SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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<section> 240.14a-11(c) or <section> 240.14a-12
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_______________________________
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<PAGE>
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD
JULY 21, 1999
AND PROXY STATEMENT
THE BEARD COMPANY
<PAGE>
THE BEARD COMPANY
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
May __, 1999
Dear Stockholders:
We invite you to attend the annual meeting of stockholders of The
Beard Company (the "Company") which will be held in Oklahoma City on
Wednesday, July 21, 1999. The matters to be considered at the meeting
are described in the formal notice and proxy statement on the following
pages.
After completing the business of the meeting, including the
election of a director, we will discuss fiscal year 1998 activities and
the current outlook for the Company. There will be a period for
questions and for discussion with your directors and officers.
If you plan to be present, please notify the Secretary of the
Company so that the necessary arrangements can be made for your
attendance. Regardless of whether you plan to personally attend, it is
important that your shares be represented at this meeting. Please
date, sign and return your proxy card in the enclosed envelope at your
earliest convenience.
W. M. BEARD HERB MEE, JR.
Chairman President
<PAGE>
THE BEARD COMPANY
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 21, 1999
TO THE STOCKHOLDERS OF THE BEARD COMPANY:
You are hereby notified that the Annual Meeting of Stockholders of The
Beard Company (the "Company") will be held on July 21, 1999 at 9:00 a.m. in
the offices of the Company, located at Enterprise Plaza, Suite 320, 5600 North
May Avenue, Oklahoma City, Oklahoma, for the purpose of considering and
voting upon the following matters:
(1) The election of one (1) director of the Company for a three (3)
year term.
(2) Amendment to The Beard Company Deferred Stock Compensation Plan.
(3) The approval of the appointment of KPMG LLP as independent
auditors of the Company for fiscal year 1999.
(4) Such other business as may properly come before the meeting or
any adjournment thereof.
The transfer books will not be closed, but only stockholders of record
at the close of business on May 14, 1999 will be entitled to notice of and to
vote at the meeting. A complete list of the stockholders entitled to vote at
the meeting shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, for ten days
prior to the meeting, at the offices of the Company, Enterprise Plaza, Suite
320, 5600 North May Avenue, Oklahoma City, Oklahoma.
You are cordially invited to attend the meeting. Even if you plan to
attend, you are requested to date, sign and return the enclosed proxy at your
earliest convenience in the enclosed envelope. You may revoke your proxy at
any time prior to exercise.
By Order of the Board of Directors
REBECCA G. WITCHER
Rebecca G. Witcher
Secretary
Oklahoma City, Oklahoma
Dated May __, 1999
<PAGE>
THE BEARD COMPANY
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
PROXY STATEMENT
This Proxy Statement is furnished to the stockholders of The Beard
Company ("Beard" or the "Company") in connection with the solicitation
of proxies to be used in voting at the Annual Meeting of Stockholders to
be held July 21, 1999. It is first being mailed to stockholders on or
about May __, 1999. THE ENCLOSED PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY.
A person giving the enclosed proxy has the power to revoke it by giving
notice to the Secretary in person, or by written notification actually
received by the Secretary, or by subsequently granting a later dated
proxy relating to the same shares, at any time prior to its being
exercised.
The Company will bear the cost of soliciting proxies, including the
charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of stock. It is possible
that further solicitation of proxies will be made by telephone or oral
communication with some stockholders of the Company following the
original solicitation. All such further solicitations will be made by
regular employees of the Company who will not be additionally
compensated therefor, and the cost will be borne by the Company.
THE COMPANY'S ANNUAL REPORT ON SECURITIES AND EXCHANGE COMMISSION FORM
10-K (THE "FORM 10-K") INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO, FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, IS INCLUDED
HEREWITH.
VOTING SECURITIES OUTSTANDING
As of April 30, 1999, 2,459,264 shares of common stock and 27,838 shares
of preferred stock of the Company had been issued and were outstanding.
Each share of common stock is entitled to one vote on all matters
presented at the meeting. Each share of preferred stock is entitled to
one vote for each full share of common stock into which it would have
been convertible had it been convertible on the record date (5.129425
shares). Accordingly, a total of 2,602,056 votes are entitled to be
cast at the meeting, and the holders of the preferred stock are entitled
to cast 17.48% of such votes. Only holders of common stock and
preferred stock of record at the close of business on May 14, 1999, will
be entitled to vote at the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the name and address of each shareholder
who is known to the Company to own beneficially more than 5% of Beard's
outstanding common stock or preferred stock, the number of shares
beneficially owned by each and the percentage of outstanding common or
preferred stock so owned as of April 30, 1999. Unless otherwise noted,
the person named has sole voting and investment powers over the shares
reflected opposite his name.
Combined
Number of Number of Common
Preferred Common and
Shares and Shares and Preferred
Nature of Percent Nature of Percent Voting
Name and Address Ownership of Class Ownership of Class Percentage
---------------- --------- -------- --------- -------- ----------
John Hancock Mutual Life
Insurance Company
("Hancock") 27,838 100.00% 312,040(1)(2) 12.69%(2) 17.48%
57th Floor
200 Clarendon Street
Boston, MA 02117
Dimensional Fund
Advisors, Inc. None 0.00% 156,965(3) 6.38% 6.03%
1299 Ocean Avenue,
11th Floor
Santa Monica, CA 90401
The Beard Group 401(k)
Trust
c/o Bank One Oklahoma,
N.A., Trustee None 0.00% 252,631(4) 10.27% 9.71%
100 N. Broadway Avenue
Oklahoma City, OK 73102
W. M. Beard None 0.00% 836,234(5) 34.00% 32.14%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
Lu Beard None 0.00% 274,912(6) 11.18% 10.57%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
Herb Mee, Jr. None 0.00% 381,899(7) 15.53% 14.68%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
_______________
(1) Shares are held by Hancock on behalf of itself and affiliated
entities.
(2) Excludes the Beard preferred shares which will collectively become
convertible into 5.49% of the outstanding common stock (after
conversion) on January 1, 2003 to the extent not previously redeemed or
converted.
(3) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 156,965
shares, all of which shares are held in portfolios of investment
companies and commingled group trusts of which Dimensional serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(4) Represents shares owned by The Beard Group 401(k) Trust (the "401(k)
Trust") at March 31, 1999 (latest information available). Shares held by
the 401(k) Trust are owned by the participating employees, each of whom
has sole voting and investment power over the shares held in his or her
account. Includes 104,729.29 and 119,888.29 shares held for the accounts
of Messrs. Beard and Mee, respectively.
(5) Includes 206,166 shares owned directly by Mr. Beard as to which
he has sole voting and investment power; 273,233 shares (or 11.11%)
owned by the William M. Beard and Lu Beard 1988 Charitable Unitrust (the
"1988 Unitrust"), of which Mr. Beard and his wife, Lu Beard, serve as
co-trustees and share voting and investment power; 68,786 shares held by
the William M. Beard Irrevocable Trust "A," 68,432 shares held by the
William M. Beard Irrevocable Trust "B," and 83,049 shares held by the
William M. Beard Irrevocable Trust "C" (collectively, the "Beard
Irrevocable Trusts") of which Messrs. Beard and Herb Mee, Jr. are
trustees and share voting and investment power; 6,738 shares each held
by the John Mason Beard II Trust and by the Joseph G. Beard Trust and
1,774 shares held by the Rebecca Banner Beard Trust as to which Mr.
