<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Barrett Resources Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Paul M. Rady, President and Chief Operating Officer
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not applicable
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
Not applicable
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
Not applicable
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
Not applicable
----------------------------------------------------------------------
(5) Total fee paid:
Not applicable
----------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not applicable
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
Not applicable
----------------------------------------------------------------------
(3) Filing Party:
Not applicable
----------------------------------------------------------------------
(4) Date Filed:
Not applicable
----------------------------------------------------------------------
Notes:
<PAGE>
BARRETT RESOURCES CORPORATION
1515 ARAPAHOE STREET
TOWER 3, SUITE 1000
DENVER, COLORADO 80202
(303) 572-3900
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 5, 1996
The Annual Meeting of the stockholders of Barrett Resources Corporation (the
"Company") will be held on June 5, 1996 at 9:00 a.m. (local time) at the
Westin Hotel, 1672 Lawrence Street, Denver, Colorado, for the following
purposes:
1. To elect the 12 members of the Company's Board Of Directors;
2. To consider and vote upon a proposal recommended by the Board Of
Directors to amend the Company's 1994 Stock Option Plan to increase from
400,000 to 1,000,000 the number of shares of Common Stock issuable pursuant
to options granted under the 1994 Stock Option Plan;
3. To consider and vote upon a proposal recommended by the Board Of
Directors to amend the Company's Non-Discretionary Stock Option Plan to
increase from 100,000 to 200,000 the number of shares of Common Stock
issuable pursuant to options granted under the Non-Discretionary Stock
Option Plan;
4. To ratify the selection of Arthur Andersen LLP to serve as the
Company's independent certified accountants for the fiscal year ending
December 31, 1996; and
5. To transact any other business that properly may come before the
meeting.
Only the stockholders of record as shown on the transfer books of the
Company at the close of business on April 8, 1996 are entitled to notice of,
and to vote at, the Stockholder Meeting.
All stockholders, regardless of whether they expect to attend the meeting in
person, are requested to complete, date, sign and return promptly the enclosed
form of proxy in the accompanying envelope (which requires no postage if
mailed in the United States). The person executing the proxy may revoke it by
filing with the Secretary of the Company an instrument of revocation or a duly
executed proxy bearing a later date, or by electing to vote in person at the
Stockholder Meeting.
ALL STOCKHOLDERS ARE EXTENDED A CORDIAL INVITATION TO ATTEND THE STOCKHOLDER
MEETING.
By the Board of Directors
[SIGNATURE OF PAUL M. RADY APPEARS HERE]
Paul M. Rady
President and Chief Operating
Officer
Denver, Colorado
April 11, 1996
<PAGE>
PROXY STATEMENT
BARRETT RESOURCES CORPORATION
1515 ARAPAHOE STREET
TOWER 3, SUITE 1000
DENVER, COLORADO 80202
(303) 572-3900
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 5, 1996
This Proxy Statement is provided in connection with the solicitation of
proxies by the Board Of Directors of Barrett Resources Corporation, a Delaware
corporation (the "Company"), to be voted at the Annual Meeting Of Stockholders
of the Company to be held at 9:00 a.m. (local time) on June 5, 1996 at the
Westin Hotel, 1672 Lawrence Street, Denver, Colorado or at any adjournment or
postponement of the meeting. The Company anticipates that this Proxy Statement
and the accompanying form of proxy will be first mailed or given to
stockholders of the Company on or about April 15, 1996.
The shares represented by all proxies that are properly executed and
submitted will be voted at the meeting in accordance with the instructions
indicated on the proxies. Unless otherwise directed, the shares represented by
proxies will be voted for each of the 12 nominees for director whose names are
set forth on the proxy card, in favor of the proposal to amend the Company's
1994 Stock Option Plan (the "1994 Plan") to increase from 400,000 to 1,000,000
the number of shares of Common Stock issuable pursuant to options granted
under the 1994 Plan, in favor of the proposal to amend the Company's Non-
Discretionary Stock Option Plan (the "Non-Discretionary Plan") to increase
from 100,000 to 200,000 the number of shares of Common Stock issuable pursuant
to options granted under the Non-Discretionary Plan, and in favor of
ratification of the selection of Arthur Andersen LLP as the Company's
independent auditors, as described in this Proxy Statement.
A stockholder giving a proxy may revoke it at any time before it is
exercised by delivering written notice of revocation to the Company, by
substituting a new proxy executed at a later date, or by requesting, in person
at the Annual Meeting, that the proxy be returned.
The solicitation of proxies is to be made principally by mail; however,
following the original solicitation, further solicitations may be made by
telephone or oral communication with stockholders of the Company. Officers,
directors and employees of the Company may solicit proxies, but without
compensation for such solicitation other than their regular compensation as
employees of the Company. Arrangements also will be made with brokerage houses
and other custodians, nominees and fiduciaries to forward solicitation
materials to beneficial owners of the shares held of record by those persons.
The Company may reimburse those persons for reasonable out-of-pocket expenses
incurred by them in so doing. All expenses involved in preparing, assembling
and mailing this Proxy Statement and the enclosed material will be paid by the
Company. A majority of the issued and outstanding shares of the Company's
common stock (the "Common Stock") entitled to vote, represented either in
person or by proxy, constitutes a quorum at any meeting of the stockholders.
Unless the context indicates otherwise, the term the "Company" or "Barrett"
shall be used in the Proxy Statement to include Barrett Resources Corporation
and all its subsidiaries that existed during the period of reference.
ELECTION OF DIRECTORS
At the Annual Meeting, the stockholders will elect 12 members of the Board
Of Directors of the Company. Each director will be elected to hold office
until the next annual meeting of stockholders and thereafter until his
successor is elected and has qualified. The affirmative vote of a majority of
the shares represented at the meeting is required to elect each director.
Cumulative voting is not permitted in the election of directors. Consequently,
each stockholder is entitled to one vote for each share of Common Stock held
in his or her name. In the absence
<PAGE>
of instructions to the contrary, the persons named in the accompanying proxy
shall vote the shares represented by that proxy for the persons named below as
Management's nominees for directors of the Company. Each of the nominees
currently is a director of the Company. There is no nominating committee of
the Board Of Directors.
Each of the nominees has consented to be named herein and to serve on the
Board if elected. It is not anticipated that any nominee will become unable or
unwilling to accept nomination or election, but, if that should occur, the
persons named in the proxy intend to vote for the election of such other
person as the Board Of Directors may recommend.
The following table sets forth, with respect to each nominee for director,
the nominee's age, his positions and offices with the Company, the expiration
of his term as a director, and the year in which he first became a director of
the Company. Individual background information concerning each of the nominees
follows the table. For additional information concerning the nominees for
director, including stock ownership and compensation, see "EXECUTIVE
COMPENSATION", "STOCK OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS", and
"CERTAIN TRANSACTIONS WITH MANAGEMENT AND PRINCIPAL STOCKHOLDERS".
<TABLE>
<CAPTION>
POSITION WITH EXPIRATION OF TERM INITIAL DATE
NAME AGE THE COMPANY (5) AS DIRECTOR AS DIRECTOR
---- --- ------------------------- ------------------ ------------
<S> <C> <C> <C> <C>
William J. Barrett(3)... 67 Chief Executive Officer and Next Annual Meeting 1983
Chairman Of The Board
Of Directors
C. Robert 61 Director Next Annual Meeting 1983
Buford(1)(2)(6)........
Derrill Cody(1)(2)...... 57 Director Next Annual Meeting 1995
James M. 61 Director Next Annual Meeting 1987
Fitzgibbons(1)(2)(4)...
Hennie L.J.M. 55 Director Next Annual Meeting 1985
Gieskes(1)(2)..........
William W. Grant, 63 Director Next Annual Meeting 1995
III(1).................
J. Frank Keller(3)...... 52 Executive Vice President, Next Annual Meeting 1983
Secretary, Chief Financial
Officer, and a Director
Paul M. Rady............ 42 President, Chief Operating Next Annual Meeting 1994
Officer, and a Director
A. Ralph Reed........... 58 Executive Vice President-- Next Annual Meeting 1990
Operations and a Director
James T. Rodgers (1)(2). 61 Director Next Annual Meeting 1993
Philippe S.E. 55 Director Next Annual Meeting 1985
Schreiber(1)(2)(7).....
Harry S. Welch(2)....... 72 Director Next Annual Meeting 1995
</TABLE>
- --------
(1) Member of the Audit Committee of the Board Of Directors.
(2) Member of the Compensation Committee of the Board Of Directors.
(3) Mr. Keller and Mr. Barrett are brothers-in-law.
(4) Mr. Fitzgibbons served as a Director of the Company from July 1987 until
October 1992. He was reelected to the Board Of Directors in January 1994.
(5) All officers are elected annually at the first Board Of Directors' meeting
following the annual meeting of stockholders. The Company has four
additional executive officers who are not named in the above table, Joseph
P. Barrett, Robert W. Howard, Eugene A. Lang, Jr. and Donald H. Stevens.
Mr. Joseph Barrett, 42, has served as Vice President--Land since March
1995 and as Co-Manager--Land since January 1993. Mr. Joseph Barrett is the
son of William J. Barrett. The receipt by Mr. Joseph Barrett in December
1995 of a gift of shares of Common Stock that was required to be reported
on an Annual Statement Of Beneficial Ownership Of Securities on Form 5 was
reported late with the Securities And Exchange Commission ("SEC"). Mr.
Howard, 41, has served as Senior Vice President--Finance and Treasurer
since March 1992. Mr. Lang, 42, has served as Senior Vice President,
General Counsel and Assistant Secretary since
2
<PAGE>
September 1995. From October 1990 until May 1994, Mr. Lang served as Vice
President, Secretary and General Counsel of Plains Petroleum Company
("Plains") and from May 1994 until July 1995 he served as Senior Vice
President, Secretary and General Counsel of Plains. Mr. Stevens, 43, has
served as Vice President--Corporate Relations and Capital Markets since
August 1992. From July 1989 until August 1992, Mr. Stevens served as
Manager, Tax Planning for Kennecott Corporation, a mining company. One
transaction in October 1995 required to be reported by Mr. Stevens on a
Statement Of Changes In Beneficial Ownership Of Securities on Form 4 was
reported late with the SEC on a Form 5, Annual Statement Of Changes In
Beneficial Ownership.
(6) One transaction in July 1995 required to be reported by Mr. Buford on a
Statement Of Change In Beneficial Ownership Of Securities on Form 4 was
reported late with the SEC on a Form 5, Annual Statement Of Changes In
Beneficial Ownership.
(7) A Statement Of Changes In Beneficial Ownership Of Securities on Form 4
with respect to one transaction by Mr. Schreiber in November 1995 was
filed two days late with the SEC.
WILLIAM J. BARRETT has been Chief Executive Officer since December 1983 and
Chairman of the Board Of Directors of the Company since March 1994. Mr.
Barrett was President of the Company from December 1983 through September
1994. Mr. Barrett has been the Chairman of the Board, Chief Executive Officer,
and a director of Plains since it became a wholly owned subsidiary of the
Company as the result of a merger in July 1995. Mr. Barrett has also been a
director of Barrett Fuels Corporation, a wholly owned subsidiary of the
Company, since its formation in September 1990. From January 1979 to February
1982, Mr. Barrett was an independent oil and gas operator in the western
United States in association with Aeon Energy, a partnership composed of four
sole proprietorships. From 1971 to 1978, Mr. Barrett served as Vice
President--Exploration and a director of Rainbow Resources, Inc., a publicly
held independent oil and gas exploration company that merged with a subsidiary
of the Williams Companies in 1978. Mr. Barrett served as President,
Exploration Manager and Director for B&C Exploration from 1969 until 1971 and
was chief geologist for Wolf Exploration Company, now known as Inexco Oil Co.,
from 1967 to 1969. He was an exploration geologist with Pan-American Petroleum
Corporation from 1963 to 1966 and worked as an exploration geologist, a
petroleum geologist and a stratigrapher for El Paso Natural Gas Co. at various
times from 1958 to 1963. Mr. Barrett received a B.S. Degree in Geology and an
M.S. Degree in Geology from Kansas State University in 1956 and 1957,
respectively.
C. ROBERT BUFORD has been a director of the Company since December 1983 and
served as Chairman of the Board Of Directors from December 1983 through March
1994. Mr. Buford has been President, Chairman of the Board and controlling
shareholder of Zenith Drilling Corporation ("Zenith"), Wichita, Kansas, since
February 1966. Zenith is engaged in the oil and gas business and owns
approximately 2.4 percent of the Company's Common Stock. Since 1993, Mr.
Buford has served as a director of Encore Energy, Inc., a wholly-owned
subsidiary of Zenith engaged in the marketing of natural gas. Mr. Buford is
also a member of the Board Of Directors of First Bancorp of Wichita, Kansas, a
bank holding company, and Lonestar Steakhouse & Saloon, Inc., a restaurant
company headquartered in Wichita, Kansas. He received a B.A. Degree in
Business Administration from Oklahoma State University in 1955.
DERRILL CODY has been a director of the Company since July 1995. From May
1990 until July 1995, Mr. Cody served as a director of Plains. Since January
1990, Mr. Cody has been an attorney in private practice in Oklahoma City,
Oklahoma. From 1986 to 1990, he was Executive Vice President of Texas Eastern
Corporation, and from 1987 to 1990 he was the Chief Executive Officer of Texas
Eastern Pipeline Company. He has been a director of the General Partner of
TEPPCO Partners, L.P. since January 1990. Mr. Cody received a B.A. Degree in
History from East Central State College in 1960 and an L.L.B. from the
University of Oklahoma in 1964.
