<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Section 240.14a-11(c) or Section 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] No fee required
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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GOODRICH PETROLEUM CORPORATION
HOUSTON, TEXAS
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1998
----------------
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
the Plaza Room, Luxury Collection Hotel, 1919 Briar Oaks, Houston, Texas, on
May 20, 1998, at 11:00 a.m. local time, for the following purposes:
1. To elect four directors, three to serve until the annual stockholders'
meeting in 2001 and one to serve until the annual stockholders' meeting
in 1999, or until their successors have been elected and qualified; and
2. To ratify the adoption of the Goodrich Petroleum Corporation Nonemployee
Directors Compensation Plan; and
3. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ended December 31, 1998; 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 24, 1998, 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
[Signature Appears Here]
Walter G. "Gil" Goodrich
President and Chief Executive
Officer
April 14, 1998
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 20, 1998, at the
Plaza Room, Luxury Collection Hotel, 1919 Briar Oaks, Houston, Texas, or at
any adjournment(s) thereof. The solicitation of proxies by the Board of
Directors will be conducted primarily by mail. In addition, directors,
officers and employees of the Company may solicit proxies by fax, telex,
telephone and personal interview. 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"). The
approximate date on which this Proxy Statement and the accompanying proxy will
first be sent to Stockholders is April 20, 1998.
A proxy may be revoked at any time (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 24, 1998 (the "Record Date") will receive notice of and will be entitled
to vote at the Annual Meeting. At the close of business on March 24, 1998,
there were 5,232,403 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,
1997, 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
Four directors are to be elected at the Annual Meeting. The Company's Bylaws
provide for a classified Board of Directors. 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 1999, 2000 and 1998. Benjamin F. Edwards, II,
Walter G. Goodrich and Arthur A. Seeligson have been nominated to serve as
Class III directors and, if elected, will serve until the Company's 2001
Annual Meeting of Stockholders or until their respective successors shall have
been elected and qualified. Jeff H. Benhard is being nominated as a Class I
director and, if elected, would serve until the 1999 Annual Meeting of
Stockholders or until his respective successor shall have been elected and
qualified. Each of the nominees for director currently serves as a director of
the Company except for Mr. Benhard who served as a director from the Company's
inception (August 1995) until his resignation in December 1996. The remaining
directors named below will not be required to stand for election at the Annual
Meeting because their present terms expire in either 1999 or 2000.
<PAGE>
James R. Jenkins, Wayne G. Kees and John C. Napley resigned from the Board
of Directors effective April 15, 1997 as a result of having reached the
Company's mandatory retirement age for directors. J. Michael Watts resigned
from the Board of Directors in September 1997.
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 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.
DIRECTORS AND DIRECTOR NOMINEES
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 III DIRECTORS AND NOMINEES--TERMS EXPIRING AT THE 1998 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Benjamin F. Edwards, II.... 72 Director
Walter G. Goodrich......... 39 President, Chief Executive Officer and Director
Arthur A. Seeligson........ 39 Director
CLASS I DIRECTOR AND NOMINEE--TERMS TO EXPIRE AT THE 1999 ANNUAL MEETING
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Sheldon Appel.............. 64 Director
Jeff H. Benhard............ 69 Director
CLASS II DIRECTORS--TERMS EXPIRING AT THE 2000 ANNUAL MEETING
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Basil M. Briggs............ 62 Director
Henry Goodrich............. 67 Chairman of the Board, Director
</TABLE>
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 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. Walter G. "Gil" Goodrich is
the son of Henry Goodrich.
Arthur A. Seeligson is a managing director with the investment banking firm
of Harris, Webb & Garrison. From 1991 to 1993, Mr. Seeligson was a Vice
President, Energy Corporate Finance at Schroder Wertheim & Company, Inc. From
1993 to 1995, Mr. Seeligson was a Principal, Corporate Finance, at
Wasserstein, Perella & Co. He was primarily engaged in the management of his
personal investments from 1995 through 1997.
2
<PAGE>
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 was a director of the Company
from its inception (August 1995) until his resignation in December 1996.
Sheldon Appel has been involved in real estate development and finance since
1955 when he formed the Sheldon Appel Company. Mr. Appel is a member of the
Rand Corporation Board of Visitors.
Basil M. Briggs has been a practicing attorney in and around Detroit,
Michigan since 1961 and is currently a shareholder with the firm of Cox,
Hodgman & Giarmarco in Troy, Michigan. Mr. Briggs is also a director of Marcum
Natural Gas Services, Inc.
Henry Goodrich is the chairman of the Company's board of directors. He 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. Mr. Goodrich
was elected Chairman of the Board of the Company in March 1996. Mr. Goodrich
also serves as a consultant to the Company. Mr. Goodrich is also a director of
Pan American Life Insurance Company. Henry Goodrich is the father of Walter G.
"Gil" Goodrich.
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., to facilitate oil
and gas investment opportunities. 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.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company had three standing committees and had
one special purpose committee during 1997, the membership and functions of
which are described below:
Executive Committee. The members of the Executive Committee are Messrs.
Walter G. Goodrich and Henry Goodrich. 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 and
Briggs with Mr. Appel serving as chairman. Mr. Watts served on the Audit
Committee until his resignation from the Board of Directors in September 1997.
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
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<PAGE>
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. Briggs, Edwards and Seeligson with Mr. Briggs serving as the chairman.
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 makes recommendations to
the Board on (i) compensation of all officers of the Company, (ii) granting of
awards under and administering the Company's stock option and other benefit
plans, and (iii) adopting and changing major Company compensation policies and
practices.
