<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-12
</TABLE>
CONTOUR ENERGY CO.
--------------------------------------------------------------------------------
(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> 2
[CONTOUR ENERGY LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 25, 2000
To Our Stockholders:
We will hold our Annual Meeting of Stockholders in the Park Avenue Room
(Lobby Level) of the Hotel Inter-Continental, 111 East 48th Street, New York,
New York 10017, at 10:30 a.m. New York time on Tuesday, July 25, 2000.
At the meeting, our stockholders will elect a Board of Directors comprised
of seven members, plus two additional members that will be elected by holders of
our outstanding preferred stock, and may conduct any other business matter that
properly comes before the meeting. These and other matters relating to the
meeting and to Contour Energy are described in the attached proxy statement,
which we encourage you to read carefully.
Stockholders of record as of the close of business on Friday, May 26, 2000
(the "Record Date") are entitled to this notice and to vote at the meeting.
You are cordially invited to attend the meeting. We value your opinion and
encourage your participation at the meeting.
/s/ John F. Bookout
John F. Bookout
Chairman of the Board, President
and Chief Executive Officer
Houston, Texas
July 3, 2000
<PAGE> 3
CONTOUR ENERGY CO.
601 JEFFERSON STREET
SUITE 1100
HOUSTON, TEXAS 77002
---------------------
PROXY STATEMENT
ANSWERS TO YOUR QUESTIONS REGARDING THE MEETING
The following answers questions that we anticipate you may have regarding
the meeting and this proxy statement. If you have additional questions, you
should contact our investor relations department at 713/652-5200.
WHY HAVE I RECEIVED THIS PROXY STATEMENT?
We mailed this proxy statement to you because you were a stockholder of
record of Contour Energy Co. at the close of business on May 26, 2000 (the
"Record Date"), which we have set as the record date for determining who is
entitled to vote at our 2000 Annual Meeting of Stockholders. On July 3, 2000, we
began mailing this proxy statement to our stockholders of record on the Record
Date.
WHEN AND WHERE WILL THE MEETING BE HELD?
We will hold the meeting in the Park Avenue Room (Lobby Level) of the Hotel
Inter-Continental, 111 East 48th Street, New York, New York 10017, at 10:30 a.m.
New York time on Tuesday, July 25, 2000.
MAY I ATTEND THE MEETING IN PERSON?
Record holders of Contour's Common Stock, $.10 par value per share (the
"Common Stock") and Contour's $2.625 Convertible Exchangeable Preferred Stock
(the "Preferred Stock") as of the Record Date are invited and encouraged to
attend the meeting and participate in the election of directors.
IF I CAN'T ATTEND THE MEETING, CAN I STILL VOTE MY SHARES?
If you will not attend the meeting but still want your votes counted, you
may sign, date and return the enclosed proxy card. This will authorize the
individuals named on that card, who are officers of Contour, to cast your votes
as you direct on that card.
WHO IS ENTITLED TO VOTE, AND HOW MANY SHARES ARE ENTITLED TO VOTE?
Stockholders of record of Common Stock and Preferred Stock as of the close
of business on the Record Date are entitled to one vote per share at the
meeting. As of the Record Date, the Company had outstanding 13,211,449 shares of
Common Stock, and 1,365,173 shares of Preferred Stock.
A list of stockholders entitled to notice of and vote at the meeting will
be made available during regular business hours at the offices of the Company,
601 Jefferson Street, Suite 1100, Houston, Texas 77002 from the date of this
proxy statement through the meeting, and will be available at the meeting, for
inspection by any stockholder of record for any purpose regarding the meeting.
Upon request, Contour will provide any record holder of Preferred Stock as of
the Record Date with stocklist materials for the Preferred Stock.
WHAT WILL WE VOTE ON AT THE MEETING?
At the meeting, all of the stockholders, voting as a single class, will
elect seven directors. Holders of Preferred Stock, voting as a separate class,
will elect two additional directors.
<PAGE> 4
HOW MANY SHARES ARE NEEDED FOR A QUORUM?
You should think of the meeting as, in effect, two meetings being held at
the same place and time: a meeting of all stockholders and a meeting of holders
of Preferred Stock. A quorum must be established separately for each of those
meetings. A majority of all of the outstanding shares entitled to vote at the
meeting must be present in person or by proxy to establish a quorum for the
meeting generally. Because Contour Production Company L.L.C. ("CPC") and John F.
Bookout own a majority of the outstanding shares and plan to have those shares
present at the meeting, a quorum should be present for the meeting generally.
However, for the election of the Preferred Directors, a majority of the
outstanding shares of Preferred Stock entitled to vote at the meeting must be
present in person or by proxy to establish a quorum of Preferred Stockholders.
WHAT WILL HAPPEN IF NO QUORUM IS PRESENT?