JAMES M. FITZGIBBONS has been a director of the Company since January 1994,
and previously served as a director of the Company from July 1987 until
October 1992. Since October 1990, Mr. Fitzgibbons has been Chairman and Chief
Executive Officer of Fieldcrest Cannon, Inc., a manufacturer of home
furnishing textiles. From January 1986 until October 1990, Mr. Fitzgibbons was
President of Amoskeag Company in Boston, Massachusetts. Prior to 1986, he was
President of Howes Leather Company, a producer of leather. Mr. Fitzgibbons is
also member of the Board Of Directors of Lumber Insurance Company, American
Textile Manufacturers Institute and a Trustee of Laurel Funds, a series of
mutual funds. Mr. Fitzgibbons received an A.B. Degree from Harvard College in
1956.
3
<PAGE>
HENNIE L.J.M. GIESKES has been a director of the Company since November
1985. Mr. Gieskes is the Managing Director of Spaarne Compagnie N.V., a
Netherlands company engaged in the investment business. From before 1976 until
December 1990, Mr. Gieskes was a Managing Director of Vitol Beheer B.V., a
Netherlands trading company engaged primarily in energy-related commodities.
Mr. Gieskes received a law degree from the University of Amsterdam, The
Netherlands, in 1968.
WILLIAM W. GRANT, III has served as a director of the Company since July
1995. From May 1987 until July 1995, Mr. Grant served as a director of Plains.
He has been an advisory director of Colorado National Bankshares, Inc. and
Colorado National Bank since 1993. He was a director of Colorado National
Bankshares, Inc. from 1982 to 1993 and the Chairman of the Board of Colorado
National Bank of Denver from 1986 to 1993. He served as the Chairman of the
Board of Colorado Capital Advisors from 1989 through 1994.
J. FRANK KELLER has been an Executive Vice President, Secretary and a
director of Barrett since December 1983 and Chief Financial Officer of the
Company since July 1995. He also has been the President and a director of
Barrett Fuels Corporation since its formation in September 1990. Mr. Keller
has served as an Executive Vice President, the Chief Financial Officer, the
Secretary, and a director of Plains since July 1995. Mr. Keller was the
President and a co-founder of Myriam Corp., an architectural design and real
estate development firm beginning in 1976, until it was reorganized as Barrett
Energy in February 1982. Mr. Keller graduated from Kansas State University in
1967 with a B.S. Degree and received an M.B.A. Degree from Colorado State
University in 1992.
PAUL M. RADY has been President, Chief Operating Officer, and a director of
the Company since September 1994. Prior to that time, Mr. Rady served as
Executive Vice President--Exploration of the Company beginning February 1993.
Mr. Rady has been the President, Chief Operating Officer, and a director of
Plains since July 1995. From August 1990 until July 1992, Mr. Rady served as
Chief Geologist for the Company, and from July 1992 until January 1993 he
served as Exploration Manager for the Company. From July 1980 until August
1990, Mr. Rady served in various positions with the Denver, Colorado regional
office of Amoco Production Company, the exploration and production subsidiary
of Amoco Corporation. Mr. Rady was a Geologist and Geophysicist for Amoco
Production Company. While with Amoco Production Company, Mr. Rady's areas of
responsibility included the Rocky Mountain Basins, Utah-Wyoming Overthrust
Belt, offshore Alaska, Oklahoma, particularly with respect to the Arkoma
Basin, and the New Ventures Group, which concentrated on the western United
States. Mr. Rady received a B.A. Degree in Geology in 1978 from Western State
College of Colorado in Gunnison, Colorado, and an M.S. Degree in Geology in
1980 from Western Washington University in Bellingham, Washington.
A. RALPH REED has been an Executive Vice President of Barrett since November
1989 and a director of Barrett since September 1990. Mr. Reed has served as
Executive Vice President--Operations and a director of Plains since July 1995.
From 1986 to 1989, Mr. Reed was an independent oil and natural gas operator in
the mid-continent region of the United States, including the period from
January 1988 to November 1989 when he acted as a consultant to Zenith Drilling
Corporation. From 1982 to 1986, Mr. Reed was President and Chief Executive
Officer of Cotton Petroleum Corporation, a wholly owned exploration and
production subsidiary of United Energy Resources, Inc. Prior to joining Cotton
Petroleum Corporation in 1980, Mr. Reed was employed by Amoco Production
Company from 1962, holding various positions including Manager of
International Production, Division Production Manager and Division Engineer.
Mr. Reed received a B.S. Degree in Petroleum Engineering from the University
of Oklahoma in 1959 and in 1975 attended the Executive School at the
University of Virginia.
JAMES T. RODGERS has been a director of the Company since November 1993. Mr.
Rodgers served as the President, Chief Operating Officer and a director of
Anadarko Petroleum Corporation ("Anadarko") from 1986 through 1992. Anadarko
is a Houston-based oil and gas exploration and production company. Prior to
1986, Mr. Rodgers was employed in other capacities by Anadarko and Amoco
Production Company. Mr. Rodgers taught Petroleum Engineering at the University
of Texas in Austin in 1958 and at Texas Tech University in Lubbock from 1958
to 1961. Mr. Rodgers currently serves as a Director of Louis Dreyfus Natural
Gas Corporation and as an Advisory Director for Texas Commerce Bank in
Houston. Mr. Rodgers received a B.S. Degree from Louisiana State University in
1956 and an M.S. Degree from the University of Texas in 1958.
4
<PAGE>
PHILIPPE S.E. SCHREIBER has been a director of the Company since November
1985. Mr. Schreiber is an independent lawyer and business consultant who also
is of counsel to the law firm of Walter, Conston, Alexander & Green, P.C. in
New York, New York. Mr. Schreiber has been affiliated with that law firm as
counsel or partner since August 1985. From 1988 to mid-1992, he also was the
Chairman of the Board and a principal shareholder of HSE, Inc., d/b/a
Manhattan Kids Limited, a privately owned corporation involved in catalogue
sales of American made children's clothing in Europe. From October 1985
through June 1992, Mr. Schreiber served as a director, and from July 1990
until June 1991 as Managing Director, of Owl Creek Investments Plc, a publicly
traded English oil and gas company. Mr. Schreiber received an A.B. Degree from
Columbia College in 1964 and a J.D. Degree from Columbia University School of
Law in 1967.
HARRY S. WELCH has been a director of the Company since July 1995. From May
1986 until July 1995, Mr. Welch served as a director of Plains. Since August
1989, he has been an attorney in private practice in Houston, Texas. He served
as Vice President and General Counsel of Texas Eastern Corporation from 1988
to July 1989. Mr. Welch received a B.B.A. Degree and an L.L.B. Degree from the
University of Texas in 1947 and 1949, respectively.
COMMITTEES AND MEETINGS.
The Board Of Directors has a Compensation Committee and an Audit Committee
as well as other committees. There is no nominating or other committee
performing similar functions. The Compensation Committee has the authority to
establish policies concerning compensation and employee benefits for employees
of the Company. The Compensation Committee reviews and makes recommendations
concerning the Company's compensation policies and the implementation of those
policies and determines compensation and benefits for executive officers.
During the fiscal year ended December 31, 1995, the Compensation Committee,
currently consisting of Messrs. Buford, Cody, Fitzgibbons, Gieskes, Rodgers,
Schreiber, and Welch, met two times.
The Audit Committee performs the following functions: recommending to the
Board Of Directors the independent auditors to be employed; discussing the
scope of the independent auditors' examination; reviewing the financial
statements and the independent auditors' report; soliciting recommendations
from the independent auditors regarding internal controls and other matters;
establishing guidelines for the Board Of Directors to review related party
transactions for potential conflicts of interest; making recommendations to
the Board Of Directors; and performing other related tasks as requested by the
Board. During the fiscal year ended December 31, 1995, the Audit Committee,
currently consisting of Messrs. Buford, Cody, Fitzgibbons, Gieskes, Grant,
Rodgers and Schreiber, met one time.
The Board Of Directors met nine times during 1995. Also during 1995, each
director participated in at least 75 percent of the aggregate of the total
number meetings of the Board Of Directors and of all committees of the Board
Of Directors on which each respective director served during that period.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE.
The following table sets forth in summary form the compensation received
during each of the Company's last three completed fiscal years by the Chief
Executive Officer of the Company and by the four other most highly compensated
executive officers whose compensation exceeded $100,000 during the year ended
December 31, 1995. Beginning with the year ended December 31, 1995, the
Company changed its fiscal year end from September 30 to December 31. The
figures in the following table are for each of the one year periods ended
December 31, 1995, 1994, and 1993.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
AWARDS PAYOUTS
----------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($)(1) ($)(2) ($)(3) ($)(4) (#)(5) ($)(6) ($)(7)
- ------------------ ------ ------ ------ ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Barrett 1995 $200,000 -0- -0- -0- -0- -0- $4,680
Chief Executive 1994 $200,000 $40,000 -0- -0- 100,000 -0- $4,560
Officer, and 1993 $175,000 $60,000 -0- -0- -0- -0- $4,555
Chairman of the
Board
Paul M. Rady 1995 $175,000 -0- -0- -0- -0- -0- $4,680
President, Chief 1994 $139,583 $30,000 -0- -0- 70,000 -0- $4,247
Operating Officer, 1993 $100,000 $30,000 -0- -0- -0- -0- $3,060
and a director
A. Ralph Reed 1995 $200,000 -0- -0- -0- -0- -0- $4,680
Executive Vice 1994 $164,583 $30,000 -0- -0- 100,000 -0- $4,705
President-- 1993 $135,000 $40,000 -0- -0- -0- -0- $4,110
Operations, and a
director
J. Frank Keller 1995 $150,000 -0- -0- -0- -0- -0- $4,560
Executive Vice 1994 $128,750 $25,000 -0- -0- 55,000 -0- $3,922
President, 1993 $ 97,500 $31,075 -0- -0- -0- -0- $2,985
Chief Financial
Officer, Secretary
and a director
William F. Wallace 1995 $211,373 -0- -0- -0- -0- -0- $3,412
Former Vice 1994 $ 76,993 -0- -0- -0- 99,030(9) -0- $6,900
Chairman of the 1993 -- -- -- -- -- -- --
Board(8)
</TABLE>
- --------
(1) The dollar value of base salary (cash and non-cash) earned during the year
indicated.
(2) The dollar value of bonus (cash and non-cash) earned during the year
indicated. Although no bonuses were determined or paid in the year ended
December 31, 1995, in March 1996, cash bonuses were determined by the
Compensation Committee and paid by the Company based upon the Company's
performance in 1995. These bonuses included $150,000 paid to William J.
Barrett, $63,000 paid to Paul M. Rady, $54,000 paid to A. Ralph Reed, and
$40,000 paid to J. Frank Keller. See "Compensation Committee Report On
Executive Compensation--Cash Bonus Awards".
(3) During the period covered by the Table, the Company did not pay any other
annual compensation not properly categorized as salary or bonus, including
perquisites and other personal benefits, securities or property.
(4) During the period covered by the Table, the Company did not make any award
of restricted stock, including share units.
(5) The sum of the number of shares of Common Stock to be received upon the
exercise of all stock options granted. The 1994 Plan was approved by the
Board Of Directors effective April 1, 1994 and was approved by
stockholders at the March 16, 1995 Annual Meeting. At the March 5, 1996
meeting of the Board Of Directors, the Board approved an amendment to the
1994 Plan to increase from 400,000 to 1,000,000 the number of shares
subject to the 1994 Plan. See "Option Grants Table" and "PROPOSAL TO AMEND
1994 STOCK OPTION PLAN".
(6) Except for stock option plans, the Company does not have in effect any
plan that is intended to serve as incentive for performance to occur over
a period longer than one fiscal year.
6
<PAGE>
(7) All other compensation received that the Company could not properly report
in any other column of the Table including annual Company contributions or
other allocations to vested and unvested defined contribution plans, and
the dollar value of any insurance premiums paid by, or on behalf of, the
Company with respect to term life insurance for the benefit of the named
executive officer, and the full dollar of the remainder of the premiums
paid by, or on behalf of, the Company. Effective in November 1993, the
Company obtained directors and officers insurance. Coverage of the named
officers under this policy may be considered compensation for the named
officers, although it has not been included in the table.
(8) Mr. Wallace's compensation was paid by Plains during the period from
October 3, 1994 (when he first became an executive officer of Plains)
through July 18, 1995 when Plains merged with a subsidiary of the Company.
Mr. Wallace resigned as an officer and director of the Company effective
January 11, 1996 and as an employee of the Company effective as of March
6, 1996.
(9) Consists of options to purchase 76,185 shares of common stock of Plains
that became options to purchase 99,030 shares of Common Stock of the
Company upon the merger of Plains with and into a subsidiary of the
Company on July 18, 1995.
OPTION GRANTS TABLE.
No grants of stock options were made during the fiscal year ended December
31, 1995 to the Company's Chief Executive Officer or the four other most
highly compensated executive officers of the Company whose compensation
exceeded $100,000 during the year ended December 31, 1995.
7
<PAGE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE.