Beard is the trustee and has sole voting and investment power; 3,256
shares held by the Rebecca Banner Beard Lilly Living Trust as to which
Mr. Beard is a co-trustee and shares voting and investment power with
his daughter; 104,729.29 shares held by the 401(k) Trust for the
account of Mr. Beard as to which he has sole voting and investment
power; and 13,333 shares held by B & M Limited, a general partnership,
of which Mr. Beard is a general partner and shares voting and investment
power with Mr. Mee. Excludes 12,500 shares subject to presently
exercisable options. Also excludes 1,679 shares owned by his wife
and 41,228 shares held by four separate trusts for the benefit of Mr.
Beard's children as to all of which Mr. Beard disclaims beneficial
ownership.
(6) Represents 273,233 shares owned by the 1988 Unitrust, of which
Mr. Beard and Mrs. Beard serve as co-trustees and share voting and
investment power. Also includes 1,679 shares owned directly by Mrs.
Beard as to which she has sole voting and investment power.
(7) Includes 21,745 shares owned directly by Mr. Mee as to which he
has sole voting and investment power; 6,666 shares held by Mee
Investments, Inc., as to which Mr. Mee has sole voting and investment
power; 13,333 shares held by B & M Limited as to which Mr. Mee shares
voting and investment power with Mr. Beard but as to which Mr. Mee has
no present economic interest; and 119,888.29 shares held by the 401(k)
Trust for the account of Mr. Mee as to which he has sole voting and
investment power. Also includes 220,267 shares held by the Beard
Irrevocable Trusts as to which Mr. Mee is a co-trustee and shares voting
and investment power with Mr. Beard but as to which Mr. Mee has no
pecuniary interest and disclaims beneficial ownership. Excludes 32,550
shares subject to presently exercisable options. Excludes 45 shares
owned by his wife, Marlene W. Mee, as to which Mr. Mee disclaims
beneficial ownership.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
number of shares of Beard common stock beneficially owned by each
director and nominee, the Chief Executive Officer ("CEO"), each named
executive officer and by all directors and executive officers as a group
and the percentage of outstanding common stock so owned as of April 30, 1999.
Amount and
Nature of
Beneficial Percent
Name and Address Ownership of Class
---------------- ---------- --------
W. M. Beard 848,734(1) 34.34%
Herb Mee, Jr. 414,449(2) 16.63%
Allan R. Hallock 28,658(3) 1.17%
Michael E. Carr 28,643 1.16%
Ford C. Price 18,665(4) ---(6)
Harlon E. Martin, Jr. 1,000 ---(6)
All directors and executive
officers as a group (8 in number) 1,117,429(5) 44.46%
__________________
(1) See footnote (5) to table "Security Ownership of Certain Beneficial
Owners." Also includes 12,500 shares subject to presently exercisable
options.
(2) See footnote (7) to table "Security Ownership of Certain Beneficial
Owners." Also includes 32,550 shares subject to presently exercisable
options.
(3) Includes 2,500 shares owned directly by Mr. Hallock as to which he
has sole voting and investment power and 26,158 shares owned by A. R.
Hallock & Co., a partnership, as to which Mr. Hallock shares voting
and investment power with his wife.
(4) Includes 10,399 shares owned directly by Mr. Price and 3,266 shares
held by an IRA for the benefit of Mr. Price, as to all of which he
has sole voting and investment power, and 5,000 shares held by the
FCP Trust as to which he has shared voting and investment power.
(5) Includes 576,182 shares as to which directors and executive officers
have sole voting and investment power (including 53,800 shares subject to
presently exercisable options) and 541,247 shares as to which they share
voting and investment power with others.
(6) Reflects ownership of less than one (1) percent.
ELECTION OF DIRECTORS
(Proposal No. 1)
The Company's Certificate of Incorporation (the "Certificate") provides
for a Board of Directors of not more than nine nor less than three
directors, including one director elected by the preferred stockholders,
as determined from time to time by the Board. The Certificate also
provides that the portion of the Board of Directors which is elected by
the Beard common stockholders shall be divided into three classes as
nearly equal in number as possible, with the term of office of one class
expiring each year.
At the meeting, one director is to be elected by the common stockholders
for a three-year term expiring at the date of the Annual Meeting of
Stockholders in 2002. The term of Mr. W. M. Beard expires this year, and
he will be the nominee for the term expiring in 2002. The Beard
preferred stockholders filled the directorship vacancy which they were
entitled to fill in February 1994 by the election of Michael E. Carr,
who will continue to serve in such capacity until his successor has been
elected.
It is the intention of the persons named in the accompanying form of
Proxy to vote Proxies for the election of the above-named nominee. Mr.
Beard has served continuously as director of the Company or of its
predecessors since first elected. In the event that he should for some
reason, presently unknown, fail to stand for election, the resulting
vacancy would be filled at such time as the board finds a suitable
candidate. The election of a director at this meeting will be by
plurality vote. The director elected at the Annual Meeting will serve
for a three-year term and until his successor is elected and qualified,
in accordance with the provisions of the Certificate and the Company's
By-Laws.
Certain information with respect to the nominee for director and five
directors whose terms do not expire this year is as follows:
Nominee for Election for a Term of Three Years Expiring in 2002:
Nominee (age), year first became a Director of Beard or Beard Oil:
W. M. Beard (70), 1974
W.M. Beard has served Beard as its Chairman of the Board and Chief
Executive Officer since December 1992. He previously served as Beard's
President and Chief Executive Officer from the Company's incorporation
in October 1974 until January 1985. He has served Beard Oil as its
Chairman of the Board and Chief Executive Officer since its
incorporation. He has also served as a director of Beard and Beard Oil
since their incorporation. Mr. Beard has been actively involved since
1952 in all management phases of Beard and Beard Oil from their
inception, and as a partner of their predecessor company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ABOVE NOMINEE.
Directors to Continue in Office with Terms Expiring in 2000:
Allan R. Hallock (69), 1986
Allan R. Hallock was elected a director of Beard in July 1993. He
served as a director of Beard Oil Company ("Beard Oil"), the predecessor
to Beard, from December 1986 until October 1993. Mr. Hallock is
currently an independent consulting geologist. He served as Vice
President and Exploration Manager of Gemini Corporation from 1970 until
December 1986.
Ford C. Price (61), 1988
Ford C. Price was elected a director of Beard in July 1993. He served
as a director of Beard Oil from June 1987 until October 1993. From 1961
until 1986 Mr. Price served in various capacities with The Economy
Company, a privately-held schoolbook publishing company, last serving as
its Chairman of the Board and Chief Executive Officer. Mr. Price is a
private investor.
