<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 (S) 240.14a-11(c) or (S) 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] No fee required.
[_] 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
-----------------------------------------------------------
<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 17, 1997
The Annual Meeting of the stockholders of Barrett Resources Corporation (the
"Company") will be held on June 17, 1997 at 9:00 a.m. (Mountain 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 approve the Company's 1997 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;
4. To consider and vote upon a proposal recommended by the Board of
Directors to amend the Company's Certificate of Incorporation to
increase the Company's authorized Common Stock from 35,000,000 shares to
45,000,000 shares;
5. To ratify the selection of Arthur Andersen LLP to serve as the Company's
independent certified accountants for the fiscal year ending December
31, 1997; and
6. 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 21, 1997 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 24, 1997
<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 17, 1997
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. (Mountain Time) on June 17, 1997 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 the
Company's stockholders on or about April 24, 1997.
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 adopt the Company's
1997 Stock Option Plan, in favor of the proposal to amend the Company's Non-
Discretionary Stock Option Plan, in favor of the proposal to amend the
Company's Certificate of Incorporation to increase the Company's authorized
Common Stock from 35,000,000 shares to 45,000,000 shares, 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 entitled to vote, represented either in person or by proxy,
constitutes a quorum at any meeting of the stockholders.
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 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.
<PAGE>
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 AS DIRECTOR AS DIRECTOR
---- --- ------------- ------------------- ------------
<S> <C> <C> <C> <C>
William J. Barrett(1)(2)(5)(7)...... 68 Chief Executive Officer and Next Annual Meeting 1983
Chairman of the Board of Directors
C. Robert Buford(1)(2)(3)(4)........ 63 Director Next Annual Meeting 1983
Derrill Cody(2)(3)(4)............... 58 Director Next Annual Meeting 1995
James M. Fitzgibbons(3)(4)(6)....... 62 Director Next Annual Meeting 1987
Hennie L.J.M. Gieskes(1)(3)(4)...... 58 Director Next Annual Meeting 1985
William W. Grant, III(3)(4)......... 64 Director Next Annual Meeting 1995
J. Frank Keller(5).................. 53 Executive Vice President, Next Annual Meeting 1983
Secretary, Chief Financial
Officer, and a Director
Paul M. Rady(2)(7).................. 43 President, Chief Operating Next Annual Meeting 1994
Officer, and a Director
A. Ralph Reed....................... 59 Executive Vice President-- Next Annual Meeting 1990
Operations and a Director
James T. Rodgers(3)(4).............. 62 Director Next Annual Meeting 1993
Philippe S.E. Schreiber(2)(3)(4).... 56 Director Next Annual Meeting 1985
Harry S. Welch(3)(4)................ 73 Director Next Annual Meeting 1995
</TABLE>
- --------
(1) Member of the Executive Committee of the Board of Directors.
(2) Member of the Board Planning and Nominating Committee of the Board of
Directors.
(3) Member of the Audit Committee of the Board of Directors.
(4) Member of the Compensation Committee of the Board of Directors.
(5) Mr. Keller and Mr. Barrett are brothers-in-law.
(6) Mr. Fitzgibbons served as a Director of the Company from July 1987 until
October 1992. He was re-elected to the Board of Directors in January 1994.
(7) The Board of Directors has elected Paul M. Rady to serve as Chief
Executive Officer effective as of July 1, 1997, at which time William J.
Barrett will retire as Chief Executive Officer. Mr. Barrett's retirement
plans include remaining as Chairman of the Board until January 1999.
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. 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
2
<PAGE>
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's retirement plans include remaining as Chairman of the Board
until January 1999 and remaining as Chief Executive Officer until July 1,
1997.
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 owns approximately 1.9 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 Intrust Financial
Corporation, a bank holding company. Mr. Buford served as a director of
Lonestar Steakhouse & Saloon, Inc. from March 1992 until his resignation on
January 3, 1997.
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 Petroleum
Company ("Plains"), which merged with a subsidiary of the Company on July 18,
1995. 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.
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 Mutual Insurance Company,
American Textile Manufacturers Institute and a Trustee of Dreyfus Laurel
Funds, a series of mutual funds.
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.
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 the Company since December 1983 and Chief Financial Officer of the
Company 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.
PAUL M. RADY has been President, Chief Operating Officer, and a director of
the Company since September 1994. Effective as of July 1, 1997, Mr. Rady will
become Chief Executive Officer and William J. Barrett will continue as
Chairman of the Board. Prior to September 1994, Mr. Rady served as Executive
Vice President-- Exploration of the Company beginning February 1993. 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,
3
<PAGE>
Colorado regional office of Amoco Production Company ("Amoco"), the
exploration and production subsidiary of Amoco Corporation. Mr. Rady was a
Geologist and Geophysicist for Amoco. While with Amoco, 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.