The following table sets forth information concerning each exercise of stock
options during the fiscal year ended December 31, 1995 by the Company's Chief
Executive Officer and the four other most highly compensated executive
officers of the Company whose compensation exceeded $100,000 during the year
ended December 31, 1995 and the fiscal year-end value of unexercised options
held by these persons:
AGGREGATED OPTION/SAR EXERCISES
FOR FISCAL YEAR ENDED DECEMBER 31, 1995
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISABLE
OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS
SHARES VALUE YEAR-END (#)(3) AT FISCAL YEAR-END ($)(4)
ACQUIRED ON REALIZED ---------------------- -------------------------
NAME EXERCISE(1) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William J. Barrett 25,000 $206,875 -0- 75,000 -0- $ 997,615
Chief Executive Officer,
and Chairman of the Board
Paul M. Rady 30,000 $562,500 17,499 52,501 $253,859 $ 731,641
President, Chief Operating
Officer, and a director
A. Ralph Reed -0- -0- 25,000 75,000 $339,650 $1,018,950
Executive Vice President--
Operations and a director
J. Frank Keller 10,000 $202,500 13,749 41,251 $198,097 $ 594,354
Executive Vice President,
Chief Financial Officer,
Secretary, and a director
William F. Wallace -0- -0- 29,710 69,320 $272,818 $ 636,545
Former Vice Chairman
Of The Board Of Directors
</TABLE>
- --------
(1) The number of shares received upon exercise of options during the fiscal
year ended December 31, 1995.
(2) With respect to options exercised during the Company's fiscal year ended
December 31, 1995, the dollar value of the difference between the option
exercise price and the market value of the option shares purchased on the
date of the exercise of the options.
(3) The total number of unexercised options held as of December 31, 1995,
separated between those options that were exercisable and those options
that were not exercisable.
(4) For all unexercised options held as of December 31, 1995, the aggregate
dollar value of the excess of the market value of the stock underlying
those options over the exercise price of those unexercised options. These
values are shown separately for those options that were exercisable, and
those options that were not yet exercisable, on December 31, 1995. As
required, the price used to calculate these figures was the closing sale
price of the Common Stock at years end, which was $29.375 per share on
December 29, 1995, the last trading day in 1995. On April 8, 1996, the
closing sale price was $24.875 per share.
Employee Retirement Plans, Long-Term Incentive Plans, And Pension Plans
The Company has an employee retirement plan (the "401(k) Plan") that
qualifies under Section 401(k) of the Internal Revenue Code Of 1986, as
amended. Employees of the Company are entitled to contribute to the 401(k)
Plan up to 15 percent of their respective salaries. For each pay period
through March 31, 1996, the Company contributed, on behalf of each employee,
50 percent of the contribution made by that employee, up to a maximum
contribution by the Company of three percent of that employee's gross salary
for that pay period. Effective April 1, 1996, the Company's matching
contribution increased to 100 percent of each participating employee's
contribution, up to a maximum of six percent of base salary, with one-half of
the match paid in cash
8
<PAGE>
and one-half of the match paid in the Company's Common Stock. The Company's
match is subject to a vesting schedule. Benefits payable to employees upon
retirement are based on the contributions made by the employee under the
401(k) Plan, the Company's matching contributions, and the performance of the
401(k) Plan's investments. Therefore, the Company cannot estimate the annual
benefits that will be payable to participants in the 401(k) Plan upon
retirement at normal retirement age.
Excluding the Company's stock option plans, the Company has no long-term
incentive plan to serve as incentive for performance to occur over a period
longer than one fiscal year.
Excluding the 401(k) Plan, the Company has no defined benefit or actuarial
or pension plans or other retirement plans.
Compensation Of Directors
Standard Arrangements. Pursuant to the Company's standard arrangement for
compensating directors of the Company, no compensation for serving as a
director is paid to directors who also are employees of the Company, and those
directors who are not also employees of the Company ("Outside Directors")
receive an annual retainer of $20,000 paid in equal quarterly installments. In
addition, for each Board Of Directors or committee meeting attended, each
Outside Director receives a $750 meeting attendance fee, and will have options
to purchase 500 shares of the Common Stock become exercisable. Effective March
5, 1996, each Outside Director receives $200 for each telephone meeting
lasting more than 15 minutes. Although these options become exercisable only
at the rate of 500 for each Board Of Directors meeting attended, each director
will be granted options to purchase 10,000 shares at the time the person
initially becomes a director. Any options that have not become exercisable at
the time of termination of a director's service will expire at that time. At
such time that the options to purchase all 10,000 shares have become
exercisable, options to purchase an additional 10,000 shares will be granted
to the director and will be subject to the restrictions on exercise. The
options are granted to the Outside Directors pursuant to the Company's Non-
Discretionary Stock Option Plan, and their exercise price is equal to the
closing sales price for the Company's Common Stock on the date of grant. The
options expire upon the later to occur of five years after the date of grant
and two years after the date those options first became exercisable.
Effective in November 1993, the Company obtained directors and officers
insurance coverage. Coverage of the directors of the Company under this policy
may be considered compensation for the directors.
Other Arrangements. During the fiscal year ended December 31, 1995, no
compensation was paid to directors of the Company other than pursuant to the
standard compensation arrangements described in the previous section.
Employment Contracts And Termination Of Employment And Change-In-Control
Arrangements.
The Company does not have any written employment contracts with respect to
any of the executive officers named in the Summary Compensation Table except
for William F. Wallace. The Company entered into a six month employment
agreement with Mr. Wallace effective at the consummation of the Barrett-Plains
merger. In addition, Mr. Wallace is a party to an agreement with Plains to
which the Company became bound as a result of the Barrett-Plains merger. That
agreement provides, among other things, that if, within three years after a
"Change-In-Control" (as defined in the agreement), Mr. Wallace's employment
with Plains is involuntarily terminated or is terminated by Mr. Wallace for
"Good Reason", Mr. Wallace is to be paid a cash amount equal to (a) 299
percent of the higher of (i) his then annual compensation (including salary,
bonuses and incentive compensation) or (ii) the highest annual compensation
(including salary, bonuses and incentive compensation) paid or payable during
any of the three calendar years ending with the year of his termination, plus
(b) an amount equal to any excise taxes payable by Mr. Wallace with respect to
these amounts and any excise or income taxes payable by Mr. Wallace as a
result of this reimbursement of excise taxes. "Good Reason" is defined as a
reduction in Mr. Wallace's compensation or employment responsibilities, a
required relocation outside the greater Denver, Colorado area or, generally,
any conduct by Plains that renders Mr. Wallace unable to discharge
9
<PAGE>
his employment duties effectively. Following the cessation of Mr. Wallace's
employment with the Company on March 6, 1996, the Company paid Mr. Wallace
$1,024,440 in satisfaction of the Company's obligations pursuant to Mr.
Wallace's employment agreement with Plains. The Company has no other
compensatory plan or arrangement that results or will result from the
resignation, retirement, or any other termination of the employment with the
Company and its subsidiaries of the executive officers named in the Summary
Compensation Table or from a change-in-control of the Company or a change in
such an executive officer's responsibilities following a change-in-control,
except that (i) in January 1994, the Board Of Directors approved a resolution
allowing all options outstanding under the Company's 1990 Stock Option Plan to
become exercisable if an announcement is made concerning a business
combination with the Company; and (ii) in September 1994, the Compensation
Committee committed to Mr. Reed that all stock options that had been granted
to him as of September 10, 1994 would become exercisable upon termination of
his employment provided that he remains in the employment of the Company
continuously until September 10, 1997, and further provided that the
Compensation Committee, or its successor, determines as of the date of his
termination that his employment performance has satisfied the Company's
employment standards for executive officers.
Compensation Committee Interlocks And Insider Participation.
During the fiscal year ended December 31, 1995, each of C. Robert Buford,
Derrill Cody, James M. Fitzgibbons, Hennie L.J.M. Gieskes, James T. Rodgers,
and Philippe S.E. Schreiber served as members of the Compensation Committee of
the Board Of Directors. Mr. Schreiber served as the President of Excel Energy
Corporation ("Excel") prior to the 1985 merger of Excel with and into the
Company, and Mr. Gieskes served as Chairman Of The Board of Excel at the time
of the merger of Excel with and into the Company. No other person who served
as a member of the Compensation Committee during the fiscal year ended
December 31, 1995 was, during that fiscal year, an officer or employee of the
Company or of any of its subsidiaries, or was formerly an officer of the
Company or of any of its subsidiaries. For a description of transactions
involving Mr. Buford and the Company, please see "CERTAIN TRANSACTIONS WITH
MANAGEMENT AND PRINCIPAL STOCKHOLDERS".
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.
Subsequent to the Barrett-Plains merger in July 1995, the Compensation
Committee of the Board Of Directors has consisted of C. Robert Buford, Derrill
Cody, James M. Fitzgibbons, Hennie L.J.M. Gieskes, James T. Rodgers, Philippe
S.E. Schreiber, and Harry S. Welch, none of whom is an employee of the
Company. Prior to the merger, the Compensation Committee consisted of Messrs.
Buford, Fitzgibbons, Gieskes, Rodgers and Schreiber. The Compensation
Committee sets and administers the policies that govern the annual
compensation and long-term compensation of executive officers of the Company.
The Compensation Committee makes all decisions concerning compensation of
executive officers and awards of stock options under the Company's stock
option plans, except the Non-Discretionary Plan Stock Option Plan for non-
employee directors.
Compensation Policies Toward Executive Officers. The Compensation
Committee's executive compensation policies are designed to provide
competitive levels of compensation that relate compensation with the Company's
annual and long-term performance goals, reward above average corporate
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining qualified executives. The Compensation
Committee attempts to achieve these objectives through a combination of base
salary, incentive stock options, and cash bonus awards. To assist the
Committee in its activities reported on in this report, the Compensation
Committee utilized outside consultants to obtain compensation information
concerning comparable companies in the oil and gas industry.
Base Salary. Executive salaries are reviewed by the Compensation Committee
on a yearly basis and are set for individual executive officers based on
subjective evaluations of each individual officer's performance, the Company's
performance, and a comparison to salary ranges for executives of other
companies in the oil and gas industry. Through these criteria, the
Compensation Committee believes that salaries may be set in a manner that is
both competitive and reasonable within the Company's industry.
10
<PAGE>
Incentive Stock Options. Stock options are granted to executive officers and
other employees of the Company by the Compensation Committee as a means of
providing long-term incentive to the Company's employees. The Compensation
Committee believes that stock options encourage increased performance by the
Company's employees, including its officers, and align the interests of the
Company's employees with the interests of the Company's stockholders.
Decisions concerning the granting of stock options are made on the same basis,
utilizing the same criteria, as decisions concerning base salary as discussed
in the previous paragraph.
Cash Bonus Awards. The Compensation Committee considers on an annual basis
whether to pay cash bonuses to some or all of the Company's employees,
including the Company's executive officers. The Compensation Committee
undertakes considerations concerning the granting of bonuses with the
objective that the Company will remain competitive in its compensation
practices and be able to retain highly qualified executive officers. With
respect to cash bonus awards for the fiscal year ended December 31, 1995, the
Compensation Committee considered the performance of the Company, including in
particular the consummation of the merger of Plains with a subsidiary of the
Company, the Company's other accomplishments without regard to the merger, the
relative performance of other companies in the oil and gas industry, and the
prospects for the Company as a result of this performance. Based on these
Company performance evaluations, the Committee then determined to give bonuses
to individual executive officers based on an assessment of the contributions
to the Company's performance of each individual executive officer together
with a comparison of bonuses and total compensation paid to executive officers
in similar positions with relatively comparable companies in the oil and gas
industry. As a result of this process and these considerations and
determinations, in March 1996, the Compensation Committee granted to eight
executive officers, including the Chief Executive Officer, aggregate cash
bonuses of $407,000 for their respective contributions to the Company during
the fiscal year ended December 31, 1995.
Employee Retirement Plan. The Company's employee retirement plan, the 401(k)
Plan, was established effective April 1, 1991, and amended effective April 1,
1996, to provide an additional means of attracting and retaining qualified
employees. Under the 401(k) Plan, as amended, the Company will contribute on
behalf of each employee 100 percent of the contribution made by that employee,
up to a maximum contribution by the Company of six percent of that employee's
gross salary for a particular pay period. One-half of the Company's matching
contribution is paid in cash and one-half is paid in the Company's Common
Stock. The Company's match is subject to a vesting schedule. Participation in
the 401(k) Plan is at the discretion of each individual employee, and the
Compensation Committee is not involved in the administration of the 401(k)
Plan.
Chief Executive Officer Compensation. The compensation of the Company's
Chief Executive Officer is determined in the same manner as the compensation
for other executive officers of the Company as described above. As a result,
the compensation of the Company's Chief Executive Officer is largely dependent
upon the overall performance of the Company as well as the compensation being
paid to the chief executive officers by other relatively comparable companies
in the oil and gas industry. The Chief Executive Officer's long-term
compensation from stock options also is largely dependent upon Company
performance. The decision to pay a cash bonus to the Chief Executive Officer
for the past fiscal year, and the amount of that bonus, resulted from the view
of the Compensation Committee that the cash bonus was merited and justified
based on the Company's overall performance and the contributions of the Chief
Executive Officer to that performance, including in particular his crucial
role in the consummation of the Plains merger, as well as a comparison of
total compensation paid to chief executive officers of other relatively
comparable companies in the oil and gas industry.