Directors to Continue in Office with Terms Expiring in 2001:
Harlon E. Martin, Jr. (51), 1997
Harlon E. Martin, Jr. was elected a director of Beard in October 1997 to
fill the directorship vacancy created by the death of W. R. Plugge. Mr.
Martin has served as the principal of H. E. Martin & Company, a Houston
investment banking firm, since its founding in 1990. He was a co-
founder of GTM Securities Corp. in 1985 and served as a principal of
such firm until 1989. Mr. Martin is a certified public accountant and a
licensed securities principal with the NASD.
Herb Mee, Jr. (70), 1974
Herb Mee, Jr. has served as Beard's President since October 1989 and as
its Chief Financial Officer since June 1993. He has served as Beard
Oil's President since its incorporation, and as its Chief Financial
Officer since June 1993. He has also served as a director of Beard and
Beard Oil since their incorporation. Mr. Mee served as President of
Woods Corporation, a New York Stock Exchange diversified holding
company, from 1968 to 1972 and as its Chief Executive Officer from 1970
to 1972.
Director Elected to Represent the Class of Preferred Stockholders
Michael E. Carr (63), 1994
Michael E. Carr was elected in February 1994 by the preferred
stockholders to fill the directorship vacancy which they are entitled to
fill. He served as Senior Vice President of Beard Oil from December
1986 until October 1993. He served as President of Sensor Oil & Gas,
Inc. from October 1993 until August 1996. He presently serves as
President of Mica Energy Corp.
Mr. Carr will serve as a director of the Company until his successor
has been elected and has qualified in such office or until such time as
all of the preferred stock has been converted or redeemed.
There is no family relationship between any of the directors or
executive officers of the Company.
Committees of the Board of Directors
The Company has standing Audit and Compensation Committees. Mr.
Price serves as chairman and Messrs. Hallock, Martin and Carr serve as
members of the Audit Committee which met twice in 1998. Mr. Hallock
serves as chairman and Messrs. Martin, Price and Carr serve as members
of the Compensation Committee which met once in 1998. During 1998, the
Board of Directors met eight times. All of the directors attended more
than 75% of the aggregate of all meetings of the Board of Directors and
Committees on which they served during 1998.
The principal functions of the Company's Audit Committee are: (1) to
annually review the selection of independent auditors and to recommend
for Board approval and stockholder ratification the appointment of
independent auditors; (2) to consult with the independent auditors of
the Company with regard to the plan of audit; (3) to review the results
of the annual audit and request additional reviews and audit procedures
if necessary; and (4) to review and approve internal audit objectives,
accounting and control policies and procedures to determine that a
reliable system of internal controls is functioning.
The principal functions of the Company's Compensation Committee are:
(1) to review the objectives, structure, cost and administration of the
Company's major compensation and benefit policies and programs; (2) to
review and make recommendations concerning remuneration arrangements for
senior management, including the specific relationship of corporate
performance to executive compensation; (3) to review the Company's
performance versus the CEO's compensation and establish measures of the
Company's performance upon which the CEO's compensation is based; and
(4) to administer the Company's compensation, benefit and incentive
plans.
The Company does not have a Nominating Committee; the Board of
Directors has nominated the directors to stand for election at the
annual meeting. Each of the persons nominated presently serves as a
director.
Executive Officers
Certain information concerning the executive officers of the Company
is set forth below:
In addition to W. M. Beard, the Company's Chairman and Chief
Executive Officer, and Herb Mee, Jr., the Company's President and Chief
Financial Officer, the following are considered to be executive officers
of the Company:
Jack A. Martine, age 49, was elected as Controller, Chief Accounting
Officer and Tax Manager of Beard in October 1996. Mr. Martine served as
tax manager for Beard from June 1989 until October 1993 at which time he
joined Sensor Oil & Gas, Inc. in a similar capacity. Mr. Martine is a
certified public accountant.
Rebecca G. Witcher, age 39, has served as Corporate Secretary of the
Company and Beard Oil since October 1993, and has served as Treasurer of
such companies since July 1997.
All executive officers serve at the pleasure of the Board of Directors.
Compliance with SEC Reporting Requirements
Section 16 of the Securities Exchange Act of 1934 requires directors
and executive officers of the Company to file reports with the
Securities and Exchange Commission reflecting transactions by such
persons in the Company's common stock. During 1998, to the knowledge of
the Company, or based on information provided by such persons to the
Company, all executive officers and directors of the Company subject to
such filing requirements fully complied with such requirements.
Compensation of Executive Officers
The table below sets forth sets forth the compensation paid or
accrued during each of the last three fiscal years by the Company and
its subsidiaries to the Company's Chief Executive Officer and each of
the Company's other most highly compensated executive officers
(hereafter referred to as the named executive officers), whose aggregate
salary and bonus exceeded $100,000, for any of the fiscal years ended
December 31, 1998, 1997, and 1996:
SUMMARY COMPENSATION TABLE
Long Term
Compensation
----------------
Annual Compensation Awards Payouts
- ---------------------------------------------- ------ -------
Securities
Underlying All Other
Name and Options/ LTIP Compensa-
Princpal Salary (A) Bonus (B) SAR's Payouts tion (C)
Position Year ($) ($) (#) ($) ($)
-------- ---- --- --- --- --- ---
W. M. Beard 1998 99,000(D) -0-(D) -0- 35,250(D) 5,503(D)
Chairman & CEO 1997 99,000(D) 18,750(D)(E) -0- 41,450(D)(E) 5,501(D)
1996 99,000(D) -0-(D) -0- 35,150(D) 5,031(D)
Herb Mee, Jr. 1998 132,000 1,250(B) -0- -0- 7,288
President & CFO 1997 132,000 26,200(B)(E) -0- -0- 7,285
1996 132,000 1,150(B) -0- -0- 6,658
_______________
(A) Amounts shown include cash compensation earned and received by
executive officers as well as amounts earned but deferred pursuant to
the Company's 401(k) Plan at the election of those officers.
Amounts shown exclude cash compensation earned but deferred pursuant to
the Company's Deferred Stock Compensation Plan.
(B) Bonus for length of service with Beard or Beard Oil.
(C) Consists of the Company's contribution to the Company's 401(k) Plan.
(D) In 1998 Mr. Beard deferred one-fourth ($33,000) of his salary and all
($2,250) of his bonus for the year; in 1997 Mr. Beard deferred one-
fourth ($33,000) of his salary and all ($2,200) of his length of
service bonus for the year; in 1996 he deferred one-fourth ($33,000)
of his salary and all ($2,150) of his bonus for the year pursuant to
the Company's Deferred Stock Compensation Plan.
(E) In 1997 Messrs. Beard and Mee each received a special bonus of
$25,000, of which $12,500 was paid in 1997 and $12,500 in 1998. Mr.
Beard deferred one-fourth of such bonus in both 1997 ($3,125) and
1998 ($3,125).