A. RALPH REED has been an Executive Vice President of the Company since
November 1989 and a director since September 1990. 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. From 1982 to 1986, Mr. Reed was
President and Chief Executive Officer of Cotton Petroleum Corporation
("Cotton"), a wholly owned exploration and production subsidiary of United
Energy Resources, Inc. Prior to joining Cotton in 1980, Mr. Reed was employed
by Amoco from 1962, holding various positions including Manager of
International Production, Division Production Manager and Division Engineer.
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. Prior to
1986, Mr. Rodgers was employed in other capacities by Anadarko and Amoco.
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 advisor to Ural Petroleum Corporation, a privately held exploration and
production company operating in the former Soviet Union.
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.
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.
COMMITTEES AND MEETINGS
The Board of Directors has a Compensation Committee, an Audit Committee, an
Executive Committee, and a Board Planning and Nominating Committee. 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 1996, the
Compensation Committee, consisting of Messrs. Buford, Cody, Fitzgibbons,
Gieskes, Grant, Rodgers, Schreiber (Chairman) and Welch, met four times. In
addition, the Compensation Committee took action in 1996 three times by
unanimous consent.
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 1996, the Audit Committee, consisting of Messrs. Buford
(Chairman), Cody, Fitzgibbons, Gieskes, Grant, Rodgers, Schreiber and Welch,
met two times.
4
<PAGE>
The Executive Committee, which held no meetings in 1996, is comprised of
Messrs. Barrett, Buford and Gieskes. The primary responsibility of the
Executive Committee is to exercise the authority of the Board, to the extent
permitted by Delaware law and the Company's Bylaws, during intervals between
regular meetings of the Board.
On January 27, 1997, the Board of Directors established the Board Planning
and Nominating Committee, consisting of Messrs. Barrett, Buford, Cody, Rady
and Schreiber. The primary responsibilities of the Committee are to review the
role, structure and procedures of the Board of Directors and its committees
and to consider and recommend candidates for election to the Board.
During 1996, the Board of Directors met 11 times and took action three times
by unanimous written consent. 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 that
director served during 1996.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. The Company believes that during the fiscal year ended December 31,
1996, its officers, directors and holders of more than 10% of the Company's
Common Stock complied with all Section 16(a) filing requirements, with the
following exception: Donald H. Stevens, Vice President--Corporate Relations
and Capital Markets, reported on October 25, 1996 on a Form 4 the sale on
September 24, 1996 of 3,750 shares. In making these statements, the Company
has relied upon the written representations of its directors and officers.
5
<PAGE>
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 years by the Chief Executive
Officer of the Company and by the four other most highly compensated executive
officers whose compensation exceeded $100,000 during the year ended
December 31, 1996. Beginning with the year ended December 31, 1995, the
Company changed its fiscal year end from September 30 to December 31. The
figures in the following table are for each of the one year periods ended
December 31, 1996, 1995, and 1994:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
AWARDS PAYOUTS
----------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION AWARD(S) OPTIONS/SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- ------------------------ ------ -------- -------- ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Barrett...... 1996 $255,417 $150,000 -0- -0- 100,000 -0- $7,913
Chief Executive Officer 1995 $200,000 -0- -0- -0- -0- -0- $4,680
and Chairman of the 1994 $200,000 $ 40,000 -0- -0- 100,000 -0- $4,560
Board
Paul M. Rady............ 1996 $206,667 $ 63,000 -0- -0- 52,000 -0- $8,138
President, Chief 1995 $175,000 -0- -0- -0- -0- -0- $4,680
Operating Officer, and 1994 $139,583 $ 30,000 -0- -0- 70,000 -0- $4,247
a director
A. Ralph Reed........... 1996 $207,917 $ 54,000 -0- -0- 40,000 -0- $7,988
Executive Vice 1995 $200,000 -0- -0- -0- -0- -0- $4,680
President-- Operations, 1994 $164,583 $ 30,000 -0- -0- 100,000 -0- $4,705
and a director
J. Frank Keller......... 1996 $155,938 $ 40,000 -0- -0- 19,200 -0- $8,222
Executive Vice 1995 $150,000 -0- -0- -0- -0- -0- $4,560
President, Chief 1994 $128,750 $ 25,000 -0- -0- 55,000 -0- $3,922
Financial Officer,
Secretary and a
director
Eugene A. Lang, Jr.,.... 1996 $141,242 $ 25,000 -0- -0- 9,600 -0- $7,432
Senior Vice President 1995 $138,422 $ 8,000 -0- -0- -0- -0- $1,500
and General Counsel(7) 1994 $127,560 -0- -0- -0- 25,460(8) -0- $1,500
</TABLE>
- --------
(1) The dollar value of bonus (cash and non-cash) paid during the year
indicated. In March 1997, cash bonuses were determined by the Compensation
Committee and paid by the Company based upon the Company's performance in
1996. These bonuses included $250,000 paid to Mr. Barrett, $160,000 paid
to Mr. Rady, $120,000 paid to Mr. Reed, $90,000 paid to Mr. Keller, and
$65,000 paid to Mr. Lang. See "Compensation Committee Report on Executive
Compensation--Cash Bonus Awards".
