SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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
The Beard Company
(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.
Title of each class of securities to which transaction applies:
_________________________________________________
Aggregate number of securities to which transaction applies:
_________________________________________________
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):
_________________________________________________
Proposed maximum aggregate value of transaction:
_________________________________________________
Total fee paid: ________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset 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.
Amount previously paid:________________
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Filing Party:_________________________________
Date Filed:_______________________________
NOTICE OF
SPECIAL MEETING IN LIEU OF
ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD
SEPTEMBER 1, 2000
AND PROXY STATEMENT
THE BEARD COMPANY
THE BEARD COMPANY
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
August 7, 2000
Dear Stockholders:
We invite you to attend the annual meeting of
stockholders of The Beard Company (the "Company") which will
be held in Oklahoma City on Friday, September 1, 2000. The
matters to be considered at the meeting are described in the
formal notice and proxy statement on the following pages.
After completing the business of the meeting, including
a reverse stock split and the election of two directors, we
will discuss fiscal year 1999 activities and the current
outlook for the Company. There will be a period for
questions and for discussion with your directors and
officers.
If you plan to be present, please notify the Secretary
of the Company so that the necessary arrangements can be
made for your attendance. Regardless of whether you plan to
personally attend, it is important that your shares be
represented at this meeting. Please date, sign and return
your proxy card in the enclosed envelope at your earliest
convenience.
W. M. BEARD HERB MEE, JR.
Chairman President
THE BEARD COMPANY
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
NOTICE OF SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
Friday, September 1, 2000
TO THE STOCKHOLDERS OF THE BEARD COMPANY:
You are hereby notified that a Special Meeting in Lieu of
Annual Meeting of Stockholders of The Beard Company (the
"Company") will be held on September 1, 2000 at 9:00 a.m. at the
Hilton Inn Northwest, located at 2945 N. W. Expressway, Oklahoma
City, Oklahoma 73112, for the purpose of considering and voting
upon the following matters:
(1) A proposal to complete a 3-for-4 reverse stock split of the
Company's outstanding common stock, and other related matters.
(2) The election of two (2) directors of the Company for three
year terms.
(3) The approval of the appointment of Cole & Reed, P.C. as
independent auditors of the Company for fiscal year 2000.
(4) Such other business as may properly come before the
meeting or any adjournment thereof.
The transfer books will not be closed, but only stockholders
of record at the close of business on July 21, 2000 will be
entitled to notice of and to vote at the meeting. A complete
list of the stockholders entitled to vote at the meeting shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for ten
days prior to the meeting, at the offices of the Company,
Enterprise Plaza, Suite 320, 5600 North May Avenue, Oklahoma
City, Oklahoma.
You are cordially invited to attend the meeting. Even if
you plan to attend, you are requested to date, sign and return
the enclosed proxy at your earliest convenience in the enclosed
envelope. You may revoke your proxy at any time prior to
exercise.
By Order of the Board of Directors
Rebecca G. Witcher
Secretary
Oklahoma City, Oklahoma
Dated August 7, 2000
THE BEARD COMPANY
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, Oklahoma 73112
PROXY STATEMENT
This Proxy Statement is furnished to the stockholders of The
Beard Company ("Beard" or the "Company") in connection with the
solicitation of proxies to be used in voting at the special
meeting of stockholders to be held September 1, 2000, in lieu of
the 2000 annual meeting. It is first being mailed to
stockholders on or about August 7, 2000. THE ENCLOSED PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
A person giving the enclosed proxy has the power to revoke
it by giving notice to the Secretary in person, or by written
notification actually received by the Secretary, or by
subsequently granting a later dated proxy relating to the same
shares, at any time prior to its being exercised.
The Company will bear the cost of soliciting proxies,
including the charges and expenses of brokerage firms and others
for forwarding solicitation material to beneficial owners of
stock. It is possible that further solicitation of proxies will
be made by telephone or oral communication with some stockholders
of the Company following the original solicitation. All such
further solicitations will be made by regular employees of the
Company who will not be additionally compensated therefor, and
the cost will be borne by the Company.
THE COMPANY'S ANNUAL REPORT ON SECURITIES AND EXCHANGE
COMMISSION FORM 10-K (THE "FORM 10-K") INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999, WAS PREVIOUSLY DELIVERED TO SHAREHOLDERS.
VOTING SECURITIES OUTSTANDING
As of June 30, 2000, 2,438,724 shares of common stock and
27,838 shares of preferred stock of the Company had been issued
and were outstanding. Each share of common stock is entitled to
one vote on all matters presented at the meeting. Each share of
preferred stock is entitled to one vote for each full share of
common stock into which it would have been convertible had it
been convertible on the record date (5.129425 shares).
