<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 (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] 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:
-------------------------------------------------------------------------
(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 20, 1999
----------------
To the Stockholders:
The annual meeting of the stockholders of Goodrich Petroleum Corporation, a
Delaware corporation (the "Company"), will be held at the Camelia Room, The
Houstonian Hotel, 111 North Post Oak Lane, Houston, Texas, on May 20, 1999, at
11:00 a.m. local time, for the following purposes:
1. To elect two directors to serve until the annual meeting of stockholders
in 2002; and
2. To ratify the appointment of KPMG LLP as the Company's independent
auditors for the fiscal year ended December 31, 1999; and
3. To transact such other business as may properly come before such meeting
or any adjournment(s) thereof.
The close of business on March 24, 1999, has been fixed as the record date
for the determination of stockholders entitled to receive notice of and to
vote at the 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 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
/s/ Walter G. "Gil" Goodrich
---------------------------------------
Walter G. "Gil" Goodrich
President and Chief Executive Officer
April 14, 1999
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 of stockholders (the "Annual Meeting") to be held at 11:00
a.m., local time on May 20, 1999, at the Camelia Room, The Houstonian Hotel,
111 North Post Oak Lane, 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 form of proxy will first be sent to stockholders is April 14,
1999.
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, 1999 (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, 1999,
there were 5,247,705 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 with receipt to each matter to be voted upon. 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,
1998, 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
Two 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 2000, 2001 and 1999. Sheldon Appel and Jeff H.
Benhard have been nominated to serve as Class III directors and, if elected,
will serve until the Company's 2002 annual meeting of stockholders or until
their respective successors shall have been elected and qualified. The
remaining directors named below will not be required to stand for election at
the Annual Meeting because their present terms expire in either 2000 or 2001.
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
<PAGE>
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 table sets forth certain information as of the record date for
each nominee for director and for each director including their name, age and
position with the Company:
Class III Directors and Nominees--Terms Expiring at the 1999 Annual Meeting
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Sheldon Appel............... 65 Director
Jeff H. Benhard............. 70 Director
Class I Director and Nominee--Terms to Expire at the 2000 Annual Meeting
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Basil M. Briggs............. 63 Director
Henry Goodrich.............. 68 Chairman of the Board, Director
Class II Directors--Terms Expiring at the 2001 Annual Meeting
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Benjamin F. Edwards, II..... 73 Director
Walter G. Goodrich.......... 40 President, Chief Executive Officer and Director
Arthur A. Seeligson......... 40 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.
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.
2
<PAGE>
Benhard initially became a director of the Company at its inception in August
1995. He resigned from the Board in December 1996 and was reelected to the
Board in May 1998.
Sheldon Appel has been involved in real estate development and finance since
1955 when he formed the Sheldon Appel Company.
Basil M. Briggs has been a practicing attorney in the Detroit, Michigan area
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 L. 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. is the Company's Senior Vice President and Chief
Operating Officer. He 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 was a partner
in and served as president 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 during
1998, 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,
Benhard and Briggs. Mr. Appel is chairman of the Audit Committee. The Audit
Committee's functions include making recommendations concerning the engagement
of independent auditors, reviewing with the independent auditors the plan for
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. Briggs, Edwards and Seeligson. Mr. Briggs serves as the chairman of
the Compensation Committee. The Compensation Committee's
3
<PAGE>
functions include the 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.
The Board of Directors held ten meetings in 1998. The Audit Committee and
the Compensation Committee each met two times in 1998. The Executive Committee
did not meet in 1998. Each director attended at least 90% 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, 1999, 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, 1999 was 5,247,705.
<TABLE>
<CAPTION>
Beneficial
Ownership
-----------------
Name of Beneficial Owner Amount Percent
------------------------ --------- -------
<S> <C> <C>
Walter G. Goodrich (1)........................................ 1,127,941 21.1%
5847 San Felipe, Suite 700
Houston, TX 77057
Henry Goodrich (2)............................................ 547,550 10.4%
333 Texas St., Suite 1350
Shreveport, LA 71101
Sheldon Appel (3)(4).......................................... 428,762 7.7%
2148 Federal Avenue, Suite A
Los Angeles, CA 90025
Roland L. Frautschi (5)....................................... 85,497 1.6%
Jeff Benhard (6).............................................. 8,901 *
Basil M. Briggs (4)........................................... 6,832 *
Benjamin F. Edwards, II (4)................................... 6,351 *
Arthur A. Seeligson (4)(7).................................... 24,851 *
Robert C. Turnham, Jr. (8).................................... 46,644 *
Directors and Executive Officers as a Group (8 persons)(9).... 1,775,651 31.4%
</TABLE>
- --------
* Less than 1%.
(1) Includes 527,769 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 issuable upon the conversion of 4,000 shares of Series A
Convertible Preferred Stock. Henry Goodrich and Walter G. Goodrich
beneficially own an aggregate of 1,147,722 shares, or 21.4% of the
outstanding shares of Common Stock.
