<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
GOODRICH PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(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:
---------------------------------------------------------------------------
Notes:
<PAGE>
GOODRICH PETROLEUM CORPORATION
HOUSTON, TEXAS
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1996
----------------
To the Stockholders:
The Annual Meeting of the Stockholders (the "Annual Meeting") of Goodrich
Petroleum Corporation, a Delaware corporation (the "Company"), will be held at
Wheless Auditorium, Commercial Center, 333 Texas Street, Shreveport,
Louisiana, on May 22, 1996, at 11:00 a.m. local time, for the following
purposes:
1. To elect three directors to serve until the annual stockholders'
meeting in 1999 and until their successors have been elected and
qualified; and
2. To approve an amendment to the Company's 1995 Nonemployee Director
Stock Option Plan;
3. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ended December 31, 1996; and
4. To transact such other business as may properly come before such
meeting or any adjournment(s) thereof.
The close of business on March 25, 1996, has been fixed as the record date
for the determination of stockholders entitled to receive notice of and to
vote at the Annual Meeting or any adjournment(s) thereof.
You are cordially invited to attend the Annual Meeting. It is important that
your shares be represented at the Annual Meeting regardless of whether you
plan to attend. Therefore, please mark, sign, date and return the enclosed
proxy promptly. If you are present at the meeting, and wish to do so, you may
revoke the proxy and vote in person.
By Order of the Board of Directors
Walter G. "Gil" Goodrich
President and Chief Executive
Officer
April 2, 1996
Houston, Texas
<PAGE>
GOODRICH PETROLEUM CORPORATION
5847 SAN FELIPE
SUITE 700
HOUSTON, TEXAS 77057
----------------
PROXY STATEMENT
----------------
SOLICITATION AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Goodrich
Petroleum Corporation, a Delaware corporation (the "Company") for use at the
Annual Meeting to be held at 11:00 a.m., local time on May 22, 1996, at
Wheless Auditorium, Commercial Center, 333 Texas Street, Shreveport,
Louisiana, or at any adjournment(s) thereof. The Company will bear the cost of
preparing and mailing proxy materials as well as the cost of soliciting
proxies. The Company will reimburse banks, brokerage firms, custodians,
nominees and fiduciaries for their expenses in sending proxy materials to the
beneficial owners of shares of the Company's common stock (the "Common
Stock"). In addition to solicitation by mail, directors, officers and
employees of the Company may solicit proxies by fax, telex, telephone and
personal interview. The approximate date on which this Proxy Statement and the
accompanying proxy will first be sent to Stockholders is April 5, 1996.
The enclosed proxy, even though executed and returned, may be revoked at any
time prior to the voting of the proxy (a) by execution and submission of a
revised proxy, (b) by written notice to the Secretary of the Company or (c) by
voting in person at the Annual Meeting. In the absence of such revocation,
shares represented by the proxies will be voted at the Annual Meeting.
Only holders of record of shares of Common Stock at the close of business on
March 25, 1996 (the "Record Date") will receive notice of and will be entitled
to vote at the Annual Meeting. At the close of business on March 25, 1996,
there were 41,804,510 shares of Common Stock outstanding. Holders of record of
shares of Common Stock on the Record Date are entitled to one vote for each
share of Common Stock held. The presence, in person or by proxy, of at least a
majority of the outstanding shares of Common Stock is required for a quorum.
The Company's annual report to stockholders for the year ended December 31,
1995, including financial statements, is being mailed herewith to all
stockholders entitled to vote at the Annual Meeting. The annual report does
not constitute a part of the proxy soliciting material.
PROPOSAL 1--ELECTION OF DIRECTORS
GENERAL
Three directors are to be elected at the Annual Meeting. The Company's
Bylaws provide for a classified Board of Directors. Thus, the Board of
Directors is divided into Classes I, II and III, the terms of office of which
are currently scheduled to expire, respectively, on the dates of the Company's
Annual Meetings of Stockholders in 1996, 1997 and 1998. Sheldon Appel, John C.
Napley and J. Michael Watts have been nominated to serve in Class I and, if
elected, will serve until the Company's 1999 Annual Meeting of Stockholders
and until their respective successors shall have been elected and qualified.
Each of the nominees for director currently serves as a director of the
Company. The remaining eight directors named below will not be required to
stand for election at the Annual Meeting because their present terms expire in
either 1997 or 1998. A plurality of the votes cast in person or by proxy by
the holders of Common Stock is required to elect a director. Accordingly,
abstentions and "broker non-votes" will have no effect on the outcome of the
election assuming a quorum is present or
<PAGE>
represented by proxy at the Annual Meeting. A broker non-vote occurs if a
broker or other nominee does not have discretionary authority and has not
received instructions with respect to a particular item. Stockholders may not
cumulate their votes in the election of directors.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted FOR the election of the nominees listed below.
Although the Board of Directors does not contemplate that any of the nominees
will be unable to serve, if such a situation arises prior to the Annual
Meeting, the persons named in the enclosed proxy will vote for the election of
such other person(s) as may be nominated by the Board of Directors.
U. E. "Pat" Patrick resigned from the Board of Directors on March 13, 1996.
The Board has determined to reduce the Board of Directors to eleven from
twelve as a result of such resignation.
The following sets forth information regarding the names, ages and principal
occupations of the nominees and directors and directorships in other companies
held by them:
CLASS I DIRECTORS AND NOMINEES--TERMS TO EXPIRE AT THE 1999 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Sheldon Appel..................... 62 Director
John C. Napley.................... 72 Director
J. Michael Watts.................. 36 Director
CLASS II DIRECTORS--TERMS EXPIRING AT THE 1997 ANNUAL MEETING
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jeff H. Benhard................... 67 Director
Henry Goodrich.................... 65 Chairman of the Board, Director
James R. Jenkins.................. 77 Director
Wayne G. Kees..................... 73 Director
CLASS III DIRECTORS--TERMS EXPIRING AT THE 1998 ANNUAL MEETING
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Basil M. Briggs................... 60 Director
Benjamin F. Edwards............... 69 Director
Walter G. Goodrich................ 37 President, Chief Executive Officer and
Director
Arthur A. Seeligson............... 37 Director
</TABLE>
DIRECTORS AND DIRECTOR NOMINEES
The following biographies describe the business experience of the directors
and nominees of the Company:
Sheldon Appel has been involved in real estate development and finance since
1955 when he formed the Sheldon Appel Companies. Mr. Appel also has served as
a director of American Consumer Industries and Beverly Hills Savings and Loan
Association and is a current director of Rand Corporation.
John C. Napley has been an independent oil and gas consultant since 1984. He
was the president of NG Securities Corp. from 1984 through October 1988.
J. Michael Watts has been a Director and Vice President of Marketing and
Administration of Goodrich Oil Company since 1985 and has been employed by
Goodrich Oil Company since 1983. From 1981 to 1983, Mr.
2
<PAGE>
Watts was employed by P&O Falco, Inc. Mr. Watts is the son-in-law of Henry
Goodrich and the brother-in-law of Walter G. Goodrich.
Jeff H. Benhard is the President and Chief Executive Officer of a number of
businesses owned by the Benhard family, including Benhard Grain, Inc., Peoples
Moss Gin Co., Inc. and Louisiana Premium Seafoods, Inc. Mr. Benhard has been
involved in the agriculture and aquaculture businesses since 1949. He is
currently a director of the Pan American Life Insurance Company and the Past
President of the LSU Foundation. Mr. Benhard is also a Director of the
Washington State Bank of Louisiana.
Henry Goodrich is a petroleum geologist with over 45 years experience in the
oil and gas industry. Mr. Goodrich has served as an exploration geologist with
the Union Producing Company and the McCord Oil Company. From 1971 to 1975, Mr.