No business will be conducted until a quorum is established. If a quorum of
all stockholders is established, but a quorum of Preferred Stockholders is not
established, then the stockholders voting as a single class will elect seven
directors, but the Preferred Stockholders will not be able to elect two
additional directors. If a quorum of Preferred Stockholders is established but a
quorum of all stockholders is not established, then the Preferred Stockholders
may elect two directors and the current seven directors will continue to serve
in accordance with our bylaws.
HOW MANY VOTES ARE NEEDED TO ELECT A DIRECTOR?
If a quorum of all stockholders is established, the seven directors to be
elected by all of the stockholders will be elected by plurality vote. That means
that the seven nominees receiving the most votes will be elected as directors,
even if they receive less than a majority of the vote. Similarly, if a quorum of
Preferred Stockholders is established, then the two directors who receive the
largest number of Preferred votes will be elected to fill the two vacancies on
the Board of Directors. Because directors will be elected by plurality,
abstentions and broker non-votes will not affect the outcome of the elections.
MAY I VOTE MORE THAN ONCE FOR A SINGLE DIRECTOR NOMINEE?
Seven directors have been nominated. You are entitled to vote your shares
for each of the seven director nominees. However, you may not choose instead to
vote your shares seven times for a single nominee. That is known as "cumulative
voting." Cumulative voting is not allowed in the election of directors or for
any other purpose. Similarly, if you are a Preferred Stockholder, you may vote
for two director nominees, but you may not vote twice for a single nominee.
WHY MAY THE PREFERRED STOCKHOLDERS ELECT ADDITIONAL DIRECTORS WITHOUT THE VOTE
OF COMMON STOCKHOLDERS?
The provisions of our charter that established the Preferred Stock give the
Preferred Stockholders the right to elect two additional directors when
dividends on the Preferred Stock are unpaid for six fiscal quarters or longer.
Those dividends are currently unpaid for longer than six quarters. Pursuant to
an order and proposed settlement in litigation brought by a holder of Preferred
Stock, the initial election of such directors will occur at the annual meeting.
That litigation will be discussed in a notice of settlement, which we expect to
send to Preferred Stockholders soon.
HOW WERE THE TWO ADDITIONAL DIRECTORS TO BE ELECTED BY THE PREFERRED
STOCKHOLDERS NOMINATED?
On June 8, 2000, we sent a letter to all of our Preferred Stockholders as
of the Record Date inviting them to nominate individuals to serve as directors.
For each nomination that we received by the close of business on June 27, 2000,
we sent the nominee a form asking him to provide the information regarding
himself that is in this proxy statement and to sign a consent to being listed as
a director nominee. We have included information on each nominee that returned
this form and consent before June 29, 2000. This nomination procedure was
undertaken, and the election of directors by preferred stockholders will be
held, pursuant to an order of the Court of Chancery of the State of Delaware in
the litigation mentioned above.
2
<PAGE> 5
WHO IS THE BOARD OF DIRECTORS RECOMMENDING I VOTE FOR?
The Board of Directors nominated the seven individuals named in this proxy
statement to be elected by all stockholders -- Messrs. Bookout, Conklin,
Davidson, Godfrey, Murray, Park and Woods. The Board of Directors recommends you
vote for these individuals. The nominees for the directorships to be elected by
Preferred Stockholders voting separately were nominated by the persons indicated
in this proxy statement. Pursuant to a proposed settlement of the litigation
mentioned above, we are not supporting or opposing any nominee for the Preferred
Directorships. The Board of Directors therefore is not making a recommendation
for or against any of those nominees. Nonetheless, we encourage Preferred
Stockholders to vote.
ELECTION OF DIRECTORS
NOMINEES FOR DIRECTOR TO BE VOTED ON BY ALL STOCKHOLDERS.
The Board of Directors has nominated the following individuals for the
seven directorships to be voted on by all stockholders. Contour Production
Company L.L.C. ("CPC") owns shares representing 49.5% of Contour's voting power.
CPC is contractually required to vote its shares for the election of Mr. John F.
Bookout as a director. CPC has informed us that it intends to vote its shares
for the election of the following nominees.
John F. Bookout, age 77, has served the Company as Chairman of the Board,
President and Chief Executive Officer since February 1996 in connection with the
Contour Transactions. He had served as Chairman of the Board and President of
Contour Production Company since its formation in 1993. Before joining as a
founder, Mr. Bookout served in positions of increasing responsibility for 38
years at Shell Oil Company, starting in 1950 as a geologist and culminating as
President, Chief Executive Officer and a director from 1976 through June 1988.
From 1988 through 1993, he served as a member of the Supervisory Board of Royal
Dutch Petroleum.
John J. Conklin, Jr., age 69, has served as a director of the Company or
its predecessor since November 1993. Mr. Conklin has been a private investor
since his retirement in 1989 as a senior partner of Conklin, Cahill & Co., a
member firm of the New York Stock Exchange, where he was active for over 35
years. He has also served as a member of the Board of Governors of the New York
Stock Exchange, the Board of Directors of the New York Futures Exchange and the
National Market Advisory Board.