Compensation Committee Of The Board
Of Directors:
C. Robert Buford
Derrill Cody
James M. Fitzgibbons
Hennie L.J.M. Gieskes
James T. Rodgers
Philippe S.E. Schreiber
Harry S. Welch
11
<PAGE>
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
cumulative total stockholder return, assuming reinvestment of dividends, for
(i) the Common Stock, (ii) a peer group (the "Peer Group") of companies
selected by the Company that are predominantly independent exploration and
production companies with properties predominantly located in the United
States, and (iii) the Standard & Poors 500 Stock Index. The companies in the
Peer Group are Cabot Oil & Gas Corporation, Devon Energy Corporation, Louis
Dreyfus Natural Gas Corporation, Parker & Parsley Petroleum Company, Pogo
Producing Company, Seagull Energy Corporation, United Meridian Corporation,
and Vintage Petroleum, Inc. The comparison shown in the graph is for the years
ended December 31, 1991, 1992, 1993, 1994 and 1995. The cumulative total
stockholder return on the Company's Common Stock was measured by dividing the
difference between the Company's share price at both the end and at the
beginning of the measurement period by the share price at the beginning of the
measurement period. Because the Company did not pay dividends on its Common
Stock during the measurement period, the calculation of the cumulative total
stockholder return on the Common Stock did not include dividends.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Barrett
Measurement Period Resources S&P Peer
(Fiscal Year Covered) Corporation 500 Index Group
- ---------------------------- ----------- --------- -------
<S> <C> <C> <C>
Measurement Point - 12/31/90 $100.00 $100.00 $100.00
FYE December 31, 1991 64.00 130.00 82.00
FYE December 31, 1992 163.00 140.00 119.00
FYE December 31, 1993 160.00 155.00 182.00
FYE December 31, 1994 315.00 157.00 156.00
FYE December 31, 1995 452.00 215.00 195.00
</TABLE>
In preparing the above performance graph for the five years ended December
31, 1995, the Company used two different indices for comparison to the
Company's cumulative stockholder return than were used in the performance
graph for the five years ended September 30, 1994 included in the Company's
proxy statement for the annual meeting of stockholders held March 16, 1995. In
last year's proxy statement, the Company utilized
12
<PAGE>
the CRSP Total Return Index For The NASDAQ Stock Market (U.S. Companies) and
the Standard & Poors Natural Gas Index of 13 companies engaged in the natural
gas business for the five year comparison. For the five year comparison shown
above in this proxy statement, the Company selected the new indices due to the
listing of the Company's Common Stock on the New York Stock Exchange and due
to the merger of Plains with and into a subsidiary of the Company. The Company
did not believe that the CRSP Total Return Index For The NASDAQ Stock Market
(U.S. Companies) was an appropriate broad equity market index for comparison
to a company whose securities are listed on the New York Stock Exchange. As a
result, the Company determined to utilize the Standard & Poors 500 Stock Index
as the broad equity market index to be compared to the performance of the
Company's Common Stock. Because of the merger of Plains with and into a
subsidiary of the Company, the Company's size was greatly increased and the
Company became involved in the production of more oil than prior to the
merger. The Company did not believe that a comparison of the performance of
the Company's Common Stock to the Standard & Poors Natural Gas Index of 13
companies engaged in the natural gas business was appropriate. Therefore, the
Company determined to utilize the Peer Group for comparison purposes. The
following line graph compares the yearly percentage change in the cumulative
total stockholder return, assuming reinvestment of dividends, for the
Company's Common Stock to the CRSP Total Return Index For The NASDAQ Stock
Market (U.S. Companies) and to the Standard & Poors Natural Gas Index of 13
companies engaged in the natural gas business in order that stockholders of
the Company may compare the Company's total return with that of the indices
used in last year's proxy statement. The comparison shown is for the five
years ended December 31, 1991, 1992, 1993, 1994 and 1995.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION> Barrett S&P NASDAQ
Measurement Period Resources Natural Gas Stock Market - US
(Fiscal Year Covered) Corporation Index Index
- ---------------------------- ----------- ----------- -----------------
<S> <C> <C> <C>
Measurement Point - 12/31/90 $100.00 $100.00 $100.00
FYE December 31, 1991 64.00 87.00 161.00
FYE December 31, 1992 163.00 97.00 187.00
FYE December 31, 1993 160.00 115.00 215.00
FYE December 31, 1994 315.00 110.00 210.00
FYE December 31, 1995 457.00 155.00 296.00
</TABLE>
13
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS
April 8, 1996 has been fixed by the Board Of Directors of the Company as the
record date for determination of stockholders entitled to notice of and to
vote at the Annual Meeting. On April 8, 1996 there were 25,204,696 shares of
Common Stock outstanding. The following table summarizes certain information
as of April 8, 1996 with respect to the ownership by each director, by each
executive officer named in the "Executive Compensation" section above, by all
executive officers and directors as a group, and by each other person known by
the Company to be the beneficial owner of more than five percent of the Common
Stock:
<TABLE>
<CAPTION>
NAME OF AMOUNT/NATURE OF PERCENT OF CLASS
BENEFICIAL OWNER BENEFICIAL OWNERSHIP BENEFICIALLY OWNED
---------------- -------------------- ------------------
<S> <C> <C>
William J. Barrett.................... 383,660 Shares(1) 1.5%
C. Robert Buford...................... 623,111 Shares(2) 2.5%
Derrill Cody.......................... 9,560 Shares(3) (4)
James M. Fitzgibbons.................. 8,500 Shares(3) (4)
Hennie L.J.M. Gieskes................. 896,214 Shares(3) 3.6%
William W. Grant, III................. 23,150 Shares(3) (4)
J. Frank Keller....................... 66,195 Shares(3) (4)
Paul M. Rady.......................... 56,500 Shares(3) (4)
A. Ralph Reed......................... 63,822 Shares(5) (4)
James T. Rodgers...................... 9,000 Shares(3) (4)
Philippe S.E. Schreiber............... 17,007 Shares(3) (4)
William F. Wallace(6)................. 263 Shares (4)
Harry S. Welch........................ 17,300 Shares(3) (4)
All Directors And Executive Officers
As A Group (17 persons).............. 2,277,768 Shares(7) 8.9%
State Farm Mutual Insurance Company
and related entities................. 2,065,233 Shares 8.2%
One State Farm Plaza
Bloomington, IL 61710
Wellington Management Company......... 1,529,700 Shares(8) 6.0%
75 State Street
Boston, MA 02109
</TABLE>
- --------
(1) The number of shares indicated includes 5,290 shares owned by Louise K.
Barrett, Mr. Barrett's wife, 230,000 shares owned by the Barrett Family
L.L.L.P., a Colorado limited partnership for which Mr. Barrett and his
wife are general partners and owners of an aggregate of 62.92294 percent
of the partnership interests, and 49,998 shares underlying options that
currently are exercisable or become exercisable within the next 60 days.
Pursuant to Rule 16a-1(a)(4) under the Securities Exchange Act of 1934
(the "1934 Act"), Mr. Barrett disclaims ownership of all but 144,723
shares held by the Barrett Family L.L.L.P., which constitutes Mr. and Mrs.
Barrett's proportionate share of the shares held by the Barrett Family
L.L.L.P.
(2) C. Robert Buford is considered a beneficial owner of the 604,830 shares of
which Zenith Drilling Corporation ("Zenith") is the record owner. Mr.
Buford owns approximately 89 percent of the outstanding common stock of
Zenith. The number of shares of the Company's stock indicated for Mr.
Buford also includes 10,000 shares that are owned by Aguilla Corporation,
which is owned by Mr. Buford's wife and adult children. Mr. Buford
disclaims beneficial ownership of the shares held by Aguilla Corporation
pursuant to Rule 16a-1(a)(4) under the 1934 Act. The number of shares
indicated also includes 8,000 shares underlying options currently
exercisable at $10.375 per share. The number of shares indicated does not
include 35,000 shares issued to Mr. Buford on April 10, 1996 pursuant to
the Company's acquisition, through a merger, of Grand Valley Corporation.
See "CERTAIN TRANSACTIONS WITH MANAGEMENT AND PRINCIPAL STOCKHOLDERS".
14
<PAGE>
(3) The number of shares indicated consists of or includes the following
number of shares underlying options that currently are exercisable or that
become exercisable within the next 60 days that are held by each of the
following persons: Derrill Cody, 9,300; James M. Fitzgibbons, 6,500;
Hennie L.J.M. Gieskes, 7,000; William W. Grant, III, 13,400; J. Frank
Keller, 22,350; Paul M. Rady, 26,500; James T. Rodgers, 9,000; Philippe
S.E. Schreiber, 7,000; and Harry S. Welch, 14,700.
(4) Less than one percent of the Common Stock outstanding.
(5) The number of shares indicated includes 12,500 shares owned by Mary C.
Reed, Mr. Reed's wife and 35,800 shares underlying options that currently
are exercisable or that become exercisable within the next 60 days.
(6) Mr. Wallace resigned as an executive officer of the Company effective
January 11, 1996 and as an employee of the Company effective March 6,
1996.
(7) The number of shares indicated includes the shares owned by Zenith that
are beneficially owned by Mr. Buford as described in note (2) and the
aggregate of 209,548 shares underlying the options described in notes (1),
(2), (3) and (5), an aggregate of 29,177 shares owned by four executive
officers not named in the above table, an aggregate of 245 shares the
beneficial ownership of which is disclaimed by the four executive officers
not named in the above table, and an aggregate of 74,109 shares underlying
options that currently are exercisable or that are exercisable within 60
days that are held by those four executive officers.
(8) Wellington Management Company, in its capacity as investment adviser, may
be deemed the beneficial owner of these shares which are owned by numerous
investment counselling clients.
CERTAIN TRANSACTIONS WITH MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
During the fiscal year ended December 31, 1995, Zenith, which until April
10, 1996 owned a working interest in many of the leases for which the Company
is the operator, paid to the Company, as operator, approximately $1,062,000 as
Zenith's portion of the lease operating expenses and development costs for
those leases. Also as a result of its working interest in those leases, Zenith
received approximately $942,000 as its share of revenues. Zenith owned working
interests ranging from three to 50 percent in leases for which the Company is
the operator. All terms and arrangements between Zenith and the Company with
respect to these working interests are the same as those between the Company
and the other working interest owners in the leases. Zenith is 89 percent
owned by Mr. Buford.
Mr. Buford also is a director of Grand Valley Corporation ("GVC"), which
owns a 10.4 percent interest in the pipeline gathering system and related
facilities on the Company's Grand Valley Prospect. Until acquired by the
Company as described below, 10 percent of GVC was owned by Mr. Buford, and 90
percent of GVC was owned by Mr. Buford's three adult children. During the
fiscal year ended December 31, 1995, GVC's proportionate share of the pipeline
gathering system's expenses, not including depreciation, was approximately
$148,000, and its share of the pipeline gathering system's revenues was
approximately $909,000. All terms and arrangements between GVC and the Company
with respect to this gathering system are the same as those between the
Company and the other owners of the gathering system.
On April 10, 1996, the Company acquired all the Piceance Basin oil and gas
interests of Zenith for $2.7 million, and the Company, through a merger of GVC
into a subsidiary company, acquired all the stock of GVC in exchange for
350,000 shares of the Company's Common Stock. Of these shares of the Company's
Common Stock, 35,000 shares were issued to Mr. Buford. Pursuant to the
respective agreements with Zenith and GVC, Zenith is responsible for all
liabilities related to the interests transferred by Zenith, and the
shareholders of GVC are responsible for certain liabilities related to GVC,
that accrue on or before March 1, 1996 and the Company is responsible for
liabilities accruing after March 1, 1996.
The terms of these transactions were negotiated with Zenith and GVC by a
Special Committee of the Board of Directors of the Company consisting of
William W. Grant, III, James T. Rodgers, Philippe S.E. Schreiber, and Harry S.
Welch, each of whom is an outside director. The Company obtained an opinion
from an investment banking firm that the terms of these transactions are fair
to the Company. As indicated above, 10 percent of GVC was owned by Mr. Buford
and 90 percent of GVC was owned by Mr. Buford's three adult children, and
Zenith is 89 percent owned by Mr. Buford.
15
<PAGE>
PROPOSAL TO AMEND 1994 STOCK OPTION PLAN
The Compensation Committee of the Board Of Directors has adopted, subject to
stockholder approval, an amendment to the Company's 1994 Stock Option Plan
(the "1994 Plan") to increase from 400,000 to 1,000,000 the number of shares
of Common Stock issuable pursuant to options granted under the 1994 Plan.
Other than this increase in the number of shares subject to the 1994 Plan,
there are no additional amendments to the 1994 Plan. The Options granted
pursuant to the 1994 Plan may be either Incentive Options or Non-Qualified
Options. The 1994 Plan is intended to provide incentives to key employees and
other persons who have or are contributing to the success of the Company by
offering them Options to purchase shares of the Company's Common Stock. The
effect of the increase in the number of shares issuable upon the exercise of
options granted under the 1994 Plan is to allow the Company to grant more
options from time to time and thereby augment its program of providing
incentives to employees. The terms of the 1994 Plan concerning Incentive
Options and Non-Qualified Options are substantially the same except that only
employees of the Company or its subsidiaries are eligible for Incentive
Options and employees and other persons are eligible for Non-Qualified
Options. The number of Options authorized is a maximum aggregate so that the
number of Incentive Options granted reduces the number of Non-Qualified
Options that may be granted. There currently are approximately 130 employees
eligible to receive Incentive Options and an unspecified number of persons
eligible to receive Non-Qualified Options.
Grants of options under the 1994 Plan prior to its amendment are disclosed
in this proxy statement under the heading "EXECUTIVE COMPENSATION: Option
Grants Table". Grants of options under the 1994 Plan after its amendment,
which are subject to the stockholders' approval of the amendment, are
disclosed below under the heading "New Plan Benefits."