Goodrich was President, Chief Executive Officer and a partner of the McCord-
Goodrich Oil Company. In 1975, Mr. Goodrich formed the Goodrich Oil Company
and remains its Chairman and Chief Executive Officer. Mr. Goodrich was elected
Chairman of the Board of the Company on March 13, 1996. Mr. Goodrich also
serves as a consultant to the Company. Mr. Goodrich is also a director of Pan
American Life Insurance Company.
James R. Jenkins is a practicing certified public accountant. He has been a
partner or officer of the firm of Jenkins, Magnus, Volk & Carrol, Bloomfield
Hills, Michigan, since 1951.
Wayne G. Kees has been primarily engaged in the management of his personal
investments since 1976. Mr. Kees is also a director of Sizzler International,
Inc.
Basil M. Briggs has been a practicing attorney in Detroit, Michigan since
1961 and is currently of counsel with the firm of Miro, Miro & Weiner in
Bloomfield Hills, Michigan. Mr. Briggs is also a director of Marcum Natural
Gas Services, Inc.
Benjamin F. Edwards, II has been an independent oil and gas consultant since
1975. From July 1977 through August 1984, Mr. Edwards was a full-time
consultant to Patrick Petroleum Company for corporate development, corporate
planning and financial matters.
Walter G. "Gil" Goodrich is the President and Chief Executive Officer of the
Company. Mr. Goodrich also served as a member of the Management Committee of
La/Cal Energy Partners a predecessor to the Company. He was Goodrich Oil
Company's Vice President of Exploration from 1985-89 and its President from
1989 to August 1995. He joined Goodrich Oil Company as an exploration
geologist in 1980.
Arthur A. Seeligson has primarily been engaged in the management of his
personal investments since 1995. From 1991 to 1993, Mr. Seeligson was a Vice
President, Energy Corporate Finance at Wertheim Schroder & Company, Inc. From
1993 to 1995, Mr. Seeligson was a Principal, Corporate Finance, at
Wasserstein, Perella & Co.
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are Walter G. Goodrich, Roland L.
Frautschi and Robert C. Turnham, Jr. Biographical information regarding Mr.
Goodrich is included under the caption "Election of Directors--Directors and
Director Nominees." Roland Frautschi is the Company's Senior Vice President,
Chief Financial Officer and Treasurer. He was employed by Goodrich Oil Company
from 1982 to August 1995. During that time, he served Goodrich Oil Company in
a number of capacities, including internal auditor, controller and from 1990
to August 1995, as Goodrich Oil Company's Vice President of Finance. Robert C.
Turnham, Jr., the Company's Senior Vice President and Chief Operating Officer,
has held various positions in the oil and gas business since 1981. From 1981
to 1984, Mr. Turnham served as a financial analyst for Pennzoil USA. In 1984,
he formed Turnham-Interests, Inc., a professional land management company.
From 1993 to August 1995, he served as president and as a partner of Liberty
Production Company, an oil and gas exploration and production company. Each of
the executive officers assumed their positions with the Company in August 1995
upon the closing of the combination of Patrick Petroleum Company ("Patrick")
and La/Cal Energy Partners ("La/Cal").
3
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has four standing committees, the
membership and functions of which are described below:
Executive Committee. The members of the Executive Committee are Messrs.
Walter G. Goodrich, Henry Goodrich and a director that has not currently been
designated by the Board of Directors. The Executive Committee is delegated the
authority to approve any actions that the Board of Directors could approve,
except to the extent restricted by law or by the Company's Certificate of
Incorporation or Bylaws.
Audit Committee. The members of the Audit Committee are Messrs. Appel,
Benhard and Briggs. The Audit Committee's functions include making
recommendations concerning the engagement of independent auditors, reviewing
with the independent auditors the plan and results of the auditing engagement,
approving professional services provided by the independent auditors and
reviewing the adequacy of the Company's internal accounting controls.
Compensation Committee. The members of the Compensation Committee are
Messrs. Benhard, Briggs and Seeligson. The Compensation Committee's functions
include a general review of the Company's compensation and benefit plans to
ensure that they meet corporate objectives. In addition, the Compensation
Committee reviews the Chief Executive Officer's recommendations on (i)
compensation of all officers of the Company, (ii) granting of awards under the
Company's stock option and other benefit plans, and (iii) adopting and
changing major Company compensation policies and practices. The Compensation
Committee reports its recommendations to the entire Board of Directors for
approval. The Compensation Committee also administers the Company's 1995 Stock
Option Plan.
Joint Participation Committee. The members of the Joint Participation
Committee are Messrs. Seeligson and Benhard. The function of the Joint
Participation Committee is to provide a disinterested oversight and awareness
of the Company's elections to acquire participation interests from Goodrich
Oil Company pursuant to the Joint Participation Agreement between the Company
and Goodrich Oil Company. The members of the Joint Participation Committee
shall determine whether to authorize management of the Company to elect to
acquire a participation interest in prospects or acquisitions generated by
Goodrich Oil Company. See "Certain Relationships and Other Transactions--Joint
Participation Agreement with Goodrich Oil Company."
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The table below sets forth, as of March 25, 1996, certain information with
respect to the shares of Common Stock beneficially owned by (i) each person
known by the Company to own beneficially five percent or more of the shares of
Common Stock, (ii) each director of the Company, (iii) each of the executive
officers of the Company, and (iv) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT OF
COMMON STOCK
AND NATURE
OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------ ------------ -------
<S> <C> <C>
Henry Goodrich(1)................................... 5,048,811 12.1%
333 Texas St., Suite 1350
Shreveport, LA 71101
Walter G. Goodrich(2)............................... 8,207,906 19.6%
5847 San Felipe, Suite 700
Houston, TX 77057
Sheldon Appel(3)(4)................................. 948,170 2.3%
Jeff H. Benhard(4).................................. 36,000 *
J. Michael Watts(4)(5).............................. 1,115,350 2.7%
Basil M. Briggs(4).................................. 20,652 *
Benjamin F. Edwards, II(4).......................... 23,000 *
Wayne G. Kees(4).................................... 30,165 *
James R. Jenkins(4)................................. 36,105 *
John C. Napley(4)................................... 69,572 *
Roland L. Frautschi................................. 663,496 1.6%
Robert C. Turnham, Jr............................... 100,310 *
Arthur A. Seeligson(4)(6)........................... 120,000 *
FMR Corp.(7)(8)..................................... 2,158,790 5.2%
82 Devonshire St.
Boston, MA 02109
Leo E. Bromberg(7)(9)............................... 3,218,786 7.7%
280 S. Beverly Dr.
Suite 401
Beverly Hills, CA 90212
Rochelle Rand(7).................................... 2,430,174 5.8%
2550 Fifth Ave.
Suite 126
San Diego, CA 92103
B.A.R.D. Industries, Inc.(10)....................... 3,107,741 7.4%
15311 Vantage Parkway West
Suite 315
Houston, TX 77032
Directors and Executive Officers as a Group (13
persons)(11)....................................... 12,017,385 28.8%
</TABLE>
- --------
* Less than 1%.
(1) Includes 4,402,152 shares held by HGF Partnership, a Louisiana general
partnership ("HGF Partnership"). Henry Goodrich is the managing general
partner of HGF Partnership, and Walter G. Goodrich holds a general
partnership interest in HGF Partnership, through a wholly owned company.
Henry Goodrich exercises sole voting and investment power with respect to
the shares held by HGF Partnership.
5
<PAGE>
(2) Includes 4,402,152 shares held by HGF Partnership, a Louisiana general
partnership owned by Henry Goodrich and, indirectly, Walter G. Goodrich.
Henry Goodrich exercises sole voting and investment power with respect to
the shares held by HGF Partnership. Also includes 2,201,076 of the shares
owned by Goodrich Energy, Inc. Walter G. Goodrich is the sole stockholder
of Goodrich Energy, Inc. Also includes 13,320 shares of Common Stock
issuable upon the conversion of 4,000 shares of Goodrich Petroleum
Corporation Series A Preferred Stock.
