<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)
Not Applicable
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
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
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<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 May 4, 2000
The Annual Meeting of the stockholders of Barrett Resources Corporation (the
"Company") will be held on May 4, 2000 at 9:00 a.m. (Mountain Time) at the
Westin Hotel, 1672 Lawrence Street, Denver, Colorado, for the following
purposes:
1. To elect the seven 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 2000 Stock Option Plan;
3. To ratify the selection of Arthur Andersen LLP to serve as the Company's
independent certified accountants for the fiscal year ending December
31, 2000; and
4. 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 March 15, 2000 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
/s/ PETER A. DEA
PETER A. DEA
Vice Chairman and Chief Executive
Officer
Denver, Colorado
March 28, 2000
<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
May 4, 2000
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 May 4, 2000 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 March 28, 2000.
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 seven nominees for director whose names
are set forth on the proxy card, in favor of the proposal to adopt the
Company's 2000 Stock Option 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 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.
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 that 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.
ELECTION OF DIRECTORS
At the Annual Meeting, the stockholders will elect seven members of the
Board of Directors of the Company. The Board previously consisted of ten
directors. In connection with the pending retirement of certain Board members,
including William J. Barrett, and the Board's decision to reduce the size of
the Board and retain only one inside director, the nominees for directors do
not include Mr. Barrett, A. Ralph Reed, J. Frank Keller or James T. Rodgers,
all of whom currently serve as directors. We would like to thank Messrs.
Barrett, Reed, Keller and Rodgers for their service on the Board. The nominees
for directors include all other current directors, plus Hennie L.J.M. Gieskes,
who previously served as a director until 1997.
<PAGE>
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, except for Hennie L.J.M. Gieskes. Mr.
Gieskes previously served as a director from November 1985 through September
1997.
Each of the nominees has consented to be named in this Proxy Statement 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" and "STOCK OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS".
<TABLE>
<CAPTION>
Initial
Position with the Expiration of Term Date as
Name Age Company as Director Director
---- --- --------------------- ------------------- --------
<S> <C> <C> <C> <C>
C. Robert Buford 66 Director Next Annual Meeting 1983
(1)(2)(3)(4)(5)........
Derrill Cody 61 Director Next Annual Meeting 1995
(1)(2)(3)(4)(5)........
Peter A. Dea............ 46 Vice Chairman, Chief Next Annual Meeting 1999
Executive Officer and
a Director
James M. Fitzgibbons 65 Director Next Annual Meeting 1987
(3)(4)(5)(6)...........
Hennie L.J.M. Gieskes 61 Nominee for Director Next Annual Meeting (7)
(7).................... (7)
William W. Grant, III 67 Director Next Annual Meeting 1995
(3)(4)(5)..............
Philippe S.E. Schreiber 59 Director Next Annual Meeting 1985
(1)(2)(3)(4)(5)........
</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) Member of the Succession Planning Committee of the Board of Directors.
(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) Mr. Gieskes served as a director of the Company from November 1985 through
September 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 1.7 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.
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
2
<PAGE>
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.
Peter A. Dea was elected as Chief Executive Officer, Vice Chairman and a
director in November 1999. (Effective April 1, 2000, Mr. Dea will become
Chairman of the Board and Chief Executive Officer.) He previously served as
Executive Vice President--Exploration from December 1998 until November 1999.
He served as Senior Vice President--Exploration of the Company from June 1996
until December 1998. He held various exploration geologist positions with the
Company from February 1994 through June 1996. Mr. Dea served as President of
Nautilus Oil and Gas Company from 1992 through 1993. From 1982 until 1991, Mr.
Dea served in various positions with Exxon Company USA.
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 January 1998, Mr. Fitzgibbons has been the Chairman of the Board of
Davidson Cotton Company. From October 1990 through December 1997, Mr.
Fitzgibbons was Chairman and Chief Executive Officer of Fieldcrest Cannon, Inc.
From January 1986 until October 1990, Mr. Fitzgibbons was President of Amoskeag
Company. Prior to 1986, he was President of Howes Leather Company. Mr.
Fitzgibbons is also a member of the Board of Directors of Lumber Mutual
Insurance Company, and he is a Trustee of Dreyfus Laurel Funds, a series of
mutual funds.
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 was an advisory director of Colorado National Bank from 1993 through 1999.
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.
Hennie L.J.M. Gieskes previously served as a director of the Company from
November 1985 until September 1997. 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.
Philippe S.E. Schreiber has been a director of the Company since November
1985. Mr. Schreiber is an independent lawyer and business consultant. From
August 1985 through December 1998, he was a partner of, or of counsel to, the
law firm of Walter, Conston, Alexander & Green, P.C. in New York, New York.