(2) 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.
(3) During the period covered by the Table, the Company did not make any award
of restricted stock, including share units.
(4) The sum of the number of shares of Common Stock to be received upon the
exercise of all stock options granted. At the March 20, 1997 meeting of
the Board of Directors, the Board approved the 1997 Plan. See "Option
Grants Table" and "PROPOSAL TO ADOPT 1997 STOCK OPTION PLAN".
(5) 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) Represents the Company's matching contribution under the Company's 401(k)
Plan for each named executive officer. The amounts for 1994 and 1995 for
Mr. Lang represent matching contributions under the Plains 401(k) Plan.
(7) Mr. Lang's compensation was paid by Plains during the period from January
1, 1994 through July 18, 1995 when Plains merged with a subsidiary of the
Company.
(8) Consists of options to purchase 25,460 shares of common stock of Plains
that became options to purchase 33,097 shares of Common Stock of the
Company upon the merger of Plains with a subsidiary of the Company.
6
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
No stock appreciation rights were granted to any executive officers or
employees in the year ended December 31, 1996. The following table provides
information on stock option grants in the year ended December 31, 1996 to the
named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE
---------------------------------------------- --------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/SHARE) DATE 5% 10%
---- ---------- ---------- --------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
William J. Barrett...... 100,000(1) 14.13% $23.125 March 5, 2003 $ 942,119 $ 2,194,882
Paul M. Rady............ 52,000(2) 7.35% $23.125 March 5, 2003 $ 489,901 $ 1,141,338
A. Ralph Reed........... 40,000(2) 5.65% $23.125 March 5, 2003 $ 376,847 $ 877,952
J. Frank Keller......... 19,200(2) 2.71% $23.125 March 5, 2003 $ 180,886 $ 421,416
Eugene A. Lang, Jr...... 9,600(2) 1.36% $23.125 March 5, 2003 $ 90,443 $ 210,708
</TABLE>
- --------
(1) Half of these option shares became exercisable on March 5, 1997, and the
balance of these option shares are first exercisable on March 5, 1998.
(2) One-fourth of these option shares became exercisable on March 5, 1997, and
an additional one-fourth of these option shares are first exercisable on
each of March 5, 1998, March 5, 1999 and March 5, 2000.
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 year ended December 31, 1996 by the Company's Chief
Executive Officer and the four other most highly compensated executive
officers of the Company whose compensation exceeded $100,000 during the year
ended December 31, 1996 and the year-end value of unexercised options held by
these persons:
AGGREGATED OPTION EXERCISES
FOR FISCAL YEAR ENDED DECEMBER 31, 1996
AND YEAR-END OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END(#)(4) FISCAL YEAR-END($)(5)
------------------------- -------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE(2) ($)(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William J. Barrett...... 20,000 $230,000 5,000 150,000 $125,000 $3,370,000
Chief Executive Officer
and Chairman of the
Board
Paul M. Rady............ -0- -0- 35,000 87,000 $951,500 $1,965,500
President, Chief
Operating Officer, and
a director
A. Ralph Reed........... 14,952 $347,709 35,048 90,000 $904,454 $2,121,800
Executive Vice
President--Operations
and a director
J. Frank Keller......... -0- -0- 27,500 46,700 $760,600 $1,135,000
Executive Vice
President, Chief
Financial Officer,
Secretary, and a
director
Eugene A. Lang, Jr...... 3,750 $ 45,825 40,859 9,600 $981,316 $ 187,200
Senior Vice President
and General Counsel
</TABLE>
- --------
(1) No stock appreciation rights are held by any of the named executive
officers.