(3) Includes 818,280 shares of Common Stock held by the Sheldon Appel
Company, a partnership affiliated with Mr. Appel. Mr. Appel has advised
the Company that he exercises sole voting and investment power with
respect to these shares. Also includes 109,890 shares of Common Stock
issuable upon the conversion of 33,000 shares of Goodrich Petroleum
Corporation Series A Preferred Stock.
(4) Includes options to purchase 20,000 shares that are currently exercisable
pursuant to the Company's 1995 Nonemployee Director Stock Option Plan.
(5) Includes 170,831 shares held by Mr. Watts' wife and 84,200 shares held
jointly by Mr. Watts and his wife over which Mr. Watts exercises shared
voting and investment power.
(6) Includes 40,000 shares issuable upon the exercise of outstanding stock
options.
(7) Based upon a report on Schedule 13G dated February 14, 1996.
(8) Includes 1,800,645 shares of Common Stock issuable upon conversion of
540,200 shares of Goodrich Petroleum Corporation Series A Preferred
Stock.
(9) Includes 2,260,667 shares held by Mr. Bromberg as trustee. Mr. Bromberg
has advised the Company that he exercises sole investment and voting
control over such shares.
(10) Based on a Schedule 13D dated February 6, 1995.
(11) The number of shares beneficially owned by all executive officers and
directors as a group includes 220,000 shares which directors of the
Company have the right to acquire pursuant to options exercisable within
60 days pursuant to the Company's 1995 Nonemployee Director Stock Option
Plan.
INFORMATION REGARDING MEETINGS
The Board of Directors held one meeting in 1995. The Audit Committee, the
Compensation Committee and the Executive Committee were established after the
merger of Patrick and La/Cal, which occurred in August 1995 and the Joint
Participation Committee was formed in March 1996. The Audit and Compensation
Committee each held one meeting in 1995, while the Executive Committee did not
meet in 1995. Each member of the Board of Directors attended the meeting in
1995, except Wayne G. Kees, who did not attend the first meeting.
DIRECTOR COMPENSATION
General. For serving on the Company's Board of Directors, each of the
directors who are not officers or consultants of the Company or its
subsidiaries are paid $1,000 for each Board of Directors meeting attended. In
addition, they will be entitled to reimbursement for their reasonable out-of-
pocket expenses in connection with travel to and from meetings of the Board of
Directors or committees thereof and to periodic grants of options to purchase
Common Stock.
Nonemployee Director Stock Option Plan. The Goodrich Petroleum Corporation
1995 Nonemployee Director Stock Option Plan (the "Director Option Plan")
provides for the grant of options to acquire Common Stock, to be granted to
each director who is not and has never been an employee of the Company (an
"Eligible Director"). The purposes of the Director Option Plan are to attract
and retain the services of experienced and knowledgeable outside directors of
the Company and to provide an incentive for such outside directors to increase
their proprietary interest in the Company's long-term success and progress.
The Director Option Plan covers an aggregate of 500,000 shares of Common Stock
(subject to adjustments in the event of stock dividends, stock splits and
certain other events). Each of the options granted under the Director Option
Plan will be non-qualified stock options. Each of the Nonemployee Directors
received options to purchase 20,000 shares of Common Stock upon completion of
the merger of Patrick and La/Cal in August 1995.
6
<PAGE>
On the date of any subsequent annual meetings of stockholders prior to the
termination of the Director Option Plan, each Nonemployee Director who is
continuing in office will automatically receive an option to purchase an
additional 10,000 shares of Common Stock at an exercise price equal to the
fair market value of the Common Stock on the date of grant.
Exercisability. Each option granted under the Director Option Plan will
expire in all cases ten years from the date the option is granted. If an
option holder ceases to be a director of the Company for cause or voluntarily
(other than by reason of mandatory retirement) not at the request of the
Board, the option may be exercised within the three month period following the
date of cessation (if otherwise within the option period), but not thereafter.
If an option holder becomes disabled or dies while a director of the Company,
such option may be exercised in full within 12 months after the date the
option holder becomes disabled or dies (if otherwise within the option
period). If an option holder ceases to be a director of the Company for any
reason other than those listed in the two preceding sentences, the option may
be exercised in full within three months after the date of cessation (if
otherwise within the option period), but not thereafter. If an option holder
dies within the three-month period after ceasing to be a director of the
Company, such option may be exercised (to the extent such option was
exercisable by the option holder at the time of his death) within 12 months
after the date of death (if otherwise within the option period).
Proposal number two of this Proxy extends the exercise period under the
Nonemployee Director Stock Option Plan to twelve months after the date a
director ceases to hold office. See "Proposal 2--To Amend the 1995 Nonemployee
Director Stock Option Plan."
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes with respect to the Company's Chief Executive
Officer, certain information relating to the compensation earned for services
rendered in all capacities during the years indicated.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
SECURITIES
ANNUAL COMPENSATION(2) UNDELRYING
NAME AND PRINCIPAL FISCAL ---------------------- OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS (NUMBER) COMPENSATION
------------------ ------ ------ ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Walter G. Goodrich...... 1995 $56,500 -0- 250,000 -0-
President and Chief
Executive Officer
</TABLE>
- --------
(1) The Company commenced operations on August 15, 1995 as the successor to
La/Cal. La/Cal did not pay compensation to any of the officers of the
Company during 1995.
(2) During the years ended December 31, 1994 and 1995, perquisites for each
individual named in the Summary Compensation Table aggregated less than
10% of the total annual salary and bonus reported for such individual in
the Summary Compensation Table. Accordingly, no such amounts are included
in the Summary Compensation Table.
GOODRICH PETROLEUM CORPORATION 1995 STOCK OPTION PLAN ("GOODRICH PLAN")
The Goodrich Plan provides for the granting of options (either incentive
stock options within the meaning of Section 422(b) of the Code, or options
that do not constitute incentive stock options ("nonqualified stock
options")), restricted stock awards, stock appreciation rights, long-term
incentive awards, and phantom stock awards, or any combination thereof. The
Goodrich Plan covers an aggregate of 3,000,000 shares of Common Stock (subject
to certain adjustments in the event of stock dividends, stock splits and
certain other events). No more than 500,000 shares of Common Stock, subject to
adjustments, may be issued pursuant to grants made under the Goodrich Plan to
any one employee in any one year. The limitation set forth in the preceding
sentence
7
<PAGE>
will be applied in a manner which permits compensation generated in connection
with the exercise of options, stock appreciation rights and, if determined by
the Compensation Committee, restricted stock awards to constitute
"performance-based" compensation for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code").
Administration. The Goodrich Plan is administered by the Compensation
Committee which consists of two or more persons who are outside and
disinterested directors for purposes of the Code and the Exchange Act. The
Compensation Committee has the power to determine which employees will receive
an award, the time or times when such award will be made, the type of the
award and the number of shares of Common Stock to be issued under the award or
the value of the award. Only persons who at the time of the grant are
employees or consultants of the Company or of any subsidiary of the Company
are eligible to receive grants under the Goodrich Plan.
Options. The Goodrich Plan provides for two types of options: incentive
stock options and nonqualified stock options. The Compensation Committee will
designate the employees to receive the options, the number of shares subject
to the options, and the terms and conditions of each option granted under the
Goodrich Plan. The term of any option granted under the Goodrich Plan shall be
determined by the Compensation Committee; provided, however, that the term of
any incentive stock option cannot exceed ten years from the date of the grant
and any incentive stock option granted to an employee who possesses more than
10% of the total combined voting power of all classes of stock of the Company
or of its subsidiary within the meaning of Section 422(b)(6) of the Code must
not be exercisable after the expiration of five years from the date of grant.
The exercise price per share of Common Stock of options granted under the
Goodrich Plan is determined by the Compensation Committee; provided, however,
that such exercise price cannot be less than the fair market value of a share
of Common Stock on the date the option is granted (subject to adjustments).