The 1994 Plan is administered by the Option Committee, which may consist of
either (i) the Company's Board Of Directors, or (ii) a committee, appointed by
the Board Of Directors, of two or more directors who have not received grants
or awards under any discretionary plan of the Company for at least one year,
except for grants pursuant to a formula plan such as the Company's Non-
Discretionary Stock Option Plan, and certain other exceptions. However, unless
determined otherwise by the Board, grants of Options to officers or to
directors may be made only by an Option Committee consisting of either (i) the
Board Of Directors if each of the Directors is not eligible, and shall not
have been eligible during the preceding year, to receive Options under the
1994 Plan or under any other stock plan of the Company, or (ii) a committee,
appointed by the Board, consisting of two or more directors, none of whom is
eligible, nor shall have been eligible during the preceding year, to receive
Options under the 1994 Plan or under any other stock plan of the Company other
than a formula plan, such as the Company's Non-Discretionary Stock Option
Plan, and certain other plans. The Option Committee has discretion to select
the persons to whom Options will be granted ("Optionees"), the number of
shares to be granted, the term of each Option and the exercise price of each
Option. However, no Option may be exercisable more than 10 years after the
granting of the Option, and no Options may be granted under the 1994 Plan
after March 31, 2004.
The exercise price of Options granted cannot be less than the fair market
value of the underlying Common Stock on the date the Options were granted. In
addition, the aggregate fair market value (determined as of the date an Option
is granted) of the Common Stock underlying the Options granted to a single
employee which become exercisable in any single calendar year may not exceed
the maximum permitted by the Internal Revenue Code for incentive stock
options. This amount currently is $100,000. No Incentive Option may be granted
to an employee who, at the time the Option would be granted, owns more than
ten percent of the outstanding stock of the Company unless the exercise price
of the Options granted to the employee is at least 110 percent of the fair
market value of the stock subject to the Option and the Option is not
exercisable more than five years from the date of grant.
Options granted pursuant to the 1994 Plan are not transferable during the
Optionee's lifetime. Subject to the other terms of the 1994 Plan, the Option
Committee has discretion to provide vesting requirements and specific
expiration provisions with respect to the Options granted.
It currently is anticipated that the exercise of the Options will be covered
by an effective registration statement, which will enable an Optionee
exercising Options to receive unrestricted stock that may be transferred or
sold in the open market unless the Optionee is a director, executive officer
or otherwise an "affiliate" of the Company. In the case of a director,
executive officer or other affiliate, the Common Stock acquired through
16
<PAGE>
exercise of the Options may be reoffered or resold only pursuant to an
effective registration statement or pursuant to Rule 144 under the Securities
Act or another exemption from the registration requirements of the Securities
Act. It also is anticipated that sales by affiliates will be covered by an
effective registration statement.
In the event a change, such as a stock split, is made in the Company's
capitalization which results in an exchange or other adjustment of each share
of Common Stock for or into a greater or lesser number of shares, appropriate
adjustment shall be made in the exercise price and in the number of shares
subject to each outstanding Option. In the event of a stock dividend, each
Optionee shall be entitled to receive, upon exercise of the Option, the
equivalent of any stock dividend that the Optionee would have received had he
or she been the holder of record of the shares purchased upon exercise. The
Option Committee also may make provisions for adjusting the number of shares
subject to outstanding Options in the event the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other increases or
reductions of shares of the Company's outstanding Common Stock.
The Option Committee may at any time terminate the 1994 Plan or make such
amendments or modifications to the 1994 Plan that the Option Committee deems
advisable.
The Incentive Options issuable under the 1994 Plan are structured to qualify
for favorable tax treatment provided for "incentive stock options" by Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). All
references to the tax treatment of the Options are under the Code as currently
in effect. Pursuant to Section 422 of the Code, Optionees will not be subject
to federal income tax at the time of the grant or at the time of exercise of
an Incentive Option. In addition, provided that the stock underlying the
Option is not sold less than two years after the grant of the Option and is
not sold less than one year after the exercise of the Option, then the
difference between the exercise price and the sales price will be treated as
long-term capital gain or loss. An Optionee also may be subject to the
alternative minimum tax upon exercise of his Options. The Company will not be
entitled to receive any income tax deductions with respect to the granting or
exercise of Incentive Options or the sale of the Common Stock underlying the
Options.
Non-Qualified Options will not qualify for the special tax benefits given to
Incentive Options under Section 422 of the Code. An Optionee does not
recognize any taxable income at the time he is granted a Non-Qualified Option.
However, upon exercise of the Option, the Optionee recognizes ordinary income
for federal income tax purposes measured by the excess, if any, of the then
fair market value of the shares over the exercise price. The ordinary income
recognized by the Optionee will be treated as wages and will be subject to
income tax withholding by the Company. Upon an Optionee's sale of shares
acquired pursuant to the exercise of a Non-Qualified Option, any difference
between the sale price and the fair market value of the shares on the date
when the Option was exercised will be treated as long-term or short-term
capital gain or loss. Upon an Optionee's exercise of a Non-Qualified Option,
the Company will be entitled to a tax deduction in the amount recognized as
ordinary income to the Optionee provided that the Company effects withholding
with respect to the deemed compensation.
There currently are options to purchase 244,850 shares of Common Stock
outstanding under the 1994 Plan. The Option Committee may grant additional
options to purchase 148,500 shares pursuant to the 1994 Plan. There also are
options to purchase 381,150 shares of Common Stock outstanding under the
Company's 1990 Plan and no additional options may be granted under the 1990
Plan.
In March 1996, the Company granted options pursuant to the 1994 Plan that
are conditioned upon the Company's stockholders approving the amendment to
increase to 1,000,000 the number of shares under the 1994 Plan. If the
stockholders do not approve the amendment to the 1994 Plan prior to March 4,
1997, these options will be void. The following table sets forth information
concerning these conditional grants of stock options made pursuant to the 1994
Plan to the Company's Chief Executive Officer and each other executive officer
of the Company whose total salary and bonus exceeded $100,000 in the fiscal
year ended December 31, 1995, to all current executive officers of the Company
as a group, to each other person who received five percent of such options,
and to all employees, including all current officers who are not executive
officers, as a group. No grants of options were made to any current directors
who are not executive officers, or to the associate of any director or
executive officer.
17
<PAGE>
PAGE>
NEW PLAN BENEFITS
1994 STOCK OPTION PLAN
<TABLE>
<CAPTION>
AGGREGATE
EXERCISE PRICE NUMBER OF SHARES
NAME AND POSITION OF OPTIONS($)* UNDERLYING OPTIONS
----------------- -------------- ------------------
<S> <C> <C>
William J. Barrett, Chief Executive Officer $2,312,500 100,000
and Chairman Of The Board
Paul M. Rady, President, Chief Operating $1,202,500 52,000
Officer, and a director
A. Ralph Reed, Executive Vice President-- $ 925,000 40,000
Operations, and a director
J. Frank Keller, Executive Vice President, $ 444,000 19,200
Chief Financial Officer, Secretary, and a
director
All Current Executive Officers As A Group $5,365,000 232,000
(Eight Persons)
All Employees As A Group (Excluding Executive $1,054,500 45,600
Officers; Five Persons)
</TABLE>
- --------
*The dollar value shown is the aggregate exercise price of all options
granted to the person or group indicated.
The closing sale price of the Company's Common Stock, as quoted on the New
York Stock Exchange, at the close of business on April 8, 1996 was $24.875.
The approval of holders of shares representing a majority of the votes
represented at the Annual Meeting will be necessary to amend the 1994 Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO INCREASE THE NUMBER OF
SHARES OF COMMON STOCK SUBJECT TO THE 1994 PLAN.
PROPOSAL TO AMEND NON-DISCRETIONARY STOCK OPTION PLAN
The Board Of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Non-Discretionary Stock Option Plan to increase
from 100,000 to 200,000 the number of shares of Common Stock issuable pursuant
to options granted under the Non-Discretionary Stock Option Plan. Other than
this increase in the number of shares subject to the Non-Discretionary Stock
Option Plan, there are no additional amendments to this Plan. The Non-
Discretionary Stock Option Plan is intended to reward non-employee directors
for their participation and contributions to the Company. The effect of the
increase in the number of shares issuable upon the exercise of options granted
under the Non-Discretionary Stock Option Plan is to allow the Company to grant
more options from time to time and thereby augment its program of providing
incentives to non-employee directors. There currently are seven non-employee
directors eligible to receive options pursuant to the Non-Discretionary Stock
Option Plan.
The Non-Discretionary Stock Option Plan provides that, upon inception of the
Plan, the Company would grant options to purchase 10,000 shares to each non-
employee director of the Company. Thereafter, at such time as a person becomes
a non-employee director of the Company, the Company will grant that person
options to purchase 10,000 shares of the Company's Common Stock. The options
become exercisable with respect to 500 shares for each Board Of Directors'
meeting the director attends or has attended after the date of grant. The
exercise price for the options shall be the fair market value of the Company's
Common Stock on the date the
18
<PAGE>
options are granted. Shares acquired upon exercise of these options cannot be
sold for six months following the date of grant.
If not previously exercised, the options expire upon the later to occur of
five years after the date of grant and two years after the date those options
first became exercisable. The options also expire 90 days after the
optionholder ceases to be a director of the Company. At such time as all
10,000 options granted to a director either have become exercisable or have
expired, and the director continues to serve as a director, the director would
be granted new options to purchase 10,000 shares at an exercise price equal to
the fair market value of the Common Stock on the date of the new grant. These
new options shall become exercisable with respect to 500 shares for each
directors' meeting attended after the date of grant and upon the same terms
and conditions as the previous options.
Options granted pursuant to the Non-Discretionary Stock Option Plan will not
qualify for special tax benefits given to incentive stock options under
Section 422 of the Internal Revenue Code.
Options granted pursuant to the Non-Discretionary Stock Option Plan are not
transferable during the optionee's lifetime other than by will, by the laws of
descent and distribution, or by a court order in a domestic relations
proceeding. The Options are exercisable during the optionee's lifetime only by
him or by the optionee's guardian or legal representative.
In the event a change, such as a stock split, is made in the Company's
Common Stock which results in an exchange or other adjustment of each share of
Common Stock for or into a greater or lesser number of shares, appropriate
adjustment shall be made in the exercise price and in the number of shares
subject to each outstanding option. In the event of a stock dividend, each
optionee shall be entitled to receive, upon exercise of the option, the
equivalent of any stock dividend that the optionee would have received had he
or she been the holder of record of the shares purchased upon exercise. The
Company also may make provisions for adjusting the number of shares subject to
outstanding options in the event the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other increases or
reductions of shares of the Company's outstanding Common Stock.
There are options to purchase 90,000 shares of Common Stock outstanding
under the Non-Discretionary Stock Option Plan and options to purchase an
additional 10,000 shares may be granted. See "EXECUTIVE COMPENSATION:
Compensation Of Directors" for information concerning options granted to non-
employee directors of the Company. Although there is no present plan to grant
additional options pursuant to the Non-Discretionary Stock Option Plan to any
particular non-employee directors, pursuant to the terms of the Non-
Discretionary Stock Option Plan, each non-employee director automatically will
receive options to purchase an additional 10,000 shares at such time that all
the options previously granted to that non-employee director become
exercisable. It is anticipated that Messrs. Rodgers, Buford and Gieskes each
will be entitled to receive grants of additional options to purchase 10,000
shares of Common Stock during 1997 assuming that each attends all meetings of
the Board scheduled through that time. Because options to purchase only 10,000
shares remain to be granted pursuant to the Non-Discretionary Stock Option
Plan, these options may not be granted unless the amendment to the Non-
Discretionary Stock Option Plan is approved by stockholders.
The closing sale price of the Company's Common Stock, as quoted on the New
York Stock Exchange at the close of business on April 8, 1996, was $24.875 per
share.
The approval of holders of shares representing a majority of the votes
represented at the Annual Meeting will be necessary to amend the Non-
Discretionary Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK SUBJECT TO THE NON-DISCRETIONARY STOCK OPTION
PLAN.
19
<PAGE>
PROPOSAL TO RATIFY THE SELECTION OF
ARTHUR ANDERSEN LLP AS AUDITORS
The Board Of Directors recommends that the stockholders of the Company vote
in favor of ratifying the selection of the certified public accounting firm of
Arthur Andersen LLP of Denver, Colorado as the auditors who will continue to
audit financial statements, review tax returns, and perform other accounting
and consulting services for the Company for the fiscal year ending December
31, 1996 or until the Board Of Directors, in its discretion, replaces them.
Arthur Andersen LLP has audited the Company's financial statements since the
fiscal year ended September 30, 1992.
An affirmative vote of the majority of shares represented at the meeting is
necessary to ratify the selection of auditors. There is no legal requirement
for submitting this proposal to the stockholders; however, the Board Of
Directors believes that it is of sufficient importance to seek ratification.
Whether the proposal is approved or defeated, the Board may reconsider its
selection of Arthur Andersen LLP. It is expected that one or more
representatives of Arthur Andersen LLP will be present at the Annual Meeting
and will be given an opportunity to make a statement if they desire to do so
and to respond to appropriate questions from stockholders.
OTHER BUSINESS
The Board Of Directors of the Company is not aware of any other matters that
are to be presented at the Annual Meeting, and it has not been advised that
any other person will present any other matters for consideration at the
meeting. Nevertheless, if other matters should properly come before the Annual
Meeting, the stockholders present, or the persons, if any, authorized by a
valid proxy to vote on their behalf, shall vote on such matters in accordance
with their judgment.