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. Mr. Schreiber has served as a director of the United States
principal affiliate of The Mayflower Corporation plc. since 1991. Mr. Schreiber
also serves as a director of other private companies.
Committees and Meetings
The Board of Directors has a Compensation Committee, an Audit Committee, an
Executive Committee, a Board Planning and Nominating Committee, and a
Succession Planning Committee. Mr. Rodgers will not be standing for re-
election. If Mr. Gieskes is elected as a director, we anticipate that he will
be considered for election to the committees on which Mr. Rodgers served.
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 1999, the
Compensation Committee, consisting of Messrs. Buford, Cody, Fitzgibbons, Grant,
Rodgers and Schreiber (Chairman), met five 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
3
<PAGE>
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 1999, the Audit Committee, consisting of
Messrs. Buford (Chairman), Cody, Fitzgibbons, Grant, Rodgers and Schreiber, met
five times.
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.
During 1999, the Executive Committee, consisting of Messrs. William J. Barrett
(who retires on March 31, 2000), Buford, Schreiber and Cody, did not meet.
The primary responsibilities of the Board Planning and Nominating 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. The Planning and Nominating Committee will consider suggestions from
stockholders regarding possible director candidates. These suggestions,
together with appropriate biographical information, should be submitted to the
Secretary of the Company. The Committee, consisting of Messrs. Buford
(Chairman), Cody and Schreiber, met twice during 1999.
The Succession Planning Committee, during 1999, consisted of Messrs. Buford,
Cody, Fitzgibbons, Grant, Rodgers and Schreiber (Chairman). The Committee
reviews management succession in general. During 1999, the Committee met 11
times, principally in conjunction with the selection of a candidate to succeed
Mr. Barrett as Chief Executive Officer.
During 1999, the Board of Directors met seven times. In addition, the Board
approved four matters by unanimous written consent. Each director participated
in at least 75 percent of the aggregate of the total number meetings and
actions by written consent of the Board of Directors and of all committees of
the Board of Directors on which that director served during 1999.
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,
1999, its officers, directors and holders of more than 10% of the Company's
common stock complied with all Section 16(a) filing requirements except as
follows: A. Ralph Reed, President, Chief Operating Officer and a director, was
late in filing two reports concerning two gifts of shares to charities and a
bequest of Company common stock received by his spouse; Bryan G. Hassler,
Senior Vice President--Marketing, was late in filing a report covering the
exercise of a stock option; and C. Robert Buford, a director, was late in
filing a report concerning the contribution of shares of the Company's common
stock owned by Zenith Drilling Company to a limited partnership in exchange for
interests in that limited partnership. In making these statements, the Company
has relied upon the written representations of its directors and officers.
4
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth in summary form the compensation earned
during each of the Company's last three completed years by the Chief Executive
Officer and former Chief Executive Officer of the Company and by the four other
most highly compensated executive officers whose compensation exceeded $100,000
during the year ended December 31, 1999 (the "Named Executive Officers"). The
figures in the following table are for fiscal years ended December 31, 1999,
1998, and 1997:
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------
Awards Payouts
Other ----------------------- -------
Annual Restricted Securities
Compen- Stock Underlying LTIP All Other
Fiscal Salary Bonus sation Award(s) Options/SARs Payouts Compensation
Name and Principal Position Year ($) ($)(1) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- --------------------------- ------ -------- -------- ------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Barrett (7)
....................... 1999 $350,016 $200,000 -0- -0- 100,000 -0- $623,100(7)
Chairman of the Board 1998 $306,512 -0- -0- -0- 110,000 -0- $ 9,600
and a director 1997 $215,000 $145,000 -0- -0- 50,000 -0- $ 9,500
Peter A. Dea (8) ....... 1999 $218,752 $175,000 -0- -0- 100,000 -0- $ 9,600
Chief Executive Officer, 1998 $167,708 -0- -0- -0- 142,000 -0- $ 9,600
Vice Chairman, and a 1997 $153,750 $ 35,000 -0- -0- 7,500 -0- $ 8,838
director
A. Ralph Reed (9) ...... 1999 $285,000 $130,000 -0- -0- 52,500 -0- $ 9,600
President, Chief
Operating 1998 $272,250 -0- -0- -0- 60,000 -0- $ 9,600
Officer, and a director 1997 $217,500 $ 70,000 -0- -0- -0- -0- $ 9,500
J. Frank Keller (10).... 1999 $180,000 $ 85,000 -0- -0- 34,350 -0- $ 9,600
Executive Vice
President, 1998 $177,131 -0- -0- -0- 35,000 -0- $ 9,600
Chief Financial Officer, 1997 $165,768 $ 90,000 -0- -0- 26,700 -0- $ 9,500
and a director
Bryan G. Hassler ....... 1999 $150,000 $208,507 -0- -0- 15,000 -0- $ 8,625
Senior Vice President-- 1998 $143,950 $121,000 -0- -0- 16,000 -0- $ 8,636
Marketing 1997 $135,000 $ 50,000 -0- -0- -0- -0- $ 9,500
</TABLE>
- --------
(1) The dollar value of bonus (cash) earned during the year indicated. The
cash bonuses earned for 1999 were determined by the Compensation Committee
on February 25, 2000. 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.