Further, the exercise price of any incentive stock option granted to an
employee who possesses more than 10% of the total combined voting power of all
classes of stock of the Company or of its subsidiaries within the meaning of
Section 422(b)(6) of the Code must be at least 110% of the fair market value
of the shares at the time such option is granted. The exercise price of
options granted under the Goodrich Plan is paid in full in a manner prescribed
by the Compensation Committee.
Restricted Stock Awards. Pursuant to a restricted stock award, shares of
Common Stock will be issued or delivered to the employee at any time the award
is made without any cash payment to the company, except to the extent
otherwise provided by the Compensation Committee or required by law; provided,
however, that such shares will be subject to certain restrictions on the
disposition thereof and certain obligations to forfeit such shares to the
Company as may be determined in the discretion of the Compensation Committee.
The restrictions on disposition may lapse based upon (a) the Company's
attainment of specific performance targets established by the Compensation
Committee that are based on (i) the price of a share of Common Stock, (ii) the
Company's earnings per share, (iii) the Company's revenue, (iv) the revenue of
a business unit of the Company designated by the Compensation Committee, (v)
the return on stockholders' equity achieved by the Company, or (vi) the
Company's pre-tax cash flow from operations, (b) the grantee's tenure with the
Company, or (c) a combination of both factors. The Company retains custody of
the shares of Common Stock issued pursuant to a restricted stock award until
the disposition restrictions lapse. An employee may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of such shares until the
expiration of the restriction period. However, upon the issuance to the
employee of shares of Common Stock pursuant to a restricted stock award,
except for the foregoing restrictions, such employee will have all the rights
of a stockholder of the Company with respect to such shares, including the
right to vote such shares and to receive all dividends and other distributions
paid with respect to such shares.
Stock Appreciation Rights. A stock appreciation right permits the holder to
receive an amount (in cash, Common Stock, or a combination thereof) equal to
the number of stock appreciation rights exercised by the holder multiplied by
the excess of the fair market value of Common Stock on the exercise date over
the stock appreciation rights' exercise price. Stock appreciation rights may
or may not be granted in connection with the
8
<PAGE>
grant of an option and no stock appreciation right may be exercised earlier
than six months from the date of grant. A stock appreciation right may be
exercised in whole or in such installments and at such times as determined by
the Compensation Committee.
Long-Term Incentive and Phantom Stock Awards. The Goodrich Plan permits
grants of long-term incentive awards ("performance awards") and phantom stock
awards, which may be paid in cash, Common Stock, or a combination thereof as
determined by the Compensation Committee. Performance awards granted under the
Goodrich Plan have a maximum value established by the Compensation Committee
at the time of the grant. A grantee's receipt of such amount is contingent
upon satisfaction by the Company, or any subsidiary, division or department
thereof, of future performance conditions established by the Compensation
Committee prior to the beginning of the performance period. Such performance
awards, however, shall be subject to later revisions as the Compensation
Committee shall deem appropriate to reflect significant unforeseen events or
changes. A performance award will terminate if the grantee's employment with
the Company terminates during the applicable performance period. Phantom stock
awards granted under the Goodrich Plan are awards of Common Stock or rights to
receive amounts equal to share appreciation over a specific period of time.
Such awards vest over a period of time or upon the occurrence of a specific
event(s) (including, without limitation, a change of control) established by
the Compensation Committee, without payment of any amounts by the holder
thereof (except to the extent required by law) or satisfaction of any
performance criteria or objectives. A phantom stock award terminates if the
grantee's employment with the Company terminates during the applicable vesting
period or, if applicable, the occurrence of a specific event(s), except as
otherwise provided by the Compensation Committee at the time of grant. In
determining the value of performance awards or phantom stock awards, the
Compensation Committee shall take into account the employee's responsibility
level, performance, potential, other awards under the Goodrich Plan, and other
such consideration as it deems appropriate. Such payment may be made in a lump
sum or in installments as prescribed by the Compensation Committee. Any
payment made in Common Stock will be based upon the fair market value of the
Common Stock on the payment date.
STOCK OPTIONS
The following table sets forth information concerning the grant of stock
options under the Goodrich Petroleum Corporation 1995 Stock Option Plan to the
executive officer in the Summary Compensation Table during fiscal 1995.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED
- -------------------------------------------------------------------------- RATES OF STOCK
PERCENTAGE OF PRICE
TOTAL OPTIONS APPRECIATION
GRANTED TO EXERCISE FOR
NUMBER OF EMPLOYEES PRICE OPTION TERM(1)
OPTIONS IN PER EXPIRATION ---------------
NAME GRANTED(2) FISCAL 1995 SHARE DATE 5% 10%
---- ---------- ------------- -------- --------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Walter G. Goodrich...... 250,000 39.7 1.065625 August 15, 2000 167,836 423,586
</TABLE>
- --------
(1) The Securities and Exchange Commission requires disclosure of the
potential realizable value or present value of each grant. The disclosure
assumes the options will be held for the full ten-year term prior to
exercise. Such options may be exercised prior to the end of such ten-year
term. The actual value, if any, an executive officer may realize will
depend upon the excess of the stock price over the exercise price on the
date the option is exercised. There is no assurance that the stock price
will appreciate at the rates shown in the table.
(2) Represents options to purchase the respective number of shares of Common
Stock which become exercisable at 25% per year commencing August 1996.
9
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information concerning option exercises and
the value of unexercised options held by the executive officer of the Company
named in the Summary Compensation Table.
AGGREGATE OPTION EXERCISES IN 1995 AND OPTION VALUES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT OPTIONS HELD AT
DECEMBER 31, 1995(1) DECEMBER 31, 1995(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Walter G. Goodrich.......... -0- 250,000 -0- -
</TABLE>
- --------
(1) Computed based on the different between aggregate fair market value and
aggregate excise price. The fair market value of the Company's Common
Stocks on December 29, 1995 was $.8125 per share based on the average of
the high and low sales prices on the New York Stock Exchange on such date.
No stock options were exercised by Mr. Goodrich in 1995.
COMPENSATION REPORT OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors of the Company
currently consists of Messrs. Jeff H. Benhard, Basil M. Briggs, and Arthur A.
Seeligson, III, none of whom are officers or employees of the Company. The
Compensation Committee was formed on September 11, 1995. The committee is
responsible for evaluating the performance of management, determining the
compensation for certain executive officers of the Company, and administering
the Company's stock option plans under which stock-related grants and awards
may be made to employees of the Company. Prior to the formation of the
committee, compensation decisions were made by the entire Board of Directors
of the Company. The members of the Compensation Committee have furnished the
following report on executive compensation for 1995.
The Company has developed a compensation policy which is designed to attract
and retain key executives responsible for the success of the Company and
motivate management to enhance long-term stockholder value. The annual
compensation package of executive officers primarily consists of (i) a cash
salary which reflects the responsibilities relating to the position and
individual performance, (ii) variable performance awards payable in cash or
stock and tied to the individual's or the Company's achievement of certain
goals or milestones, and (iii) long-term stock based incentive awards which
strengthen the mutuality of interest between the executive officers and the
Company's stockholders.
In determining the level and position of compensation for each of the
Company's executive officers, the Board of Directors took into account various
qualitative and quantitative indicators of corporate and individual
performance. Although no specific target has been established, the Board
generally seeks to set salaries at the low to medium end of the range in
comparison to peer group companies. In setting such salaries, the Board
considers its peer group to be certain companies in the energy exploration and
production industry with market capitalizations similar to that of the
Company. In addition, in evaluating the performance of management, the Board
takes into consideration such factors as successful acquisitions and operating
results. In addition, the Board recognizes performance and achievements that
are more difficult to quantify, such as the successful supervision of major
corporate projects, demonstrated leadership ability, and contributions to the
industry and community development.