VOTING PROCEDURES
Votes at the Annual Meeting of Stockholders are counted by Inspectors of
Election appointed by the Chairman of the meeting. If a quorum is present, an
affirmative vote of a majority of the votes entitled to be cast by those
present in person or by proxy is required for the approval of items submitted
to stockholders for their consideration, including the election of directors,
unless a different number of votes is required by statute or the Company's
Certificate Of Incorporation. Abstentions by those present at the meeting are
tabulated separately from affirmative and negative votes and do not constitute
affirmative votes. If a stockholder returns his proxy card and withholds
authority to vote for any or all of the nominees, the votes represented by the
proxy card will be deemed to be present at the meeting for purposes of
determining the presence of a quorum but will not be counted as affirmative
votes. Shares in the name of brokers that are not voted are treated as not
present.
RESOLUTIONS PROPOSED BY INDIVIDUAL STOCKHOLDERS
In order to be considered for inclusion in the Company's Proxy Statement and
form of proxy relating to the Company's next Annual Meeting Of Stockholders
following the end of the Company's 1996 fiscal year, proposals by individual
stockholders must be received by the Company no later than December 5, 1996.
AVAILABILITY OF REPORTS ON FORM 10-K
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF
ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995, TO
ANY OF THE COMPANY'S STOCKHOLDERS OF RECORD OR TO ANY STOCKHOLDER WHO OWNS THE
COMPANY'S COMMON STOCK LISTED IN THE NAME OF A BANK OR BROKER AS NOMINEE, AT
20
<PAGE>
THE CLOSE OF BUSINESS ON APRIL 8, 1996. ANY REQUEST FOR A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K SHOULD BE MAILED TO THE SECRETARY,
BARRETT RESOURCES CORPORATION, 1515 ARAPAHOE STREET, TOWER 3, SUITE 1000,
DENVER, COLORADO 80202, (303) 572-3900.
This Notice and Proxy Statement are sent by order of the Board Of Directors.
[SIGNATURE OF PAUL M. RADY APPEARS HERE]
Paul M. Rady
President and Chief Operating
Officer
Dated: April 11, 1996
21
<PAGE>
DETACH HERE
For the Annual meeting of Stockholders of
BARRETT RESOURCES CORPORATION
Proxy Solicited on Behalf of the Board of Directors
P
R The undersigned hereby appoints Paul M. Rady and J. Frank Keller, or
O either of them, as proxies with full power of substitution to vote all
X the shares of the undersigned with all of the powers which the undersigned
Y would possess if personally present at the Annual meeting of Stockholders
of Barrett Resources Corporation (the "Corporation"), to be held at 9:00
A.M. on June 5, 1996, at the Westin Hotel, 1672 Lawrence Street, Denver,
Colorado, or any adjournments thereof, on the following matters set forth
on the reverse side.
SEE REVERSE
SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
[LOGO OF BARRETT RESOURCES APPEARS HERE]
- --------------------------------------------------------------------------------
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
Regardless of whether you plan to attend the Annual Meeting of Stockholders, you
can ensure your shares are represented at the Meeting by promptly completing and
returning your proxy (attached below) in the enclosed envelope. Thank you for
your attention to this important matter.
- --------------------------------------------------------------------------------
DETACH HERE
[X] Please mark
votes as in
this example.
UNLESS CONTRARY INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED IN FAVOR OF ITEMS 1, 2, 3, AND 4. THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS OF BARRETT RESOURCES CORPORATION.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR AGAINST ABSTAIN
NOMINEES: William J. Barrett, C. Robert Buford, Derrill Cody, 2. Proposal to amend the [ ] [ ] [ ]
James M. Fitzgibbons, Hennie L.J.M. Gieskes, William W. Corporations 1994 Stock Option Plan.
Grant, III, J. Frank Keller, Paul M. Rady, A. Ralph Reed, 3. Proposal to amend the [ ] [ ] [ ]
James T. Rodgers, Philippe S.E. Schreiber, Harry S. Welch Corporation's Non-Discretionary Stock Option Plan.
[ ] FOR [ ] WITHHELD 4. Proposal to ratify the [ ] [ ] [ ]
ALL FROM ALL the selection by the Board of Directors of
NOMINEES NOMINEES Arthur Andersen LLP as the independent certified
accountants for the Corporation for the fiscal year
MARK HERE [ ] ending December 31, 1996.
FOR ADDRESS 5. In their discretion, the proxies are authorized to vote
CHANGE AND upon such other business as may properly come before the
NOTE BELOW meeting.
[ ] __________________________________ EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE,
For all nominees except as noted above SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.
(Please sign exactly as shown on your stock certificate and on
the envelope in which this proxy was mailed. When signing as
partner, corporate officer, attorney, executor, administrator,
trustee, guardian, etc., give full title as such and sign your
own name as well. If stock is held jointly, each joint owner
should sign.)
Signature:_______________________ Date:___________ Signature:__________________________ Date:____________
</TABLE>
<PAGE>
APPENDIX I
BARRETT RESOURCES CORPORATION
1994 STOCK OPTION PLAN
As Adopted As Of April 1, 1994
And As Amended As Of March 5, 1996
This 1994 Stock Option (the "Plan") is adopted by Barrett Resources
Corporation (the "Company") effective as of April 1, 1994 and as amended as of
March 5, 1996.
1. Definitions.
-----------
Unless otherwise indicated or required by the particular context, the
terms used in this Plan shall have the following meanings:
Board: The Board Of Directors of the Company.
-----
Code: The Internal Revenue Code of 1986, as amended.
----
Common Stock: The $.01 par value common stock of the Company.
------------
Company: Barrett Resources Corporation, a corporation incorporated
-------
under the laws of Delaware, any current or future wholly owned subsidiaries of
the Company, and any successors in interest by merger, operation of law,
assignment or purchase of all or substantially all of the property, assets or
business of the Company.
Date Of Grant: The date on which an Option, as defined below, is
-------------
granted under the Plan.
Disinterested Person: A director who has not been granted or awarded
--------------------
equity securities pursuant to any plan of the Company or of any of the Company's
affiliates during the one year prior to that director's service as an
administrator of the Plan, except as otherwise provided in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), with respect to (a) participation in formula plans or ongoing securities
acquisitions plans, and (b) an election to receive securities for an annual
retainer fee.
Fair Market Value: The Fair Market Value of the Option Shares (defined
-----------------
below). The Fair Market Value as of any date shall be as reasonably determined
by the Option Committee (defined below); provided, however, that if there is a
public market for the Common Stock, the Fair Market Value of the Option Shares
as of any date shall not be less than the last reported sale price for the
Common Stock on that date (or on the preceding stock market business day if such
date is a Saturday, Sunday, or a holiday), on the New York Stock Exchange
("NYSE"), as reported in The Wall Street Journal, or if not reported in The Wall
----------------------- --------
Street Journal, as reported in The Denver Post, Denver, Colorado or, if no last
- -------------- ---------------
sale price for the NYSE is available, then the last reported sale price on
either another stock exchange or on a national or local over-the-counter market,
as reported by The Wall Street Journal, or if not available there, in The Denver
----------------------- ----------
Post; provided further, that if no such published last sale price is available
- ----
and a published bid price is available from one of those sources, then the Fair
Market Value of the shares shall not be less than such last reported bid price
for the Common Stock, and if no such published bid price is available, the Fair
Market Value of such shares shall not be less than the average of the bid prices
<PAGE>
quoted as of the close of business on that date by any two independent persons
or entities making a market for the Common Stock, such persons or entities to be
selected by the Option Committee.
Incentive Options: "Incentive stock options" as that term is defined
-----------------
in Code Section 422 or the successor to that Section.
Key Employee: A person designated by the Option Committee who is
------------
employed by the Company and whose continued employment is considered to be in
the best interests of the Company; provided, however, that Key Employees shall
not include those members of the Board who are not employees of the Company.
Key Individual: A person, other than an employee of the Company, who
--------------
is committed to the interests of the Company; provided, however, that Key
Individuals shall not include those members of the Board who are not employees
of the Company.
Non-Qualified Options: Options that are not intended to qualify, or
---------------------
otherwise do not qualify, as "incentive stock options" under Code Section 422 or
the successor to that Section. To the extent that Options that are designated
by the Option Committee as Incentive Options do not qualify as "incentive stock
options" under Code Section 422 or the successor to that Section, those Options
shall be treated as Non-Qualified Options.
Option: The rights to purchase Common Stock granted pursuant to the
------
terms and conditions of an Option Agreement (defined below).
Option Agreement: The written agreement (including any amendments or
----------------
supplements thereto) between the Company and either a Key Employee or a Key
Individual designating the terms and conditions of an Option.
Option Committee: With respect to grants of Options to Employees other
----------------
than Officers and Directors of the Company, the Plan shall be administered by an
Option Committee ("Option Committee") composed of the Board or at least two
members of the Board. With respect to grants of Options to Officers or to
Directors, the Plan shall be administered by the Board, if each member is a
Disinterested Person, or by a committee, selected by the Board, consisting of
two or more Directors, each of whom is a Disinterested Person. Such committee
may also be deemed an Option Committee.
Option Shares: The shares of Common Stock underlying an Option granted
-------------
pursuant to this Plan.
Optionee: A Key Employee or Key Individual who has been granted an
--------
Option.
2. Purpose And Scope.
-----------------
(a) The purpose of the Plan is to advance the interests of the Company
and its stockholders by affording Key Employees and Key Individuals, upon whose
initiative and efforts, in the aggregate, the Company is largely dependent for
the successful conduct of its business, an opportunity for investment in the
Company and the incentive advantages inherent in stock ownership in the Company.
-2-
<PAGE>
(b) This Plan authorizes the Option Committee to grant Incentive
Options to Key Employees and to grant Non-Qualified Options to Key Employees and
Key Individuals, selected by the Option Committee while considering criteria
such as employment position or other relationship with the Company, duties and
responsibilities, ability, productivity, length of service or association,
morale, interest in the Company, recommendations by supervisors, the interests
of the Company, and other matters.
3. Administration Of The Plan.
--------------------------
(a) The Plan shall be administered by the Option Committee. The Option
Committee shall have the authority granted to it under this Section and under
each other section of the Plan.
(b) In accordance with and subject to the provisions of the Plan, the
Option Committee shall select the Optionees and shall determine (i) the number
of shares of Common Stock to be subject to each Option, (ii) the time at which
each Option is to be granted, (iii) whether an Option shall be granted in
exchange for the cancellation and termination of a previously granted option or
options under the Plan or otherwise, (iv) the purchase price for the Option
Shares, provided that the purchase price shall be a fixed, and cannot be a
fluctuating, price, (v) the option period, (vi) the manner in which the Option
becomes exercisable, including whether portions of the Option become exercisable
at different times, and (vii) such other terms and conditions as the Option
Committee may deem necessary or desirable. The Option Committee shall determine
the form of Option Agreement to evidence each Option.
(c) The Option Committee from time to time may adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Option Committee shall keep minutes
of its meetings and those minutes shall be distributed to every member of the
Board.
(d) The Board from time to time may make such changes in and additions
to the Plan as it may deem proper and in the best interests of the Company
provided, however, that no such change or addition shall impair any Option
previously granted under the Plan, and that the approval by written consent of a
majority of the holders of the Company's securities entitled to vote, or by the
affirmative votes of the holders of a majority of the Company's securities
entitled to vote at a meeting duly held in accordance with the applicable laws
of the State of Delaware, shall be required for any amendment which would do any
of the following:
(i) materially modify the eligibility requirements for
receiving Options under the Plan;
(ii) materially increase the benefits accruing to Key
Employees or Key Individuals under the Plan; or
(iii) materially increase the number of shares of Common
Stock that may be issued under the Plan.
(e) Each determination, interpretation or other action made or taken
by the Option Committee, unless otherwise determined by the Board, shall be
final, conclusive and binding on all persons, including without limitation, the
Company, the stockholders, directors, officers and employees
-3-
<PAGE>
of the Company, and the Optionees and their respective successors in interest.
No member of the Option Committee shall be personally liable for any action,
determination, or interpretation made in good faith with respect to the Plan,
and all members of the Option Committee shall be, in addition to rights they may
have as directors of the Company, fully protected by the Company with respect to
any such action, determination or interpretation. If the Board makes a
determination contrary to the Option Committee's determination, interpretation
or other action, then the Board's determination shall be final and conclusive in
the same manner.
4. The Common Stock.
----------------
The Board is authorized to appropriate, issue and sell for the
purposes of the Plan, and the Option Committee is authorized to grant Options
with respect to, a total number not in excess of 1,000,000 shares of Common
Stock, either treasury or authorized and unissued, or the number and kind of
shares of stock or other securities which in accordance with Section 9 shall be
substituted for the 1,000,000 shares or into which such 1,000,000 shares shall
be adjusted. All or any unsold shares subject to an Option, that for any reason
expires or otherwise terminates before it has been exercised, again may be made
subject to Options under the Plan.
5. Eligibility.
-----------
Incentive Options may be granted only to Key Employees. Non-
Qualified Options may be granted both to Key Employees and to Key Individuals.
Key Employees and Key Individuals may hold more than one Option under the Plan
and may hold Options under the Plan as well as options granted pursuant to other
plans or otherwise.
6. Option Price.
------------
The Option Committee shall determine the purchase price for the
Option Shares; provided, however, that the purchase price to be paid by
Optionees for the Option Shares shall not be less than 100 percent of the Fair
Market Value of the Option Shares on the Date Of Grant and provided further that
the purchase price shall be a fixed, and cannot be a fluctuating, price.
7. Duration And Exercise Of Options.
--------------------------------
(a) Except as provided in Section 17, the option period shall
commence on the Date Of Grant and shall continue for the period designated by
the Option Committee up to a maximum of ten years from the Date Of Grant.