Special Committee. The Special Committee was formed on April 17, 1996, and
its members were Messrs. Seeligson and Briggs with Mr. Seeligson serving as
chairman. The Board authorized the Special Committee to evaluate a transaction
involving the proposed acquisition of the oil and gas properties of La/Cal
Energy Partners II and certain working interest owners, on behalf of the
Company and to proceed with negotiating the terms of an acquisition if
warranted by their evaluation. The Special Committee recommended the Board
approve the negotiated terms of the acquisition and the Board so approved such
action. The transaction was finalized on January 31, 1997 and the Committee
was dissolved.
The Board of Directors held seven meetings in 1997. The Audit, Compensation,
and Special Committees met two, three and one times, respectively, in 1997.
The Executive Committee did not meet in 1997. Each director other than those
who resigned during 1997, attended at least 87% of the aggregate number of
meetings of the Board of Directors and any committee on which such director
served.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The table below sets forth, as of March 24, 1998, 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
outstanding 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. The total number of outstanding
common shares as of March 24, 1998 was 5,232,403.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP
-----------------
NAME OF BENEFICIAL OWNER AMOUNT PERCENT
------------------------ --------- -------
<S> <C> <C>
Walter G. Goodrich (1)...................................... 1,168,319 21.8%
5847 San Felipe, Suite 700
Houston, TX 77057
Henry Goodrich (2).......................................... 648,601 12.4%
333 Texas St., Suite 1350
Shreveport, LA 71101
Rochelle Rand (3)........................................... 312,665 5.9%
2550 Fifth Ave., Suite 126
San Diego, CA 92103
Leo Bromberg (4)............................................ 286,803 5.5%
280 S. Beverly Dr. Suite 401
Beverly Hills, CA 90212
Sheldon Appel (5)(6)........................................ 282,620 5.2%
2148 Federal Avenue, Suite A
Los Angeles, CA 90025
Roland L. Frautschi (7)..................................... 116,839 2.2%
Basil M. Briggs (6)......................................... 5,082 *
Benjamin F. Edwards, II (6)................................. 5,250 *
Arthur A. Seeligson (6)(8).................................. 23,750 *
Robert C. Turnham, Jr. (9).................................. 43,944 *
Directors and Executive Officers as a Group (8 persons)(10). 1,744,136 31.2%
</TABLE>
- --------
* Less than 1%.
(1) Includes 550,269 shares held by HGF Partnership, a Louisiana partnership
owned by Henry Goodrich and Walter G. Goodrich. Henry Goodrich is the
managing general partner of HGF Partnership and Walter G. Goodrich holds
an indirect general partnership interest in the partnership. Henry
Goodrich exercises sole voting and investment power with respect to the
shares held by the partnership. Includes 47,833 shares issuable upon the
conversion of 42,900 shares of Series B Convertible Preferred Stock. Also
includes 282,134 shares currently owned by Goodrich Energy, Inc. and
61,496 shares issuable to Goodrich Energy, Inc. upon the conversion of
55,153 shares of Series B Convertible Preferred Stock. Walter G. Goodrich
is the sole stockholder of Goodrich Energy, Inc. Also includes 1,667
shares of Common Stock issuable upon the conversion of 4,000 shares of
Series A Preferred Stock and options to purchase 21,875 shares that are
exercisable pursuant to the Company's 1995 Stock Option Plan. Henry
Goodrich and Walter G. Goodrich beneficially own an aggregate of
1,266,652 shares, or 23.6% of the outstanding shares of Common Stock
deemed to be outstanding.
(2) Includes 550,269 shares held by HGF Partnership, a Louisiana partnership
owned by Henry Goodrich and Walter G. Goodrich. Henry Goodrich is the
managing general partner of HGF Partnership and Walter G. Goodrich holds
an indirect general partnership interest in the partnership. Henry
Goodrich exercises sole voting and investment power with respect to the
shares held by the partnership. Also includes options to purchase 17,500
shares that are currently exercisable pursuant to the Company's 1995
Stock Option Plan. Henry Goodrich and Walter G. Goodrich beneficially own
an aggregate of 1,226,652 shares or 23.6% of the outstanding shares of
Common Stock.
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<PAGE>
(3) Based on Schedule 13-G filed on February 12, 1998, as of December 31,
1997, and includes 33,268 shares issuable upon the conversion of 29,837
shares of Series B Preferred Stock.
(4) Based on Schedule 13-G filed on February 12, 1998, as of December 31,
1997, and includes 145,084 shares held by Mr. Bromberg as trustee. Mr.
Bromberg has advised the Company that he exercises sole investment and
voting control over such shares. Also includes 21,954 shares issuable
upon the conversion of 19,690 shares of Series B Convertible Preferred
Stock held by Mr. Bromberg personally. Also includes 682 shares held in a
limited partnership, the sole general partner of which is a corporation
in which Mr. Bromberg is the sole shareholder.
(5) Includes 102,285 shares of Common Stock, 156,207 shares issuable upon the
conversion of 140,096 shares of Series B Convertible Preferred Stock and
13,751 shares of Common Stock issuable upon the conversion of 33,000
shares of Series A Convertible Preferred 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 5,377 shares owned by a
partnership in which Mr. Appel is a limited partner.
(6) Includes 5,000 shares issuable upon the exercise of outstanding stock
options under the Company's 1995 Nonemployee Director Stock Option Plan.
(7) Includes 10,000 shares issuable upon the exercise of outstanding stock
options under the Company's 1995 Stock Option Plan and 1,583 shares of
Common Stock issuable upon the conversion of 3,500 and 300 shares of
Series A Convertible Preferred Stock held personally and by his wife,
respectively. Also includes 21,342 shares issuable upon the conversion of
19,141 shares of Series B Convertible Preferred Stock.