For 1995, the Board included in its evaluations the successful merger
between Patrick and La/Cal, the establishment of a bank credit facility, the
refinancing of existing Patrick and La/Cal debt during 1995, and as well as
improved operating results for 1995. Base compensation is established by the
Compensation Committee, subject to the approval of the Board of Directors, and
reviewed annually. When establishing or reviewing base compensation levels for
each executive officer, the Compensation Committee, in accordance with its
general compensation policy, considers numerous factors, including the
responsibilities relating to the position, the
10
<PAGE>
qualifications of the executive, and the relevant experience the individual
brings to the Company, strategic goals for which the executive has
responsibility and compensation levels of comparable companies. No
predetermined weights are given to any one of such factors. The salaries for
each of the executive officers in 1995, including the Company's Chief
Executive Officer, were determined based upon the foregoing factors. In 1995,
Mr. Walter G. Goodrich, the Company's Chief Executive Officer, was paid at an
annual rate of $150,000, pursuant to an employment contract between Mr.
Goodrich and the Company.
In addition to each executive officer's base compensation, the Board may
award cash bonuses and/or grant awards under the Company's stock option plan
to chosen executive officers depending on the extent to which certain personal
and corporate performance goals are achieved. Such goals are the same as
discussed above. No cash bonuses or stock awards were made for 1995. In
deciding not to pay bonuses for 1995, the Compensation Committee took into
account the fact that the Company had only operated on a combined basis since
mid-August and the stock option grants made to executive officers of the
Company in connection with the Patrick/La/Cal combination.
Mr. Walter G. Goodrich, the Company's President and Chief Executive Officer,
received options to purchase 250,000 shares of Common Stock of the Company at
an exercise price of 110% of the market price per share on the date of the
grant ($1.065625 per share). The options granted to Mr. Goodrich vest equally
over four years from the date of the grant and have a five year term.
The Board has not yet adopted a policy with respect to the limitation under
the Federal Tax Code that generally limits the Company's ability to deduct
compensation in excess of $1,000,000 to a particular executive officer in any
year.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing
under the Securities Act of 1933, as amended, or under the Securities Exchange
Act of 1934, as amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
The foregoing report is given by the following members of the Board of
Directors.
Jeff H. Benhard
Basil M. Briggs
Arthur A. Seeligson,
11
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the Common
Stocks to the Dow Jones Equity Market Index and the Dow Jones Secondary Oil
Index for the period beginning August 31, 1995 and ending February 29, 1996.
The graph assumes that the value of the investment in the shares of Common
Stock and each index was $100 at August 31, 1995 (using the closing price of
$1.125 for the Company's Shares), and that all dividends were reinvested. The
Common Stock began trading on the New York Stock Exchange on August 15, 1995.
Prior to that time there was no market in the Company's stock and,
accordingly, five year data is not applicable.
COMPARISON OF MONTHLY CUMULATIVE RETURN
AMONG GOODRICH PETROLEUM CORPORATION
DOW JONES EQUITY MARKET INDEX AND DOW JONES SECONDARY OIL INDEX
<TABLE>
<CAPTION>
COMPANY 8/31/95 9/29/95 10/31/95 11/30/95 12/29/95 1/31/96 2/29/96
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Goodrich Petroleum
Corporation......... 100 111.11 88.88 83.33 72.22 72.22 77.77
Dow Jones Equity
Market Index........ 100 104.17 103.69 108.48 110.46 114.14 115.51
Dow Jones Secondary
Oil Index........... 100 92.20 93.99 100.15 104.97 104.33 104.44
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
The foregoing stock price performance comparisons shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended, except to
the extent that the Company specifically incorporates this graph by reference,
and shall not otherwise be deemed filed under such acts.
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will not make or endorse any predictions as to future stock
performance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, no executive officer of the Company served as (i) a
member of the Compensation Committee (or other Board committees performing
equivalent functions or, in the absence of any such committee, the entire
Board of Directors) of another entity, one of whose executive officers served
as a Director of the Company, or (ii) a director of another entity, one of
whose executive officers served on the Board of Directors of the Company or
its subsidiaries.
DISCLOSURE OF FILINGS BY INSIDERS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than ten
percent of the Common Stocks, to file initial reports of ownership and reports
of changes in ownership (Forms 3, 4, and 5) of Common Stock with the
Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange. Officers, directors and greater than 10% Stockholders are required
by SEC regulation to furnish the Company with copies of all such forms that
they file.
To the Company's knowledge based solely on the Company's review of the
copies of such reports received by the Company and on written representations
by certain reporting persons that no reports on Form 5 were required, the
Company believes that during the fiscal year ended December 31, 1995, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% Stockholders were complied with, except Jeff Benhard, who
filed a Form 4 in January 1996 that should have been filed in August 1995.
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
Relationship Before the Merger
In connection with the formation of La/Cal in July 1993 and the related
financing, Messrs. Henry Goodrich, Walter G. Goodrich, Roland L. Frautschi and
J. Michael Watts, and entities affiliated with them, became entitled to
certain back-in and carried interests with respect to the interests in the
properties which were contributed to La/Cal. Such persons also received
certain promotional interests at the time such properties were acquired prior
to the formation of La/Cal. Each of Messrs. Henry Goodrich, Walter G.
Goodrich, Frautschi and Watts were entitled to such promotional and back-in
rights pursuant to the terms of participation agreements with working-interest
participants in the properties in which La/Cal subsequently acquired and now
owns working interests. All such promotional and back-in interests of such
persons and their affiliates, as well as such persons' other participation
interests, for which such persons paid their full share of drilling expenses,
were contributed to La/Cal in July 1993 in connection with the organization of
the partnership and the related financing. During 1995, La/Cal made cash
distributions to such persons and their affiliates in connection with all of
the partnership interests held by such persons and their affiliates as
follows: Mr. Henry Goodrich (1995--$41,274); Mr. Walter G. Goodrich (1995--
$523,027); Mr. Frautschi (1995--$41,539); and Mr. Watts (1995--$69,913).
Messrs. Henry Goodrich, Walter G. Goodrich, Frautschi and Watts were
employees of Goodrich Oil Company from January 1, 1995 to August 15, 1995.
Such persons received cash compensation from Goodrich Oil Company of $3,275,
$32,304, $30,414 and $52,009 during 1995. During these periods, Goodrich Oil
Company also reimbursed such individuals for certain out-of-pocket business
expenses. Mr. Walter G. Goodrich and Mr. Frautschi resigned as officers and
employees of Goodrich Oil Company in August 1995.
13
<PAGE>
The Company leases office space in Shreveport, Louisiana from Goodrich Oil
Company at a monthly cost of approximately $3,000.
Joint Participation Agreement with Goodrich Oil Company
During the negotiations between Patrick and La/Cal, representatives of
Patrick requested that the Company have participation rights in prospects
generated and drilled by Goodrich Oil Company after the Merger. Goodrich Oil
Company is owned by Henry Goodrich, who is the father of the Company's Chief
Executive Officer and is the Chairman of the Board of the Company, and is
engaged in developing oil and gas drilling programs for its participants,
primarily in South Louisiana and East Texas. Goodrich Oil Company is a party
to participation agreements, with certain industry partners and individual
investors pursuant to which such persons (the "GOC Participants") invest in
drilling programs developed by Goodrich Oil Company. Goodrich Oil Company
continued to operate with geologists and other professional personnel separate
from the Company.
The Company entered into a Joint Participation Agreement with Goodrich Oil
Company pursuant to which the Company and Goodrich Oil Company agreed to offer
to the other a 50% participation interest in such company's share of all
drilling prospects and acquisitions of producing properties identified after
August 15, 1995 by either company. Accordingly, the GOC Participants will have
the opportunity to invest, through Goodrich Oil Company, in prospects or
acquisitions identified by the Company, and the Company will have the
opportunity to participate in future Goodrich Oil Company drilling programs
and acquisitions. Goodrich Oil Company will not receive any compensation or
management fees from the Company, and the Company will not receive any such
fees from Goodrich Oil Company, in connection with such arrangements. The
Joint Participation Agreement will terminate on the earlier of (i) December
31, 2000, or (ii) at such time as neither Walter G. Goodrich or Henry Goodrich
is an employee, director or consultant of the Company.