(2) The number of shares received upon exercise of options during the year
ended December 31, 1996.
(3) With respect to options exercised during the Company's year ended December
31, 1996, 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.
(4) The total number of unexercised options held as of December 31, 1996,
separated between those options that were exercisable and those options
that were not exercisable.
(5) For all unexercised options held as of December 31, 1996, 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, 1996. As
required, the price used to calculate these figures was the closing sale
price of the Common Stock at year's end, which was $42.625 per share on
December 31, 1996. On April 21, 1997, the closing sale price was $ per
share.
8
<PAGE>
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 matching contribution paid in cash and one-half paid in the Company's
Common Stock. The Company's matching contribution 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 401(k) Plan, the Company has no defined benefit
or actuarial or pension plans or other retirement plans.
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.
COMPENSATION OF DIRECTORS
Standard Arrangements. Pursuant to the Company's standard arrangement for
compensating directors, 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. Effective March 5, 1996, each Outside
Director receives $200 for each telephone meeting lasting more than 15
minutes. Effective April 1, 1997, the meeting attendance fee was increased to
$1,000 and the fee for telephone meetings lasting more than 15 minutes was
increased to $300. Also effective April 1, 1997, the Chairman of the
Compensation and Audit Committees will receive a $1,500 meeting attendance fee
for each committee meeting. For each Board of Directors or committee meeting
attended, each Outside Director will have options to purchase 500 shares of
Common Stock become exercisable. Although these options become exercisable
only at the rate of 500 for each meeting attended, each director will be
granted options to purchase 10,000 shares at the time the individual initially
becomes a director. (The Board of Directors has approved, and recommended for
stockholder approval, amendments to the Non-Discretionary Stock Option Plan.
If the stockholders approve the proposed amendments to the Non-Discretionary
Stock Option Plan, options thereunder will become exercisable at the rate of
1,000 shares for each meeting attended.) 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 same restrictions on
exercise as the previously received options. 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.
Other Arrangements. During the year ended December 31, 1996, 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 Mr. Lang. Mr. Lang 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. Lang's employment is involuntarily
terminated or is terminated by Mr. Lang for "Good Reason", Mr. Lang is to be
paid a cash amount equal to (a) two times of the higher of (i) his then annual
compensation (including
9
<PAGE>
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. Lang
with respect to these amounts and any excise or income taxes payable by Mr.
Lang as a result of this reimbursement of excise taxes. "Good Reason" is
defined as a reduction in Mr. Lang's compensation or employment
responsibilities, a required relocation outside the greater Denver, Colorado
area or, generally, any conduct that renders Mr. Lang unable to discharge his
employment duties effectively. This agreement terminates on July 18, 1998. 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 the responsibilities of any such executive officer
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 year ended December 31, 1996, each 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 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 year ended
December 31, 1996 was, during that 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
None of the members of the Compensation Committee of the Board of Directors
is an employee of the Company. 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 for awards under 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, stock options, and cash bonus awards. To assist the Committee in its
activities discussed in this report, the Compensation Committee utilizes
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.
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
10
<PAGE>
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, 1996, the
Compensation Committee considered the performance of the Company, the
Company's accomplishments, 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 whether and to what extent to grant bonuses to the respective
executive officers based on an assessment of their respective 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 1997, the Compensation Committee granted to 12
executive officers, including the Chief Executive Officer, aggregate cash
bonuses of $1,047,500 for their respective contributions to the Company during
the fiscal year ended December 31, 1996.
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
determination by 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 Company's reserve growth, in the Company's increase in
production, in the continued integration of Plains into the Company, and in
the successful completion of the Company's Common Stock offering in June 1996,
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
William W. Grant, III
James T. Rodgers
Philippe S.E. Schreiber, Chairman
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, 1992, 1993, 1994, 1995 and 1996. 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.