(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, except in the case of Mr. Barrett
who received additional cash compensation described in Note (7) below.
(7) Mr. Barrett was elected as Chief Executive Officer on March 23, 1998, and
served in that office until November 18, 1999. He will retire as Chairman
of the Board and as a director on March 31, 2000. The
5
<PAGE>
amount shown under "All Other Compensation" for Mr. Barrett for 1999
includes $612,500 payable to Mr. Barrett upon his March 31, 2000
retirement for his contribution to the overall performance of the Company
since returning from retirement in March 1998.
(8) Mr. Dea was elected as Chief Executive Officer, Vice Chairman and a
director on November 18, 1999. Mr. Dea has been elected as Chairman of
the Board beginning on April 1, 2000.
(9) Mr. Reed's membership on the Board will end on May 4, 2000.
(10) Mr. Keller's membership on the Board will end on May 4, 2000.
Option Grants in Last Fiscal Year
No stock appreciation rights were granted to any executive officers or
employees in the year ended December 31, 1999. The following table provides
information on stock option grants in the year ended December 31, 1999 to the
Named Executive Officers.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Price Appreciation
Options Employees Exercise for Option Term
Granted in Fiscal Price Expiration ---------------------
Name (#) Year ($/Share) Date 5% 10%
---- ---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
William J. Barrett...... 100,000 (1) 13.62% $16.4375 3/31/2003 $2,498,250 $4,093,250
Peter A. Dea............ 100,000 (2) 13.62% $31.6875 11/18/2006 $ 973,250 $2,568,250
A. Ralph Reed........... 52,500 (3) 7.15% $16.4375 2/26/2006 $1,311,581 $2,148,956
J. Frank Keller......... 34,350 (3) 4.68% $16.4375 2/26/2006 $ 858,148 $1,406,031
Bryan G. Hassler........ 15,000 (3) 2.04% $16.4375 2/26/2006 $ 374,737 $ 613,987
</TABLE>
- --------
(1) These option shares become exercisable on March 31, 2000.
(2) One-fourth of these option shares become exercisable on each of November
18, 2000, November 18, 2001, November 18, 2002, and November 18, 2003.
(3) One-fourth of these option shares become exercisable on each of February
26, 2000, February 26, 2001, February 26, 2002, and February 26, 2003.
6
<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, 1999 by the Named Executive
Officers and the year-end value of unexercised options held by these persons:
Aggregated Option Exercises
For Fiscal Year Ended December 31, 1999
And Year-End Option Values (1)
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Value Year-End (#) (4) Fiscal Year-End ($) (5)
Shares Acquired Realized ------------------------- -------------------------
Name on Exercise (2) ($) (3) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William J. Barrett...... 28,000 $347,125 210,000 150,000 $681,875 $1,300,000
Peter A. Dea............ 34,811 $285,979 46,782 217,282 $231,327 $ 590,796
A. Ralph Reed........... 28,400 $408,250 52,500 100,000 $240,000 $ 745,625
J. Frank Keller......... 55,000 $508,674 40,250 75,000 $116,212 $ 476,850
Bryan G. Hassler........ 8,969 $ 52,937 24,012 42,000 $ 22,705 $ 18,984
</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, 1999.
(3) With respect to options exercised during the Company's year ended December
31, 1999, 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, 1999,
separated between those options that were exercisable and those options
that were not exercisable.
(5) For all unexercised options held as of December 31, 1999, 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, 1999. As
required, the price used to calculate these figures was the closing sale
price of the common stock at year's end, which was $29.44 per share on
December 31, 1999. On March 15, 2000, the closing sale price was $24.00 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. In addition, the Company
currently contributes on behalf of each participating employee 100 percent of
that employee's contribution, up to a maximum contribution by the Company of
six percent of that employee's gross salary for that pay period, 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.
7
<PAGE>
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 $1,000 meeting attendance fee for each Board or Committee meeting
attended. Each Outside Director also receives $300 for each telephone meeting
lasting more than 15 minutes. The Chairmen of the Compensation and Audit
Committees receive, however, a $1,500 meeting attendance fee for each committee
meeting. Beginning on April 1, 2000, the meeting attendance fee will increase
to $1,100, the Chairman's fees for Committee Meetings will increase to $1,600,
and the fee for telephone meetings will increase to $500. All directors are
reimbursed for out-of-pocket expenses incurred in connection with attending
Board and Committee meetings.