Pursuant to the Joint Participation Agreement, the Company has the right to
approve each drilling prospect or acquisition. Management of the Company
presents each Goodrich Oil Company drilling prospect or acquisition to the
Joint Participation Committee for approval prior to acceptance of such
program. The Company will not forfeit its participation rights on future
programs if the Company elects not to participate in a proposed prospect or
acquisition, and Goodrich Oil Company will not lose its participation rights
in future prospects or acquisitions by electing not to participate in a
prospect or acquisition proposed by the Company.
The Company believes that its association as a participant with Goodrich Oil
Company will increase the number of drilling prospects to which the Company is
exposed and will permit the Company to pursue valuable drilling opportunities
which will contribute to the Company's growth. In addition, Mr. Goodrich will
provide valuable geological and business advice to the Company regarding its
participation in Goodrich Oil Company programs and the Company's internally
generated prospects.
Participation Agreements
Pursuant to the participation agreements between Goodrich Oil Company and
the GOC Participants, each of Henry Goodrich, Walter G. Goodrich, Roland L.
Frautschi and J. Michael Watts were entitled to certain back-in or carried
participating interests upon the recoupment of costs associated with wells in
which Goodrich Oil Company participates. All such interests owned by Henry
Goodrich, Walter G. Goodrich, Roland L. Frautschi and J. Michael Watts were
and will be assigned to the Company with respect to wells approved during the
period when such person has an employment or consulting relationship with, or
is a member of the Board of Directors of, the Company. Generally,
participation accounting in individual exploration programs is conducted on a
per-well basis. After the payout of an individual program well, the Company's
working interest in the individual well (assuming that the Company and
Goodrich Oil Company collectively hold a 100% combined working interest in the
well) will increase to approximately 53-55% as a result of the assignment of
the back-in and/or carried working interests from such persons.
14
<PAGE>
Since prior to the formation of La/Cal, Henry Goodrich, Walter G. Goodrich,
Roland L. Frautschi and J. Michael Watts have personally participated in
Goodrich Oil Company's drilling programs. Such persons have paid their pro
rata share of all expenses associated with their interests in each prospect.
It is anticipated that such persons may continue to participate in future
Goodrich Oil Company drilling programs in the future. It is anticipated that
the sum of such persons' participation interests in future Goodrich Oil
Company drilling programs should not exceed 10% of the aggregate interests of
the GOC Participants.
A significant percentage of the gas sold by La/Cal is, and after the Merger
a significant percentage of the gas sold by the Company has been and will be,
marketed through Natural Gas Ventures, L.L.C. ("NGV") which was organized by
affiliates of Goodrich Oil Company. Participants in NGV marketing activities
participate in any profits or other benefits to NGV on a pro rata basis based
upon gas sold through the venture.
Consulting Agreement with Henry Goodrich
The Company entered into a five-year consulting agreement with Mr. Henry
Goodrich commencing August 15, 1995. Mr. Goodrich provides consulting services
to the Company with regard to the identification and evaluation of acquisition
and drilling opportunities, financing transactions, investor relations and
other matters. Mr. Goodrich receives annual consulting fees from the Company
of $150,000 for such services over the five-year term of the agreement. Mr.
Goodrich also received a grant of options to purchase 250,000 shares of Common
Stock at the closing price for such shares on August 15, 1995.
Consulting Agreement with Leo E. Bromberg
The Company entered into a five-year consulting agreement with Mr. Leo E.
Bromberg commencing October 20, 1995, which the Company or Mr. Bromberg may
terminate on any anniversary date of the consulting agreement. Mr. Bromberg
provides consulting services to the Company with regard to the acquisition and
financing of hydrocarbon assets. Mr. Bromberg receives annual consulting fees
from the Company of $120,000 for such services over the five-year term of the
agreement.
PROPOSAL 2--TO AMEND THE 1995 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
At the Annual Meeting, the stockholders will be asked to approve an
amendment (the "Amendment") to the Company's 1995 Nonemployee Director Stock
Option Plan (the "Director Option Plan") to extend the option exercise period
for Nonemployee Directors whose membership on the Board terminates for a
reason other than disability or death. The Amendment was unanimously approved
by the Board on March 13, 1996, subject to stockholder approval at the Annual
Meeting.
Below is a summary of the primary features of the Amendment and the Director
Option Plan. A copy of the Amendment is attached hereto as Appendix I hereto,
and a copy of the Director Option Plan and revised Nonemployee Director Stock
Option Agreement is available upon a stockholder's written request to the
Company at 5847 San Felipe, Suite 700, Houston, Texas 77057. Approval of the
Amendment requires the affirmative vote of a majority of the shares present,
or represented, and entitled to vote at the Annual Meeting.
DESCRIPTION OF THE AMENDMENT
Prior to the Amendment, in the event a Nonemployee Director's membership on
the Board terminates for a reason other than disability or death, the
Nonemployee Director's outstanding options are exercisable in full by the
Nonemployee Director at any time during a period of three months following
such termination or, if the Nonemployee Director dies during such three-month
period, by the Nonemployee Director's estate (or the person who acquires the
option by will or the laws of descent and distribution or otherwise by reason
of the death of the Nonemployee Director) at any time during a period of one
year following the Director's death, subject to the expiration date of such
options.
15
<PAGE>
The Amendment provides that, in the event a Eligible Director's membership
on the Board terminates for a reason other than disability or death, the
Eligible Director's outstanding options would be exercisable in full by the
Eligible Director at any time during a period of one year following such
termination or, if the Eligible Director dies during such one-year period, by
the Eligible Director's estate (or the person who acquires the option by will
or the laws of descent and distribution or otherwise by reason of the death of
the Eligible Director) at any time during a period of one year following the
Director's death, subject to the expiration date of such options.
DESCRIPTION OF THE DIRECTOR OPTION PLAN
The Director Option Plan is intended to promote the interests of the Company
and its stockholders by helping award and retain directors who are not and who
have never been employees of the Company or its subsidiaries ("Eligible
Directors") and allowing them to develop a sense of proprietorship and personal
involvement in the development and financial success of the Company. Shares
issuable pursuant to the Director Option Plan may be authorized but unissued
shares or reacquired shares, and the Company may purchase shares required for
this purpose. The aggregate maximum number of shares authorized to be issued
under the Director Option Plan pursuant to grants of stock options is 500,000
shares of Common Stock (which amount is subject to adjustment upon a
reorganization, stock split, recapitalization, or other change in the Company's
capital structure). Shares subject to expired options are not counted against
the number of shares available under the Director Option Plan.
ELIGIBILITY
Only Eligible Directors are eligible to receive options under the Director
Option Plan.
TERM OF THE DIRECTOR OPTION PLAN
The Director Option Plan was effective as of August 15, 1995 (the "Effective
Date"). If not sooner terminated by the Board, the Director Option Plan will
terminate on the date that the remaining shares of Common Stock that may be
issued under the Director Option Plan are not sufficient to cover the options
required to be granted under the terms of the Director Option Plan.
OPTION AWARDS
Under the terms of the Director Option Plan, each Eligible Director who
served in such capacity on the Effective Date received a grant of a
nonstatutory stock option to acquire 20,000 shares of Common Stock. Each
Eligible Director elected or appointed to the Board after the Effective Date
will receive, as of the date of such election or appointment, a grant of a
nonstatutory stock option to acquire 20,000 shares of Common Stock (which
amount is subject to adjustment upon a reorganization, stock split,
recapitalization, or other change in the Company's capital structure).
Further, each Eligible Director serving in such capacity immediately after an
Annual Meeting in a year subsequent to the Effective Date and not receiving an
initial grant as of such date will receive, as of the date of such Annual
Meeting, a grant of a nonstatutory stock option to acquire 10,000 shares of
Common Stock (which amount is subject to adjustment upon a reorganization,
stock split, recapitalization, or other change in the Company's capital
structure). The exercise price for shares purchased pursuant to an option
granted under the Director Option Plan is the mean of the high and low prices
of the shares of Common Stock subject to the option as reported on the New
York Exchange composite tape on the date the option is granted or on the last
preceding date on which such prices were so reported. Options granted under
the Director Option Plan are for a term of ten years from the date of grant.