[GRAPH APPEARS HERE]
TOTAL RETURN ANALYSIS
Measurement period BARRETT RESOURCES
(Fiscal Year Covered) CORP PEER GROUP S&P 500
Measurement Pt -
12/31/91 $ 100.00 $ 100.00 $ 100.00
FYE 12/31/92 $ 254.00 $ 151.00 $ 107.60
FYE 12/31/93 $ 248.00 $ 229.00 $ 118.40
FYE 12/31/94 $ 490.00 $ 192.00 $ 119.90
FYE 12/29/95 $ 701.00 $ 261.00 $ 164.90
FYE 12/31/96 $1,018.00 $ 419.00 $ 202.80
12
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS
April 21, 1997 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 that date there were 31,340,876 shares of Common
Stock outstanding. The following table summarizes certain information as of
April 21, 1997 with respect to the ownership by each director, by each
executive officer named in the "EXECUTIVE COMPENSATION" section, 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................ 410,236 Shares(1) 1.3%
C. Robert Buford.................. 653,366 Shares(2) 2.1%
Derrill Cody...................... 13,560 Shares(3) *
James M. Fitzgibbons.............. 11,500 Shares(3) *
Hennie L.J.M. Gieskes............. 899,214 Shares(3) 2.9%
William W. Grant, III............. 26,150 Shares(3) *
J. Frank Keller................... 82,673 Shares(3) *
Eugene A. Lang, Jr................ 49,886 Shares(3) *
Paul M. Rady...................... 87,173 Shares(3) *
A. Ralph Reed..................... 91,177 Shares(4) *
James T. Rodgers.................. 12,000 Shares(3) *
Philippe S.E. Schreiber........... 20,507 Shares(3) *
Harry S. Welch.................... 19,800 Shares(3) *
All Directors and Executive
Officers as a Group
(20 persons) ................... 2,481,776 Shares(5) 7.8%
Fidelity Management and Research
Corporation...................... 3,163,660 Shares(6) 10.1%
82 Devonshire Street
Boston, MA 02109
State Farm Mutual Automobile
Insurance Company and
affiliates....................... 2,278,233 Shares(6)(7) 7.3%
One State Farm Plaza
Bloomington, IL 61710
</TABLE>
- --------
* Less than 1% of the Common Stock outstanding.
(1) The number of shares indicated includes 36,292 shares owned by Mr.
Barrett's wife, 230,000 shares owned by the Barrett Family L.L.L.P., a
Colorado limited liability 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 75,000 shares underlying options
that currently are exercisable or become exercisable within 60 days
following April 21, 1997. 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 598,210 shares of
which 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 11,500 shares underlying
stock options are currently exercisable or that become exercisable within
60 days following April 21, 1997.
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<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 60 days following April 21, 1997 that are held
by each of the following persons: Derrill Cody, 13,300; James M.
Fitzgibbons, 9,500; Hennie L.J.M. Gieskes, 10,000; William W. Grant, III,
16,400; J. Frank Keller, 40,900; Eugene A. Lang, Jr., 43,259; Paul M.
Rady, 57,000; James T. Rodgers, 12,000; Philippe S.E. Schreiber, 10,500;
and Harry S. Welch, 17,200.
(4) The number of shares indicated includes 10,150 shares owned by Mary C.
Reed, Mr. Reed's wife and 55,848 shares underlying options that currently
are exercisable or that become exercisable within 60 days following April
21, 1997.
(5) 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 372,407 shares underlying the options described in notes (1),
(2), (3) and (4), an aggregate of 25,734 shares owned by seven executive
officers not named in the above table, and an aggregate of 78,800 shares
underlying options that currently are exercisable or that are exercisable
within 60 days following April 21, 1997 that are held by those seven
executive officers.
(6) Based on information included in a Schedule 13G filed with the Securities
and Exchange Commission by the named stockholders and from information
obtained from other sources.
(7) The number of shares indicated includes the shares owned by entities
affiliated with State Farm Mutual Automobile Insurance Company ("SFMAI").
Those entities and SFMAI may be deemed to constitute a "group" with regard
to the ownership of shares reported on a Schedule 13G under the Securities
Exchange Act of 1934, as amended.
CERTAIN TRANSACTIONS WITH MANAGEMENT AND PRINCIPAL STOCKHOLDERS
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
Grand Valley Corporation ("GVC") into a subsidiary company, acquired all the
stock of GVC in exchange for 350,000 shares of the Company's Common Stock.
These transactions were effective March 1, 1996. Pursuant to the respective
agreements with Zenith and GVC, Zenith and the shareholders of GVC are
responsible for liabilities 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 were fair
to the Company.
Prior to the Company's acquisition of these interests as described above,
Zenith owned a working interest in many of the leases for which the Company is
the operator. For the period from January 1, 1996 through the effective date
of the acquisition, Zenith paid to the Company, as operator, approximately
$77,000 as Zenith's portion of the lease operating expenses and development
costs for those leases. Also as a result of its working interests, which
ranged from three to 50 percent in leases for which the Company is the
operator, Zenith received approximately $448,000 as its share of revenues. All
terms and arrangements between Zenith and the Company with respect to these
working interests were 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 was a director of GVC, which owned a 10.4 percent interest
in the pipeline gathering system and related facilities on the Company's Grand
Valley Gathering System. Until acquired by the Company, as described above,
ten percent of GVC was owned by Mr. Buford, and 90 percent of GVC was owned by
Mr. Buford's three adult children. From January 1, 1996 through the effective
date of the acquisition, GVC's proportionate share of the pipeline gathering
system's expenses, not including depreciation, was approximately $33,000, and
its share of the pipeline gathering system's revenues was approximately
$101,000. 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.