(2) Includes 527,769 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. Henry Goodrich and Walter G. Goodrich
beneficially own an aggregate of 1,147,652 shares, or 21.4% of the
outstanding shares of Common Stock.
(3) Includes 104,136 shares of Common Stock, 255,254 shares issuable upon the
conversion of 227,905 shares of Series B Convertible Preferred Stock and
13,751 shares 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 50,372 shares issuable upon the conversion of 45,177
shares of Series B Convertible Preferred Stock held by a trust of which
Mr. Appel is trustee.
5
<PAGE>
(4) Includes 5,250 shares issuable upon the exercise of outstanding stock
options, exercisable within 60 days of the Record Date, under the
Company's 1995 Nonemployee Director Compensation Plan.
(5) Includes 1,583 shares issuable upon the conversion of 3,500 shares of
Series A Convertible Preferred Stock held and 300 shares of Series A
Convertible Preferred Stock by his wife.
(6) Includes 4,313 shares issuable upon the exercise of outstanding stock
options, exercisable within 60 days of the Record Date, under the
Company's 1997 Nonemployee Director Compensation Plan. Also includes 2,500
shares of Common Stock held by Mr. Benhard's wife.
(7) Includes 3,750 shares issuable upon the exercise of outstanding stock
options, exercisable within 60 days of the Record Date, under the
Company's 1995 Stock Option Plan.
(8) Includes 1,375 shares issuable upon the conversion of 3,300 shares of
Series A Convertible Preferred Stock. Also includes 21,450 shares of
Common Stock and 2,084 shares issuable upon the conversion of 5,000 shares
of Series A Convertible Preferred Stock held by Mr. Turnham's wife.
(9) The number of shares of Common Stock beneficially owned by all executive
officers and directors as a group includes (i) 25,313 shares issuable upon
the exercise of outstanding stock options, exercisable within 60 days of
the Record Date, under the Company's 1995 Nonemployee Director
Compensation Plan, (ii) 3,750 shares issuable upon the exercise of
outstanding stock options, exercisable within 60 days of the Record Date,
under the Company's 1995 Stock Option Plan, (iii) 20,460 shares issuable
upon the conversion of 49,100 shares of Series A Convertible Preferred
Stock, and (iv) 436,296 shares issuable upon the conversion of 389,550
shares of Series B Convertible Preferred Stock.
Director Compensation
General. For serving as a member of 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 incurred
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.
Nonemployee Director Compensation Plan. The Goodrich Petroleum Corporation
Directors Compensation Plan (the "Director Compensation Plan") provides for
both discretionary option and formula option grants and will 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 purposes
of the Director Compensation 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 Directors Compensation Plan provides for an annual fee of $5,000 (in
cash or common stock) to be paid to each nonemployee director. The Directors
Compensation Plan also provides for the annual issuance of options to purchase
2,000 shares of Common Stock to each nonemployee director on the date of the
Company's annual meeting of stockholders.
The Directors Compensation Plan also provides for the payment of $1,000 to
each nonemployee director 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 of Directors or committees thereof.
The maximum number of shares that may be issued under the Directors
Compensation Plan is 150,000. Options granted under the Directors Compensation
Plan have a term of 10 years and are 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
6
<PAGE>
for up to four years from the date of such termination, but only as to the
number of shares such optionee could have purchased on the date of termination
from the Board of Directors. Discretionary option grants are exercisable as
determined by the Board of Directors, and formula option grants are 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 certain information with respect to the
compensation earned by the Company's executive officers for services rendered
in all capacities during the years indicated.
<TABLE>
<CAPTION>
Long-Term
Compensation--
Annual Securities
Compensation(1) Underlying
Name and Principal Fiscal --------------- Options All Other
Position Year Salary Bonus (Number) Compensation(2)
------------------ ------ ------ ------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Walter G. Goodrich........ 1998 $150,000 $ -- 26,800 $3,225
President and Chief 1997 $150,000 30,000 25,000 4,400
Executive Officer 1996 $150,000 17,000 -- --
Roland L. Frautschi....... 1998 $ 85,861 $ -- 16,080 $2,620
Senior Vice President and 1997 $ 85,861 18,000 -- 2,619
Chief Financial Officer 1996 $ 82,530 11,000 12,500 --
Robert C. Turnham, Jr..... 1998 $ 94,003 $ -- 16,080 $2,929
Senior Vice President and 1997 $ 94,003 18,000 -- 1,084
Chief Operating Officer 1996 $ 80,863 11,000 12,500 --
</TABLE>
- --------
(1) 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.
(2) 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").
7
<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 subsidiaries 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
8
<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 1998 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...... 26,800 23% $6.46 5/20/2003 $47,832 $105,696
</TABLE>
Stock Option Exercises and Year-End Holdings
The named executive officers did not exercise any stock options during 1998.
At the February 25, 1999 meeting of the Board of Directors, the Board of
Directors approved a surrender/regrant program whereby employees and directors
of the Company could surrender their present options and be regranted options
equal to 75% of their previous number of options. Vesting periods for the
regranted options began with the regrant date and the options will have an
exercise price equal to the closing stock price on the date of declaration by
the Board of Directors.