Options granted under the Director Option Plan are fully exercisable following
the date of grant. Options granted under the Director Option Plan are not
transferable by the option holder except by will or by the laws of descent and
distribution and are exercisable only by the Eligible Director (or his or her
guardian or legal representative) during the lifetime of the Eligible
Director. The option price upon exercise may be paid by a Eligible Director in
cash, other shares of Common Stock owned by the Eligible Director, or by a
combination of cash and Common Stock.
16
<PAGE>
TERMINATION OF BOARD MEMBERSHIP
Under the current terms of the Director Option Plan, the exercisability of
outstanding options granted under the Director Option Plan after the Eligible
Director's membership on the Board terminates is determined based on the
reason for such termination. In the event the Eligible Director's membership
on the Board terminates by reason of disability or death, the Eligible
Director's outstanding options are exercisable in full at any time during a
period of one year following such termination, subject to the expiration date
of such options. In the event the Eligible Director's membership on the Board
terminates for a reason other than disability or death, the Eligible
Director's outstanding options are exercisable in full at any time during a
period of three months following such termination or, if the Eligible Director
dies during such three-month period, by the Eligible Director's estate (or the
person who acquires the option by will or the laws of descent and distribution
or otherwise by reason of the death of the Eligible Director) at any time
during a period of one year following the Director's death, subject to the
expiration date of such options. If the Amendment is approved, then, in the
event a Eligible Director's membership on the Board terminates for a reason
other than disability or death, the Eligible Director's outstanding options
will be exercisable in full at any time during a period of one year following
such termination or, if the Eligible Director dies during such one-year
period, by the Eligible Director's estate (or the person who acquires the
option by will or the laws of descent and distribution or otherwise by reason
of the death of the Eligible Director) at any time during a period of one year
following the Eligible Director's death, subject to the expiration date of
such options.
CORPORATE CHANGE
If the Company is not the surviving entity in any merger or consolidation,
all options outstanding under the Director Option Plan will be exercisable for
the number and class of securities or property that the Eligible Director
would have been entitled to had the option already been exercised. If the
Company sells, leases or exchanges or agrees to sell, lease or exchange all or
substantially all of its assets or if the Company is dissolved and liquidated,
each Eligible Director must surrender his outstanding options to the Company
and the Company will cancel such options and pay to each Eligible Director and
amount of cash equal to the per share price offered to stockholders of the
Company in any such sale lease exchange of assets or dissolution transaction
for the shares subject to such options over the exercise prices under such
options for such shares.
AMENDMENTS
The Board may terminate the Director Option Plan at any time with respect to
any shares for which options have not yet been granted. Further, the Board may
alter or amend the Director Option Plan from time to time; provided, however,
the Director Option Plan may not be amended more than once every six months
other than to comport with changes in the Internal Revenue Code of 1986, as
amended (the "Code"), the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules thereunder; and provided, further, that no
amendment may adversely affect the rights of any holder of an outstanding
option, or any unexercised portion thereof, without the holder's consent and
that no alteration or amendment that materially increases the benefits
accruing to Eligible Directors under the Director Option Plan, increases the
aggregate number of shares of Common Stock that may be issued pursuant to the
Director Option Plan, increases or decreases the number of shares subject to
each option, changes the schedule of grants, extends the terms of the options,
changes the class of individuals eligible to receive options under the
Director Option Plan or extends the term of the Director Option Plan may be
adopted without the prior approval of the stockholders of the Company.
FEDERAL INCOME TAX ASPECTS OF THE DIRECTORS PLAN
An Eligible Director will not recognize any taxable income at the time an
option is granted under the Director Option Plan. Ordinary income will be
recognized by a Eligible Director at the time of exercise in an amount equal
to the excess of the fair market value of the shares of Common Stock on the
date of exercise over the option price for such shares. However, if other
shares of Common Stock have been purchased by a Eligible Director within six
months of the exercise of an option, recognition of the income attributable to
such exercise
17
<PAGE>
may under certain circumstances be postponed for a period of up to six months
from the date of such purchase of such other shares of Common Stock due to
liability to suit under Section 16(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). If applicable, one effect of any such
postponement would be to measure the amount of the Eligible Director's taxable
income by reference to the fair market value of such shares at the time such
liability to suit under Section 16(b) of the Exchange Act no longer exists
(rather than at the earlier date of the exercise of the option). Upon a
Eligible Director's exercise of an option granted under the Director Option
Plan, the Company may claim a deduction for compensation paid at the same time
and in the same amount as ordinary income is recognized by the Eligible
Director.
The Director Option Plan is not qualified under section 401(a) of the Code.
The comments set forth in the above paragraphs are only a summary of certain
of the Federal income tax consequences relating to the Director Option Plan.
No consideration has been given to the effects of state, local, or other tax
laws on the Director Option Plan or a Eligible Director.
INAPPLICABILITY OF ERISA
Based upon current law and published interpretations, the Company does not
believe the Director Option Plan is subject to any of the provisions of ERISA.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT
TO THE 1995 ELIGIBLE DIRECTOR STOCK OPTION PLAN, AND PROXIES EXECUTED AND
RETURNED WILL BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
PROPOSAL 3--APPROVAL OF AUDITORS
The Board has appointed the firm of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1996, subject to
ratification by the Company's stockholders. KPMG Peat Marwick LLP has acted as
the Company's auditors since inception. Representatives of KPMG Peat Marwick
LLP are expected to be present at the Annual Meeting.
The affirmative vote of holders of a majority of the shares of Common Stock
entitled to vote in person or by proxy at the 1996 Annual Meeting is required
to ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for fiscal year 1996.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP, AND PROXIES EXECUTED AND RETURNED WILL
BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
STOCKHOLDERS PROPOSALS AND DIRECTOR NOMINATIONS
Stockholders may propose matters to be presented at stockholders' meetings
and may also nominate persons to be directors. Formal procedures have been
established for those proposals and nominations.
PROPOSALS FOR 1997 ANNUAL MEETING
Pursuant to various rules promulgated by the SEC, any proposals of holders
of Common Stock intended to be presented to the annual meeting of stockholders
of the Company to be held in 1997 must be received by the Company, addressed
to Glynn E. Williams, Jr., Secretary, 5847 San Felipe, Suite 700, Houston,
Texas 77057, no later than February 20, 1997, to be included in the Company
proxy statement and form of proxy relating to that meeting. With respect to
business to be brought before the Annual Meeting, the Company has not received
any notices from its stockholders.
18
<PAGE>
In addition to the SEC rules described in the preceding paragraph, the
Company's bylaws provide that for business to be properly brought before the
Company's annual meetings of stockholders beginning with the 1997 Annual
Meeting of Stockholders, it must be either (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (b) otherwise brought before the meeting by or at the direction
of the Board of Directors or (c) otherwise properly brought before the meeting
by a stockholder of the Company who is a stockholder of record at the time of
giving of notice thereinafter provided for, who shall be entitled to vote at
such meeting and who complies with the following notice procedures. In
addition to any other applicable requirements, for business to be brought
before an annual meeting by a stockholder of the Company, the stockholder must
have given timely notice in writing of the business to be brought before an
annual meeting of stockholders of the Company to the Secretary of the Company.
To be timely, a stockholder's notice must be delivered to or mailed and
received at the Company's principal executive offices, 5847 San Felipe, Suite
700, Houston, Texas 77057, on or before February 20, 1997. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and address, as
they appear on the Company's books, of the stockholder proposing such
business, (iii) the acquisition date, the class and the number of shares of
Common Stock that are owned beneficially by the stockholder, (iv) any material
interest of the stockholder in such business and (v) a representation that the
stockholder intends to appear in person or by proxy at the meeting to bring
the proposed business before the meeting. Notwithstanding the foregoing bylaw
provisions, a stockholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with respect to
the matters set for in the foregoing bylaw provisions. Notwithstanding
anything in the Company's bylaws to the contrary, no business shall be
conducted at the annual meeting except in accordance with the procedures
outlined above.