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<PAGE>
PROPOSAL TO ADOPT 1997 STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder approval, the
Company's 1997 Stock Option Plan (the "1997 Plan"). The 1997 Plan will
terminate, and all options granted under the 1997 Plan will be void, if the
1997 Plan is not approved by the Company's stockholders on or before March 20,
1998.
Options to purchase 1,500,000 shares of Common Stock may be granted pursuant
to the 1997 Plan. The Options granted pursuant to the 1997 Plan may be either
Incentive Options or Non-Qualified Options. The 1997 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 adoption of
the 1997 Plan will be to increase the number of shares issuable upon the
exercise of options that may be granted under all the Company's stock option
plans, which will allow the Company to grant more options from time to time
and thereby augment its program of providing incentives to employees and other
persons. The terms of the 1997 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 who have contributed or are contributing to the success of
the Company 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 180 employees eligible to receive Incentive
Options and an unspecified number of persons eligible to receive Non-Qualified
Options.
Grants of options under the 1997 Plan, which are subject to the
stockholders' approval of the 1997 Plan, are disclosed below under the heading
"New Plan Benefits".
The 1997 Plan will be 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 1997 Plan or under any other stock plan of the Company, or (ii) a
committee, appointed by the Board, consisting of two or more directors,
neither of whom is eligible, nor shall have been eligible during the preceding
year, to receive Options under the 1997 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 Board of Directors has
determined that the Compensation Committee will act as the Option Committee at
all times that the members of the Compensation Committee meet these criteria.
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 1997 Plan after March 20, 2007.
The exercise price of Options granted cannot be less than the fair market
value of the underlying Common Stock on the date the Options are 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.
All options granted under the 1997 Plan will become fully exercisable upon
the occurrence of a change in control of the Company or certain mergers or
other reorganizations or asset sales described in the 1997 Plan.
15
<PAGE>
Options granted pursuant to the 1997 Plan will not be transferable during
the Optionee's lifetime. Subject to the other terms of the 1997 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
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 Board of Directors may at any time terminate the 1997 Plan or make such
amendments or modifications to the 1997 Plan that the Board of Directors deems
advisable, except that no amendments may impair previously outstanding Options
and amendments that materially modify eligibility requirements for receiving
Options, that materially increase the benefits accruing to persons eligible to
receive Options, or that materially increase the number of shares under the
1997 Plan must be approved by the Company's stockholders.
The Incentive Options issuable under the 1997 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 968,050 shares of Common Stock
outstanding under the 1994 Stock Option Plan. The Option Committee may grant
additional options to purchase 900 shares pursuant to that Plan.
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<PAGE>
There also are options to purchase 302,223 shares of Common Stock outstanding
under the Company's 1990 Stock Option Plan, and no additional options may be
granted under that Plan. In addition there are options to purchase 100,871
shares of Common Stock under the former Plains employee option plans. No
additional options will be granted under the former Plains plans. In summary,
the Company only has a total of 900 shares available to grant under all the
current Option Plans.
In March 1997, the Company granted options pursuant to the 1997 Plan that
will be void if the stockholders do not approve the 1997 Plan prior to March
20, 1998. The following table sets forth information concerning the portion of
these conditional grants of stock options made pursuant to the 1997 Plan to
the Company's Chief Executive Officer and each other executive officer of the
Company whose total salary and bonus exceeded $100,000 in the fiscal year
ended December 31, 1996, to all current executive officers of the Company as a
group, to any person who received five percent of such options, and to all
employees, including all current officers who are not executive officers, as a
group. No grants of options were made to any current directors who are not
executive officers under the 1997 Plan.