(8) Includes 5,000 shares issuable upon the exercise of outstanding stock
options under the Company's 1995 Stock Option Plan.
(9) Includes 7,500 shares issuable upon the exercise of outstanding vested
stock options under the Company's 1995 Stock Option Plan and 1,375 shares
of Common Stock issuable upon the conversion of 3,300 shares of Series A
Convertible Preferred Stock. Also 11,250 shares held and 2,084 shares of
Common Stock issuable upon the conversion of 5,000 shares of Series A
Preferred Stock held by Mr. Turnham's wife.
(10) The number of shares of Common Stock beneficially owned by all executive
officers and directors as a group includes (i) 20,000 shares issuable
upon the exercise of outstanding stock options under the Company's 1995
Nonemployee Director Stock Option Plan, (ii) 61,875 shares issuable upon
the exercise of outstanding stock options under the Company's 1995 Stock
Option Plan (iii) 20,460 shares issuable upon the conversion of 49,100
shares of Series A Preferred Stock, and (iv) 286,878 shares issuable upon
the conversion of 257,290 shares of Series B Preferred Stock.
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 have been paid $1,000 for each meeting attended. In addition,
directors were reimbursed for their reasonable out-of-pocket expenses in
connection with travel to meetings of the Board of Directors or committees
thereof and received periodic grants of options to purchase Common Stock.
Directors did not receive compensation for serving on committees except that
members of the Special Committee received $1,000 for each in-person meeting
and $250 for each telephonic meeting.
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 was not nor had ever 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 62,500 shares of Common Stock
(subject to adjustments in the event of stock dividends, stock splits and
certain other events).
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<PAGE>
Pursuant to the Director Option Plan, on the date of each annual meeting of
stockholders, each Nonemployee Director who is continuing in office
automatically receives an option to purchase 1,250 shares of Common Stock at
an exercise price equal to the fair market value of the Common Stock on the
date of grant. Seven non-employee Directors received such an option grant in
connection with the Company's annual shareholders meeting held May 21, 1997.
Each option granted under the Director Option Plan expires ten years from
the date the option was granted. If an option holder ceases to be a director
of the Company for any reason, the option may be exercised in full within four
years after the date of cessation (if otherwise within the option period).
Directors Compensation Plan. If ratified by the shareholders of the Company,
the Director Option Plan would be terminated and replaced with the Goodrich
Petroleum Corporation Nonemployee Directors Compensation Plan (the "Directors
Compensation Plan") (see Proposal 2--Adoption of the Nonemployee Directors
Compensation Plan). The Directors Compensation Plan would also specify
guidelines for annual and per meeting fees to be paid the Company's
nonemployee directors.
The Directors Compensation Plan would provide for an annual fee to be paid
to each nonemployee director valued at $5,000 to be paid in common stock. The
Directors Compensation Plan would also provide for the annual issuance of
options to purchase 2,000 shares of the Company's Common Stock to each
nonemployee director on the date of the Company's annual meeting of
stockholders. Consistent with current policy, the Directors Compensation Plan
would provide for the payment of $1,000 to each nonemployee directors for each
board meeting attended in person and the reimbursement of reasonable out-of-
pocket expenses in connection with travel to meetings of the board or
committees thereof. For more information, see Proposal 2--Adoption of the
Nonemployee Directors Compensation Plan.
PROPOSAL 2--ADOPTION OF THE NONEMPLOYEE DIRECTORS COMPENSATION PLAN
The Goodrich Petroleum Corporation Nonemployee Directors Compensation Plan
(see Exhibit A) is being presented to the stockholders of the Company for
ratification. The Goodrich Petroleum Corporation 1995 Nonemployee Directors
Stock Option Plan would be terminated and replaced by the Directors
Compensation Plan. The Directors Compensation Plan provides for both the award
of stock options to and compensation of non-employee directors of the Company.
See "Director Compensation". The Directors Compensation Plan provides for both
discretionary option and formula option grants and would be administered by
the Board of Directors of the Company, which may delegate all of its power of
administration, with the exception of the power to authorize issuance of
options. No director may vote or decide upon any matter relating solely to
such director under the Directors Compensation Plan, nor may any director vote
in any case in which the director's individual right to claim any benefit
under the Directors Compensation Plan is particularly involved.
The Directors Compensation Plan would provide for an annual fee to be paid
to each nonemployee director valued at $5,000 to be paid in Common Stock. The
Plan would also provide for the annual issuance of options to purchase 2,000
shares of the Company's Common Stock to each nonemployee director on the date
of the Company's annual meeting of stockholders. Consistent with current
policy, the Plan would provide for the payment of $1,000 to each nonemployee
directors for each board meeting attended in person and the reimbursement of
reasonable out-of-pocket expenses in connection with travel to meetings of the
board or committees thereof.
The maximum number of shares which may be issuable under the Directors
Compensation Plan is 150,000. Options granted under the Directors Compensation
Plan will have a term of 10 years and will be subject to earlier termination
if the optionee's membership on the Board of directors terminates for cause.
If the optionee's membership on the Board of Directors is terminated for any
reason other than cause, options may be exercised for up to four years from
the date of such termination, but only as to the number of shares such
optionee could
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<PAGE>
have purchased on the date of termination from the Board of Directors.
Discretionary option grants will be exercisable as determined by the Board of
Directors, and formula option grants will be fully exercisable on the date of
grant. The exercise price of an option shall be the closing stock price on the
date of grant for both discretionary option grants and formula option grants.