For each Board of Directors or committee meeting attended, each Outside
Director will have options to purchase 1,000 shares of common stock become
exercisable. Although these options become exercisable only at the rate of
1,000 for each meeting attended, each director will be granted options to
purchase 10,000 shares at the time the individual 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 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 the exercise price for those options 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, 1999, 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 has entered into severance agreements with Messrs. Barrett,
Reed, Keller, Dea and Hassler. Generally, the Agreements of Messrs. Reed,
Keller, Dea and Hassler provide, among other things, that if, within three
years after a Change-in-Control (as defined in the severance agreement) the
employee's employment is terminated by the employee for "Good Reason" or by the
Company other than for "Cause" (as such terms are defined in the severance
agreement), the employee will be entitled to a lump sum cash payment equal to
three times (two times in the case of Mr. Hassler) the employee's annual
compensation (based on annual salary and past annual bonus) in addition to
continuation of certain benefits for three years (two years in the case of Mr.
Hassler) from the date of termination. Mr. Barrett's agreement, which expires
on March 31, 2000, provides that, if his employment is terminated by him for
Good Reason or by the Company other than for Cause prior to March 31, 2000, he
will receive a lump sum cash amount equal to the compensation that would have
been paid from his termination date through March 31, 2000, in addition to
continued benefits through March 31, 2000.
In addition, the Company's stock option plans and option agreements under
the plans provide for the acceleration of option exercisability in the event of
a change-in-control.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 1999, each of Messrs. Buford, Cody,
Fitzgibbons, Grant, Rodgers and 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. No other person who served as a member of the Compensation
Committee during the year ended
8
<PAGE>
December 31, 1999 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, except Mr. Buford who served as the Chairman of the
Board from December 1983 through March 1984. However, Mr. Buford was never a
salaried employee of the Company.
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 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.
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 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
considers 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 the fiscal year ended December
31, 1999, the Compensation Committee, in February 2000, considered the
performance of the Company, particularly the reserve growth achieved and the
successful reorganization of the Company's operations. Based on the foregoing,
the Committee awarded a bonus of $175,000 to Mr. Dea, a bonus of $130,000 to
Mr. Reed, and a bonus of $85,000 to Mr. Keller. A bonus of $208,507 was awarded
to Mr. Hassler pursuant to the Company's Marketing and Trading Group Bonus Plan
based on results achieved in 1999. This plan was developed by the Compensation
Committee as a means of rewarding those individuals who contribute to the
profitability of the Company through their activities as members of the
Marketing and Trading Group. The Company has the right to terminate the
Marketing and Trading Group Bonus Plan at any time. Mr. Hassler is the only
officer who participates in this plan.
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
9
<PAGE>
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 enhancement of stockholder value, including the reserve growth
achieved and the successful reorganization of the Company's operations
accomplished during 1999, as well as the compensation being paid to the chief
executive officers by other relatively comparable companies in the oil and gas
industry. In addition, in February, 2000, the Compensation Committee approved a
$612,500 payment to Mr. Barrett upon his retirement on March 31, 2000 in
recognition of his contributions to the Company since returning from retirement
in March 1998. The Chief Executive Officer's long-term compensation from stock
options also is largely dependent upon Company performance.
