<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
EVERGREEN RESOURCES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
EVERGREEN RESOURCES, INC.
1000 Writer Square, 1512 Larimer Street
Denver, Colorado 80202
303-534-0400
--------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 28, 1997
TO THE SHAREHOLDERS OF EVERGREEN RESOURCES, INC.:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of Evergreen
Resources, Inc., a Colorado corporation (the "Company") will be held on the 37th
floor of the Denver Petroleum Club, 555 Seventeenth Street, Denver, Colorado,
on May 28, 1997, at 10:00 a.m., Mountain Daylight Time, and at any and all
adjournments thereof, for the purpose of considering and acting upon the
following matters:
1. To elect three (3) Directors of the Company;
2. To transact such other business as properly may come before the
meeting or any adjournment thereof.
Only holders of record of the Company's common stock at the close of business on
April 28, 1997 will be entitled to notice of and to vote at the Meeting or at
any adjournment or adjournments thereof.
All Shareholders, whether or not they expect to attend the Meeting in person,
are urged to sign and date the enclosed Proxy and return it promptly in the
enclosed postage-paid envelope which requires no additional postage if mailed in
the United States. The giving of a proxy will not affect your right to vote in
person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
JAMES S. WILLIAMS
CHAIRMAN
Denver, Colorado
April 28, 1997
<PAGE>
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of Directors of
Evergreen Resources, Inc., a Colorado corporation (the "Company"), for use at
the Company's Annual Meeting of Shareholders to be held on the 37th floor of the
Denver Petroleum Club, 555 Seventeenth Street, Denver, Colorado, on May 28,
1997, at 10:00 a.m., Mountain Daylight Time, and at any adjournment thereof.
This Proxy Statement and the accompanying Proxy Card will be mailed to the
Company's Shareholders on or about April 28, 1997.
Any person signing and returning the enclosed Proxy may revoke it at any time
before it is voted by giving written notice of such revocation to the Company,
or by voting in person at the Meeting. The expense of soliciting proxies,
including the cost of preparing, assembling and mailing this proxy material to
Shareholders, will be borne by the Company. It is anticipated that
solicitations of proxies for the Meeting will be made only by use of the mails;
however, the Company may use the services of its Directors, Officers and
Employees to solicit proxies personally or by telephone without additional
salary or compensation to them. Brokerage houses, custodians, nominees and
fiduciaries will be requested to forward the proxy soliciting materials to the
beneficial owners of the Company's shares held of record by such persons, and
the Company will reimburse such persons for their reasonable out-of-pocket
expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance therewith at
the Meeting. Shares not voting as a result of a proxy marked abstain will be
counted as part of total shares voting in order to determine whether or not a
quorum has been achieved at the Meeting.
Shares will not be counted as part of the vote on any business at the Meeting on
which the Shareholder has abstained.
The Company has changed its Fiscal Year-end from March 31 to December 31.
The Company's Annual Report to Shareholders for the fiscal year ended December
31, 1996 is being mailed simultaneously to the Company's Shareholders, but does
not constitute part of these proxy soliciting materials.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's no par
value voting common stock, with each share entitled to one vote. Only
Shareholders of record at the close of business on April 28, 1997 are entitled
to notice of and to vote at the Meeting or any adjournment thereof. On April
28, 1997 the Company had 9,392,220 shares of its no par value voting common
stock outstanding, each of which is entitled to one vote on all matters to be
voted upon at the Meeting, including the election of Directors. No fractional
shares are presently outstanding.
A majority of the Company's outstanding voting common stock represented in
person or by proxy shall constitute a quorum at the Meeting. The affirmative
vote of a majority of the votes cast, providing a quorum is present, is
necessary to elect the Directors. Cumulative voting in the election of
Directors is not permitted.
2
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows the identity of beneficial owners known to the Company
to own five percent or more of the Company's common stock as of April 28, 1997.
This information is based upon filings made by such persons with the Securities
and Exchange Commission or upon information provided to the Company.