Ralph P. Davidson, age 72, served as Chairman of the Board of the Company
from October 1995 through February 1996 and has served as a director of the
Company or its predecessor since November 1993. Mr. Davidson provides consulting
services to nonprofit organizations as President of Davidson Associates. From
1980 through 1987, he was Chairman of the Board of Time, Inc., where he spent 21
years with Time Magazine in various executive capacities. Mr. Davidson is a
member of the Board of Trustees of Phoenix House, the National Council for
Adoption, the Emeritus Foundation and The American University in Bulgaria.
Adam P. Godfrey, age 38, has served as a director of the Company since
March 19, 1998, and, since January 1, 1998, he has been the sole shareholder and
president of a corporation that serves as a manager of the limited liability
company that is the general partner of Bessemer Holdings, L.P. ("Bessemer") and
other affiliated investment partnerships including investment partnerships that
comprise the BH Group (the "BH Group"). The BH Group owns a majority of the
membership interests in Contour. Mr. Godfrey is also the sole shareholder and
president of a corporation that is a general partner of Bessemer Partners & Co.
("BPC"), an affiliate of Bessemer. From July 1993 to December 1997, Mr. Godfrey
was a principal with BPC, and a member of the general partner of Bessemer. Mr.
Godfrey is a director of several private companies.
William J. Murray, age 85, has served as a director of the Company or its
predecessor since March 1984. Mr. Murray has been an independent petroleum
consultant for more than the past five years. He served on the Texas Railroad
Commission for 16 years, during six of which he served as Chairman. Mr. Murray
currently
3
<PAGE> 6
serves on a number of industry committees, including as Chairman of the Industry
Advisory Committee on Natural Gas Ratable Take and Chairman of the Industry
Voluntary Allocation Committee.
Edward Park, age 29, has served as a director of the Company since March
2000. Mr. Park is a principal at BPC which he joined in 1994. Mr. Park is also a
member of the limited liability company that is the general partner of Bessemer
Holdings, L.P. ("Bessemer") and other affiliated investment partnerships,
including the investment partnerships that comprise BH Group. Mr. Park is a
director of several private companies.
Ward W. Woods, age 57, has served as a director of the Company since his
election in February 1996. He is the sole stockholder and president of
corporations that from 1989 to 1999 served as a managing general partner or
principal manager of the general partner of Bessemer and other affiliated
investment partnerships including those comprising the BH Group. A partnership
affiliated with Mr. Woods is a member of the general partner of Bessemer and
other affiliated partnerships including BH Group. He is also the sole
stockholder and president of a corporation that until 1999 served as a managing
general partner of BPC. Mr. Woods was the President and Chief Executive Officer
of Bessemer Securities, LLC ("BSLLC") and its wholly owned subsidiary Bessemer
Securities Corporation ("BSC") (from 1989 to 1999). BSC is the primary limited
partner of Bessemer, and BSC and BSLLC are the primary limited partners in
another partnership in the BH Group. Mr. Woods serves as a manager of BSLLC and
a director of BSC. He is a director of Boise Cascade Corporation and several
private companies.
NOMINEES FOR DIRECTOR TO BE VOTED ON BY PREFERRED STOCKHOLDERS ONLY.
The following individuals have been nominated to fill the two directorships
to be elected by Preferred Stockholders voting as a separate class. The
information presented below is based on information provided by the individual
nominees. You may vote for two of these nominees for each share of preferred
stock you hold.
Lee Balter, age 67, is the Chairman of Tallix, Inc., a fine art foundry
casting sculpture in bronze, aluminum and stainless steel. He has been a
director of Network Response, Inc., an e-transaction service provider, for the
last eight years. During the past five years, he has also been Chairman,
Treasurer and Director of three not-for-profit organizations. Mr. Balter is the
general partner of several real estate partnerships. Mr. Balter was nominated by
Prudential Securities Incorporated, who is the record holder of shares of
Preferred Stock beneficially owned by Mr. Balter.
Seth W. Hamot, age 38, is the managing partner of Actionvest Partners, an
investment manager for a fund which invested in defaulted securities. Mr. Hamot
also is president of Roark, Rearden, Hamot Inc., which is the general partner of
Costa Brava Partners, a limited partnership which invests in the equity of small
firms that are being restructured. Mr. Hamot was nominated by Bear, Stearns
Securities Corp, who is the record holder of shares of Preferred Stock
beneficially owned by Western Financial Co.
Robert D. Kincaid, age 39, has been a Senior Vice President of Haddington
Ventures, LLC, a private equity fund manager for energy infrastructure and
technology related investments, since October of 1998. From July 1997 until
October 1998, Mr. Kincaid was self-employed and engaged in corporate finance
advisory work. From May 1992 until July 1997, Mr. Kincaid served as Treasurer of
TPC Corporation (NYSE:TPC), which was engaged in natural gas marketing,
gathering, processing and storage and was sold to Pacific Corp (NYSE:PPW) in
April 1997. Mr. Kincaid was nominated by Dain Rauscher Wessels, who is the
record holder of shares of Preferred Stock beneficially owned by Mr. Kincaid and
Janet C. Kincaid.