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information, with respect to the named
executive officers, concerning the exercise of options during the
Company's last fiscal year and unexercised options held as of the end of
the last fiscal year:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- --------------- ------------ ------------- -------------
W. M. Beard 37,500 $ 106,641 12,500/-0- $15,234/-0-
Herb Mee, Jr. 17,450 $ 59,575 32,550/-0- $40,688/-0-
Compensation of Directors
Mr. Carr received compensation of $9,050 for services rendered during
1998 as a director of Beard. Messrs. Hallock, Martin and Price received
$8,800, $9,050 and $9,050, respectively, of deferred fees under the
Company's Deferred Stock Compensation Plan (the "Plan"). Under the
Plan, the electing officers and directors can defer fees and
compensation until termination of service or termination of the Plan, at
which time the accounts will be settled by distribution of a number of
shares of the Company's common stock equal to the number of Units
credited under the Plan. A Unit is equal to the amount deferred divided
by the fair market value of a share of common stock on the date of
deferral. Currently, the non-management directors each receive $500 per
month for their services, and also receive the following fees for
directors' meetings which they attend: annual and 1-1/2 day meetings --
$750; regular meeting -- $500; telephone meeting -- $100 to $300
depending upon length of meeting. The non-management directors also
receive a small year-end bonus depending upon their length of service as
directors of Beard and Beard Oil. Accordingly, Messrs. Hallock, Martin,
Price, and Carr received $500, $50, $500 and $200, respectively, in
1998. All of the directors except Mr. Carr elected to defer such bonuses
pursuant to the Plan. Beard also provides health and accident insurance
benefits for its non-management directors who are not otherwise covered
and the value of these benefits is included in the above compensation
amounts. None of the directors received additional compensation in 1998
for their committee participation.
The two eligible non-management directors (Messrs. Hallock and Price)
were each granted 5,000 phantom stock units (the "Units") under the
Company's 1994 Phantom Stock Units Plan on November 1, 1994. Mr. Carr
was awarded 5,000 Units when he became eligible on February 22, 1995.
All of these awards were based on an award price of $2.00* per share and
vest over a five year period at the rate of 20% per year. Messrs.
Hallock, Martin, Price and Carr were each granted 5,000 Units on October
23, 1997 at an award price of $5.00 per share, the market value of the
stock on such date. The 1997 awards vest over a four year period at the
rate of 25% per year. Each participant has the option of receiving
payment for his award: (i) as it vests; (ii) at the conclusion of the
award period; or (iii) 50% as it vests, with the other 50% deferred to
the conclusion of the award period. Payments are based upon
appreciation in the market value of the Company's common stock during
the appropriate time interval selected. Mr. Carr received a cash
payment of $1,987 in 1999 for 1,000 Units which vested on February 22,
1999, $3,046 in 1998 for 1,000 Units which vested on February 22, 1998
and $3,808 in 1997 for 2,000 Units which vested on February 22, 1997.
________________
*The market value on November 1, 1994 was $1.875 per share; on February
22, 1995 it was $1.75 per share.
Compensation Committee Interlocks and Insider Participation
Michael E. Carr, who has been elected by the preferred shareholders
to serve as their representative on the Board of Directors, was elected
to serve as a member of the Compensation Committee on April 26, 1994.
Mr. Carr served as Senior Vice President of Beard Oil from December 1986
until October 1993.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of
Directors (the "Board") establishes the general compensation policies of
the Company. The Committee meets once each year to establish specific
compensation levels for the chairman/chief executive officer ("CEO") and
the president/chief financial officer ("CFO") and to review the
executive officers' compensation generally. (The compensation for
executive officers other than the CEO and CFO is actually determined by
the CEO and CFO).
The Committee's goal in setting executive compensation is to
motivate, reward and retain management talent who support the Company's
goals of increasing shareholder value. This goal is to provide
competitive levels of compensation that relate to the Company's long-
term performance goals and objectives, reward outstanding corporate
performance and recognize individual initiative and achievement. The
Committee endeavors to achieve these objectives through a combination of
base salary, cash bonuses and stock options.
The Committee believes that the total compensation of its CEO, CFO
and other executive officers should be tied to the Company's success in
achieving long-term growth in earnings, cash flow and stock price per
share. The Committee also believes that the total cash compensation of
such officers should, to the extent possible, be similar to the total
cash compensation of similarly situated executives of peer group public
companies. To date neither the Company nor the Committee has been able
to establish a peer group which they feel is comparable enough in size,
financial structure and diversity of operations to establish a valid
comparison. The Committee noted that, through March 31, 1999, the
Company's per share stock price has grown at a compound rate of more
than 15% following the major restructure (the "1993 Restructure") which
occurred on October 26, 1993.
No executive officer's compensation for 1998 exceeded the $1 million
deduction limit under Section 162(m) of the Internal Revenue Code, as
amended, and the same result is anticipated for 1999. The Committee
does not anticipate that any executive officer's compensation would
approach the threshold level in the foreseeable future.
Base Salaries. No salary increases have been granted to the
Company's top two executive officers since September of 1990.
Management totally restructured the Company during the period from 1993
to 1998. As a result there was a significant improvement in financial
results which restored the Company to profitability in 1993 and 1994.
1995 and 1996 were disappointing years profit-wise. 1997 was highly
profitable due to the sale of substantially all of the assets of the
Company's dry ice subsidiary, Carbonic Reserves ("Carbonics"). Another
disappointing year profit-wise followed in 1998. No changes in base
salary are currently under consideration for the CEO and CFO.
Cash Bonuses. All employees of the Company receive a small year-end
bonus depending upon their length of service as employees of Beard or
Beard Oil. Because of the overall financial results, no other cash
bonuses have been paid to present executive officers during the last
five fiscal years, except for a special bonus paid to all employees of
the parent company for their efforts related to the Carbonics sale in
late 1997. Such bonus included $25,000 each paid to the CEO and CFO,
and a total of $17,175 paid to two other executive officers of the
Company.
Beard Group 401(k) Plan. One of the investment options available
under the Company's 401(k) Plan (the "401(k) Plan") is the option for
each participant to invest all or part of his investment account in
Company common stock ("The Beard Company Stock Fund Investment Option").
Because the bank trustee of this portion of the 401(k) Plan was having
difficulty purchasing sufficient shares of such stock in the open
market, the 401(k) Plan was amended in September of 1995 to permit the
bank to purchase authorized shares of Beard common stock directly from
the Company, and the Company reserved 150,000 shares of its authorized
but unissued common stock for such purpose. The Committee felt that
this step was extremely important because it enabled key management
members to significantly increase their ownership in the Company,
further aligning their interests with those of the shareholders. Since
the amendment was approved, the bank trustee has purchased 88,300 shares
from the Company, with more than 75% of such shares being purchased for
the accounts of present executive officers of the Company.
Stock Options. The Committee desires to reward long-term strategic
management practices and enhancement of shareholder value through the
award of stock options. The Committee believes that stock options
encourage increased performance by the Company's key employees by
providing incentive to employees to elevate the long-term value of the
Company's common stock, thus aligning the interests of the Company's
employees with the interests of its shareholders. Additionally, stock
options build stock ownership and provide employees with a long-term focus.