<TABLE>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------ -------------------- ----------------
<S> <C> <C>
Heartland Advisors, Inc. 1,019,800 9.1%
790 North Milwaukee Street
Milwaukee, WI 53202
Gold Energy Inc. 733,939 (1) 6.4%
P.O. Box 2485
Greenville, SC 29602
Energy Investors Fund, LP 378,952 (2) 3.4%
200 Berkeley Street, 20th Floor
Boston, MA 02116
Energy Investors Fund II, LP 1,213,764 (3) 10.7%
200 Berkeley Street, 20th Floor
Boston, MA 02116
Energy Investors Partners, LP 378,952 (4) 3.4%
200 Berkeley Street, 20th Floor
Boston, MA 02116
Energy Investors Partners II, LP 1,213,764 (5) 10.7%
200 Berkeley Street, 20th Floor
Boston, MA 02116
EIF Investors, Inc. 1,592,716 (6) 14.2%
1075 Noel Avenue
Wheeling, IL 60090
EIF Acquisition, L.L.C. 1,592,716 (6) 14.2%
1075 Noel Avenue
Wheeling, IL 60090
Indeck Capital, Inc. 1,592,716 (6) 14.2%
1075 Noel Avenue
Wheeling, IL 60090
Gerald R. Forsythe 1,592,716 (6) 14.2%
1075 Noel Avenue
Wheeling, IL 60090
John Hancock Mutual Life 2,498,376 (7) 22.2%
Insurance Company
200 Claredon Street
Boston, MA 02117
</TABLE>
_____________
3
<PAGE>
(1) Gold Energy Inc., a Delaware corporation, is 100% owned by Goldenergy
Investments, Inc. ("Goldenergy"), a Panama corporation. The ultimate
beneficial owners of the Company's shares held by Goldenergy are unknown to
the management of the Company, which has no direct or indirect ownership of
Goldenergy. The Company is unaware of any additional shares of Evergreen
to which Goldenergy has the right to acquire beneficial ownership.
(2) Includes 14,452 shares issuable to warrants presently exercisable.
(3) Includes 185,548 shares issuable to warrants presently exercisable.
(4) Consists of shared voting and dispositive power over 364,500 shares and
14,452 warrants held directly by Energy Investors Fund, L.P. ("Fund I").
(5) Consists of shared voting and dispositive power over 1,028,216 shares and
185,548 warrants held directly by Energy Investors Fund II, L.P. ("Fund
II").
(6) Consists of share voting and dispositive power over (1) 364,500 shares and
14,452 warrants held directly by Fund I and (2) 1,028,216 shares and 185,548
warrants held directly by Fund II.
(7) Consists of 905,660 shares issuable upon conversion of presently
convertible outstanding Convertible Preferred Stock. Also includes shared
voting and dispositive power over (1) and (2) as above in (6).
In addition to those persons set forth in the table above, CEDE & Co. was the
record holder of more than 5% of the common stock as of April 28, 1996; however,
the Company does not know the nature of the beneficial ownership of such shares.
4
<PAGE>
SECURITIES OWNERSHIP OF MANAGEMENT
The following table provides information as of April 24, 1996, regarding the
Company's common stock beneficially owned by each Director, nominee for Director
and each officer.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------- -------------------- ----------------
Alain Blanchard 39,590 (1)(4) .4%
98 Avenue Moliere
Brussels, Belgium
Dennis R. Carlton 145,796 (2) 1.3%
7776 S. Marshall Ct.
Littleton, CO 80123
Kevin R. Collins 33,000 (3) .3%
7520 S. Emerson St.
Littleton, CO 80122
Larry D. Estridge 21,000 (4) .2%
106 Lady Banks Lane
Greenville, SC 29650
J. Keither Martin 9,500 (5) .1%
3 Sequoia Street
Golden, CO 80401
John J. Ryan III 259,732 (6) 2.3%
13 avenue de Bude
1202 Geneva Switzerland
Mark S. Sexton 166,672 (7) 1.5%
4059 Witter Gulch Road
Evergreen, CO 80439
Scott D. Sheffield 4,700 .04%
20 Hialeah
Midland, TX 79705
Ian M. Thomson 35,000 (8) .3%
Phoenix Court
Bartholomew Street
Newbury Berkshire RG14 5QA
United Kingdom
James S. Williams 135,040 (9) 1.2%
2800 S. University Blvd. #158
Denver, CO 80210
All Officers and Directors 850,030 7.6%
As A Group (10 Persons)
- --------------------------
(1) Director of Gold Energy Inc. Disclaims any beneficial ownership in shares
owned by Gold Energy Inc.