The Directors Compensation Plan contains provisions whereby the Board of
Directors may make adjustments in the number of shares to be acquired upon
exercise of options in the event of a stock split, combination or stock
dividend.
The Directors Compensation Plan may be amended or terminated at any time by
the Board of Directors. Such amendment or termination will not impair the
rights of a non-employee director or affect options previously granted and
outstanding under the Directors Compensation Plan.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes with respect to certain of the Company's
executive officers, certain information relating to the compensation earned
for services rendered in all capacities during the years indicated.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION--
ANNUAL COMPENSATION(2) SECURITIES
---------------------- UNDERLYING
NAME AND PRINCIPAL FISCAL OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS (NUMBER) COMPENSATION(3)
------------------ ------ -------- ------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Walter G. Goodrich...... 1997 $150,000 $30,000 25,000 $4,400
President and Chief 1996 $150,000 $17,500 -- --
Executive Officer 1995 $ 56,500(1) -- 31,250 --
Roland L. Frautschi..... 1997 $ 85,861 $18,000 -- $2,619
Senior Vice President 1996 $ 82,530 $11,000 12,500 --
and Chief Financial 1995 $ 30,049(1) -- 18,500 --
Officer
Robert C. Turnham, Jr... 1997 $ 94,003 $18,000 -- $1,084
Senior Vice President 1996 $ 80,863 $11,000 12,500 --
and Chief Operating 1995 $ 26,295(1) -- 12,500 --
Officer
</TABLE>
- --------
(1) The Company commenced operations on August 15, 1995.
(2) During the years presented perquisites for the persons 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.
(3) Amounts represent matching contributions by the Company to the executive
officer's SIMPLE IRA accounts.
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 375,000 shares of Common Stock (subject
to certain adjustments in the event of stock dividends, stock splits and
certain other events). No more than 62,500 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 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").
8
<PAGE>
Administration. The Goodrich Plan is administered by the Compensation
Committee which consists of members of the Board 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 such as (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 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
9
<PAGE>
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 OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock options granted
during 1997 to the executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES OF
STOCK PRICES
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
-------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ---------- ------------ -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Walter G. Goodrich...... 25,000 59% $7.15 3-3-02 $49,385 $109,129
</TABLE>
STOCK OPTION EXERCISES AND YEAR-END HOLDINGS
The named executive officers did not exercise any stock options during 1997.
The following table sets forth information concerning stock option holdings
and the value of unexercised in-the money stock options held by the executive
officers of the Company named in the Summary Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS HELD
DECEMBER 31, 1997 AT DECEMBER 31, 1997(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Walter G. Goodrich.......... 15,625 40,625 -- $33,359
Roland L. Frautschi......... 10,000 21,250 $11,875 $33,438
Robert C. Turnham, Jr....... 7,500 17,500 $10,000 $30,625
</TABLE>
- --------
(1) Computed based on the difference between aggregate fair market value and
aggregate exercise price. The fair market value of the Company's Common
Stock on December 31, 1997 was $8.50 per share based on the closing sales
price on the New York Stock Exchange on such date.
10
<PAGE>
COMPENSATION REPORT OF THE BOARD OF DIRECTORS
The Compensation 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. The members
of the Compensation Committee have furnished the following report on executive
compensation for 1997.
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 and/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. The Board generally seeks to set salaries which compare 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 oil and gas drilling results, 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 and demonstrated leadership ability.
For 1997, the Board included in its evaluations the exploration and
financial results of the Company along with each individual's job performance.
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 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.
In addition to each executive officer's base compensation, the Board may
award cash bonuses and/or stock 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. In early 1998, the executive officers were awarded cash
and stock bonuses for their 1997 performance as disclosed in the Summary
Compensation Table.
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.
The foregoing report is given by the following members of the Board of
Directors.
Basil M. Briggs
Benjamin F. Edwards, II
Arthur A. Seeligson
11
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
Common Stock to the S&P 500 Index and the Everen Securities Small Cap E&P
Index for the period beginning August 15, 1995 (the Company's inception) and
ending December 31, 1997. The graph assumes that the value of the investment
in the shares of Common Stock and each index was $100 at August 15, 1995
(using the closing price of $7.50 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 CUMULATIVE RETURN
AMONG GOODRICH PETROLEUM CORPORATION
S & P 500 INDEX AND EVEREN SECURITIES SMALL CAP E & P INDEX(*)
[GRAPH APPEARS HERE]
8/15/95 12/29/95 6/28/96 12/31/96 6/30/97 12/31/97
------- -------- ------- -------- ------- --------
Goodrich Petroleum
Corporation 100 86.67 86.93 73.33 73.33 113.33
S&P 500 100 109.17 120.83 129.17 158.33 175
Everen Small Ca 100 100.93 110.28 149.53 150.47 142.06
- --------
(*) The Everen Securities Small Cap E & P Index was formally known as the
Principal Financial Securities Small Cap E & P Index.
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, 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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 Stock, 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.
The Company believes that during the fiscal year ended December 31, 1997,
all Section 16(a) filing requirements applicable to its officers, directors
and greater than 10% stockholders were complied with.
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
Joint Participation Agreement with Goodrich Oil Company
During the negotiations between Patrick Petroleum Company ("Patrick") and
La/Cal Energy Partners ("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 prior to May 1, 1997.
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 have had
the opportunity to invest, through Goodrich Oil Company, in prospects or
acquisitions identified by the Company, and the Company has had the
opportunity to participate in future Goodrich Oil Company drilling programs
and acquisitions. Goodrich Oil Company did not receive any compensation or
management fees from the Company, and the Company did not receive any such
fees from Goodrich Oil Company, in connection with such arrangements.