The Committee and the Board have placed particular emphasis upon
stock options in structuring the compensation package for senior
management, in the belief that the interests of senior management and
the Company's shareholders should be as closely aligned as possible.
CEO Compensation
W. M. Beard has been Chairman and CEO of the Company and its
predecessors since 1974. Mr. Beard's 1998 base salary was $132,000, and
has not increased since 1990. He receives, along with all other Beard
employees, a small year-end bonus based on length of service with Beard
or Beard Oil. He received $25,000 (25% of which he elected to defer)
as part of a special 1997 bonus paid to all employees of the parent
company for their efforts related to the Carbonics sale. The 1994 stock
option grant of 50,000 shares to Mr. Beard reflected the Committee's
desire to provide significant incentives which link long-term executive
compensation to long-term growth in equity for all shareholders, as
described above. The award also reflected Mr. Beard's position and
level of responsibility within the Company, the Committee's qualitative
analysis of his performance in managing the Company, and the importance
of the role he plays in determining the Company's strategic direction.
Based on the Company's profitability, the granting of any additional
stock options to Mr. Beard or other key management members was not
considered by the Committee, with the exception of a small award to one
executive officer due to a promotion and increased responsibilities. A
significant portion of the Company's outstanding options were exercised
in 1998, including 75% of his outstanding option by Mr. Beard. The
Committee may consider the awarding of additional options to key
management members, including Mr. Beard, in 1999 and subsequent years.
Any such grants will depend upon the Company's profitability, the
outlook for its various businesses and the Committee's determination of
the need to provide additional incentives to management.
COMPENSATION COMMITTEE
Allan R. Hallock, Chairman
Harlon E. Martin, Jr.
Ford C. Price
Michael E. Carr
STOCK PERFORMANCE
The following performance graph compares The Beard Company's cumulative
total stockholder return on its common stock against the cumulative
total return of the American Stock Exchange Market Value Index and the
SIC Code Index of the Bituminous Coal, Surface Mining Industry compiled
by Media General Financial Services for the period from December 31,
1993 through December 31, 1998. The performance graph assumes that the
value of the investment in The Beard Company stock and each index was
$100 on December 31, 1993 and that any dividends were reinvested. The
Beard Company has never paid dividends on its common stock.
December December December December December December
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- --------
The Beard Company 100.00 92.86 121.43 164.29 300.00 185.71
Bituminous Coal,
Surface Mining
Industry Index 100.00 84.36 88.27 129.41 105.44 65.36
AMEX Market Index 100.00 88.33 113.86 120.15 144.57 142.61
The Industry Index chosen consists of the following companies: Arch
Coal, Inc., China Energy Resources, Covol Technologies Inc., Pittston
Minerals Group and Yanzhou Coal Mining Co.
AMENDMENT TO THE BEARD COMPANY
DEFERRED STOCK COMPENSATION PLAN
(Proposal No. 2)
At the 1996 Annual Meeting of Shareholders held on June 3, 1996, the
shareholders authorized The Beard Company Deferred Stock Compensation
Plan (the "Plan") which first became effective November 1, 1995. The
Plan is intended to advance the interests of the Company and its
shareholders by providing a means to attract and retain highly-qualified
persons to serve as Officers and Directors and to promote ownership by
Officers and Directors of a greater proprietary interest in the Company,
thereby aligning such interests more closely with the interests of
shareholders of the Company.
A copy of the Plan, as proposed to be amended, is attached to this
Proxy Statement as Exhibit A and the description contained herein is
qualified in its entirety by reference to the complete text of the Plan.
Capitalized terms used below not otherwise defined herein shall have the
meaning ascribed to them in the Plan.
Upon the recommendation of management, the Board of Directors of the
Company voted on April 21, 1999, subject to stockholder approval, to
amend the Plan effective January 1, 1999, to increase the number of
shares of common stock authorized for issuance thereunder from 50,000 to
100,000; to delete the six month notice required to change an election
and provide for 30 day notice prior to the next payment date; and to
delete reference to Rules under Section 16b-3 of the Exchange Act that
no longer apply. As of December 31, 1998, the Compensation and Fees
which had been credited to the individual Participants' Stock Unit
Accounts, and which will ultimately be converted into Beard common
stock, totaled 49,775.62. Management does not believe the remaining
shares are sufficient to meet the Company's needs. The Board concurs
with management's recommendation, and believes that the proposed
increase in the number of shares available for issuance under the Plan
will enable the Company to continue its policy of attracting and
retaining highly-qualified persons to serve as Officers and Directors by
promoting ownership of a greater proprietary interest in the Company.
The Plan enables Officers and Directors of the Company to defer
Compensation and Fees in cash and to elect payments of such Compensation
and Fees in Beard common stock. All Officers and Directors are
automatically entitled to participate in the Plan. There are currently
nine individuals eligible for the Plan. Directors may elect to defer a
minimum of 25% of their Compensation and Fees or a greater amount in 25%
increments and Officers may elect to defer a minimum of 10% of
Compensation and Fees or a greater amount in 5% increments. All
Compensation and/or Fees deferred under the Plan will be credited to the
individual Participant's Stock Unit Account and will then be converted
into Beard common stock by dividing the amount of Compensation and Fees
deferred by the Fair Market Value of one Share of common stock as of the
date the Compensation or Fees would have otherwise been paid. Once a
person ceases to be an Officer or Director, their participation in the
Plan automatically terminates. The Plan complies with the requirements
of Rule 16b-3 of the Exchange Act. Following shareholder approval, a
maximum of 100,000 Shares of Beard common stock may be issued under the
Plan.
The Shares received by the Participant in lieu of Compensation and
Fees will be maintained in each Participant's Stock Unit Account until
(i) the Participant ceases to be an Officer or Director, for any reason,
or (ii) termination of the Plan upon the earlier of the following
events: (a) no Shares remain available under the Plan, (b) June 30,
2006, or (c) action of the Board of Directors terminating the Plan.
Upon any of these events, the Shares of common stock in each
Participant's Stock Unit Account will be distributed. The Participants
will not have shareholder rights with respect to these Shares until this
distribution.
The Plan may be amended or terminated without shareholder vote or
consent of the Participants, unless required by Federal or state law or
regulation or the rules of any stock exchange or automated quotation
system on which the Shares are listed or quoted. If a vote is required
it will be taken at the next shareholders' meeting after such amendment
or modification.
The Plan is administered by the Compensation Committee (the
"Committee"), which is composed of not less than two members of the
Board of Directors. No Participant shall make any determination
relating solely or primarily to his or her own Shares or Stock Unit
Account. The Committee makes all determinations necessary to administer
the Plan, but each Participant solely has the right an authority to make
an election to defer Compensation and Fees pursuant to the Plan.