(2) Includes 75,450 shares issuable pursuant to stock purchase warrants
presently exercisable.
5
<PAGE>
(3) Includes 15,000 shares issuable pursuant to stock purchase warrants
presently exercisable.
(4) Includes 20,000 shares issuable pursuant to stock purchase warrants
presently exercisable.
(5) Includes 2,000 shares issuable pursuant to stock purchase warrants
presently exercisable.
(6) Includes 30,000 shares issuable pursuant to stock purchase warrants
presently exercisable.
(7) Includes 78,450 shares issuable pursuant to stock purchase warrants
presently exercisable.
(8) Includes 35,000 shares issuable pursuant to stock purchase warrants
presently exercisable.
(9) Includes 66,500 shares issuable pursuant to stock purchase warrants
presently exercisable.
There is no arrangement, known to the Company, including any pledge by any
person of securities of the Company or any of its parents, the operation of
which may at a subsequent date result in a change in control of the Company.
ELECTION OF DIRECTORS
The Articles of Incorporation of Evergreen Resources, Inc. provide that the
members of the Company's Board of Directors shall be divided into three classes,
as nearly equal in number as possible, each of which is to serve for three
years, with one class being elected each year.
To be elected as a Director, each nominee must receive the favorable vote of a
majority of the shares represented and entitled to be voted at the Meeting. The
persons named in the enclosed form of proxy, unless otherwise directed therein,
intend to vote such proxy FOR the election of the nominee named below as
Director for the term specified. If the nominee becomes unavailable for any
reason, the persons named in the form of proxy are expected to consult with
management of the Company in voting the shares represented by them. Management
has no reason to believe that the nominee will be unavailable or unwilling to
serve if elected to office. To the knowledge of management, the nominee intends
to serve the term for which election is sought.
The Board of Directors has nominated one person for election as Director at this
Meeting to serve for a three year term. The nominee is currently serving as a
Director and has consented to serve for the new term.
PRESENT DIRECTORS NOMINATED FOR RE-ELECTION
Director Term to
Name Age Position Since Expire
---- --- -------- -------- -------
Alain Blanchard 55 Director 1989 2000
Larry D. Estridge 53 Director 1989 1999
Scott D. Sheffield 44 Director 1996 2000
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
Director Term
Name Age Position Since Expires
---- --- -------- -------- -------
Dennis R. Carlton 45 Vice President and Director 1995 1998
John J. Ryan III 69 Director 1989 1999
Mark S. Sexton 41 President, CEO and Director 1995 1998
James S. Williams 62 Chairman and Director 1981 1998
There is no family relationship between any Director, executive or person
nominated or chosen by Evergreen to become a Director or Executive Officer.
There is no compensatory plan or arrangement with respect to any individual
named above which results or will result from the resignation, retirement or any
other termination of employment with the Company, or from a change in the
control of the Company.
6
<PAGE>
No Director or Executive Officer of the Company or nominee for election as a
Director has been indebted to the Company or its subsidiaries at any time since
the beginning of the Company's last fiscal year in any amount.
Additional information regarding the nominee for election as a Director and the
continuing Directors of the Company is as follows:
NOMINEES
ALAIN BLANCHARD - DIRECTOR
Mr. Blanchard was named Director of Evergreen in May 1989. From 1983 until 1988
Mr. Blanchard was an Associate and shareholder of Laidlaw Adams and Peck. A
resident of Brussels, Belgium, he has managed discretionary funds for private
and institutional clients for over 20 years and continues to do so. Mr.
Blanchard graduated from the University of Paris with a doctorate in economics
and a degree in political science.