Compensation Committee of the Board
of Directors:
C. Robert Buford
Derrill Cody
James M. Fitzgibbons
William W. Grant, III
James T. Rodgers
Philippe S.E. Schreiber, Chairman
10
<PAGE>
Performance Graph
The following line graph compares the yearly percentage change in the
cumulative total stockholder return, assuming reinvestment of dividends, for
(1) the common stock, (2) 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 (3)
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. Parker & Parsley Petroleum Company is included in the Peer Group until
August 8, 1997 when it ceased to exist after it merged with and into Mesa
Operating Co., a subsidiary of Pioneer Natural Resources Company. United
Meridian Corporation is included in the Peer Group until March 27, 1998 when it
merged with and into Ocean Energy Corporation. Seagull Energy Corporation is
included in the Peer Group until March 30, 1999 when it merged with Ocean
Energy Corporation. The comparison shown in the graph is for the years ended
December 31, 1995, 1996, 1997, 1998 and 1999. 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>
Total Return Analysis
12/30/94 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
<S> <C> <C> <C> <C> <C> <C>
Barrett Resources $100 $143.29 $207.93 $147.56 $117.08 $143.61
Peer Group $100 $135.94 $218.23 $189.22 $142.59 $178.59
S&P 500 $100 $137.54 $169.15 $225.48 $289.91 $350.91
</TABLE>
11
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND PRINCIPAL STOCKHOLDERS
March 15, 2000 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 32,601,589 shares of common
stock outstanding. The following table summarizes certain information as of
March 15, 2000 with respect to the ownership by each director and nominee for
director, by each Named 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>
Amount/Nature
of Beneficial Percent of Class
Name of Beneficial Owner Ownership Beneficially Owned
------------------------ ------------- ------------------
<S> <C> <C>
William J. Barrett....................... 595,199(1) 1.8%
C. Robert Buford......................... 642,866(2) 2.0%
Derrill Cody............................. 31,560(3) *
Peter A. Dea............................. 65,740(3) *
James M. Fitzgibbons..................... 28,500(3) *
Hennie L.J.M. Gieskes.................... 899,214 2.8%
William W. Grant, III.................... 39,250(3) *
Bryan G. Hassler......................... 34,741(3) *
J. Frank Keller.......................... 139,197(3) *
A. Ralph Reed............................ 141,666(4) *
James T. Rodgers......................... 28,000(3) *
Philippe S.E. Schreiber.................. 27,507(3) *
All Directors and Executive Officers as a
Group (16 Persons)...................... 1,998,036(5) 6.0%
Franklin Resources, Inc. ................ 3,627,021 11.1%
777 Mariners Island Shares(6)
San Mateo, CA 94403
State Farm Mutual Automobile Insurance
Company and affiliates.................. 2,936,938 9.0%
One State Farm Plaza Shares(6)(7)
Bloomington, IL 61710
</TABLE>
- --------
* Less than 1% of the common stock outstanding.
(1) The number of shares indicated includes 90,412 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 48.626622
percent of the partnership interests, and 360,000 shares underlying options
that currently are exercisable or become exercisable within 60 days
following March 15, 2000. Pursuant to Rule 16a-1(a)(4) under the Exchange
Act, Mr. Barrett disclaims ownership of all but 111,841 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 548,210 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 Exchange
Act. The number of shares indicated also includes 20,500 shares underlying
stock options that currently are exercisable or that become exercisable
within 60 days following March 15, 2000.
12
<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 March 15, 2000 that are held by each
of the following persons: Derrill Cody, 31,300; Peter A. Dea, 56,157; James
M. Fitzgibbons, 16,500; William W. Grant, III, 26,900; Bryan G. Hassler,
31,512; J. Frank Keller, 67,812; James T. Rodgers, 18,000; and Philippe
S.E. Schreiber, 20,500.
(4) The number of shares indicated includes 6,700 shares owned by Mary C. Reed,
Mr. Reed's wife, and 88,125 shares underlying options that currently are
exercisable or that become exercisable within 60 days following March 15,
2000.
(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 737,306 shares underlying the options described in notes (1), (2), (3)
and (4), an aggregate of 38,010 shares owned by six executive officers not
named in the above table, and an aggregate of 185,800 shares underlying
options that currently are exercisable or that are exercisable within 60
days following March 15, 2000 that are held by those six executive
officers.
(6) Based on information included in a Schedule 13G filed with the Securities
and Exchange Commission by the named stockholders.
(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.
TRANSACTIONS WITH MANAGEMENT
During 1999, there were no transactions between the Company and its
directors, executive officers or known holders of greater than five percent of
the Company's common stock in which the amount involved exceeded $60,000 and in
which any of the foregoing persons had or will have a material interest.
PROPOSAL TO ADOPT 2000 STOCK OPTION PLAN
The Board of Directors has adopted, subject to stockholder approval, the
Company's 2000 Stock Option Plan (the "2000 Plan"). The 1999 Plan will
terminate, and all options granted under the 2000 Plan will be void, if the
2000 Plan is not approved by the Company's stockholders on or before February
25, 2001.
Options to purchase 600,000 shares of common stock may be granted pursuant
to the 2000 Plan. The Options granted pursuant to the 2000 Plan may be either
Incentive Options or Non-Qualified Options. The 2000 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 2000
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 2000 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 200 employees eligible to receive Incentive Options and an
unspecified number of persons eligible to receive Non-Qualified Options.