The approval and adoption of this proposed amendment requires the
affirmative vote by a majority of the Company's outstanding common and
preferred stock present in person or represented at the meeting and
entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE THE PROPOSAL TO AMEND
THE BEARD COMPANY DEFERRED STOCK COMPENSATION PLAN TO INCREASE THE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE THEREUNDER FROM 50,000 TO
100,000, TO CHANGE CERTAIN NOTICE PROVISIONS, AND TO DELETE REFERENCES
TO CERTAIN EXCHANGE ACT RULES THAT NO LONGER APPLY.
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal No. 3)
KPMG LLP ("KPMG"), Independent Certified Public Accountants, have been
independent auditors of the Company and Beard Oil since its
incorporation in 1974. Although not formally required, stockholders'
approval of such appointment is requested. To the knowledge of
management, such accountants do not have any direct, or material
indirect, financial interest in the Company and its subsidiaries, nor
have they had any connection during the past three (3) years with the
Company or any of its subsidiaries in the capacity of promoter,
underwriter, voting trustee, director, officer or employee.
Representatives of KPMG are expected to be present at the meeting. They
will have the opportunity to make a statement if they so desire and are
expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE
THE APPOINTMENT OF KPMG.
In the event the appointment of KPMG should not be approved by the
stockholders, the Board of Directors will make another appointment, to
be effective at the earliest feasible time.
VOTE REQUIRED
The holders of shares entitled to cast a majority of the votes, present
in person or by proxy, constitute a quorum for the transaction of
business at the meeting. The affirmative vote of holders of the
Company's stock entitled to cast a majority of the votes represented at
the annual meeting will be required for the approval of (1) the
amendment to The Beard Company Deferred Stock Compensation Plan and (2)
the appointment of KPMG as independent auditors of the Company for 1999.
The election of directors shall be by a plurality of the vote of the
shares present in person or represented by proxy at the meeting and
entitled to vote on the election of directors.
The office of the Company's Secretary appoints an inspector of election
to tabulate all votes and to certify the results of all matters voted
upon at the annual meeting. Neither the corporate law of the State of
Oklahoma, the state in which the Company is incorporated, nor the
Company's Certificate of Incorporation or By-Laws have any specific
provisions regarding the treatment of abstentions and broker non-votes.
It is the Company's policy to count abstentions or broker non-votes for
purposes of determining the presence of a quorum at the meeting; to
treat abstentions as votes not cast but to treat them as shares
represented at the meeting for determining results on actions requiring
a majority vote; and to consider neither abstentions or broker non-votes
in determining results of plurality votes.
STOCKHOLDER PROPOSALS
The Board of Directors anticipates that next year's annual meeting will
be held during the first week of June 2000. Any proposals of
stockholders intended to be presented at the 2000 Annual Meeting of
Stockholders must be received by the Company not later than February 2,
2000 in order for the proposals to be included in the proxy statement
and proxy card relating to such meeting. It is suggested that
proponents submit their proposals by certified mail, return receipt
requested. No stockholder proposals were received for inclusion in this
Proxy Statement.
OTHER MATTERS
Management knows of no other matters to be brought before the Annual
Meeting of Stockholders; however, if any additional matters are properly
brought before the meeting, the persons named in the enclosed proxy will
vote the proxies in their discretion in the manner they believe to be in
the best interest of the Company.
The accompanying form of proxy has been prepared at the direction of the
Company, of which you are a stockholder, and is sent to you at the
request of the Board of Directors. The proxies named herein have been
designated by your Board of Directors.
Management urges you, even if you presently plan to attend the meeting
in person, to execute the enclosed proxy and mail it as indicated
immediately. If a proxy is properly signed and is not revoked by the
shareholder, the shares it represents will be voted according to the
instructions of the shareholder; provided, however, if no specific
instructions are given, the shares will be voted as recommended by the
Board of Directors. A shareholder may revoke his or her proxy any time
before it is voted at the meeting. A shareholder who attends the
meeting and wishes to vote in person may revoke his or her proxy at the
meeting. Otherwise, a shareholder must advise the secretary of the
Company in writing of revocation of his or her proxy.
THE BEARD COMPANY
By Order of the Board of Directors
REBECCA G. WITCHER
Rebecca G. Witcher
Secretary
Oklahoma City, Oklahoma
May __, 1999
<PAGE>
EXHIBIT A
AMENDMENT NO. ONE
TO
THE BEARD COMPANY
DEFERRED STOCK COMPENSATION PLAN
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 Purpose. The Beard Company Deferred Stock
Compensation Plan, as amended, (the "Plan") is intended to
advance the interests of the Company and its shareholders by
providing a means to attract and retain highly-qualified persons
to serve as Officers and Directors and to promote ownership by
Officers and Directors of a greater proprietary interest in the
Company, thereby aligning such interests more closely with the
interests of shareholders of the Company.
1.2 Effective Date. This Plan first became effective
November 1, 1995 and was approved by the shareholders of the
Company by the affirmative vote of a majority of shares of the
Company present, or represented, and entitled to vote on the
subject matter, at the 1996 Annual Meeting of Shareholders of the
Company. The Plan, as amended, shall become effective on January
1, 1999, subject to the approval of the shareholders of the
Company by the affirmative vote of a majority of the shares of
the Company present, or represented, and entitled to vote on the
subject matter, at the 1999 Annual Meeting of Shareholders of the
Company.
ARTICLE II
DEFINITIONS
The following terms shall be defined as set forth
below:
2.1 "Board" means the Board of Directors of the
Company.
2.2 "Compensation" means all or part of the cash
remuneration payable to an Officer in his or her capacity as an
Officer.
2.3 "Committee" means the Compensation Committee of
the Board.
2.4 "Company" means The Beard Company, an Oklahoma
corporation, or any successor thereto.
2.5 "Deferral Date" means the date Fees or
Compensation would otherwise have been paid to the Participant.
2.6 "Director" means any individual who is a member
of the Board.
2.7 "Exchange Act" means the Securities Exchange Act
of 1934, as amended. References to any provision of the Exchange
Act include rules thereunder and successor provisions and rules
thereto.
2.8 "Fair Market Value" means the "Market Price" as
defined in the Certificate of Designations for the Company's
outstanding Series A Convertible Preferred Stock, but in no event
shall Fair Market Value be less than an amount below which would
cause an adjustment to the number of shares of the Company's
common stock to be issued upon conversion of the Series A
Convertible Preferred Stock.
2.9 "Fees" means all or part of any retainer and/or
fees payable to a Director in his or her capacity as a Director.
2.10 "Officer" means any person so designated by the
Board.
2.11 "Participant" means a Director or Officer who
defers Fees or Compensation under Article VI of this Plan.
2.12 "Reconciliation Events" means certain events
which cause the amount of Fees or Compensation actually paid
during a period to differ from the amount of Fees credited
pursuant to Section 6.4, including, but not limited to, the
following: an increase or decrease in Fees paid, additional
meetings held, missed attendance at certain meetings, newly
elected directors and Terminations of Service.
2.13 "Secretary" means the Corporate Secretary or any
Assistant Corporate Secretary of The Beard Company.
2.14 "Shares" means shares of the common stock of The
Beard Company, par value $.001 per share, or of any successor
corporation or other legal entity adopting this Plan.