NOMINATIONS FOR 1997 ANNUAL MEETING AND FOR ANY SPECIAL MEETINGS
Only persons who are nominated in accordance with the following procedures
will be eligible for election, and to serve, as directors. Nominations of
persons for election to the Company's Board of Directors may be made at a
meeting of stockholders (a) by or at the direction of the Board of Directors
or (b) by any stockholder of the Company who is a stockholder of record at the
time of giving of notice thereinafter provided for, who shall be entitled to
vote for the election of directors at the meeting and who complies with the
following notice procedures. Such nominations, other than those made by or at
the direction of the Board of Directors, shall be made pursuant to timely
notice in writing to the Secretary of the Company. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
Company's principal executive offices, 5847 San Felipe, Suite 700, Houston,
Texas 77057 (i) with respect to an election to be held at the annual meeting
of stockholders of the Company, before February 20, 1997, and (ii) with
respect to an election to be held at a special meeting of stockholders of the
Company for the election of Directors, not later than the close of business on
the 10th day following the date on which notice of the date of the meeting was
mailed or public disclosure of the date of the meeting was made, whichever
first occurs. Such stockholder's notice to the Secretary shall set forth (a)
as to each person whom the stockholder proposes to nominate for election or
reelection as a director, all information relating to the person that is
required to be disclosed in solicitations for proxies for election of
directors, or is otherwise required, pursuant to Regulation 14A under the
Exchange Act (including the written consent of such person to be named in the
proxy statement as a nominee and to serve as a director if elected); and (b)
as to the stockholder giving the notice, (i) the name and address, as they
appear on the Company's books, of such stockholder, and (ii) the class and
number of shares of capital stock of the Company which are beneficially owned
by the stockholder. In the event a person is validly designated as a nominee
to the Board and shall thereafter become unable or unwilling to stand for
election to the Board of Directors, the Board of Directors or the stockholder
who proposed such nominee, as the case may be, may designate a substitute
nominee. Notwithstanding the foregoing bylaw provisions, a stockholder shall
also comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth in the
foregoing bylaw provisions.
19
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other matters that are to be
presented for action at the Annual Meeting. However, if any other matters
properly come before the Annual Meeting or any adjournment(s) thereof, it is
intended that the enclosed proxy will be voted in accordance with the judgment
of the persons voting the proxy.
By Order of the Board of Directors
Walter G. "Gil" Goodrich
President and Chief Executive
Officer
Houston, Texas
April 2, 1996
20
<PAGE>
APPENDIX I
FIRST AMENDMENT TO
GOODRICH PETROLEUM CORPORATION
1995 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
WHEREAS, GOODRICH PETROLEUM CORPORATION (the "Company") has heretofore
adopted the GOODRICH PETROLEUM CORPORATION 1995 NONEMPLOYEE DIRECTOR STOCK
OPTION PLAN (the "Plan"); and
WHEREAS, the Company desires to amend the Plan in certain respects;
NOW, THEREFORE, the Plan shall be amended as follows:
1. Subject to the provisions of paragraph 2 hereof, Paragraph 3 of the
Nonemployee Director Stock Option Agreement, which is incorporated by Article
II of the Plan, shall be deleted in its entirety and the following shall be
substituted therefor:
"3. Exercise of Option. Subject to the earlier expiration of this Option
as herein provided, this Option may be exercised, by written notice to the
Company at its principal executive office addressed to the attention of its
President and Chief Executive Officer, at any time and from time to time
after the date of grant hereof. This Option is not transferable by Director
otherwise than by will or the laws of descent and distribution, and may be
exercised only by Director (or Director's guardian or legal representative)
during Director's lifetime. If a Director's membership on the Board of
Directors of the Company (the "Board") terminates, this Option may be
exercised as follows:
(a) If Director's membership on the Board terminates by reason of
disability, this Option may be exercised in full by Director (or
Director's guardian or legal representative or Director's estate or the
person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Director) at any
time during the period of one year following such termination.
(b) If Director dies while a member of the Board, Director's estate,
or the person who acquires this Option by will or the laws of descent
and distribution or otherwise by reason of the death of Director, may
exercise this Option in full at any time during the period of one year
following the date of Director's death.
(c) If Director's membership on the Board terminates for any reason
other than as described in (a) or (b) above, this Option may be
exercised in full by Director at any time during the period of one year
following such termination, or by Director's estate (or the person who
acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Director) at any time during the
period of one year following the date of the Director's death if
Director dies within such one-year period.
This Option shall not be exercisable in any event after the expiration of
ten years from the date of grant hereof. The purchase price of shares as to
which this Option is exercised shall be paid in full at the time of
exercise (A) in cash (including check, bank draft or money order payable to
the order of the Company), (B) by delivering to the Company shares of Stock
having a fair market value equal to the purchase price, or (C) any
combination of cash or Stock. No fraction of a share of Stock shall be
issued by the Company upon exercise of an Option or accepted by the Company
in payment of the purchase price thereof; rather, Director shall provide a
cash payment for such amount as is necessary to effect the issuance and
acceptance of only whole shares of Stock. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company
to Director, Director (or the person permitted to exercise this Option in
the event of Director's death) shall not be or have any of the rights or
privileges of a stockholder of the Company with respect to shares
acquirable upon an exercise of this Option."
A-1
<PAGE>
2. This amendment to the Plan shall be effective with respect to all options
outstanding under the Plan on or after August 15, 1995, provided that it is
approved by the stockholders of the Company at the 1996 Annual Meeting of
Stockholders.
3. As amended hereby, the Plan is specifically ratified and reaffirmed.
A-2
<PAGE>
GOODRICH PETROLEUM CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 22, 1996
The undersigned hereby constitutes and appoints Walter G. Goodrich and
Glynn E. Williams, Jr. and each and either of them, his true and lawful
attorneys and proxies with full power of substitution, for and in the name,
place and stead of the undersigned, to attend the Annual Meeting of Stockholders
of Goodrich Petroleum Corporation to be held at Wheless Auditorium, Commercial
Center, 333 Texas Street, Shreveport, Louisiana, on May 22, 1996 at 11:00 a.m.,
local time, and any adjournment(s) thereof, with all powers the undersigned
would possess if personally present and to vote thereof, as provided on the
reverse side of this card, the number of shares the undersigned would be
entitled to vote if personally present. In accordance with their discretion,
said attorneys and proxies are authorized to vote upon such other matters as may
properly come before the meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR
THE THREE NOMINEES AND FOR PROPOSALS 2 AND 3.
(To be Signed and Continued on the Reverse Side.)
SEE REVERSE SIDE
- ------------------
A-3
<PAGE>
[X] Please mark
your votes as in
this example.
FOR WITHHOLD
To vote for all AUTHORITY Nominees: Sheldon Appel
Nominees listed John C. Napley
J. Michael Watts
[_] [_] [_]
1. ELECTION OF
DIRECTORS
FOR all nominees listed
(except as marked to the contrary below)
- ---------------------------------
2. Proposal to approve an FOR AGAINST ABSTAIN
amendment to the [_] [_] [_]
Company's 1995 Non-
Employee Director
Stock Option Plan.
3. Proposal to ratify the FOR AGAINST ABSTAIN
appointment of KPMG [_] [_] [_]
Peat Marwick LLP as
the Company's
independent auditors
for the fiscal year
ended December 31,
1996.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN
THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
A-4
<PAGE>
SIGNATURE:___________________________ DATE:____________________, 1996
SIGNATURE:___________________________ DATE:____________________, 1996
IF HELD JOINTLY
NOTE: When signing as attorney, executor, administrator, trustee or guardian,
please give full title. If more than one trustee, all should sign. All
joint owners must sign.
A-5