The 2000 Plan will be administered by the Option Committee, which may be
composed of the entire Board of Directors or by a Committee of at least two
directors selected by the Board. If the Option Committee consists of less than
the entire Board, each member of the Committee is required to be a "non-
employee director" and, to the extent necessary for any option granted under
the 2000 Plan to be considered as performance based compensation that is not
subject to limitations on deductibility under the Internal Revenue
13
<PAGE>
Code (the "Code"), shall be an "Outside Director". A "non-employee director" is
a director who (1) is not currently an officer or employee of the Company or
any of its subsidiaries, (2) does not receive compensation from the Company in
excess of $60,000 for services rendered other than as a director, and (3) is
not involved in a transaction that is required to be disclosed in the Company's
Form 10-K and proxy reports as a related party transaction. An "Outside
Director" has the meaning as set forth in the Code and regulations under the
Code, and means, generally, a director who (1) is not a current employee of the
Company, (2) is not a former employee of the Company who receives compensation
for prior services during the taxable year in question, (3) has not been an
officer of the Company, and (4) does not receive compensation from the Company,
either directly or indirectly, in any capacity other than as a director. 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 2000 Plan after February
25, 2010.
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 2000 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 2000 Plan.
Options granted pursuant to the 2000 Plan will not be transferable during
the Optionee's lifetime except in limited circumstances set forth in the 2000
Plan. Subject to the other terms of the 2000 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.
14
<PAGE>
The Board of Directors may at any time terminate the 2000 Plan or make such
amendments or modifications to the 2000 Plan that the Board of Directors deems
advisable, except that no amendments may impair previously outstanding Options
and amendments that require stockholder approval under applicable law may not
be made without that approval.
The Incentive Options issuable under the 2000 Plan are structured to qualify
for favorable tax treatment provided for "incentive stock options" by Section
422 of 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 592,302 shares of common stock
outstanding under the Company's 1999 Stock Option Plan, and the Committee may
grant additional options to purchase 4,698 shares under that Plan. There
currently are options to purchase 139,158 shares of common stock outstanding
under the Company's 1997 Stock Option Plan, and the Option Committee may grant
additional options to purchase 24,157 shares pursuant to that Plan. There also
are options to purchase 536,371 shares of common stock outstanding under the
1994 Stock Option Plan. The Option Committee may grant additional options to
purchase 58,875 shares pursuant to that Plan. In addition, there are options to
purchase 33,416 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 has a total of only 87,730 shares available to grant under
all the current option Plans.
No options have been granted pursuant to the 2000 Plan.
The closing sale price of the Company's common stock, as quoted on the New
York Stock Exchange, at the close of business on March 15, 2000 was $24.00 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 2000 Plan.
The Board of Directors unanimously recommends a vote "FOR" the proposal to
adopt the 2000 Plan.
15
<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 year ending December 31, 2000
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. See below, "Resolutions Proposed By Individual Stockholders;
Discretionary Authority To Vote Proxies".
VOTING PROCEDURES
Votes at the Annual Meeting of Stockholders are counted by an Inspector 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;
DISCRETIONARY AUTHORITY TO VOTE PROXIES
In order to be considered for inclusion in the Company's Proxy Statement and
form of proxy relating to the Company's Annual Meeting of Stockholders to be
held in 2001 following the end of the Company's 2000 fiscal year, proposals by
individual stockholders must be received by the Company no later than November
23, 2000. Stockholder proposals also must comply with certain SEC rules and
regulations.
In addition, the proxy solicited by the Board of Directors for the 2001
Annual Meeting of Stockholders will confer discretionary authority on any
stockholder proposal presented at that meeting, unless the Company is provided
with notice of such proposal no later than February 7, 2001.
16
<PAGE>
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, 1999 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 MARCH 15, 2000. 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.
Dated: March 28, 2000 Peter A. Dea
Vice Chairman and Chief Executive
Officer
* * * * *
17
<PAGE>
BARRETT RESOURCES CORPORATION
2000 STOCK OPTION PLAN
As Adopted As Of February 25, 2000
This 2000 Stock Option (the "Plan") is adopted by Barrett Resources
Corporation (the "Company" effective as of February 25, 2000.
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.
-----
Change in Control. For purposes of this Plan, a "Change in Control"
shall mean any of the following events:
(a) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended (the "1934 Act"))
immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of thirty percent or
more of the combined voting power of the Company's then outstanding Voting
Securities; provided, however, that in determining whether a Change in
Control has occurred, Voting Securities which are acquired in a "Non-
Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (1) an employee benefit plan (or
a trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Company (a "Subsidiary"), (2) the Company or any Subsidiary, or (3) any
Person in connection with a "Non-Control Transaction."