The Joint Participation Agreement was scheduled to terminate on the earlier
of (i) December 31, 2000, or (ii) at such time as neither Walter G. Goodrich
or Henry Goodrich was an employee, director or consultant of the Company.
Goodrich Oil Company advised the Company that it would not pursue additional
drilling prospects or acquisitions subsequent to May 1, 1997. Accordingly, the
Joint Participation Agreement was terminated. During 1997, the Company and
Goodrich Oil Company participated in five of eight wells drilled by the
Company which were covered under the Joint Participation Agreement prior to
the termination.
During 1997, until the termination of the Joint Participation Agreement,
Henry Goodrich, Walter G. Goodrich, Roland Frautshi and J. Michael Watts
(until his resignation) participated as individual investors in Goodrich Oil
Company's drilling programs and accordingly acquired working interests in five
of eight wells drilled by the Company. Such persons paid their pro rata share
of all expenses associated with their interests in each prospect. During 1997,
the sum of such persons' participation interests in the Goodrich Oil Company
drilling programs did not exceed 10% of the aggregate interests of the
Goodrich Oil Company Participants.
13
<PAGE>
Working Interest Investments by Executive Officers
In connection with the cessation of new prospect activities by Goodrich Oil
Company, the former investors of Goodrich Oil Company, including Henry
Goodrich, Walter G. Goodrich and Roland Frautschi, are working interest
investors in certain of the drilling prospects of the Company, and
accordingly, participated in four of seventeen wells drilled by the Company
during the year subsequent to May 1, 1997. Such persons have paid their pro
rata share of all expesnes associated with their interest in each prospect.
During 1997, the sum of such persons' participation interests did not exceed
5% of the aggregate interests of all participants in those prospects.
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 was awarded a bonus of $30,000 related to his and the Company's
performance in 1997, and also received 25,000 common stock options in 1997.
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 drilling capital and 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 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, 1998, subject to
ratification by the Company's stockholders. KPMG Peat Marwick LLP has acted as
the Company's auditors since its inception in 1995. A representative of KPMG
Peat Marwick LLP is expected to be present at the Annual Meeting, will be
offered the opportunity to make a statement if such representative desires to
do so and will be available to respond to appropriate questions.
The affirmative vote of holders of a majority of the shares of Common Stock
entitled to vote in person or by proxy at the 1998 Annual Meeting is required
to ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for fiscal year 1998. Approval of the proposal requires
the affirmative vote of a majority of the shares present, or represented, and
entitled to vote at the Annual Meeting. Accordingly, abstentions will have the
effect of a vote against the proposal, and broker non-votes will have no
effect on the proposal (assuming a quorum is present).
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.
14
<PAGE>
STOCKHOLDER 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 1999 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 1999 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 19, 1999, 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.
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, 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 19, 1999. 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 forth 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.
DIRECTOR NOMINATIONS FOR 1999 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 19, 1999, 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
15
<PAGE>
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.
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
[Signature Appears Here]
Walter G. "Gil" Goodrich
President and Chief Executive
Officer
Houston, Texas
April 14, 1998
16
<PAGE>
EXHIBIT A
GOODRICH PETROLEUM CORPORATION
NONEMPLOYEE DIRECTORS COMPENSATION PLAN
Effective May 20, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE PAGE
------- -----
<C> <S> <C>
I --Definitions and Construction.................................. I-1
II --Nonemployee Director Compensation............................. II-1
III --Stock Options................................................. III-1
IV --Designation of Beneficiaries.................................. IV-1
V --Administration of the Plan.................................... V-1
VI --Miscellaneous................................................. VI-1
</TABLE>
<PAGE>
GOODRICH PETROLEUM CORPORATION
NONEMPLOYEE DIRECTORS COMPENSATION PLAN
W I T N E S S E T H :
WHEREAS, GOODRICH PETROLEUM CORPORATION (the "Company") desires to establish
a compensation and benefits plan with respect to directors who are not
employees of the Company, which includes cash remuneration, stock, and stock-
based remuneration;
NOW, THEREFORE, the GOODRICH PETROLEUM CORPORATION NONEMPLOYEE DIRECTORS
COMPENSATION PLAN is hereby adopted in its entirety as follows, effective as
of May 20, 1998:
<PAGE>
I.
DEFINITIONS AND CONSTRUCTION
1.1 Definitions. Where the following words and phrases appear in the Plan,
they shall have the respective meanings set forth below, unless their context
clearly indicates to the contrary.
(1) Annual Meeting: The annual meeting of the stockholders of the Company
each year.
(2) Board: The Board of Directors of the Company.
(3) Code: The Internal Revenue Code of 1986, as amended.
(4) Company: Goodrich Petroleum Corporation or any successor thereto.
(5) Corporate Change: One of the following events: (i) the merger,
consolidation, or other reorganization of the Company in which the
outstanding Stock is converted into or exchanged for a different class of
securities of the Company, a class of securities of any other issuer
(except a direct or indirect wholly owned subsidiary of the Company),
cash or other property; (ii) the sale, lease, or exchange of all or
substantially all of the assets of the Company to any other corporation
or entity (except a direct or indirect wholly owned subsidiary of the
Company); (iii) the adoption by the stockholders of the Company of a plan
of liquidation and dissolution; (iv) the acquisition (other than any
acquisition pursuant to any other clause of this definition) by any
person or entity, including without limitation a "group" as contemplated
by Section 13(d)(3) of the 1934 Act, of beneficial ownership, as
contemplated by such Section, of more than fifty percent (based on voting
power) of the Company's outstanding capital stock; or (v) as a result of
or in connection with a contested election of directors, the persons who
were directors of the Company before such election shall cease to
constitute a majority of the Board.