David K. Lifschultz, age 54, has been the Chairman and Chief Executive
Officer of Lifschultz Industries, Inc. (Nasdaq:LIFF), a manufacturer of precise
heat measuring instruments, since 1992. From 1987 until 1992, he served as CEO
of Lifschultz Fast Freight, Inc., a trucking operation carrying LTL freight and
truckload. Prior to 1987, he held various management positions in Lifschultz
Fast Freight, Inc. Mr. Lifschultz was nominated by Prudential Securities
Incorporated, who is the record holder of shares of Preferred Stock beneficially
owned by Mr. Lifschultz.
Eric Pomerantz, age 43, serves as General Counsel and Secretary to Novartis
Animal Health US, Inc., a pharmaceutical marketing and sales company focused on
companion animals and a wholly-owned indirect subsidiary of Novartis AG, a
global pharmaceutical and life sciences company headquartered in Switzerland.
4
<PAGE> 7
Before that. Mr. Pomerantz worked as litigation counsel in various divisions of
Ciba Geigy AG and Sandoz AG, predecessors to Novartis. Mr. Pomerantz served for
10 years as a prosecutor in New York City. Mr. Pomerantz was nominated by First
Clearing Corp., who is the record holder of shares of Preferred Stock
beneficially owned by Max J. Silberman.
Raymond L. Steele, age 65, serves on the boards of directors of DualStar
Technologies (Nasdaq:DSTR), ICH Corporation and Video Services Corp (AMEX:VS),
and previously served on the boards of directors of Emerson Radio Corp
(AMEX:MSN) and Orion Picture Corp. Mr. Steele was nominated by Collier Brown &
Company, who is the record holder of shares of Preferred Stock beneficially
owned by Lloyd I. Miller, III, Lloyd I. Miller, Trust A-4, Milfam I, L.P. and
Milfam II, L.P.
Robert P. Wardin, age 65, is a registered professional engineer. From 1981
to 1996, Mr. Wardin was Treasurer and Director of Aladdin International, a
public investment holding and diversified fast food restaurant company. From
1979 to 1983, he was Director of Energro International, a public company having
oil and gas holdings, agricultural products and manufacturing operations for
tubing and water distribution. From 1978 to 1999, he served as Director of
Consolidated American Resources, an investment holding company. Mr. Wardin has
been Chief Engineer, Pi Engineering, Inc.; Senior Principal Engineer/Scientist
Consultant to UNISYS; Senior Principal Engineer/Scientist, Honeywell Systems &
Research Division; Senior Engineer University of Illinois Physics Research
Laboratory; Research Assistant, U.S. Atomic Energy Commission. He also was
Director of Venture Funding at Sterling Capital, Inc., a venture capital group.
Mr. Wardin was nominated by A.G. Edwards & Sons, Inc., who is the record holder
of shares of Preferred Stock beneficially owned by Mr. Wardin.
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
BOARD AND COMMITTEE MEETINGS
During 1999, the Board took action at a total of twelve meetings. No
director attended or participated in fewer than 75% of these meetings for which
he was eligible.
COMMITTEES AND COMMITTEE MEETINGS
The Board has standing Audit, Compensation and Nominating Committees. These
committees were as follows during 1999:
<TABLE>
<CAPTION>
AUDIT
COMMITTEE NOMINATING COMMITTEE COMPENSATION COMMITTEE
--------- -------------------- ----------------------
<S> <C> <C>
Ralph P. Ogden M. Ward W.
Davidson -- Chairman Phipps -- Chairman Woods -- Chairman
John J. Conklin, Jr. William J. Murray John J. Conklin, Jr.
Adam P. Godfrey Ward W. Woods Ralph P. Davidson
Ogden M. Phipps
</TABLE>
Since March 2000, these committees are as follows:
<TABLE>
<CAPTION>
AUDIT
COMMITTEE NOMINATING COMMITTEE COMPENSATION COMMITTEE
--------- -------------------- ----------------------
<S> <C> <C>
Ralph P. Ward W. Ward W.
Davidson -- Chairman Woods -- Chairman Woods -- Chairman
John J. Conklin, Jr. William J. Murray John J. Conklin, Jr.
Adam P. Godfrey Edward Park Ralph P. Davidson
Adam P. Godfrey
</TABLE>
The Audit Committee is charged with various duties relating to the
Company's financial reporting obligations. These responsibilities include
recommending the appointment of independent auditors to the Board, reviewing the
compensation of the auditors, reviewing the scope and results of the annual
audit performed by the independent auditors, assuring that proper guidelines are
established for the dissemination of
5
<PAGE> 8
financial information, conferring with the auditors to assure the adequate
training and supervision of the Company's accounting personnel, meeting
periodically with the auditors, the Board and senior management to ensure the
adequacy of internal controls and reporting functions and reviewing the
Company's consolidated financial statements. The Audit Committee held two
meetings during 1999.