LARRY D. ESTRIDGE - DIRECTOR
Mr. Estridge was named a Director of Evergreen in May 1989. He received an A.B.
degree from Furman University in 1966 and a J.D. from Harvard University School
of Law in 1969. He resides in Greenville, South Carolina, and is a partner in
the law firm of Wyche, Burgess, Freeman & Parham, P.A. He has been affiliated
with the Wyche law firm since July 1972. He has represented Evergreen and a
number of affiliated companies for over 10 years.
SCOTT D. SHEFFIELD - DIRECTOR
Mr. Sheffield was named a Director of Evergreen in September 1996. Mr Sheffield
is currently Chairman, President and CEO of Parker & Parsley Petroleum Company
(NYSE "PDP") and has been since April of 1985. From 1979 to April 1985 he was
employed by Parker & Parsley in various engineering positions, serving from
1981-1985 as Vice President of Engineering. Mr. Sheffield obtained a Bachelor
of Science Degree in Petroleum Engineering from the University of Texas in 1975.
He resides in Midland, Texas.
CONTINUING DIRECTORS
DENNIS R. CARLTON - VICE PRESIDENT EXPLORATION AND DIRECTOR
PRESIDENT - EVERGREEN OPERATING CORPORATION ("EOC")
Mr. Carlton was named a Director of Evergreen in March 1995. He received a
Bachelor of Science degree in Geology in 1972 and a Master of Science degree in
Geology in 1975 from Wichita State University. He joined Evergreen in December
1981 as Vice President Geology. He was named a Director in March 1985 and
President in December 1986. He served as President and a Director until May
1989 when he was named Executive Vice President of EOC. In May 1991 he was
named Vice President Exploration of Evergreen. In June 1995 he was named
President of EOC. He resides in Littleton, Colorado and devotes full time to
Evergreen.
JOHN J. RYAN III - DIRECTOR
CHAIRMAN - EVERGREEN RESOURCES (U.K.) LTD.
Mr. Ryan was named a Director of Evergreen in May 1989. Since 1982 he has been
engaged in international tax and investment activities. Mr. Ryan, a resident of
Geneva, Switzerland, is also Chairman of Evergreen Resources (U.K.) Ltd.
MARK S. SEXTON - PRESIDENT, CEO AND DIRECTOR
CEO- EOC
Mr. Sexton was named a Director of Evergreen in March 1995 and President and CEO
in June 1995. He has managed the daily activities of Evergreen Operating
Corporation ("EOC") since 1987 and was named Vice President Operations for
Evergreen and President of EOC in 1989. A Registered Professional Engineer in
Colorado, Mr. Sexton graduated in 1978 from Stanford University with a B.S.
degree in Mechanical Engineering.
7
<PAGE>
From 1978 to 1982, he was employed in various engineering and financial
positions with Amoco Production Company. From 1982 to 1985, he was employed
with Norwest Bank Minneapolis as Manager of Engineering and Evaluations.
From January 1986 to June 1987, he was President of Sound Energy Development
Co. and Managing Director of the Carbon River Energy Partnership. He resides
in Evergreen, Colorado and devotes full time to Evergreen.
JAMES S. WILLIAMS - CHAIRMAN AND DIRECTOR
Mr. Williams has been the Chairman and a Director of Evergreen since founding
the Company in 1981. Mr. Williams graduated in 1956 from Columbia College and
has been engaged in U.S. and international oil and gas activities for over
twenty-three years. Mr. Williams resides in Denver, Colorado and devotes full
time to Evergreen.
MEETINGS OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held sixteen meetings, formally or by consent,
during the fiscal period ended December 31, 1996. No incumbent Director
attended fewer than 75% of such meetings.
The Audit Committee, presently composed of Alain Blanchard, Larry D. Estridge
and James S. Williams, was formed on May 11, 1989. The Committee recommends to
the Board the firm to be employed as the Company's independent auditors and
consults with and reviews the reports of the Company's independent auditors and
the Company's internal financial staff. One meeting was held during the fiscal
period ended December 31, 1996.
The Compensation Committee, formed in August 1990, is presently composed of Mark
S. Sexton and Larry D. Estridge. The Compensation Committee assists the Board
in establishing compensation for key Employees. Two meetings were held during
the fiscal period ended December 31, 1996.