(6) Director: A member of the Board.
(7) Effective Date: May 20, 1998.
(8) Fair Market Value: For all purposes under the Plan, the fair market value
of a share of Stock on a particular date shall be equal to the closing
price of the Stock reported on the stock exchange composite tape on that
date or, if no prices are reported on that date, on the last preceding
date on which such prices of the Stock are so reported. In the event the
Stock is not publicly traded at the time a determination of its value is
required to be made hereunder, the determination of its fair market value
shall be made by the Board in such manner as it deems appropriate.
(9) 1934 Act: The Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(10) Nonemployee Director: Each Director who is not an employee of the
Company.
(11) Option: An option to purchase shares of Stock granted under Article III
of the Plan, which shall not constitute an incentive stock option within
the meaning of section 422(b) of the Code.
(12) Option Agreement: A written agreement between the Company and a
Nonemployee Director evidencing an Option.
(13) Plan: The Goodrich Petroleum Corporation Nonemployee Directors
Compensation Plan, as amended from time to time.
(14) Plan Year: The twelve-consecutive month period commencing on the date of
the Annual Meeting.
(15) Rule 16b-3: SEC Rule 16b-3 promulgated under the 1934 Act, as such may be
amended from time to time, and any successor rule, regulation or statute
fulfilling the same or a similar function.
(16) Stock: The common stock, $ 0.20 par value, of the Company.
1.2 Number and Gender. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the
plural shall be considered to include the singular. The masculine gender,
where appearing in the Plan, shall be deemed to include the feminine gender.
1.3 Headings. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.
I-1
<PAGE>
II.
NONEMPLOYEE DIRECTOR COMPENSATION
2.1 Annual Retainer. Each Nonemployee Director shall be paid an annual
retainer consisting of an amount determined by the Board and listed on Exhibit
A, the most current version of which shall be attached hereto, which shall be
paid on the date of the Annual Meeting in a Stock payment as determined by the
Board, based on the Fair Market Value of the Stock at the time of payment.
Notwithstanding the foregoing, an individual who is elected or appointed to
the Board during the Plan Year shall be paid a pro-rata portion of the annual
retainer on the date such individual is elected or appointed to the Board.
2.2 Meeting Fees. Each Nonemployee Director shall be paid a cash meeting fee
in an amount determined by the Board and listed on Exhibit A, the most current
version of which shall be attached hereto, for Board meetings attended by such
Nonemployee Director in person. Except as otherwise determined by the Board, a
Nonemployee Director shall not be paid a cash meeting fee for Board meetings
in which such Nonemployee Director participates by telephone. A Nonemployee
Director shall be reimbursed for the reasonable expenses incurred to attend
Board meetings. Except as otherwise determined by the Board, a Nonemployee
Director shall not be paid meeting fees for attending committee meetings.
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III.
STOCK OPTIONS
3.1 General. Subject to the express provisions of the Plan, the Board shall
have authority, in its discretion, to determine which Nonemployee Directors
shall receive an Option and the time or times when such Option shall be
granted. In making such determinations, the Board may take into account the
nature of the services rendered by the respective Nonemployee Directors, their
present and potential contribution to the Company's success and such other
factors as the Board in its discretion shall deem relevant. Further, subject
to the express provisions of the Plan, the Board shall determine the form,
terms, restrictions and provisions of each Option Agreement to be entered into
between the Company and the Nonemployee Director. The terms and conditions of
each Option Agreement need not be identical. The determinations of the Board
on the matters referred to in this Section 3.1 shall be conclusive.
3.2 Formula Option Grants. As of the date of each Annual Meeting occurring
on or after the Effective Date, each Nonemployee Director who is a member of
the Board immediately after such Annual Meeting shall be granted an Option to
purchase 2,000 shares of Stock (subject to adjustments in the same manner as
provided in Section 6.2 hereof with respect to shares of Stock subject to
Options then outstanding) on the date of such reelection. If, as of any date
that the Plan is in effect, there are not sufficient shares of Stock available
under the Plan to allow for the grant to each Nonemployee Director of an
Option for the number of shares provided herein, the Plan shall terminate as
provided in Section 6.7 hereof.
3.3 Option Period. The term of each Option shall be ten years.
3.4 Limitations on Grant or Exercise of Option.
(a) A Nonemployee Director who has outstanding options to purchase Stock
granted under the Goodrich Petroleum Corporation 1995 Stock Option Plan,
which provides for grants of options and other stock-based compensation to
employees and consultants of the Company, shall not be eligible to be
granted an Option pursuant to Section 3.2 of the Plan.
(b) Each Option granted to a Nonemployee Director pursuant to Section 3.1
of the Plan shall be exercisable at the time and in the manner determined
by the Board. Each Option granted to a Nonemployee Director pursuant to
Section 3.2 of the Plan shall be fully exercisable on the date of grant
thereof.
(c) Except as provided under Rule 16b-3, the Board, in its sole
discretion, shall have the right to accelerate the exercisability of an
Option granted pursuant to Section 3.1 of the Plan; provided, however, that
upon the occurrence of a Corporate Change, all outstanding Options shall
automatically become fully exercisable without the necessity of any action
on the part of the Board.
3.5 Termination of Membership on the Board. Subject to the limitation on the
term of an Option under Section 3.3, if a Nonemployee Director's membership on
the Board terminates for any reason, such Nonemployee Director's Options may
be exercised in full at any time during the period of four years following
such termination by such Nonemployee Director, or by his designated
beneficiary or beneficiaries.