Accordingly, a total of 2,581,516 votes are entitled to be cast
at the meeting, and the holders of the preferred stock are
entitled to cast 17.62% of such votes. Only holders of common
stock and preferred stock of record at the close of business on
July 21, 2000, will be entitled to vote at the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the name and address of each
shareholder who is known to the Company to own beneficially more
than 5% of Beard's outstanding common stock or preferred stock,
the number of shares beneficially owned by each and the
percentage of outstanding common or preferred stock so owned as
of June 30, 2000. Unless otherwise noted, the person named has
sole voting and investment powers over the shares reflected
opposite his name.
Number of Number of Combined
Preferred Common Common and
Shares and Percent Shares and Percent Preferred
Nature of of Nature of of Voting
Name and Address Ownership Class Ownership Class(8) Percentage(8)
- --------------------------------------------------------------------------------
John Hancock Financial
Services, Inc. (Hancock) 27,838 100.00% 312,040(1)(2) 12.80%(2) 17.62%
57th Floor
200 Clarendon Street
Boston, Massachusetts 02117
Dimensional Fund None 0.00% 152,265(3) 6.24% 5.90%
Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
The Beard Group 401(k)
Trust None 0.00% 240,042(4) 9.84% 9.30%
c/o Bank One, Oklahoma,
N.A., Trustee
100 N. Broadway Avenue
Oklahoma City, OK 73102
W. M. Beard None 0.00% 858,667(5) 35.03% 33.10%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
Lu Beard None 0.00% 308,186(6) 12.64% 11.94%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
Herb Mee, Jr. None 0.00% 388,858(7) 15.79% 14.92%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
_________________
(1) Shares are held by Hancock on behalf of itself and
affiliated entities.
(2) Excludes the Beard preferred shares which will collectively
become convertible into 5.53% of the outstanding common stock
(after conversion) on January 1, 2003 to the extent not
previously redeemed or converted.
(3) Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor, is deemed to have beneficial
ownership of 152,265 shares, all of which shares are held in
portfolios of investment companies and commingled group
trusts which Dimensional serves as investment manager.
Dimensional disclaims beneficial ownership of all such
shares.
(4) Represents shares owned by The Beard Group 401(k) Trust (the
"401(k) Trust") at March 31, 2000 (latest information
available). Shares held by the 401(k) Trust are owned by
the participating employees, each of whom has sole voting
and investment power over the shares held in his or her
account. Includes 103,161.69 and 119,092.16 shares held for
the accounts of Messrs. Beard and Mee, respectively.
(5) Includes 206,166 shares owned directly by Mr. Beard as to
which he has sole voting and investment power; 306,507
shares (or 12.57%) owned by the William M. Beard and Lu
Beard 1988 Charitable Unitrust (the "1988 Unitrust"), of
which Mr. Beard and his wife, Lu Beard, serve as co-trustees
and share voting and investment power; 48,286 shares held
by the William M. Beard Irrevocable Trust "A," 68,432 shares
held by the William M. Beard Irrevocable Trust "B," and
83,549 shares held by the William M. Beard Irrevocable Trust
"C" (collectively, the "Beard Irrevocable Trusts") of which
Messrs. Beard and Herb Mee, Jr. are trustees and share
voting and investment power; 6,738 shares each held by the
John Mason Beard II Trust and by the Joseph G. Beard Trust
as to which Mr. Beard is the trustee and has sole voting and
investment power; 3,256 shares held by the Rebecca Banner
Beard Lilly Living Trust as to which Mr. Beard is a co-
trustee and shares voting and investment power with his
daughter; 103,161.69 shares held by The Beard Group 401(k)
Trust (the "401(k) Trust") for the account of Mr. Beard as
to which he has sole voting and investment power; and 13,333
shares held by B & M Limited, a general partnership, of
which Mr. Beard is a general partner and shares voting and
investment power with Mr. Mee. Also includes 12,500 shares
subject to presently exercisable options. Excludes 1,679
shares owned by his wife as to which Mr. Beard disclaims
beneficial ownership.
(6) Represents 306,507 shares owned by the 1988 Unitrust, of
which Mr. Beard and Mrs. Beard serve as co-trustees and
share voting and investment power. Also includes 1,679
shares owned directly by Mrs. Beard as to which she has sole
voting and investment power.