BUSINESS EXPERIENCE OF KEY MANAGEMENT
KEVIN R. COLLINS - VICE PRESIDENT FINANCE, TREASURER AND CHIEF FINANCIAL
OFFICER
Mr. Collins joined Evergreen as Vice President and Treasurer in July 1995. He
received a B.S. in Business Administration and Accounting from the University of
Arizona in 1980, and became a CPA in 1983. Mr. Collins has been involved in
public accounting for over twelve years. From 1986 to 1994 he was employed by
BDO Seidman, Denver where he rose to the position of Senior Manager. He was
with Ehrhardt Keefe Steiner & Hottman, CPA's, Denver from October 1994 to June
1995. He resides in Littleton, Colorado and devotes full time to Evergreen.
J. KEITHER MARTIN - SECRETARY
CONTROLLER - EOC
Mr. Martin was named Secretary of Evergreen in June 1995. He has served as
Controller for EOC since 1984. During the previous sixteen years, Mr. Martin
was employed by Anderson Oil Company as Director of Financial Information. He
resides in Golden, Colorado and devotes full time to Evergreen.
IAN M. THOMSON - MANAGING DIRECTOR
EVERGREEN RESOURCES (U.K.) LTD.
Mr. Thomson graduated in 1961 from Edinburgh University with a BSc (Hons) degree
in engineering followed by post-graduate studies at Imperial College, London.
He was a Board Director of the Laird Group PLC, a leading U.K. industrial
conglomerate, responsible for a mining equipment subsidiary in the U.K., U.S.
and other countries. He presently holds various non-executive directorships in
U.K. industrial and manufacturing companies. Mr. Thomson resides in Oxford,
England.
8
<PAGE>
FLOYD TRUJILLO - GAS MARKETING MANAGER
Mr. Trujillo joined EOC as Production Supervisor in 1988. From 1986-1988 he was
employed by Consolidated Oil & Gas as a Production Analyst. From 1983-1986 he
was employed by Henderson Petroleum as Production Supervisor. Mr. Trujillo
resides in Denver and devotes full time to Evergreen.
TERM OF OFFICE
Each Officer holds office until his successor is duly elected and qualified or
until his death, resignation or removal, if earlier. Any Officer elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the Company will be served
thereby.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The information contained in the following Summary Compensation Table for the
fiscal years ended March 31, 1996, and 1995, and the nine month fiscal period
ended December 31, 1996.
<TABLE>
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- --------------------- -------
RESTRICTED
FISCAL OTHER ANNUAL STOCK LTIP ALL OTHER
NAME AND YEAR/ SALARY BONUS COMPENSATION AWARD(S) WARRANTS PAYOUTS COMPENSATION
PRINCIPAL POSITION PERIOD ($) ($) ($)(1) ($)(2) (#) ($) ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis R. Carlton 12/31/96 60,000 0 23,963 30,000 0 0
Vice President and a 1996 86,750 0 0 31,875 0 0 0
Director 1995 73,334 0 0 32,917 0 0 0
- ----------------------------------------------------------------------------------------------------------
Mark S. Sexton 12/31/96 60,000 0 0 23,963 33,000 0 0
President, CEO and a 1996 86,750 0 0 31,875 0 0 0
Director 1995 73,334 0 0 32,917 0 0 0
- ----------------------------------------------------------------------------------------------------------
James S. Williams 12/31/96 60,000 0 0 23,963 22,500 0 0
Chairman and a 1996 86,742 0 0 39,463 0 0 0
Director 1995 68,333 0 0 37,220 0 0 0
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) For each of the named Executives, the aggregate amount of perquisites
and other personal benefits did not exceed 10% of the Executive's total
annual salary and bonus.
(2) The references to "SARs" in the Summary Compensation Table and all other
tables in this Proxy Statement have been omitted, since the Corporation has
never authorized any SARs.
9
<PAGE>
WARRANT GRANTS
The following table sets forth information pertaining to five-year stock
purchase warrants granted to the named executives during the last fiscal
period.