NEW PLAN BENEFITS
1997 STOCK OPTION PLAN
<TABLE>
<CAPTION>
AGGREGATE
EXERCISE PRICE NUMBER OF SHARES
NAME AND POSITION OF OPTIONS($)* UNDERLYING OPTIONS
----------------- -------------- ------------------
<S> <C> <C>
William J. Barrett, Chief Executive Officer
and Chairman of the Board................... $ 1,643,750 50,000
Paul M. Rady, President, Chief Operating
Officer, and a director..................... $ 1,643,750 50,000
A. Ralph Reed, Executive Vice President--
Operations, and a director.................. -0- -0-
J. Frank Keller, Executive Vice President,
Chief Financial Officer, Secretary, and a
director.................................... $ 877,763 26,700
Eugene A. Lang, Jr., Senior Vice President
and General Counsel......................... $ 1,078,300 32,800
All Current Executive Officers as a Group
(12 Persons)................................ $ 8,180,944 248,850
All Employees as a Group (Excluding Executive
Officers; 53 Persons)....................... $10,168,238 309,300
</TABLE>
- --------
* The dollar value shown is the aggregate exercise price of all options
granted to the person or group indicated as of March 20, 1997.
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 21, 1997 was $ per
share.
The approval of holders of shares representing a majority of the votes
represented at the Annual Meeting will be necessary to adopt the 1997 Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
ADOPT THE 1997 PLAN.
17
<PAGE>
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 200,000 to 300,000 the number of shares of Common Stock issuable pursuant
to options granted under the Non-Discretionary Stock Option Plan (the "Non-
Discretionary Plan") and the manner in which options under the Non-
Discretionary Plan become exercisable. The exercise terms of the Non-
Discretionary Plan have been amended to provide that options to purchase 1,000
shares shall become exercisable for each director for each Board of Directors
meeting attended, other than a meeting attended by telephone conference call.
The Non-Discretionary Plan previously provided that options become exercisable
at the rate of 500 shares per meeting, including telephone conference calls,
that were at least four hours in length and allowed meetings of less than four
hours occurring within a 365-day period to be aggregated. Other than the
preceding changes, there are no additional amendments to the Non-Discretionary
Plan.
The Non-Discretionary 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 Plan is to allow the Company to grant more options
from time to time, and the change in the number of options that become
exercisable for each board meeting attended should increase the rate at which
options become exercisable and new options are granted, allowing the Company
to thereby augment its program of providing incentives to non-employee
directors. There currently are eight non-employee directors eligible to
receive options pursuant to the Non-Discretionary Plan.
The Non-Discretionary Plan, as amended, 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 any time that a non-employee
director owns no options that may become exercisable, the Company will grant
that person options to purchase 10,000 shares of the Company's Common Stock.
The exercise price for the options shall be the fair market value of the
Company's Common Stock on the date the 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, options that have been granted
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.
Options granted pursuant to the Non-Discretionary 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 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 the optionee 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 120,000 shares of Common Stock outstanding
under the Non-Discretionary Plan and options to purchase an additional 70,000
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-
18
<PAGE>
Discretionary Plan to any particular non-employee directors, pursuant to the
terms of the Non-Discretionary 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.
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 21, 1997, was $ 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 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE
NON-DISCRETIONARY PLAN.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board has unanimously approved and proposed for stockholder approval an
amendment to the Company's Certificate of Incorporation to increase the
Company's authorized Common Stock from 35,000,000 to 45,000,000 shares. The
Company's Certificate of Incorporation currently authorizes the issuance of
35,000,000 shares of Common Stock and 1,000,000 shares of preferred stock. As
of April 21, 1997, 31,340,876 shares of the Company's Common Stock were issued
and outstanding, and 1,591,944 shares of Common Stock were reserved for
issuance under the Company's stock option plans and 150,000 shares of Common
Stock were reserved for issuance for another purpose. If the stockholders
approve the 1997 Plan, an additional 1,500,000 shares of the Company's Common
Stock will be reserved for issuance pursuant to the 1997 Plan. If the
stockholders approve the amendment to the Non-Discretionary Plan, an
additional 100,000 shares of the Company's Common Stock will be reserved for
issuance pursuant to the Non-Discretionary Plan. Without amending the
Certificate of Incorporation, the Company would be able to issue 1,917,180
additional shares of Common Stock (317,180 additional shares of Common Stock
if the stockholders approve the 1997 Plan and the amendment to the Non-
Discretionary Plan). If the proposed change in authorized capital is approved
by stockholders, the Company will have 1,917,180 shares of unissued and
unreserved shares of Common Stock available for issuance in the future
(10,317,180 shares if the stockholders approve the 1997 Plan and the amendment
to the Non-Discretionary Plan).