2.15 "Stock Units" means the credits to a
Participant's Stock Unit Account under Article VI of this Plan,
each of which represents the right to receive one Share upon
settlement of the Stock Unit Account.
2.16 "Stock Unit Account" means the bookkeeping
account established by the Company pursuant to Section 6.4.
2.17 "Termination Date" means the date the Plan
terminates pursuant to Section 12.8.
2.18 "Termination of Service" means termination of
service as a Director or Officer in any of the following
circumstances:
(a) Where the Participant voluntarily resigns or
retires;
(b) Where a Director is not re-elected (or
elected in the case of an appointed Director) to the Board by the
shareholders, or an Officer is not re-elected as an Officer by
the Board; or
(c) Where the Participant dies.
ARTICLE III
SHARES AVAILABLE UNDER THE PLAN
Subject to adjustment as provided in Article X, the
maximum number of Shares that may be distributed in settlement of
Stock Unit Accounts under this Plan shall not exceed 100,000.
Such Shares may include authorized but unissued Shares or
treasury Shares.
ARTICLE IV
ADMINISTRATION
4.1 This Plan shall be administered by the Board's
Compensation Committee, or such other committee or individual as
may be designated by the Board. Notwithstanding the foregoing,
no Director who is a Participant under this Plan shall
participate in any determination relating solely or primarily to
his or her own Shares, Stock Units or Stock Unit Account.
4.2 It shall be the duty of the Committee to
administer this Plan in accordance with its provisions and to
make such recommendations of amendments or otherwise as it deems
necessary or appropriate.
4.3 The Committee shall have the authority to make
all determinations it deems necessary or advisable for
administering this Plan, subject to the limitations in Section
4.1 and other explicit provisions of this Plan.
ARTICLE V
ELIGIBILITY
Each Director and Officer of the Company shall be
eligible to defer Fees and Compensation under Article VI of this
Plan.
ARTICLE VI
DEFERRAL ELECTIONS IN LIEU OF CASH PAYMENTS
6.1 General Rule. Each Director or Officer may, in
lieu of receipt of Fees or Compensation, defer such Fees or
Compensation in accordance with this Article VI.
6.2 Timing of Election. Each eligible Director or
Officer who wishes to defer Fees or Compensation under this Plan
must make an irrevocable written election at least six (6) months
prior to the beginning of the date on which the Fees or
Compensation would otherwise be paid; provided, however, that
with respect to (a) any election made by a newly-elected or
appointed Director or Officer ("New Participant Elections") and
(b) elections made prior to shareholder approval for the Plan as
provided in Section 1.2 hereof ("Initial Elections"), the
following special rules shall apply: (i) with respect to any New
Participant Elections, the Company shall hold such deferred Fees
or Compensation (without interest) and credit them pursuant to
Section 6.4 on or as of the date which follows by six months such
deferral election and (ii) with respect to any Initial Elections,
such elections shall be effective for any Fees or Compensation
paid on the date the election was made and the Company shall hold
such deferred Fees or Compensation (without interest) and credit
them pursuant to Section 6.4 on or as of the date on which the
shareholders of the Company approve the Plan in accordance with
Section 1.2; provided, however, the Fair Market Value used to
determine the number of Stock Units to be credited shall be the
Fair Market Value as of the date the election was made. An
election by a Director or an Officer shall be deemed to be
continuing and therefore applicable to Fees or Compensation to be
paid in periods unless the Director or Officer revokes or changes
such election by filing a new election form thirty (30) days
prior to the next payment date for Fees or Compensation.
6.3 Form of Election. An election shall be made in a
manner satisfactory to the Secretary. Generally, an election
shall be made by completing and filing the specified election
form with the Secretary of the Company within the period
described in Section 6.2. At minimum, the form shall require the
Director or Officer to specify the following:
(a) a percentage (for Directors in 25%
increments, and for Officers not less than 10% and in 5%
increments thereafter), not to exceed an aggregate of 100% of the
Fees or Compensation to be deferred under this Plan; and
(b) the manner of settlement in accordance with
Section 7.2.
6.4 Establishment of Stock Unit Account. The Company
will establish a Stock Unit Account for each Participant. All
Fees or Compensation deferred pursuant to this Article VI shall
be credited to the Participant's Stock Unit Account as of the
Deferral Date and converted to Stock Units as follows: The
number of Stock Units shall equal the deferred Fees or
Compensation divided by the Fair Market Value of a Share on the
Deferral Date, with fractional units calculated to three (3)
decimal places.
6.5 Credit of Dividend Equivalents. As of each
dividend payment date with respect to Shares, each Participant
shall have credited to his or her Stock Unit Account an
additional number of Stock Units equal to: the per-share cash
dividend payable with respect to a Share on such dividend payment
date multiplied by the number of Stock Units held in the Stock
Unit Account as of the close of business on the record date for
such dividend divided by the Fair Market Value of a Share on such
dividend payment date. If dividends are paid on Shares in a form
other than cash, then such dividends shall be notionally
converted to cash, if their value is readily determinable, and
credited in a manner consistent with the foregoing and, if their
value is not readily determinable, shall be credited "in kind"
to the Participant's Stock Unit Account.
6.6 Reconciliations. The Company shall record all
Reconciliation Events and, as soon as reasonably practicable
after the end of each calendar quarter or after a Termination of
Service, make appropriate adjustments to each Participant's Stock
Unit Account to reflect such Reconciliation Events; provided,
however, the Fair Market Value used to determine such adjustments
shall be the same Fair Market Value used to determine the number
of Stock Units credited to such Participant's Stock Unit Account.
ARTICLE VII
SETTLEMENT OF STOCK UNITS
7.1 Settlement of Account. The Company will settle a
Participant's Stock Unit Account in the manner described in
Section 7.2 as soon as administratively feasible following the
earlier of (i) notification of such Participant's Termination of
Service or (ii) the Termination Date.
7.2 Payment Options. An election filed under Article
VI shall specify whether the Participant's Stock Unit Account is
to be settled by delivering to the Participant (or his or her
beneficiary) the number of Shares equal to the number of whole
Stock Units then credited to the Participant's Stock Unit
Accounts, in (a) a lump sum, or (b) substantially equal annual
installments over a period not to exceed ten (10) years. If,
upon lump sum distribution or final distribution of an
installment, less than one whole Stock Unit is credited to a
Participant's Stock Unit Account, cash will be paid in lieu of
fractional shares on the date of such distribution.
7.3 Continuation of Dividend Equivalents. If payment
of Stock Units is deferred and paid in installments, the
Participant's Stock Unit Account shall continue to be credited
with dividend equivalents as provided in Section 6.5.
7.4 In Kind Dividends. If any "in kind" dividends
were credited to the Participant's Stock Unit Account under
Section 6.5, such dividends shall be payable to the Participant
in full on the date of the first distribution of Shares under
Section 7.2.