<TABLE>
Potential
Number of % of Total Realizable Value at
Securities Warrants Assumed Annual
Underlying Granted to Exercise Rates of Stock Price
Warrants Employees or Base Appreciation
Granted in Fiscal Price Expiration For Warrant Term [2]
Name (#) Period ($/Share)[1] Date 5% 10%
- ------------------- ---------- ---------- ------------ ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis R. Carlton 30,000 17.6% 7.00 9/5/01 $57,300 $128,000
Mark S. Sexton 33,000 19.3% 7.00 9/5/01 $64,350 $141,000
James S. Williams 22,500 13.2% 7.00 9/5/01 $43,875 $ 96,000
</TABLE>
[1] The exercise price is above the market price of the Company's Common Stock
on the date of the grant.
[2] The amounts disclosed in these columns, which reflect appreciation at the 5%
and 10% rates recommended by the SEC, are not intended to be a forecast of
the Company's Common Stock price and are not intended to be indicative of
the actual values which may be realized by the named executives.
WARRANT/OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named
Executives of the Company concerning the exercise of options/warrants during
the last fiscal year and unexercised warrants held as of the end of the
fiscal year.
Value of
Number of Unexercised
Unexercised In-The-Money
Shares Warrants/Options Warrants/Options
Acquired Value FY End (#) FY End ($)
on Exercise Realized Exercisable (E)/ Exercisable (E)/
Name (#) ($) Unexercisable (U) Unexercisable (U)
- ----------------- ----------- -------- ----------------- -----------------
Dennis R. Carlton 0 0 75,450 (E) $108,956 (E)
Mark S. Sexton 0 0 78,450 (E) $112,706 (E)
James S. Williams 0 0 66,500 (E) $ 92,875 (E)
During the fiscal period ended December 31, 1996, the Company deferred no
compensation to the persons named in the preceding tables.
REPORT ON EXECUTIVE COMPENSATION
The goal of the Compensation Committee is to ensure that the Company employs
qualified, experienced Executives whose financial interest is aligned with
that of the Shareholders. The Committee considers general industry practice,
tax effects and other factors in structuring executive compensation.
Base salaries for each of the Company's Executives are determined by taking into
consideration performance, length of tenure with the Company and compensation by
Industry competitors for comparable positions. In order to
10
<PAGE>
determine comparable salary levels paid within the Industry, the Committee
reviews various surveys and publicly filed information of its competitors.
Executive performance may be measured by several criteria that are considered
important to the Company's success. These criteria are not specifically
weighted in the determination of whether to award an annual bonus to an
Executive, since the relative importance of such criteria may change from
year to year and the relative responsibilities of each Executive in the
achievement of each of the objectives may differ. Examples of criteria
considered are: quantity of oil and gas reserves, production and cash flow
added; finding cost of oil and gas reserves; control of lifting costs; project
development, and overall financial management.
The Company also utilizes restricted stock, stock options and/or stock
purchase warrants as incentives for Executives. The size of such grants is
dependent on individual performance, level of responsibility and base salary,
and the number of restricted shares, options and/or warrants in relation to
the total outstanding shares of Common Stock and Common Stock equivalents.
In the nine month fiscal period ended December 31, 1996, Mark S. Sexton,
President and CEO, received $83,963 of compensation for his services.
During the fiscal period ended December 31, 1996, the Committee approved
restricted stock grants to members of Management as additional compensation.
SUBMITTED BY THE BOARD OF DIRECTORS
11
<PAGE>
PERFORMANCE GRAPH
The following performance graph reflects yearly percentage change in (i) the
Company's cumulative, five year total stockholder return on Common Stock as
compared with the cumulative, five year total return of (ii) the National
Securities Dealers Automated Quotation System ("NASDAQ") Stock Market Index
of U.S. Companies and (iii) a peer group index. The NASDAQ index and the
peer group index were supplied by the Center for Research in Security Prices
(CRSP), an independent third-party source, and is comprised of approximately
155 companies categorized under the Standard Industrial Classification Number
13 (Oil and Gas Extraction) applicable to the Company. All cumulative
returns are calculated on a fiscal year basis ending on December 31 of each
year.