The Board believes that the additional shares of Common Stock resulting from
the amendment of the Certificate of Incorporation should be available for
issuance from time to time as may be required for various purposes, including
the issuance of Common Stock in connection with financing or acquisition
transactions and the issuance or reservation of Common Stock for employee
stock options. The Company anticipates that in the future it will consider a
number of possible financing and acquisition transactions that may involve the
issuance of additional equity, debt or convertible securities. If the proposed
increase in authorized capital is approved, the Board would be able to
authorize the issuance of shares for these purposes without the necessity, and
related costs and delays, of either calling a special stockholders' meeting or
of waiting for the regularly scheduled annual meeting of stockholders in order
to increase the authorized capital. If in a particular instance stockholder
approval were required by law, New York Stock Exchange rule or otherwise
deemed advisable by the Board, then the matter would be referred to the
stockholders for their approval regardless of whether a sufficient number of
shares previously had been authorized. For example, the current rules of the
New York Stock Exchange would require approval by the Company's stockholders
if the number of shares of Common Stock to be issued equaled or exceeded 20
percent of the shares of Common Stock outstanding immediately prior to that
issuance. The stockholders of the Company are not entitled to preemptive
rights with respect to the issuance of any authorized but unissued shares.
The proposed change in capital is not intended to have any anti-takeover
effect and is not part of any series of anti-takeover measures contained in
any debt instruments or the Certificate of Incorporation or the Bylaws of the
Company in effect on the date of this Proxy Statement. However, stockholders
should note that the availability of additional authorized and unissued shares
of Common Stock could make any attempt to gain
19
<PAGE>
control of the Company or the Board more difficult or time consuming and that
the availability of additional authorized and unissued shares might make it
more difficult to remove current management. Although the Board currently has
no intention of doing so, shares of Common Stock could be issued by the Board
to dilute the percentage of Common Stock owned by a significant stockholder
and increase the cost of, or the number of, voting shares necessary to acquire
control of the Board or to meet the voting requirements imposed by Delaware
law with respect to a merger or other business combination involving the
Company. The Company is not aware of any proposed attempt to take over the
Company or of any attempt to acquire a large block of the Company's Common
Stock. The Company has no present intention to use the increased authorized
Common Stock for anti-takeover purposes.
The affirmative vote of a majority of the outstanding shares of the Common
Stock entitled to vote at the Annual Meeting of Stockholders is required to
approve the proposed amendment to the Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL CONCERNING THE
INCREASE IN AUTHORIZED CAPITAL.
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 year ending December 31, 1997
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
SELECTION OF ARTHUR ANDERSEN LLP AS AUDITORS.
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
20
<PAGE>
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 1997 calendar year, proposals by individual
stockholders must be received by the Company no later than December 26, 1997.
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, 1996, 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
THE CLOSE OF BUSINESS ON APRIL 21, 1997. 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 24, 1997
21
<PAGE>
THIS 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
- --------------------------------------------------------------------------------
PROXY PROXY
For the Annual Meeting Of Stockholders of
BARRETT RESOURCES CORPORATION
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Paul M. Rady and J. Frank Keller, or either
of them, as proxies or ______________ (stockholders may strike the person(s)
designated by Management and insert name and address of other person(s) to vote
the proxy and mail proxy to named proxy holder) with power of substitution to
vote all the shares of the undersigned with all of the powers which the
undersigned 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 17, 1997, at the Westin Hotel, 1672 Lawrence Street, Denver,
Colorado, or any adjournments thereof, on the following matters:
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- --------------------------------------------------------------------------------
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, 4 and 5. This proxy is solicited on
behalf of the Board of Directors of Barrett Resources Corporation.
1. ELECTION OF DIRECTORS
<PAGE>
Nominees: William J. Barrett, C. Robert Buford, Derrill Cody, James M.
Fitzgibbons, Hennie L.J.M. Gieskes, William W. Grant, III, J. Frank Keller,
Paul M. Rady, A. Ralph Reed, James T. Rodgers, Philippe S.E. Schreiber, Harry
S. Welch
FOR ALL NOMINEES [_] WITHHELD FROM ALL NOMINEES [_]
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE [_] MARK HERE FOR ADDRESS CHANGE AND
NOTE BELOW [_]
2. Proposal to adopt the Corporation's 1997 Stock Option Plan.
___For ___Against ___Abstain
3. Proposal to amend the Corporation's Non-Discretionary Stock Option Plan.
___For ___Against ___Abstain
4. Proposal to authorize and approve amendment to the Certificate of
Incorporation to increase this authorized Common Stock from 35,000,000
shares to 45,000,000 shares.
___For ___Against ___Abstain
5. Proposal to ratify the selection by the Board of Directors or Arthur
Andersen LLP as the independent certified accountants for the Corporation
for the fiscal year ending December 31, 1997.
6. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE, 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: _________________