The Compensation Committee has the authority and responsibility to review
the compensation policies of the Company, to administer and approve all elements
of compensation for elected corporate officers, to consider and recommend to the
Board succession plans for executive officers, and to grant awards to key
employees under the Company's incentive and performance plans. The Compensation
Committee held three meetings during 1999.
The Nominating Committee was formed in 1996 to evaluate the size and
composition of the Board and establish guidelines for qualifications for
directors to be elected by the common and the Preferred voting as a class. Any
recommendations for such directors by stockholders will be considered if
received within 120 days prior to the anniversary date of the last annual
meeting of stockholders. The selection of all directors will be in accordance
with established guidelines. The Nominating Committee met once in 1999.
COMPENSATION OF DIRECTORS
The Company's non-management directors receive $3,750 quarterly and $1,000
for each committee meeting attended.
EXECUTIVE OFFICERS
The following are the current executive officers of the Company. All
officers hold office until their successors are duly appointed and qualified.
<TABLE>
<CAPTION>
OFFICER OR
DIRECTOR OF THE
NAME AGE POSITION COMPANY SINCE
---- --- -------- ---------------
<S> <C> <C> <C>
John F. Bookout...... 77 President, Chief Executive Officer and February 1996
a Director
Rick G. Lester....... 48 Senior Vice President and Chief October 1998
Financial Officer
Kenneth R. Sanders... 50 Senior Vice President -- Exploration August 1999
and Production
</TABLE>
Rick G. Lester was elected Senior Vice President and Chief Financial
Officer in October 1998. Previously, he was Vice President and Chief Financial
Officer of Domain Energy Corporation ("Domain") until its merger into Lomak
Petroleum to form Range Resources Corporation. Mr. Lester served in various
positions with Tenneco, Inc. and its subsidiaries prior to his tenure at Domain.
Kenneth R. Sanders was elected Senior Vice President -- Exploration and
Production of the Company in August 1999. Before joining the Company, Mr.
Sanders served in positions of increasing responsibility at Seagull Energy E &
P, Inc. since 1991, concluding as Vice President -- Exploitation, Acquisitions &
Engineering.
6
<PAGE> 9
COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following shows compensation paid during the last three fiscal years to
our Chief Executive Officer and our other executive officers whose compensation
exceeded $100,000 in 1999 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
---------------------------------- ------------
CASH STOCK OPTION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) BONUS ($) AWARDS (#) COMPENSATION ($)(2)
--------------------------- ---- ---------- --------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C> <C>
John F. Bookout..................... 1999 800,000 187,500(3) 190,430(3) -- 10,000
Chairman, President and CEO 1998 800,000 -- -- -- 10,000
1997 800,000 -- -- --
Dallas D. Laumbach(4)............... 1999 87,083 75,000(3) 76,172(3) -- 5,225
Former Senior Vice President 1998 190,000 -- -- -- 10,000
1997 190,000 -- -- -- 9,500
Rick G. Lester...................... 1999 175,000 75,000(3) 76,172(3) -- 10,000
Senior Vice President & 1998 43,750 50,000 -- 38,100 2,625
Chief Financial Officer
Kenneth R. Sanders(4)............... 1999 79,167 50,000(4) -- 62,500
Senior Vice
President -- Exploration &
Production
</TABLE>
---------------
(1) Perquisites and other benefits did not exceed 10% of any named officer's
total annual salary and bonus and therefore are excluded.
(2) Amounts include matching contributions by the Company to the named executive
officer's 401(k) account.
(3) Messrs. Bookout, Laumbach and Lester were awarded special bonuses on June 8,
1999 in recognition of extraordinary services performed on behalf of the
Company during 1998 and the first-half of 1999, consisting of each receiving
cash and shares of Common Stock (31,250 to Mr. Bookout, 12,500 to Mr.
Laumbach and 12,500 to Mr. Lester, in each case as adjusted for the 1-for-10
stock split effected July 30, 1999 under the Company's 1997 Long-Term
Incentive-Performance Plan. The closing price of the Company's common stock
as of close of June 7, 1999 on the NASDAQ was $6.09375 (as adjusted for the
1-for-10 stock split effected July 30, 1999).
(4) Mr. Sanders was appointed Senior Vice President -- Exploration and
Production effective August 1, 1999 after Mr. Laumbach left the employment
of the Company effective June 15, 1999, and Mr. Sanders received an initial
bonus upon employment by the Company.
OPTION GRANTS IN 1999
The following table provides information about options granted during 1999
to the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
--------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- ------------ ------------ -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kenneth R. Sanders............ 37,500 14.82% 10.00 8/01/09 0
25,000 9.90% 3.4375 8/01/09 54,046 136,962
</TABLE>
7
<PAGE> 10
---------------
(1) Potential realizable value is based on an assumption that the stock price of
the Common Stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the 10-year option term. These
numbers are calculated based on the requirements promulgated by the
Securities and Exchange Commission and do not reflect the Company's future
stock price growth, which is dependent on future performance and stock
market conditions.