12/31/91 12/31/92 12/31/93 12/31/94 12/30/95 12/29/96
-------- -------- -------- -------- -------- --------
100.0 113.5 79.4 59.6 56.7 93.6
100.0 116.4 133.6 130.6 184.7 227.2
100.0 103.5 133.0 124.3 153.7 252.7
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
LEGEND
SYMBOL CRSP TOTAL RETURN INDEX FOR: 12/31/91 12/31/92 12/31/93 12/31/94 12/30/95 12/29/96
- ------ ---------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
-- EVERGREEN RESOURCES, INC. 100.0 113.5 79.4 59.6 56.7 93.6
** Nasdaq Stock Market (US Companies) 100.0 116.4 133.6 130.6 184.7 227.2
++ NASDAQ Stocks (SIC 1300-1399 US Companies) 100.0 103.5 133.0 124.3 153.7 252.7
Oil and gas extraction
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/91.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
OTHER INFORMATION
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
To the Company's knowledge, during the fiscal period ended December 31, 1996,
the Company's Officers and Directors complied with all applicable Section
16(a) filing requirements. This statement is based solely on a review of the
copies of such reports furnished to the Company by its Officers and Directors
and their written representations that such reports accurately reflect all
reportable transactions.
COMPENSATION OF DIRECTORS
Directors of the Company receive fees of $100 per meeting for their
attendance at meetings of the Company's Board of Directors and have currently
waived these fees. All Directors are reimbursed for reasonable out-of-pocket
expenses incurred in connection with attending Board and Shareholder's
meetings. Directors who are not Officers or are not on salary with the
Company receive $15,000 per year.
EMPLOYEE STOCK OWNERSHIP PLAN
In May 1991 the Company established an Employee Stock Ownership Plan
("ESOP"), to provide eligible Employees with retirement benefits.
Employees are eligible to participate in the ESOP upon completing one year of
service. Contributions to the ESOP are made at the discretion of the Company
and can be made in cash or other property as the Trustee considers
appropriate. These contributions are used to purchase the Company's stock.
A participant generally is fully vested after five years of service or upon
his or her death, disability or retirement.
Shares of common stock acquired by the ESOP are allocated each year to the
account of each participant according to a formula based upon the
participant's compensation. On July 15, 1991 the Company contributed $50,000
to the ESOP which acquired, in an open market transaction, 11,750 shares of
Evergreen common stock. The Company has subsequently contributed shares of
restricted Evergreen common stock to the ESOP as follows: April 2, 1992 -
10,000 shares; June 17, 1993 - 15,000 shares; December 29, 1993 - 15,000
shares; December 1995 - 10,000 shares; July 1996 -10,000 shares.
KEY EMPLOYEE EQUITY PLAN
On August 12, 1992, the Shareholders ratified a Key Employee Equity Plan
("the Plan"). Under this Plan, to be administrated by the Compensation
Committee, Key Employees, as designated by the Board, may receive stock
bonuses, stock purchase warrants or stock options, in order to bring total
compensation in line with industry levels.
In no event will the Plan be granted stock or warrants which in their
totality exceed 10% of the fully diluted issued and outstanding shares,
including outstanding stock options or stock purchase warrants of the
Company, as of the date of each annual grant. In no event will the value of
stock or warrant grants under the Plan exceed the total gross compensation
actually paid said Key Employees during the prior fiscal year. Value will be
determined by the Board.
The Company will issue to the Officers and/or Directors listed below new five
year warrants to purchase Common Stock exercisable at $7.00 per share in each
of the next four years, as follows:
Number of Warrants to be Issued
------------------------------------------
1997 1998 1999 2000
------ ------ ------ ------
Dennis R. Carlton 17,500 17,500 17,500 17,500
Kevin R. Collins 8,750 8,750 8,750 8,750
Mark S. Sexton 19,250 19,250 19,250 19,250
James S. Williams 13,125 13,125 13,125 13,125
13
<PAGE>
The warrants will be issued in 1997, 1998, 1999 and 2000 only if the Company
experiences at least twenty percent growth over the previous fiscal year
(including the nine month period ended December 31, 1996) in each of the
following three categories: total proved developed reserves, total
production, and cash flow. Additionally, in order to qualify for the
warrants, the Officers and/or Directors must be employed by the Company as of
the last day of each fiscal year.