(b) During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee; provided that, subject to the following
sentence and paragraph (d) of this Section 7, in the event of the legal
disability of an Optionee, the guardian or personal representative of the
Optionee may exercise the Option. If the Option is an Incentive Option, it may
be exercised by the guardian or personal representative of the Optionee only if
the guardian or personal representative obtains a ruling from the Internal
Revenue Service or an opinion of counsel to the effect that neither the grant
nor the exercise of such power is violative of Code Section 422(b)(5) or the
successor to that provision. Any opinion of counsel must be both from counsel
acceptable to the Option Committee and in a form acceptable to the Option
Committee.
-4-
<PAGE>
(c) If the Optionee's employment or affiliation with the Company is
terminated for any reason including the Optionee's death, any Option then held,
to the extent that the Option was exercisable according to its terms on the date
of termination, may be exercised for up to, and not more than, three months
after termination. The duration, if any, of the exercise period of the Option
subsequent to termination will be determined by the Option Committee. Any
options remaining unexercised shall expire at the later of termination or the
end of the extended exercise period, if any.
(d) Each Option shall be exercised in whole or in part by
delivering to the office of the Treasurer of the Company written notice of the
number of shares with respect to which the Option is to be exercised and by
paying in full the purchase price for the Option Shares purchased as set forth
in Section 8 herein; provided, that an Option may not be exercised in part
unless the purchase price for the Option Shares purchased is at least $1,000.
(e) No Option Shares may be sold, transferred or otherwise disposed
of within six months of the Date Of Grant by any person who is subject to the
reporting requirements of Section 16(a) of the Exchange Act on the Date Of
Grant.
8. Payment For Option Shares.
-------------------------
(a) If the purchase price of the Option Shares purchased by any
Optionee at one time exceeds $1,000, the Option Committee, in its sole
discretion, upon request by the Optionee, may permit all or part of the purchase
price for the Option Shares to be paid by delivery to the Company for
cancellation shares of the Common Stock previously owned by the Optionee
("Previously Owned Shares") with a Fair Market Value as of the date of the
payment equal to the portion of the purchase price for the Option Shares that
the Optionee does not pay in cash. Notwithstanding the above, an Optionee shall
be permitted to exercise his Option by delivering Previously Owned Shares only
if he has held, and provides appropriate evidence of such, the Previously Owned
Shares for more than six months prior to the date of exercise. This period (the
"Holding Period") may be extended by the Option Committee acting in its sole
discretion as is necessary, in the opinion of the Option Committee, so that,
under generally accepted accounting principles, no compensation shall be
considered to have been or to be paid to the Optionee as a result of the
exercise of the Option in this manner. At the time the Option is exercised, the
Optionee shall provide an affidavit, and such other evidence and documents as
the Option Committee shall request, to establish the Optionee's Holding Period.
As indicated above, an Optionee may deliver shares of Common Stock as part of
the purchase price only if the Option Committee, in its sole discretion, agrees,
on a case by case basis, to permit this form of payment.
(b) If payment for the exercise of an Option is made other than by
the delivery to the Company for cancellation of shares of the Common Stock, the
purchase price shall be paid in cash, certified funds, or Optionee's check.
Payment shall be considered made when the Treasurer of the Company receives
delivery of the payment at the Company's address, provided that a payment made
by check is honored when first presented to the Optionee's bank.
9. Change In Stock, Adjustments, Etc.
----------------------------------
In the event that each of the outstanding shares of Common Stock
(other than shares held by dissenting stockholders which are not changed or
exchanged) should be changed into, or exchanged for, a different number or kind
of shares of stock or other securities of the Company, or if further changes or
exchanges of any stock or other securities into which the Common Stock shall
have been
-5-
<PAGE>
changed, or for which it shall have been exchanged, shall be made (whether by
reason of merger, consolidation, reorganization, recapitalization, stock
dividends, reclassification, split-up, combination of shares or otherwise), then
there shall be substituted for each share of Common Stock that is subject to the
Plan but not subject to an outstanding Option hereunder, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock (other than shares held by dissenting stockholders which are not changed
or exchanged) shall be so changed or for which each outstanding share of Common
Stock (other than shares held by dissenting stockholders) shall be so changed
or for which each such share shall be exchanged. Any securities so substituted
shall be subject to similar successive adjustments.
In the event of any such changes or exchanges, (i) the Option
Committee shall determine whether, in order to prevent dilution or enlargement
of rights, an adjustment should be made in the number, or kind, or option price
of the shares or other securities that are then subject to an Option or Options
granted pursuant to the Plan, (ii) the Option Committee shall make any such
adjustment, and (iii) such adjustments shall be made and shall be effective and
binding for all purposes of the Plan.
10. Relationship To Employment Or Position.
--------------------------------------
Nothing contained in the Plan, or in any Option or Option Share
granted pursuant to the Plan, (i) shall confer upon any Optionee any right with
respect to continuance of his employment by, or position or affiliation with, or
relationship to, the Company, or (ii) shall interfere in any way with the right
of the Company at any time to terminate the Optionee's employment by, position
or affiliation with, or relationship to, the Company.
11. Nontransferability Of Option.
----------------------------
No Option granted under the Plan shall be transferable by the
Optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution, or except pursuant to a qualified domestic relations
order as defined in the Code, the Employee Retirement Income Security Act, or
rules promulgated thereunder. Except as provided in the preceding sentence, any
attempt to transfer the Option shall void the Option.
12. Rights As A Stockholder.
-----------------------
No person shall have any rights as a stockholder with respect to
any share covered by an Option until that person shall become the holder of
record of such share and, except as provided in Section 9, no adjustments shall
be made for dividends or other distributions or other rights as to which there
is an earlier record date.
13. Securities Laws Requirements.
----------------------------
No Option Shares shall be issued unless and until, in the opinion
of the Company, any applicable registration requirements of the Securities Act
of 1933, as amended, any applicable listing requirements of any securities
exchange on which stock of the same class is then listed, and any other
requirement of law or of any regulatory bodies having jurisdiction over such
issuance and delivery, have been fully complied with. Each Option Agreement and
each Option Share certificate may be imprinted with legends reflecting federal
and state securities laws restrictions and conditions, and the Company may
-6-
<PAGE>
comply therewith and issue "stop transfer" instructions to its transfer agent
and registrar in good faith without liability.
14. Disposition Of Shares.
---------------------
To the extent reasonably requested by the Company, each Optionee,
as a condition of exercise, shall represent, warrant and agree, in a form of
written certificate approved by the Company, as follows: (a) that all Option
Shares are being acquired solely for his own account and not on behalf of any
other person or entity; (b) that no Option Shares will be sold or otherwise
distributed in violation of the Securities Act of 1933, as amended, or any other
applicable federal or state securities laws; (c) that he will report all sales
of Option Shares to the Company in writing on a form prescribed by the Company;
and (d) that if he is subject to reporting requirements under Section 16(a) of
the Exchange Act, (i) he will not violate Section 16(b) of the Exchange Act,
(ii) he will furnish the Company with a copy of each Form 4 and Form 5 filed by
him, and (iii) he will timely file all reports required under the federal
securities laws.
15. Effective Date Of Plan; Termination Date Of Plan.
------------------------------------------------
Subject to the approval of the amendment to the Plan on or before
March 4, 1997 by the affirmative vote of the holders of a majority of the shares
of Common Stock entitled to vote and represented at a meeting duly held in
accordance with the applicable laws of the State of Delaware, the Plan shall be
deemed effective as of April 1, 1994. The Plan shall terminate at midnight on
the date that is ten years from that date, except as to Options previously
granted and outstanding under the Plan at that time. No Options shall be granted
after the date on which the Plan terminates. The Plan may be abandoned or
terminated at any earlier time by the Board, except with respect to any Options
then outstanding under the Plan.
16. Limitation On Amount Of Option.
------------------------------
The aggregate Fair Market Value of the Option Shares underlying all
Incentive Options that have been granted to a particular Optionee and that
become exercisable for the first time during the same calendar year shall not
exceed $100,000, provided that this amount shall be increased or decreased, from
time to time, as Code Section 422 or the successor to that Section is amended,
so that this amount at all times shall equal the amount of the limitation set
forth in the Code. For purposes of the preceding sentence, Fair Market Value of
the Shares underlying any particular Option shall be determined as of the date
that Option is granted.
17. Ten Percent Stockholder Rule.
----------------------------
No Incentive Option may be granted to a Key Employee who, at the
time the Incentive Option is granted, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Company or of
any "parent corporation" or "subsidiary corporation", as those terms are defined
in Section 424, or its successor provision, of the Code, unless at the time the
Incentive Option is granted the purchase price for the Option Shares is at least
110 percent of the Fair Market Value of the Option Shares on the Date Of Grant
and the Incentive Option by its terms is not exercisable after the expiration of
five years from the Date Of Grant. For purposes of the preceding sentence, stock
ownership shall be determined as provided in Section 424, or its successor
provision, of the Code.
-7-
<PAGE>
18. Withholding Taxes.
-----------------
The Option Agreement shall provide that the Company may take such
steps as it may deem necessary or appropriate for the withholding of any taxes
which the Company is required by any law or regulation or any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with any Option including, but not limited to, the withholding of all
or any portion of any payment or the withholding of issuance of Option Shares to
be issued upon the exercise of any Option.
19. Effect Of Changes In Control And Certain Reorganizations.
--------------------------------------------------------
(a) In event of a Change In Control of the Company (as defined
below), the Option Committee, in its sole discretion, shall have the right, but
not the obligation, to do any or all of the following:
(i) provide that all Options granted pursuant to
the Plan shall become exercisable immediately
at the time of such Change In Control (or at
such other time as the Committee shall
determine), except that this acceleration
would not occur with respect to any Incentive
Options for which the acceleration would
result in a violation of Section 16 of this
Plan;
(ii) provide for an Optionee to surrender an Option
(or portion thereof) and to receive in
exchange a cash payment, for each Option share
underlying the surrendered Option, equal to
the excess of the aggregate Fair Market Value
of the Option Share on the date of surrender
over the exercise price for the Option Share.
To the extent any Option is surrendered
pursuant to this Subparagraph 19(a) (ii), it
shall be deemed to have been exercised for
purposes of Section 4 hereof; and
(iii) make any other adjustments, or take any other
action, as the Option Committee, in its
discretion, shall deem appropriate provided
that any such adjustments or actions would not
result in an Optionee receiving less value
than pursuant to any or all of Subparagraphs
19(a)(i) or 19(a) (ii) above.
For purposes of this Section 19, a "Change
In Control" of the Company shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act regardless of whether the
Company is then subject to such reporting requirement.
(b) In the event that the Company enters into, or the Board shall
propose that the Company enter into, a Reorganization Event (as defined below),
the Option Committee, in its sole discretion, may make any or all of the
following adjustments:
(i) by written notice to each Optionee provide
that such Optionee's Options shall be
terminated or cancelled, unless exercised
within 30 days (or such
-8-
<PAGE>
other period as the Option Committee shall
determine) after the date of such notice;
(ii) advance the dates upon which any or all
outstanding Options shall be exercised,
except that this advance will not occur with
respect to any Incentive Options for which
the advance would result in a violation of
Section 16 of this Plan;
(iii) provide for termination or cancellation of an
Option in exchange for payment to the
Optionee of an amount in cash or securities
equal to the excess, if any, over the
exercise price of that Option of the Fair
Market Value of the Option Shares subject to
the Option at the time of such termination or
cancellation; and
(iv) make any other adjustments, or take any other
action, as the Option Committee, in its
discretion, shall deem appropriate, provided
that any such adjustments or actions shall
not result in the Optionee receiving less
value than is possible pursuant to any or all
of Subparagraphs 19(b)(i), 19(b)(ii), and
19(b) (iii) above. Any action taken by the
Option Committee may be made conditional upon
the consummation of the applicable
Reorganization Event.
For purposes of this Section 19, a
"Reorganization Event" shall be deemed to occur if (A) the Company is merged or
consolidated with another corporation, (B) one person becomes the beneficial
owner of all of the issued and outstanding equity securities of the Company (for
purposes of this Section 19(b), the terms "person" and "beneficial owner" shall
have the meanings assigned to them in Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder), (C) a division or subsidiary of
the Company is acquired by another corporation, person or entity, (D) all or
substantially all the assets of the Company are acquired by another corporation,
or (E) the Company is reorganized, dissolved or liquidated.
20. Other Provisions.
----------------
The following provisions are also in effect under the Plan:
(a) The use of a masculine gender in the Plan shall also include
within its meaning the feminine, and the singular may include the plural, and
the plural may include the singular, unless the context clearly indicates to the
contrary.
(b) Any expenses of administering the Plan shall be borne by the
Company.
(c) This Plan shall be construed to be in addition to any and all
other compensation plans or programs. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power or
authority of the Board to adopt such other additional incentive or other
compensation arrangements as the Board may deem necessary or desirable.
-9-
<PAGE>
(d) The validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and the rights of any and
all persons having or claiming to have an interest therein or thereunder shall
be governed by and determined exclusively and solely in accordance with the laws
of the State of Colorado, except in those instances where the rules of conflicts
of laws would require application of the laws of the State of Delaware.
* * * * *
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<PAGE>
Appendix II
BARRETT RESOURCES CORPORATION
NON-DISCRETIONARY STOCK OPTION PLAN
As Amended March 5, 1996
This Non-Discretionary Stock Option Plan (the "Plan") is adopted by Barrett
Resources Corporation (the "Company"), to be effective as of May 1, 1991.
1. Definitions.
-----------
Unless otherwise indicated or required by the particular context, the
terms used in this Plan shall have the following meaning:
Board: The Board of Directors of the Company.
-----
Code: The Internal Revenue Code of 1986, as amended.