(b) The individuals who, as of the date hereof, are members of
the Board (the "Incumbent Board"), cease for any reason to constitute at
least two-thirds of the Board; provided, however, that if the election, or
nomination for election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the then Incumbent Board,
such new director shall, for purposes of this Plan, be considered as a
member of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated
under the 1934 Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended to avoid or settle
any Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
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<PAGE>
(1) A merger, consolidation or reorganization involving the
Company, unless
(A) the stockholders of the Company, immediately before
such merger, consolidation or reorganization, own, directly or
indirectly, immediately following such merger, consolidation or
reorganization, at least sixty percent of the combined voting power of
the outstanding Voting Securities of the corporation resulting from
such merger or consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation
or reorganization, and
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization constitute at least two-thirds
of the members of the board of directors of the Surviving Corporation
or a corporation beneficially owning, directly or indirectly, a
majority of the Voting Securities of the Surviving Corporation, and
(C) no Person (other than the Company, any Subsidiary,
any employee benefit plan (or any trust forming a part thereof)
maintained by the Company, the Surviving Corporation or any
Subsidiary, or any Person who, immediately prior to such merger,
consolidation or reorganization had Beneficial Ownership of thirty
percent or more of the then outstanding Voting Securities) owns,
directly or indirectly, thirty percent or more of the combined voting
power of the Surviving Corporation's then outstanding voting
securities, and
(D) a transaction described in clauses (A) through (C)
shall herein be referred to as a "Non-Control Transaction";
(2) A complete liquidation or dissolution of the Company; or
(3) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the
Company which, by reducing the number of Voting Securities outstanding,
increases the proportional number of shares Beneficially Owned by the
Subject Person, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such share acquisition by the Company,
the Subject Person becomes the Beneficial Owner of any additional Voting
Securities which increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
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<PAGE>
(d) Notwithstanding anything contained in this Plan to the contrary,
if the Optionee is an employee of the Company and Optionee's employment is
terminated prior to a Change in Control and the Optionee reasonably
demonstrates that such termination (i) was at the request of a third party
who has indicated an intention or taken steps reasonably calculated to
effect a Change in Control and who effectuates a Change in Control (a
"Third Party") or (ii) otherwise occurred in connection with, or in
anticipation of, a Change in Control which actually occurs, then for all
purposes of this Plan, the date of a Change in Control with respect to the
Optionee shall mean the date immediately prior to the date of such
termination of the Optionee's employment.
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: 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 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.
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<PAGE>
Non-Employee Director: A director of the Company who (a) is not
currently an officer of the Company or a parent or subsidiary of the Company, or
otherwise currently employed by the Company or a parent or subsidiary of the
Company, (b) does not receive compensation, either directly or indirectly, from
the Company or a parent or subsidiary of the Company, for services rendered as a
consultant or in any capacity other than as a director, except for an amount
that does not exceed the dollar amount for which disclosure would be required
pursuant to Regulation S-K, Item 404(a), under the Securities Act of 1933, as
amended, (c) does not possess an interest in any other transaction for which
disclosure by the Company would be required pursuant to Regulation S-K, Item
404(a), and (d) is not engaged in a business relationship for which disclosure
by the Company would be required pursuant to Regulation S-K, Item 404(a).
Non-Qualified Options: Options that are not intended to qualify, or
otherwise do not qualify, as Incentive Options. 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 and an Outside
Director.
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: The Plan shall be administered by an Option
Committee ("Option Committee") composed of the Board or by a committee of at
least two directors selected by the Board; provided, however, that (a) if the
Option Committee consists of less than the entire Board, each member shall be a
Non-Employee Director and (b) to the extent necessary for any Option intended to
qualify as Performance-Based Compensation to so qualify, each member of the
Option Committee, whether or not it consists of the entire Board, shall be an
Outside Director. For purposes of the proviso to the preceding sentence (the
"Proviso"), if one or more members of the Committee is not, in the case of
clause (a) of the Proviso, a Non-Employee Director, or, in the case of clause
(b) of the Proviso, an Outside Director, and, in either case, recuses himself or
herself or abstains from voting with respect to a particular action taken by the
Option Committee, then the Option Committee, with respect to that action, shall
be deemed to consist only of the members of the Option Committee who have not
recused themselves or abstained from voting.
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.
Outside Director: "Outside Director" shall have the meaning set
forth in Section 162 of the Code or the successor to that Section and any
regulations promulgated under that or the successor to that Section.
Performance-Based Compensation: "Performance-Based Compensation"
means any Option that is intended to constitute "performance-based compensation"
within the meaning of Section 162(m)(4)(C) of the Code and the regulations
promulgated thereunder.
4
<PAGE>
Permitted Transferee: A Permitted Transferee means, with respect to
any person, such person's immediate family, trusts solely for the benefit of
such family members and partnerships in which such family members and/or trusts
are the only partners. For this purpose, immediate family of a person means the
person's spouse, parents, children, stepchildren and grandchildren and the
spouses of such parents, children, stepchildren and grandchildren.
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.