Except for the Warrants described above, any future options or warrants
granted to Officers, Directors or Employees of the Company will be at an
exercise price per share of no less than 100% of the fair market value on the
date of such grants.
EMPLOYEE RETIREMENT PLAN
The Company's employee retirement plan, the 401(k) Plan, was established
effective January 1, 1997 to provide an additional means of attracting and
retaining qualified employees. Under the 401(k) Plan, the Company will
contribute on behalf of each employee 50 percent of the contribution made by
that employee, up to a maximum contribution by the Company of six percent of
that employee's gross salary for a particular pay period. 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. The Corporation may make an additional annual contribution, completely
at the discretion of the Compensation Committee, and based upon the
performance of the Corporation that year. Employees will vest 20% per year
for each year following the first year of employment.
TRANSACTIONS WITH MANAGEMENT
No Director or Executive Officer of the Company, nominee for election as a
Director, security holder who is known to the Company to own of record or
beneficially more than 5% of any class of the Company's voting securities, or
any member of the immediate family of any of the foregoing persons, has had
any material transaction since the beginning of the Company's last fiscal
year, or has any currently proposed material transaction, to which the
Company was or is to be a party, in any amount.
INDEPENDENT AUDITORS
BDO Seidman, LLP, currently serves the Company as independent auditors.
Representatives of BDO Seidman, LLP, will be present at the Annual Meeting
and will be available to respond to appropriate questions from Shareholders.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any other matter to be presented at the Meeting other than as set
forth herein. However, if any other matters are properly brought before the
Meeting, the shares represented by valid proxies will be voted with respect
to such matters in accordance with the judgement of the persons voting them.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a Shareholder to be presented at the Company's 1998 Annual
Meeting must be received at the offices of the Company, 1000 Writer Square,
1512 Larimer Street, Denver, Colorado 80202, no later than December 15, 1997.
JAMES S. WILLIAMS
CHAIRMAN
Denver, Colorado
April 28, 1997
14
<PAGE>
PROXY PROXY
EVERGREEN RESOURCES, INC.
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF THE SHAREHOLDERS TO BE HELD ON MAY 28, 1997
The undersigned hereby constitutes and appoints James S. Williams and Mark S.
Sexton, and each of them, the true and lawful attorneys and proxies of the
undersigned, with full power of substitution and appointment, for and in the
name, place and stead of the undersigned, to act for and vote all of the
undersigned's shares of no par value common stock of Evergreen Resources,
Inc., a Colorado corporation, at the Annual Meeting of Shareholders to be
held at the Denver Petroleum Club, 555 Seventeenth Street, Denver, Colorado,
at 10:00 a.m., Mountain Daylight Time, on May 28, 1997, and any and all
adjournments thereof, for the following purposes:
1. The election of three (3) Directors of the Company.
/ / FOR the nominee listed below (except as marked to the contrary):
Alain Blanchard Larry D. Estridge Scott D. Sheffield
/ / WITHHOLD AUTHORITY to vote for the nominees.
2. To transact such other business as properly may come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ABOVE.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE
WITH THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
(Continued on other side)
<PAGE>
The undersigned hereby acknowledges
receipt of the Notice of Annual
Meeting of Shareholders, Proxy
Statement and Annual Report to
Shareholders furnished therewith.
Dated: , 1997
----------------------
-----------------------------------
-----------------------------------
Signature(s) should agree with the
name(s) hereon. Executors,
administrators, trustees, guardians
and attorneys should indicate when
signing. Attorneys should submit
powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF EVERGREEN
RESOURCES, INC. PLEASE SIGN AND RETURN THIS PROXY TO EVERGREEN RESOURCES,
INC., 1512 LARIMER STREET SUITE 1000, DENVER, COLORADO 80202. THE GIVING OF
A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
