
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O |
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Signature [PLEASE SIGN WITHIN BOX] |
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Date |
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Signature (Joint Owners) |
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Date |
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CanArgo Energy Corporation, P.O Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles and
stating that such person is a beneficial owner of Common Stock of the Company.
STOCKHOLDER PROPOSALS FOR 2008 ANNUAL MEETING
Any stockholder intending to submit to the Company a proposal for inclusion in the Companys
Proxy Statement and proxy for the 2008 annual meeting must submit such proposal so that it is
received by the Company no later than October 31, 2007, and such proposal must otherwise comply
with Rule 14a-8 under the Exchange Act. Proposals should be sent to the Corporate Secretary,
CanArgo Energy Corporation, P.O. Box 291, St. Peter Port, Guernsey, GY1 3RR, British
Isles. If a stockholder intends to submit a proposal at next years Annual Meeting, which proposal
is not intended to be included in the Companys Proxy Statement and form of proxy relating to that
meeting, the stockholder must give appropriate notice to the Company not later than December 31,
2007. As to all such matters which the Company does not have notice on or prior to December 31,
2007, discretionary authority shall be granted to the persons designated in the Companys proxy
related to 2008 Annual Meeting to vote on such proposal.
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By Order of the Board of Directors
Liz Landles
Corporate Secretary
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St. Peter Port
Guernsey
British Isles
CANARGO ENERGY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CANARGO ENERGY CORPORATION FOR ANNUAL MEETING
OF STOCKHOLDERS ON JUNE 5, 2007
The undersigned hereby constitutes and appoints David Robson and Liz Landles, and each of
them, the attorneys and proxies of the undersigned with full power of substitution to appear and to vote all
of the shares of the Common Stock of CanArgo Energy Corporation held of record by the undersigned
on April 23, 2007 as if personally present at the Annual Meeting of stockholders to be held on June
5, 2007 and any adjournment or postponement thereof, as designated on the reverse.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CANARGO ENERGY
CORPORATION. IF NO VOTE IS INDICATED, THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED
ON THE REVERSE AND ACCORDING TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE MEETING.
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THIS PROXY IN THE ENVELOPE
PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE ANNUAL MEETING. THIS PROXY
IS TO BE RECEIVED BY MAIL IN THE POSTAGE-PAID ENVELOPE PROVIDED TO CANARGO ENERGY CORPORATION, C/O
ADP, 51 MERCEDES WAY, EDGEWOOD, NY 11717 TO BE RECEIVED ON OR PRIOR TO JUNE 4, 2007, 15:00 HOURS EASTERN
DAYLIGHT SAVING TIME OR ELECTRONICALLY VIA THE INTERNET AT www.proxyvote.com OR BY PHONE AT +1 800 690 6903 PRIOR TO 11.59 PM EASTERN
DAYLIGHT SAVING TIME ON JUNE 6, 2007.
CANARGO ENERGY CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CANARGO ENERGY CORPORATION FOR ANNUAL MEETING
OF STOCKHOLDERS ON JUNE 5, 2007
The undersigned hereby constitutes and appoints David Robson and Liz Landles, and each of
them, the attorneys and proxies of the undersigned with full power of substitution to appear and to
vote all of the shares of the Common Stock of CanArgo Energy Corporation held of record by the
undersigned on April 23, 2007 as if personally present at the Annual Meeting of stockholders to be
held on June 5, 2007 and any adjournment or postponement thereof, as designated below:
(1) |
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ELECTION OF DIRECTORS: |
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FOR all nominees listed below (except as indicated to the contrary below) |
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WITHHOLD AUTHORITY to vote for all nominees listed below |
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Michael Ayre Russ Hammond Vincent McDonnell David Robson Nils Trulsvik, |
(INSTRUCTION: To withhold authority to vote for any nominee, draw a line through his name above)
(2) |
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TO APPROVE AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO
INCREASE THE AUTHORIZED COMMON SHARE CAPITAL FROM 375,000,000 SHARES
OF COMMON STOCK TO 500,000,000 SHARES OF COMMON STOCK. |
o FOR o AGAINST o ABSTAIN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF CANARGO ENERGY CORPORATION. IF
NO VOTE IS INDICATED, THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE PROPOSALS AND ACCORDING TO
THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THIS PROXY IN THE ENVELOPE PROVIDED. IT IS
IMPORTANT FOR YOU TO BE REPRESENTED AT THE ANNUAL MEETING. THIS PROXY IS TO BE RECEIVED BY DEN
NORSKE BANK, REGISTRARS DEPARTMENT, DEN NORSKE BANK ASA, VERDIPAPIRSERVICE, STRANDEN 21, 0021 OSLO,
NORWAY. FAX NUMBER: +47 22 48 11 71 ON OR PRIOR TO 29TH OF MAY 2007 13:00 HOURS CENTRAL
EUROPEAN TIME.
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Dated: , 2007
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Signature(s) |
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Print Name |
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IMPORTANT: please sign exactly as your name or names appear on this
proxy, and when signing as an attorney, executor, administrator,
trustee or guardian, give your full title as such. If the signatory
is a corporation, sign the full corporate name by duly authorized
officer, or if a partnership, sign in partnership name by authorized
person. |
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Please indicate whether you intend to attend this meeting:
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o Yes
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o No |
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Householding Election: Please indicate if you consent to receive certain future investor communications in a single package per household: |
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o Yes |
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o No |