EMPLOYMENT AGREEMENTS
In 1999 we extended for an additional three-year term the three-year
employment agreement with John F. Bookout at a base salary of $800,000. In
October 1998, we entered into a one-year evergreen employment agreement with
Rick G. Lester at a base salary of $175,000 and an initial bonus of $50,000. In
1999, we entered into a one-year evergreen employment agreement with Kenneth R.
Sanders at a base salary of $190,000 and an initial bonus of $50,000. Each of
the agreements provides for a lump sum severance payment if the covered
executive is terminated by us without cause or as otherwise permitted, as
defined in the agreements. Mr. Bookout would be entitled to a severance payment
covering the balance of the three-year term, Mr. Lester's severance payment
would be equal to one year's salary, and in the case of a change of control,
eighteen months' salary plus annual performance awards as defined in the
agreement and all unvested options accelerated to 100% vesting. Mr. Sander's
severance payment would be equal to one year's salary plus annual performance
award as defined in the agreement, and in the case of a change of control, two
year's salary and all unvested options accelerated to 100% vesting. Each of the
agreements provides for various other benefits and for indemnification of the
covered executive under certain conditions.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policy. In 1996, Deloitte & Touche LLP's Performance
Management and Compensation Group ("D&T PMC Group") was retained to review the
competitiveness of the Company's current compensation program ("Compensation
Review") including various comparisons by specific positions with a
representative peer group, consisting of base salary, annual incentives,
long-term incentives, retirement benefits and non-qualified deferred
compensation. Upon consideration of the Compensation Review, the Committee
requested D&T PMC Group to design an annual and long-term incentive plan which
would permit the Company to be competitive with industry peers and linked to
corporate, team and individual performances. D&T PMC Group then in consultation
with the Committee developed the 1997 Annual and Long-Term Incentive-Performance
Plan (the "1997 Plan"), which was approved by the Committee and recommended to
the Board for its approval, subject to stockholder approval. As previously
mentioned, the 1997 Plan was approved on May 29, 1997 by stockholders.
The Committee's goal is to maintain executive compensation at levels that
are competitive with industry peers and linked to corporate performance;
nevertheless it recognizes that the actual compensation in any particular year
may be above or below published rates for competitors. In addition, due to the
volatility of the energy industry, the Company's compensation levels from year
to year may not correlate directly with various corporate performance measures
in a particular year. The Committee believes, however, that the Company's 1997
Plan enables it to balance the relationship between compensation and performance
in the best interests of the stockholders.
Salary Determinations. The salaries for Messrs. Bookout and Laumbach were
established in employment agreements approved by the Board. The salaries for Mr.
Lester in 1998 and Mr. Sanders in 1999 were established in their employment
agreements approved by the Committee. There have been no other changes by the
Committee or otherwise to the Company's Named Executive Officers' salaries.
Incentive-Performance Recommendations. The Committee, in accordance with
the 1997 Plan, approved the specific individual NQSO grants and annual cash
incentive-performance awards in 1997, including specific criteria to be used in
determining the amounts of 1997 cash incentive-performance awards, which were
paid in 1998. There have been no other bonuses paid to the Named Executive
Officers in 1998. In 1998 in accordance with the 1997 Plan, the Committee
approved the specific individual NQSO grants and annual cash incentive-
performance awards, including specific criteria to be used in determining the
amounts of 1998 awards. Since
8
<PAGE> 11
the threshold criteria established under the 1997 Plan were not met in 1998, no
annual cash incentive-performance award payments were authorized.
Special Awards. In June 1999, the Committee considered and authorized the
grant of special recognition awards consisting of (1) cash bonuses for 1998 and
part of 1999 to certain Company employees other than Messrs. Bookout, Laumbach
and Lester in the aggregate amount of $248,000, (2) non-qualified stock options
under the Company's 1997 Plan to certain Company employees other than Messrs.
Bookout, Laumbach and Lester covering in the aggregate 190,495 shares, and (3)
special bonuses to Messrs. Bookout, Laumbach and Lester in the aggregate amounts
of $337,500 in cash and 56,250 in shares of common stock under the 1997 Plan.
This report has been approved by Ward W. Woods, Chairman, John J. Conklin,
Jr., Ralph P. Davidson and Adam P. Godfrey, comprising all of the members of the
Compensation Committee.