3.6 Option Price and Payment. Subject to adjustment as provided in Section
6.2, the price at which a share of Stock may be purchased upon exercise of an
Option granted pursuant to Section 3.1 shall be determined by the Board, and
the price at which a share of Stock may be purchased upon exercise of an
Option granted pursuant to Section 3.2 shall be the Fair Market Value of a
share of Stock on the date such Option is granted. The Option or portion
thereof may be exercised by delivery of an irrevocable notice of exercise to
the Company in a manner specified by the Board. The purchase price of the
Option or portion thereof shall be paid, in whole or in part, (a) in cash or
(b) by the delivery of a number of shares of Stock (plus cash if necessary)
valued at their Fair Market Value, or (c) in a broker-financed "cashless
exercise" of the Option pursuant to procedures established by the Board (as
the same may be amended from time to time).
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3.7 Restrictions on Transfer. An Option shall not be transferable otherwise
than (a) by will or the laws of descent and distribution, (b) pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, or (c) with the consent of the Board.
3.8 Stockholder Rights and Privileges. A Nonemployee Director shall be
entitled to all the privileges and rights of a stockholder only with respect
to such shares of Stock as have been purchased under the Option and for which
certificates of stock have been registered in the Nonemployee Director's name.
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IV.
DESIGNATION OF BENEFICIARIES
Each Nonemployee Director shall have the right to designate the beneficiary
or beneficiaries to receive benefits under the Plan in the event of such
Nonemployee Director's death. Each such designation shall be made by executing
the beneficiary designation form prescribed by the Board and filing it with
the Board. Any such designation may be changed at any time by execution of a
new designation in accordance with this Article. If no such designation is on
file with the Board at the time of the death of the Nonemployee Director or
such designation is not effective for any reason as determined by the Board,
then the designated beneficiary or beneficiaries to receive the distribution
shall be as follows:
(1) If a Nonemployee Director leaves a surviving spouse, such Nonemployee
Director's benefits shall be paid to such surviving spouse;
(2) If a Nonemployee Director leaves no surviving spouse, such
Nonemployee Director's benefits shall be paid to such Nonemployee
Director's executor or administrator, or to such Nonemployee Director's
heirs at law if there is no administration of such Nonemployee Director's
estate.
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V.
ADMINISTRATION OF THE PLAN
5.1 Administration by the Board; Delegation of Powers and Duties. The
general administration of the Plan shall be vested in the Board. The Board may
delegate any or all of the powers and duties of the Board set forth in Section
5.3 hereof. Such delegation must be in writing, specifying the powers and
duties delegated, and must be accepted in writing by the delegatee. The Board
may rescind any such delegation at any time, in its sole discretion, provided
that such rescission be in writing. Nothing in Section 5.1 shall be construed
to permit the delegation by the Board of its power to authorize the issuance
of an Option.
5.2 Self-Interest of Participants. No Director shall have any right to vote
or decide upon any matter relating solely to such Director under the Plan or
to vote in any case in which the Director's individual right to claim any
benefit under the Plan is particularly involved. In any case in which a
Director is so disqualified to act and the remaining members of the Board
cannot agree, the Board shall appoint a temporary substitute member to
exercise all the powers of the disqualified Director concerning the matter in
which the Director is disqualified.
5.3 Board's Powers and Duties. The Board shall supervise the administration
and enforcement of the Plan according to the terms and provisions hereof and
shall have all powers necessary to accomplish these purposes, including, but
not limited to the right, power, authority, and duty:
(a) To make rules, regulations, and bylaws for the administration of the
Plan that are not inconsistent with the terms and provisions hereof, and to
enforce the terms of the Plan and the rules and regulations promulgated
thereunder by the Board;
(b) To construe in the Board's discretion all terms, provisions,
conditions, and limitations of the Plan;
(c) To correct any defect, supply any omission, or reconcile any
inconsistency that may appear in the Plan in such manner and to such extent
as they shall deem in the Board's discretion expedient to effectuate the
purposes of the Plan;
(d) To employ and compensate such accountants, attorneys, investment
advisors, and other agents, employees, and independent contractors as the
Board may deem necessary or advisable for the proper and efficient
administration of the Plan;
(e) To determine in the Board's discretion all questions relating to
eligibility;
(f) To make a determination in the Board's discretion as to the right of
any person to benefits under the Plan and to prescribe procedures to be
followed by distributees in obtaining benefits hereunder; and
(g) To make the determinations specified in Article III.
5.4 Indemnity. To the extent permitted by applicable law, the Company shall
indemnify and save harmless each member of the Board against any and all
expenses, liabilities and claims (including legal fees incurred to defend
against such liabilities and claims) arising out of the Board's discharge in
good faith of responsibilities under or incident to the Plan, including any
expenses, liabilities and claims that are caused by or result from an act or
omission constituting the negligence of such individual in the performance of
such responsibilities, but excluding expenses and liabilities that are caused
by or result from such individual's own gross negligence or willful
misconduct. This indemnity shall not preclude such further indemnities as may
be available under insurance purchased by the Company or provided by the
Company under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise, as such indemnities are permitted under applicable
law.
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VI.
MISCELLANEOUS
6.1 Shares Subject to the Plan. Subject to adjustment in the same manner as
provided in Section 6.2 with respect to shares of Stock subject to Options
then outstanding, the aggregate number of shares of Stock that may be issued
under the Plan shall not exceed 150,000 shares. Shares shall be deemed to have
been issued under the Plan to the extent paid as an annual retainer or subject
to an Option granted under the Plan. To the extent that an Option lapses or is
forfeited, any shares of Stock subject to such Option shall again be available
for use under the Plan. The Stock to be paid as an annual retainer or offered
pursuant to the grant of an Option may, at the discretion of the Company, be
authorized but unissued Stock or Stock previously issued and outstanding and
reacquired by the Company.