ARTICLE VIII
UNFUNDED STATUS
The interest of each Participant in any Fees or
Compensation deferred under this Plan (and any Stock Units or
Stock Unit Account relating thereto) shall be that of a general
creditor of the Company. Stock Unit Accounts, and Stock Units
(and, if any, "in kind" dividends) credited thereto, shall at all
times be maintained by the Company as bookkeeping entries
evidencing unfunded and unsecured general obligations of the
Company.
ARTICLE IX
DESIGNATION OF BENEFICIARY
Each Participant may designate, on a form provided by
the Committee, one or more beneficiaries to receive the Shares
described in Section 7.2 in the event of such Participant's
death. The Company may rely upon the beneficiary designation
last filed with the Committee, provided that such form was
executed by the Participant or his or her legal representative
and filed with the Committee prior to the Participant's death.
ARTICLE X
ADJUSTMENT PROVISIONS
In the event any recapitalization, reorganization,
merger, consolidation, spin-off, combination, repurchase,
exchange of shares or other securities of the Company, stock
split or reverse split, or similar corporate transaction or event
affects Shares such that an adjustment is determined by the Board
or Committee to be appropriate to prevent dilution or enlargement
of Participants' rights under this Plan, then the Board or
Committee will, in a manner that is proportionate to the change
to the Shares and is otherwise equitable, adjust the number or
kind of Shares to be delivered upon settlement of Stock Unit
Accounts under Article VII.
ARTICLE XI
COMPLIANCE WITH RULE 16b-3
Subject to Section 6.2, it is the intent of the Company
that this Plan comply in all respects with applicable provisions
of Rule 16b-3 under the Exchange Act in connection with the
deferral of Fees and Compensation.
ARTICLE XII
GENERAL PROVISIONS
12.1 No Right to Continue as an Officer or Director.
Nothing contained in this Plan will confer upon any Participant
any right to continue to serve as an Officer or Director.
12.2 No Shareholder Rights Conferred. Nothing
contained in this Plan will confer upon any Participant any
rights of a shareholder of the Company unless and until Shares
are in fact issued or transferred to such Participant in
accordance with Article VII.
12.3 Change to the Plan. The Board may amend, alter,
suspend, discontinue, extend, or terminate the Plan without the
consent of shareholders or Participants, except that any such
action will be subject to the approval of the Company's
shareholders at the next annual meeting of shareholders having a
record date after the date such action was taken if such
stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated
quotation system on which the Shares may then be listed or
quoted, or if the Board determines in its discretion to seek such
shareholder approval; provided, however, that, without the
consent of an affected Participant, no such action may materially
impair the rights of such Participant with respect to any Stock
Units credited to his or her Stock Unit Account.
12.4 Consideration; Agreements. The consideration for
Shares issued or delivered in lieu of payment of Fees or
Compensation will be the service of the Officer or Director
during the period to which the Fees or Compensation paid in the
form of Shares related.
12.5 Compliance with Laws and Obligations. The
Company will not be obligated to issue or deliver Shares in
connection with this Plan in a transaction subject to the
registration requirements of the Securities Act of 1933, as
amended, or any other federal or state securities law, any
requirement under any listing agreement between the Company and
any national securities exchange or automated quotation system or
any other laws, regulations, or contractual obligations of the
Company, until the Company is satisfied that such laws,
regulations, and other obligations of the Company have been
complied with in full. Certificates representing Shares
delivered under the Plan will be subject to such stop-transfer
orders and other restrictions as may be applicable under such
laws, regulations, and other obligations of the Company,
including any requirement that a legend or legends be placed
thereon.
12.6 Limitations on Transferability. Stock Units and
any other right under the Plan that may constitute a "derivative
security" as generally defined in Rule 16a-1(c) under the
Exchange Act will not be transferable by a Participant except by
will or the laws of descent and distribution (or to a designated
beneficiary in the event of a Participant's death); provided,
however, that such rights may be transferred to one or more
trusts or other beneficiaries during the lifetime of the
Participant in connection with the Participant's estate planning,
but only if and to the extent then permitted under Rule 16b-3 and
consistent with the registration of the offer and sale of Shares
on Form S-8 or a successor registration form of the Securities
and Exchange Commission. Stock Units and other rights under the
Plan may not be pledged, mortgaged, hypothecated, or otherwise
encumbered, and shall not be subject to the claims of creditors.
12.7 Governing Law. The validity, construction, and
effect of the Plan and any agreement hereunder will be determined
in accordance with the laws of the State of Oklahoma, without
giving effect to principles of conflicts of laws, and applicable
federal law.
12.8 Plan Termination. Unless earlier terminated by
action of the Board or Executive Committee of the Board, the Plan
will remain in effect until the earlier of (i) such time as no
Shares remain available for delivery under the Plan and the
Company has no further rights or obligations under the Plan or
(ii) June 30, 2006.
<PAGE>
PROXY
THE BEARD COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR STOCKHOLDERS MEETING ON JULY 21, 1999
The undersigned stockholder of The Beard Company, an Oklahoma corpora-
tion, hereby appoints W. M. Beard and Herb Mee, Jr. or either of them, with
full power of substitution, as true and lawful agents and proxies to
represent the undersigned and vote all shares of stock of The Beard Company
owned by the undersigned in all matters coming before the 1999 Annual
Meeting of Stockholders (or any adjournment thereof) of The Beard Company
to be held in the offices of the Company, located at Enterprise Plaza, Suite
320, 5600 North May Avenue, Oklahoma City, Oklahoma, on Wednesday, July 21,
1999 at 9:00 a.m. local time. The Board of Directors recommends a vote "FOR"
the following matters, all as more specifically set forth in the Proxy
Statement:
1. Election of Director.
[ ] FOR the nominee listed below
[ ] WITHHOLD AUTHORITY to vote for the nominee listed below
W. M. Beard - three year term expiring in 2002
2. Approval of the amendment to The Beard Company Deferred Stock
Compensation Plan, a copy of which is attached to the accompanying
Proxy Statement as Exhibit A.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of Appointment of KPMG LLP as independent certified public
accountants for fiscal 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote with respect to
any other matters that may come before the Meeting or any adjournment
thereof, including matters incident to its conduct.
I/WE RESERVE THE RIGHT TO REVOKE THE PROXY AT ANY TIME BEFORE THE EXERCISE
THEREOF. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER
SPECIFIED ABOVE BY THE STOCKHOLDER. TO THE EXTENT CONTRARY SPECIFICATIONS
ARE NOT GIVEN, THIS PROXY WILL BE VOTED "FOR" ITEMS 2 AND 3 AND "FOR" THE
ELECTION OF THE DIRECTOR NOMINATED.
Dated ________________________, 1999
____________________________________
(Signature)
____________________________________
(Signature if held jointly)
Please sign exactly as your name appears
on your stock certificate indicating your
official position or representative
capacity, if applicable, if shares are
held jointly, each owner should sign.
IMPORTANT: PLEASE SIGN, DATE AND RETURN
THIS PROXY BEFORE THE DATE OF THE ANNUAL
MEETING IN THE ENCLOSED ENVELOPE.