----
Common Stock: The $.01 par value common stock of the Company.
------------
Company: Barrett Resources Corporation, a corporation incorporated
-------
under the laws of Delaware, any current or future wholly owned subsidiaries of
the Company, and any successors in interest by merger, operation of law,
assignment or purchase of all or substantially all of the property, assets or
business of the Company.
Date Of Grant: The date on which an Option, as defined below, is
-------------
granted under the Plan.
Fair Market Value: Fair Market Value of the Common Stock as of a
-----------------
certain date shall be calculated as follows: (i) if there is a public market for
the Common Stock, the Fair Market Value of the Common Stock shall be equal to
and not less than the last reported sale price for the Common Stock on that date
(or on the preceding stock market business day if such date is a Saturday,
Sunday, or a holiday), on either a national or local over-the-counter market, as
reported by The Denver Post, Denver, colorado, or if not available there, in the
---------------
Wall Street Journal; (ii) if no such published last sale price is available and
- -------------------
a published bid price is available from one of those sources, then the Fair
Market Value of the Common Stock shall be equal to and not less than such last
reported bid price for the Common Stock on that date (or on the preceding stock
market business day if such date is a Saturday, Sunday, or a holiday), and (iii)
if no such published bid price is available, the Fair Market Value of the Common
Stock shall be equal to and not less than the average of the bid prices quoted
as of the close of business on that date (or on the preceding stock market
business day if such date is a Saturday, Sunday, or a holiday) by any two
independent persons or entities making a market for the Common Stock.
Non-Employee Director: A person who is a member of the Board of
---------------------
Directors and who is not an employee of the Company.
Option: The rights to purchase Common Stock granted pursuant to the
------
terms and conditions of an Option Agreement (defined below).
<PAGE>
Option Agreement: The written agreement (including any amendments or
----------------
supplements thereto) between the Company and a Non-Employee Director designating
the terms and conditions of an Option.
Option Shares: The shares of Common Stock underlying an Option granted
-------------
pursuant to this Plan.
Optionee: A Non-Employee Director who has been granted an Option.
--------
2. Purpose And Scope.
-----------------
(a) The purpose of the Plan is to advance the interests of the Company
and its stockholders by affording Non-Employee Directors, whose participation
and guidance contributes to the successful operation of the Company, an
opportunity for investment in the Company and the incentive advantages inherent
in stock ownership in the Company.
(b) This Plan provides that Options be granted to Non-Employee Directors
according to the formula set forth in Section 3 of this Plan.
3. Operation Of The Plan.
---------------------
(a) Grant Of Options: Amount And Timing. Options to purchase 200,000
-----------------------------------
shares of Common Stock shall be granted under the Plan to each Non-Employee
Director at the later to occur of (i) May 1, 1991 and (ii) the date he or she
becomes a Non-Employee Director of the Company. In addition, on the date that
all of an Optionee's Options to purchase 10,000 shares either have become
exercisable, as provided in Section 3(c), or have expired, as provided in
Section 3(d), Options to purchase an additional 10,000 shares shall be granted
to the Optionee provided that, at that time, he or she is a Non-Employee
Director. All Options shall be exercisable only as set forth in Section 3(c)
below and shall be subject to the other terms and conditions set forth in this
Plan or otherwise established by the Company.
(b) Option Exercise Price. The exercise price for the Options shall
---------------------
be the Fair Market Value of the Common Stock on the Date Of Grant.
(c) Exercise. For each Board of Directors' meeting attended by an
--------
Optionee subsequent to December 15, 1990, Options to purchase 500 shares of
Common Stock will become exercisable. For purposes of the Plan, a "Board of
Directors' meeting attended" shall mean a board of Directors' meeting which is
attended by the Optionee in person or by telephone conference call and which is
at least four hours in length. For purposes of this Section 3(c), Board of
Directors' meetings of less than four hours in length may be cumulated with
other Board of Directors' meetings of less than four hours in length provided
that any such meetings cumulated together occur within a 365-day period and
further provided that they have not been cumulated previously for the purposes
of this Section 3(c).
(d) Term. the Options shall expire upon the later to occur of (i) five
----
years from the Date Of Grant and (ii) two years after the Options to purchase
those shares first become exercisable. Notwithstanding the foregoing, Options
shall expire, if not exercised, 90 days after the Optionee ceases to be a
director of the Company.
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<PAGE>
(e) Amendments. This Plan may be changed or modified from time to time
----------
provided, however, that (A) no such change or modification shall impair any
Option previously granted under the Plan, (B) the provisions relating to the
amount, price and timing of the options shall not be amended more than once
every six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act, or rules promulgated thereunder, and (C) the
approval by written consent of a majority of the holders of the Company's
securities entitled to vote, or by the affirmative votes of the holders of a
majority of the Company's securities entitled to vote at a meeting duly held in
accordance with the applicable laws of the state of Delaware, shall be required
for any amendment which would do any of the following:
(i) materially modify the eligibility requirements for receiving
Options under the Plan;
(ii) materially increase the benefits accruing to Non-Employee
Directors under the Plan; or
(iii) materially increase the number of shares of Common Stock that
may be issued under the Plan.
4. Number of Shares.
----------------
The Board is authorized to appropriate, issue and sell for the purposes
of the Plan an aggregate maximum of 200,000 shares of Common Stock, including
both treasury and newly issued shares, or the number and kind of shares of stock
or other securities which in accordance with Section 8 shall be substituted for
the 200,000 shares or into which such 200,000 shares shall be adjusted. All or
any unsold shares subject to an Option, that for any reason expires or otherwise
terminates before it has been exercised, again may be made subject to other
Options under the Plan.
5. Eligibility.
-----------
Options shall be granted under the Plan only to Non-Employee Directors
provided that any Non-Employee Director may waive his right to participate in
the Plan.
6. Exercise Of Options.
-------------------
(a) During the lifetime of the Optionee, the Option shall be exercisable
only by the Optionee; provided that, subject to Section 3(c) and 3(d), in the
event of the legal disability of an Optionee, the guardian or personal
representative of the Option may exercise the Option.
(b) Each Option shall be exercised in whole or in part by delivering to
the office of the Treasurer of the Company written notice of the number of
shares with respect to which the Option is to be exercised and by paying in full
the purchase price for the Option Shares purchased as set forth in Section 7
herein; provided, that an Option may not be exercised in part unless the
purchase price for the Option Shares purchased is at least $1,000.
(c) No Option Shares may be sold, transferred or otherwise disposed of
for a period of at least six months following the Date Of Grant of the Option.
-3-
<PAGE>
7. Payment For Option Shares.
-------------------------
(a) For any single purchase by an Optionee of Option Shares at a total
purchase price in excess of $1,000, the Company, in its sole discretion, upon
request by the Optionee, may permit all or part of the purchase price for the
Option Shares to be paid by delivery to the Company for cancellation shares of
the Common Stock previously owned by the Optionee ("Previously Owned Shares")
with a Fair Market Value as of the date of the payment equal to the portion of
the purchase price for the Option Shares that the Optionee does not pay in cash.
Notwithstanding the above, an Optionee shall be permitted to exercise his Option
by delivering Previously Owned Shares only if he has held, and provides
appropriate evidence of such, the Previously Owned Shares for more than six
months prior to the date of exercise. This period (the "Holding Period") may be
extended by the Company acting in its sole discretion as is necessary, in the
opinion of the Company, so that, under generally accepted accounting principles,
no compensation shall be considered to have been or to be paid to the Optionee
as a result of the exercise of the Option in this manner. At the time the
Option is exercised, the Optionee shall provide an affidavit, and such other
evidence and documents as the Company shall request, to establish the Optionee's
Holding Period. As indicated above, an Optionee may deliver shares of Common
Stock as part of the purchase price only if the Company, in its sole discretion
agrees, on a case by case basis, to permit this form of payment.
(b) If payment for the exercise of an Option is made other than by the
delivery to the Company for cancellation of shares of the Common Stock, the
purchase price shall be paid in cash or certified funds.
8. Change In Stock, Adjustments, Etc.
----------------------------------
In the event that each of the outstanding shares of Common Stock (other
than shares held by dissenting stockholders which are not changed or exchanged)
should be changed into, or exchanged for, a different number or kind of shares
of stock or other securities of the Company, or if further changes or exchanges
of any stock or other securities into which the Common Stock shall have been
changed, or for which it shall have been exchanged, shall be made (whether by
reason of merger, consolidation, reorganization, recapitalization, stock
dividends, reclassification, split-up, combination of shares or otherwise), then
there shall be substituted for each share of Common Stock that is subject to the
Plan but not subject to an outstanding Option hereunder, the number and kind of
shares of stock or other securities into which each outstanding share of Common
Stock (other than shares held by dissenting stockholders which are not changed
or exchanged) shall be so changed or for which each outstanding share of Common
Stock (other than shares held by dissenting stockholders) shall be so changed or
for which each such share shall be exchanged. Any securities so substituted
shall be subject to similar successive adjustments.
In the event of any such changes or exchanges, (i) the Company shall
adjust the number, or kind, or option price of the shares or other securities
that are then subject to an Option or Options granted pursuant to the Plan in
order to prevent dilution or enlargement of rights and (ii) such adjustments
shall be effective and binding for all purposes of the Plan.
-4-
<PAGE>
9. Status As Director.
------------------
Nothing contained in the Plan, or in any Option granted or Option
Shares issued pursuant to the Plan, (i) shall confer upon any Optionee any right
with respect to continuance of his position as a director of the Company, or
(ii) shall interfere in any way with the right of the Company at any time to
elect not to continue or to terminate the Optionee's position as a director of
the Company.
10. Nontransferability Of Option.
----------------------------
No option granted under the Plan shall be transferable by the Optionee,
either voluntarily or involuntarily, except by will or by the laws of descent
and distribution, or pursuant to a qualified domestic relations order as defined
in the Code, the Employee Retirement Income Security Act, or rules promulgated
thereunder. Except as provided in the preceding sentence, any attempt to
transfer an Option shall void the Option.
11. Rights As A Stockholder.
-----------------------
No person shall have any rights as a stockholder with respect to any
share covered by an Option until that person shall become the holder of record
of such share and, except as provided in Section 8, no adjustments shall be made
for dividends or other distributions or other rights as to which there is an
earlier record date.
12. Securities Laws Requirements.
----------------------------
No Option Shares shall be issued unless and until, in the opinion of
the Company, any applicable registration requirements of the Securities Act of
1933, as amended, any applicable listing requirements of any securities exchange
on which stock of the same class is then listed, and any other requirement of
law or of any regulatory bodies having jurisdiction over such issuance and
delivery, have been fully complied with. Each Option Agreement and each Option
Share certificate may be imprinted with legends reflecting federal and state
securities laws restrictions and conditions, and the Company may comply
therewith and issue "stop transfer" instructions to its transfer agent and
registrar in good faith without liability.
13. Disposition Of Shares.
---------------------
To the extent reasonably requested by the Company, each Optionee, as a
condition of exercise, shall represent, warrant and agree, in a form of written
certificate approved by the Company, as follows: (a) that all Option Shares are
being acquired solely for his own account and not on behalf of any other person
or entity; (b) that no Option Share will be sold for at least six months
following the Date Of Grant of the Option; (c) that no Option Shares will be
sold or otherwise distributed in violation of the Securities Act of 1933, as
amended, or any other applicable federal or state securities laws; (d) that he
will report all sales of Option Shares to the Company in writing on a form
prescribed by the Company; and (e) that if he is subject to reporting
requirements under Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (i) he will not violate Section 16(b) of the
Exchange Act, (ii) he will furnish the Company with a copy of each Form 4 and
Form 5 filed by him, and (iii) he will timely file all reports required under
the federal securities laws.
-5-
<PAGE>
14. Effective Date Of Plan; Termination Date Of Plan.
------------------------------------------------
The Plan shall be deemed effective as of May 1, 1991 and shall
terminate at midnight on May 1, 2001, except as to Options previously granted
and outstanding under the Plan at that time. No Options shall be granted after
the date on which the Plan terminates. The Plan may be abandoned or terminated
at any earlier time by the affirmative vote of the holders of a majority of the
shares of Common Stock entitled to vote and represented at a meeting duly held
in accordance with the applicable laws of the State of Delaware, except with
respect to any Options then outstanding under the Plan.
15. Withholding Taxes.
-----------------
The Option Agreement shall provide that the Company may take steps as
it may deem necessary or appropriate for the withholding of any taxes which the
Company is required by any law or regulation or any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with any Option including, but not limited to, the withholding of all or any
portion of any payment or the withholding of issuance of Option Shares to be
issued upon the exercise of any Option.
16. Other Provisions.
----------------
The following provisions are also in effect under the Plan:
(a) The use of a masculine gender in the Plan shall also include within
its meaning the feminine, and the singular may include the plural, and the
plural may include the singular, unless the context clearly indicates to the
contrary.
(b) Any expenses of administering the Plan shall be borne by the
Company.
(c) This Plan shall be construed to be in addition to any and all other
compensation plans or programs. The adoption of the Plan by the stockholders of
the Company shall not be construed as creating any limitations on the power or
authority of the Board to adopt such other additional incentive or other
compensation arrangements as the Board may deem necessary or desirable.
(d) The validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and the rights of any and
all persons having or claiming to have an interest therein or thereunder shall
be governed by and determined exclusively and solely in accordance with the laws
of the State of Colorado, except in those instances where the rules of conflicts
of laws would require application of the laws of the State of Delaware.
BARRETT RESOURCES CORPORATION
By: /s/ William J. Barrett
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William J. Barrett, Chief Executive Officer
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