6.2 Recapitalization or Reorganization.
(a) The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization
or other change in the Company's capital structure or its business, any merger
or consolidation of the Company, any issue of debt or equity securities ahead
of or affecting Stock or the rights thereof, the dissolution or liquidation of
the Company or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding.
(b) If the Company shall effect a subdivision or consolidation of shares of
Stock or the payment of a stock dividend on Stock without receipt of
consideration by the Company, the number of Options which may thereafter be
granted and the number of Options that are outstanding (i) in the event of an
increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
(c) Except as hereinbefore expressly provided, no adjustment to the number
of Options outstanding or to be granted shall be made in the event of issuance
by the Company of shares of stock of any class or securities convertible into
shares of stock of any class for any purpose; upon direct sale; upon the
exercise of rights or warrants to subscribe therefor; upon conversion of
shares or obligations of the Company convertible into such shares or other
securities or otherwise.
6.3 Application of Rule 16b-3. It is intended that the Plan and any grant of
an Option made to a person subject to Section 16 the 1934 Act meet all of the
requirements of Rule 16b-3. If any provision of the Plan or any such Option
would disqualify the Plan, such Option under, or would otherwise not comply
with, Rule 16b-3, such provision or Option shall be construed or deemed
amended to conform to Rule 16b-3.
6.4 Payment of Expenses. All expenses incident to the administration of the
Plan, including, but not limited to, legal and accounting expenses and
expenses of the Board, shall be paid by the Company.
6.5 Not Contract for Services. The adoption and maintenance of the Plan
shall not be deemed to be a contract between the Company and any person or to
be consideration for the services of any person. Nothing herein contained
shall be deemed to give any person the right to be retained in the service of
the Company or to restrict the right of the Company to discharge any person at
any time nor shall the Plan be deemed to give the Company the right to require
any person to remain in the service of the Company or to restrict any person's
right to terminate such person's service at any time.
6.6 Other Laws; Withholding. The Company shall not be obligated to issue any
Stock as payment of an annual retainer or pursuant to any Option granted under
the Plan at any time when the shares covered by such Option have not been
registered under the Securities Act of 1933, as amended, and such other state
and federal laws, rules or regulations as the Company or the Board deems
applicable and, in the opinion of legal counsel for
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the Company, there is no exemption from the registration requirements of such
laws, rules or regulations available for the issuance and sale of such shares.
No fractional shares of Stock shall be delivered. All compensation and
payments provided for hereunder shall be subject to applicable withholding and
other deductions as shall be required of the Company under any applicable,
local, state or federal law.
6.7 Amendment and Termination. The Board may from time to time, in its
discretion, amend, in whole or in part, any or all of the provisions of the
Plan; provided, however, that no amendment may be made that would impair the
rights of a Nonemployee Director with respect to Options previously granted to
such Nonemployee Director. The Board may terminate the Plan at any time;
provided, however, that the termination of the Plan shall not affect Options
previously granted and outstanding under the Plan. Further, except with
respect to Options then outstanding, if not sooner terminated by the Board
pursuant to the preceding sentence, the Plan shall terminate upon and no
further Options shall be granted as of the date that the remaining number of
shares of Stock which may be issued under the Plan pursuant to Section 6.1 is
not sufficient to cover the Options required to be granted under Section 3.2.
6.8 Severability. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.
6.9 Governing Laws. All provisions of the Plan shall be construed in
accordance with the laws of Texas.
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EXECUTED this day of , 1998.
GOODRICH PETROLEUM CORPORATION
By:__________________________________
Name:_____________________________
Title:____________________________
<PAGE>
GOODRICH PETROLEUM CORPORATION
NONEMPLOYEE DIRECTORS COMPENSATION PLAN
EXHIBIT A--ANNUAL RETAINER AND MEETING FEES
Nonemployee Director Retainer (paid in Stock) $5,000 per year
Board Meeting Fees $1,000 per meeting
<PAGE>
PROXY PROXY
GOODRICH PETROLEUM CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 20, 1998
The undersigned hereby constitutes and appoints Walker 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 the Plaza Room, Luxury
Collection Hotel, 1919 Briar Oaks, Houston, Texas on May 20, 1998 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.
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.
(To be Signed and Continued on the Reverse Side.)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
GOODRICH PETROLEUM CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [_]
[ ]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS - For Withhold For All 2. To ratify the adoption of the For Against Abstain
Nominees: (Class III) Benjamin F. Edwards II, All All Except* Goodrich Petroleum Corporation [_] [_] [_]
Walter G. Goodrich, Arthur A. [_] [_] [_] Nonemployee Directors Compen-
Seeligson and (Class I) sation Plan.
Jeff H. Benhard.
3. Proposal to ratify the appoint- For Against Abstain
* To withhold authority to vote for any individual ment of KPMG Peat Marwich LLP as [_] [_] [_]
nominee, write that nominee's name on the line the Company's independent auditors
provided below: for the fiscal year ended December 31,
_______________________________________________ 1998.
------------------------------------------------------------------------ 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 FOUR NOMINEES AND FOR PROPOSALS
THIS AREA RESERVED FOR ADDRESSING 2 AND 3.
Dated: _______________________, 1998
Signature(s) __________________________________
------------------------------------------------------------------------ _______________________________________________
NOTE: WHEN SIGNING AS ATTORNEY, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. IF
MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. ALL JOINT
OWNERS MUST SIGN.
- ------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