STOCK PERFORMANCE CHART
The following graph shows the performance of the cumulative total return to
shareholders (stock price appreciation plus dividends) during the previous five
years in comparison to returns of the Standard & Poor's 500 Composite Stock
Price Index and the peer group. Contour's peer group consists of the following
14 energy industry companies: Barrett Resources (NYSE:BRR), Belco Oil & Gas
(NYSE:BOG), Cabot Oil & Gas (NYSE:COG), Chesapeake Energy (NYSE:CHK), Forest Oil
& Gas (NYSE:FST), HS Resources (NYSE:HSE), Houston Exploration (NYSE:THX), KCS
Energy (NYSE:KCS), Louis Dreyfus (NYSE:LD), Newfield Exploration (NYSE:NFX),
Patina Oil & Gas (NYSE:POG), Southwestern Energy (NYSE:SWN) and Swift Energy
(NYSE:SFY). This chart was prepared by using data provided by the Institutional
Market Services division of Standard & Poor's, and is based on the assumptions
that $100 was invested at the close of trading on the last trading day preceding
the first day of 1995, and the reinvestment of any dividends.
[Perf.graph]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
S&P 500........................................... 137.58 169.17 225.60 290.08 351.12
Peer Group........................................ 116.33 194.14 148.09 89.82 113.20
CONC.............................................. 36.19 67.23 60.33 16.38 1.43
</TABLE>
9
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, the only person we know to beneficially own more
than five percent of any class of our capital stock is Contour Production
Company L.L.C. ("CPC"), which beneficially owns 7,214,405 shares of the Common
Stock. Bessemer Holdings, L.P. ("Bessemer") owns a majority of the membership
interests in CPC. Based on a Statement on Schedule 13-D filed with the SEC, CPC
and Bessemer are each deemed to beneficially own the shares of Common Stock held
of record by CPC. As of April 21, 2000, those shares represented 49.5% of the
total voting power of our capital stock (consisting of shares of common stock
and preferred stock). Bevairohn, Ltd., a partnership controlled by John F.
Bookout, Chairman, President and CEO of the Company, and six other investment
partnerships having the same general partner as Bessemer own the remaining
interests in Contour. Contour has agreed, subject to certain limitations, to
vote for the election of Mr. Bookout as a director of the Company.
The following table shows information as of April 21, 2000 with respect to
the Company's Common Stock and its Preferred Stock beneficially owned, directly
or indirectly, by each of the Company's directors and director nominees, by the
Named Executive Officers and by all of its directors and executive officers as a
group.
<TABLE>
<CAPTION>
COMMON PERCENT PREFERRED PERCENT
NAME OF BENEFICIAL OWNER STOCK(1) OF CLASS STOCK OF CLASS(3)
------------------------ --------- -------- --------- -----------
<S> <C> <C> <C> <C>
CPC(1)............................................... 7,214,405 54.6% -- --
Lee Balter........................................... -- -- 34,000 2.5%
John F. Bookout...................................... 274,048 2.07 -- --
John J. Conklin, Jr. ................................ 9,104 * -- --
Ralph P. Davidson(2)................................. 9,725 * -- --
Adam P. Godfrey(3)................................... -- -- -- --
Seth W. Hamot........................................ -- * 3,500 *
Robert D. Kincaid.................................... -- -- 2,100 --
Rick G. Lester(4).................................... 12,700 -- -- --
David K. Lifschultz.................................. 32,609 * 27,000 2.0
William J. Murray(5)................................. 8,181 * 2,000 *
Edward Park(3)....................................... -- -- -- --
Eric Pomerantz....................................... 1,260 * 524 *
Kenneth R. Sanders................................... 2,000 * -- --
Raymond L. Steele.................................... -- -- -- --
Robert P. Wardin..................................... -- -- 10,500 *
Ward W. Woods(3)..................................... -- -- -- --
All current directors and executive officers as a
group (9 persons).................................. 315,758 2.39% 2,000 *
</TABLE>
---------------
* Less than 1%
(1) CPC's address is 630 Fifth Avenue, 39th Floor, New York, New York 10111.
Bessemer Holdings, L.P. owns a majority of the membership interests in CPC.
Based on a Statement on Schedule 13-D filed with the SEC, CPC and Bessemer
are each deemed to beneficially own the shares of common stock held of
record by CPC. CPC has agreed, subject to certain limitations, to vote for
the election of Mr. Bookout as a director of the Company.
(2) Excludes 12,225 shares of Common Stock held by Mr. Davidson's wife as to
which Mr. Davidson has disclaimed beneficial ownership.
(3) Excludes 7,214,405 shares of Common Stock held by CPC, in which Messrs.
Godfrey, Park and Woods have an indirect interest, and as to which each of
Messrs. Godfrey, Park and Woods have disclaimed beneficial ownership.
(4) Represents shares of Common Stock subject to vested options.
(5) Includes 2,000 shares of Preferred Stock held in Mr. Murray's defined
benefit pension plan.
10
<PAGE> 13
RELATED PARTY TRANSACTION
We have entered into an agreement with BPC pursuant to which BPC provides
us with financial advisory services. For its services under this agreement, we
paid BPC an advisory fee of $500,000 in December 1999. In addition, we reimburse
BPC expenses it incurs in rendering advisory services. We have also agreed to
indemnify BPC and its affiliates against certain liabilities under this
agreement.