9
<PAGE>
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, 1998 at December 31, 1998(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Walter G. Goodrich.......... 29,688 53,362 $-- $--
Roland L. Frautschi......... 16,250 31,080 $-- $--
Robert C. Turnham, Jr....... 12,500 28,580 $-- $--
</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, 1998 was $1.31 per share based on the closing sales
price on the New York Stock Exchange on such date.
In February 1999 pursuant to the aforementioned stock option
surrender/regrant program, Walter G. Goodrich surrendered stock options
totaling 83,050, and was regranted stock options totaling 62,288. Such stock
options have a four year vesting period beginning on February 25, 1999 and an
exercise price per share of $0.83. Roland L. Frautschi and Robert C. Turnham,
Jr., surrendered stock options totaling 47,330 and 41,080, respectively, and
were regranted stock options totaling 35,498 and 30,810, respectively. Such
stock options have a five year vesting period beginning February 25, 1999 and
an exercise price per share of $0.75.
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 1998.
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 at a level comparable
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. The Board also 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 1998, 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
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 1998 were determined based on the foregoing
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. There were no cash or stock bonuses awarded to executive
officers for 1998 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 Compensation Committee
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 Prudential Securities E & P Small
Cap Price Index for the period beginning August 15, 1995 (the Company's
inception) and ending December 31, 1998. The Everen Securities Small Cap E & P
Index, which was used in last year's proxy statement, is no longer available
and, accordingly, was not used for this year's performance graph. 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 $1.31 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 Prudential Securities
E & P Small Cap Price Index
[Performance Graph appears here]
Prudential Securities
E & P Small
Goodrich Petroleum S&P 500 Cap Price Index
------------------ ------- ---------------------
8/15/95 100 100 100
12/29/95 86.65 110.27 106.49
6/28/96 86.91 120.06 142.22
12/31/96 73.32 132.61 181.29
6/30/97 73.32 158.48 181.56
12/31/97 113.31 173.74 197.38
6/30/98 74.15 202.99 165.99
12/31/98 17.5 220.1 86.79
12
<PAGE>
Compensation Committee Interlocks and Insider Participation
During 1998, 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, 1998,
all Section 16(a) filing requirements applicable to its officers, directors
and greater than 10% stockholders were complied with.
Certain Relationships and Other Transactions
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 nine, nine and eleven, respectively, of the
twenty-three wells drilled by the Company during 1998. Such persons have paid
their pro rata share of all expenses associated with their interest in each
prospect. During 1998, 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 received options to purchase 26,800 shares of Common Stock in 1998.
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.
13
<PAGE>
PROPOSAL 2--APPROVAL OF AUDITORS
The Board has appointed the firm of KPMG LLP as the Company's independent
auditors for the fiscal year ending December 31, 1999, subject to ratification
by the Company's stockholders. KPMG LLP has acted as the Company's auditors
since its inception in 1995. A representative of KPMG 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 1999 Annual Meeting is required
to ratify the appointment of KPMG LLP as the Company's independent auditors
for fiscal year 1999. 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 LLP, and proxies executed and returned will be so voted
unless contrary instructions are indicated thereon.
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 2000 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 2000 must be received by the Company, addressed
to Lonnie J. Shaw, Secretary, 5847 San Felipe, Suite 700, Houston, Texas
77057, no later than January 21, 2000, 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. For a stockholder's notice to be timely with respect
to business to be brought before the annual meeting of stockholders of the
Company to be held in 2000, it 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, 2000. 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
14
<PAGE>
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 2000 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. For a stockholder's notice
to be timely with respect to business to be brought before the annual meeting
of stockholders of the Company to be held in 2000, it must 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,
2000, 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.
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
/s/ Walter G. "Gil" Goodrich
------------------------------------
Walter G. "Gil" Goodrich
President and Chief Executive Officer
Houston, Texas
April 14, 1999
15
<PAGE>
GOODRICH PETROLEUM CORPORATION
Proxy Solicited on Behalf of the Board of Directors of
the Company for the Annual Meeting of Stockholders on May 20, 1999
The undersigned hereby constitutes and appoints Walter G. Goodrich and
Lonnie J. Shaw 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 Camelia Room, The Houstonian Hotel, 111
North Post Oak Lane, Houston, Texas on May 20, 1999 at 11:00 a.m., local time,
and any adjournments(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. / /
[ ]
For Withhold For All
All All Except*
1. Election of Directors - / / / / / /
Nominees: (Class III) Sheldon Appel
and Jeff H. Benhard.
* To withhold authority to vote for any individual
nominee, write that nominee's name on the line
provided below:
_______________________________________________
For Against Abstain
2. Proposal to ratify the appointment of KPMG Peat / / / / / /
Marwick LLP as the Company's independent auditors
for the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
<S> <C>
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 Proposal 2.
</TABLE>
Dated:_____________________, 1999
Signature(s)___________________________________________
_______________________________________________________
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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.