(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, including provisions for the
termination of the Option prior to the expiration of the exercise period upon
the occurrence of certain events, (vi) the manner in which the Option becomes
exercisable, including whether portions of the Option become exercisable at
different times and including determining that, at any time, the portion not yet
exercisable shall become exercisable upon the occurrence of certain events, 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 and may amend the terms of any Option (subject to
Section 3(d) below).
(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 no change that under
applicable law requires the approval of stockholders may be made without such
approval.
5
<PAGE>
(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 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 600,000 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 600,000 shares or into which such 600,000 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. No one person may be granted during any two-
year period Options under the Plan to purchase more than 200,000 shares.
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 15, the option period shall
commence on the Date Of Grant or other date or dates determined by the Option
Committee 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
6
<PAGE>
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.
(c) If the Optionee's employment or affiliation with the Company is
terminated for any reason except the Optionee's death, then (I) any Incentive
Option then held, to the extent that the Incentive Option was exercisable
according to its terms on the date of termination, may be exercised only to the
extent determined by the Option Committee at the time of grant or thereafter and
set forth in the Option Agreement, but in no case more than three (3) months
after termination of the Optionee's employment, and (ii) any Non-Qualified
Option then held by the Optionee, to the extent that the Non-Qualified Option
was exercisable according to its terms on the date of termination, may be
exercised only to the extent determined by the Option Committee at the time of
grant or thereafter and set forth in the Option Agreement, but in no case more
than three (3) years after termination of the Optionee's employment or
affiliation. If the Optionee's employment or affiliation with the Company is
terminated because of 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 only to the extent determined by the Option
Committee at the time of grant or thereafter and set forth in the Option
Agreement, but in no case more than one (1) year after termination. Any Option
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 may be exercised until the Plan is approved by the
stockholders of the Company as provided in Section 15 below.
8. Payment For Option Shares.
-------------------------
(a) If the purchase price of the Option Shares purchased by any
Optionee at one time exceeds $1,000, all or part of the purchase price for the
Option Shares may 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 (or such lesser period as the Option
Committee may permit). 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.
(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
7
<PAGE>
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 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, spin-off, 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 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 shall be transferable by the Optionee otherwise than by
will or by the laws of descent and distribution or, in the case of an Option
other than an Incentive Stock Option, pursuant to a domestic relations order
(within the meaning of Rule 12a-12 promulgated under the Exchange Act), and
Options shall be exercisable during the lifetime of an Optionee only by the
Optionee or his or her guardian or legal representative. Notwithstanding the
foregoing, the Committee may set forth in the Agreement evidencing an Option
(other than an Incentive Stock Option) at the time of grant or thereafter, that
the Option may be transferred to Permitted Transferees of the Optionee, and for
purposes of this Plan, a Permitted Transferee of an Optionee shall be deemed to
be the Optionee. The terms of an Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee.
8
<PAGE>
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 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 Plan on or before February 25, 2001 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 February 25, 2000. 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
9
<PAGE>
sentence, Fair Market Value of the Shares underlying any particular Option shall
be determined as of the Date of Grant of that Option.
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
"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.
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.
In event of a Change In Control of the Company, then all Options
granted pursuant to the Plan shall become exercisable immediately at the time of
such Change In Control, and, in addition, the Option Committee, in its sole
discretion, shall have the right, but not the obligation, to do any or all of
the following:
(a) 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), it shall be deemed to have been exercised for purposes
of Section 4 hereof; and
(b) 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 Subparagraph 19(a) above.
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.
10
<PAGE>
(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.
(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.
* * * * *
11
<PAGE>
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
- --------------------------------------------------------------------------------
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 Peter A. Dea and J. Frank Keller, or either
of them, as proxies with full 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 May 4, 2000, at the
Westin Hotel, 1672 Lawrence Street, Denver, Colorado, or any adjournments
thereof, on the following matters set forth on the reverse side:
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 and 3. This proxy is solicited on behalf
of the Board of Directors of Barrett Resources Corporation.
1. ELECTION OF DIRECTORS
Nominees: C. Robert Buford, Derrill Cody, Peter A. Dea, James M.
Fitzgibbons, Hennie L.J.M. Gieskes, William W. Grant, III, and Philippe
S.E. Schreiber
<PAGE>
FOR ALL NOMINEES [_] WITHHELD FROM ALL NOMINEES [_]
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE [_]
2. Proposal to adopt the Corporation's 2000 Stock Option Plan.
___FOR ___AGAINST ___ABSTAIN
3. Proposal to ratify the selection by the Board of Directors of Arthur
Andersen LLP as the independent certified accountants for the Corporation
for the fiscal year ending December 31, 2000.
___FOR ___AGAINST ___ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [_]
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:___________________________