SECTION 16(A) BENEFICIAL OWNERSHIP AND REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission reports of ownership and changes in ownership of common
stock and other equity securities of the Company. Based on a review of reports
and information provided to the Company by executive officers, directors and
greater than 10% stockholders, the Company believes all reports required to be
filed in 1999 were timely filed.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP ("D&T") is engaged as the Company's independent
public accountant to audit its financial statements. D&T has audited the
financial statements of the Company since fiscal 1995. Stockholder ratification
of the appointment of auditors is not required. D&T will be represented at the
meeting, will have the opportunity to make statements, and will be available to
respond to appropriate questions.
NO OTHER MATTERS
We know of no business other than the matters discussed in this proxy
statement that properly may be, or is likely to be, brought before the meeting.
/s/ John F. Bookout
John F. Bookout
Chairman of the Board, President
and Chief Executive Officer
Houston, Texas
July 3, 2000
11
<PAGE> 14
-------------------------------------------------------------------------------
CONTOUR ENERGY CO.
PROXY - ANNUAL MEETING OF SHAREHOLDERS
JULY 25, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of stock of Contour Energy Co. hereby appoints Rick G.
Lester, Betty Dauzat and Tracy Philipp, or any of them, proxies of the
undersigned with full power of substitution, to vote at the Annual Meeting of
Shareholders of Contour Energy Co. to be held in the Park Avenue Room (Lobby
Level) of the Hotel Inter-Continental 111 East 48th Street, New York, New
York 10017, at 10:30 a.m. New York time on Tuesday, July 25, 2000, and at any
adjournment or postponement thereof, the number of votes that the undersigned
would be entitled to cast if personally present.
PLEASE MARK, SIGN, DATE AND RETURN IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
-------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
<PAGE> 15
[REVERSE OF PROXY CARD
FOR COMMON STOCKHOLDERS]
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN PLEASE MARK
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE YOUR VOTE AS [X]
VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED IN ITEM 1. INDICATED IN
THIS EXAMPLE
(1) ELECTION OF DIRECTORS BY ALL SHAREHOLDERS:
FOR all nominees WITHHOLD NOMINEES: John F. Bookout, John J. Conklin, Jr., Ralph P. Davidson,
listed to the right AUTHORITY Adam P. Godfrey, William J. Murray, Edward Park, Ward W. Woods
(except as marked to vote for all nominees
to the contrary) listed to the right (Instruction: To withhold authority to vote for any of these nominees,
[ ] [ ] cross through such nominee's name.)
IN THEIR DISCRETION, THE ABOVE-NAMED PROXIES
ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF AND UPON MATTERS INCIDENT
TO THE CONDUCT OF THE MEETING.
DATED: , 2000
---------------------
----------------------------------------------
Signature
----------------------------------------------
Signature if held jointly
Please sign your name exactly as it appears
hereon. Joint owners must each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give your full
title as such.
------------------------------------------------------------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
</TABLE>
<PAGE> 16
[REVERSE OF PROXY CARD FOR PREFERRED STOCKHOLDERS]
<TABLE>
<S> <C> <C>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED PLEASE MARK
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR YOUR VOTE AS [X]
NOMINEES NAMED IN ITEM 1. INDICATED IN
THIS EXAMPLE.
The Board of Directors recommends a "For" vote for the following Directors.
(1) ELECTION OF DIRECTORS BY ALL SHAREHOLDERS:
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
NOMINEES: John F. Bookout, John J. Conklin, Jr., Ralph P. Davidson, Adam P. Godfrey, William J. Murray, Edward Park, Ward W. Woods
(Instruction: To withhold authority to vote for any of these nominees, cross through such nominee's name.)
(2) ELECTION OF DIRECTORS BY PREFERRED SHAREHOLDERS:
The Board of Directors makes no recommendation either for or against the following.
IMPORTANT INSTRUCTIONS: If you are a holder of Preferred Stock, you may vote for up to two of the individuals named below. To vote
for a nominee, place an "X" in the box under that nominee's name. IF YOU DO NOT VOTE FOR ANY NOMINEES OR VOTE FOR MORE THAN TWO
NOMINEES, YOUR PROXY WILL NOT BE VOTED, AND WILL BE DEEMED TO HAVE ABSTAINED ON THIS MATTER.
[ ] [ ] [ ] [ ] [ ] [ ] [ ]
Lee Balter David K. Lifschultz Robert P. Wardin Seth W. Hamot Eric Pomerantz Robert D. Kincaid Raymond L. Steele
DATED: , 2000
--------------------------------------
---------------------------------------------------
Signature
---------------------------------------------------
Signature if held jointly
IN THEIR DISCRETION, THE ABOVE-NAMED PROXIES ARE AUTHORIZED TO VOTE UPON Please sign your name exactly as it appears hereon.
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY Joint owners must each sign. When signing as
ADJOURNMENT THEREOF AND UPON MATTERS INCIDENT TO THE CONDUCT OF THE attorney, executor, administrator, trustee or
MEETING. guardian, please give your full title as such.
------------------------------------------------------------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
</TABLE>