(7) Includes 25,005 shares owned directly by Mr. Mee as to which
he has sole voting and investment power; 6,666 shares held
by Mee Investments, Inc., as to which Mr. Mee has sole
voting and investment power; 13,333 shares held by B & M
Limited as to which Mr. Mee shares voting and investment
power with Mr. Beard but as to which Mr. Mee has no present
economic interest; and 1119,092.16 shares held by the 401(k)
Trust for the account of Mr. Mee as to which he has sole
voting and investment power. Also includes 200,267 shares
held by the Beard Irrevocable Trusts as to which Mr. Mee is
a co-trustee and shares voting and investment power with Mr.
Beard but as to which Mr. Mee has no pecuniary interest and
disclaims beneficial ownership. Also includes 24,495 shares
subject to presently exercisable options. Excludes 45
shares owned by his wife, Marlene W. Mee, as to which Mr.
Mee disclaims beneficial ownership.
(8) All percentages reflected above exclude 393,405 common
shares held by the Company as treasury stock.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding
the number of shares of Beard common stock beneficially owned by
each director and nominee, the Chief Executive Officer ("CEO"),
each named executive officer and by all directors and executive
officers as a group and the percentage of outstanding common
stock so owned as of June 30, 2000.
Amount and
Nature of
Beneficial Percent
Name and Address Ownership of Class(6)
---------------- ---------- -----------
W. M. Beard 858,667(1) 35.03%
Herb Mee, Jr. 388,858(2) 15.79%
Michael E. Carr 28,643 1.17%
Ford C. Price 18,665(3) ---(5)
Allan R. Hallock 2,500 ---(5)
Harlon E. Martin, Jr. 1,000 ---(5)
Jack A. Martine 11,375 ---(5)
Rebecca G. Witcher 3,880 ---(5)
All directors and executive
officers as a group
(8 in number) 1,099,988(4) 44.20%
__________________
(1) See footnote (5) to table "Security Ownership of Certain
Beneficial Owners."
(2) See footnote (7) to table "Security Ownership of Certain
Beneficial Owners."
(3) Includes 10,399 shares owned directly by Mr. Price and 3,266
shares held by an IRA for the benefit of Mr. Price, as to all of
which he has sole voting and investment power, and 5,000 shares
held by the FCP Trust as to which he has shared voting and
investment power.
(4) Includes 571,625 shares as to which directors and executive
officers have sole voting and investment power and 528,363 shares
as to which they share voting and investment power with others.
(5) Reflects ownership of less than one (1) percent.
(6) See footnote (8) to table "Security Ownership of Certain
Beneficial Owners."
APPROVAL OF A 3-FOR-4 REVERSE STOCK SPLIT
(Proposal No. 1)
Purpose Of The Reverse Split
Beard proposes to engage in a 3-for-4 reverse stock
split of its outstanding shares of common stock by amending its
Certificate of Incorporation to decrease the number of shares of
common stock authorized for issuance by Beard and increasing the
par value of the shares. Upon approval of the reverse stock
split, Beard will file an amendment to its Certificate of
Incorporation. Upon filing the amendment, each four shares of
Beard's common stock, par value $0.001, held by stockholders as
of the record date will automatically convert into three shares
of Beard's new common stock, par value $0.001333.
The primary reason for the reverse stock split is to
comply with the Philadelphia Stock Exchange listing requirements.
Beard's common stock is currently listed on the American Stock
Exchange; however, upon completion of the reverse stock split,
Beard plans to qualify for listing on the Philadelphia Stock
Exchange. Beard does not currently satisfy the listing
requirements of the American Stock Exchange or the Philadelphia
Stock Exchange. Unless the reverse stock split occurs, Beard's
stock will likely be delisted from the American Stock Exchange
and be traded on the OTC Bulletin Board.
Beard's Board of Directors and management believe that
it is in the best interests of Beard and its stockholders to file
an application to list Beard's shares on the Philadelphia Stock
Exchange. The Company believes that, upon completion of the
reverse stock split and subject to meeting the Exchange's stock
price requirements, Beard will meet the requirements for listing
on the Philadelphia Stock Exchange, which will provide Beard's
stockholders with greater liquidity than if the stock were traded
on the OTC Bulletin Board. The Philadelphia Stock Exchange will
require a stock price of $3.00 per share on each of the five
business days prior to the application date, and there is no
assurance that the stock will trade at that price.
A listing on the Philadelphia Stock Exchange will also
provide Beard's stock with a continued exemption from the
limitations on trading applicable to "penny stocks," defined as
any stock traded at below $5 per share except stocks listed on a
national exchange or authorized for quotation on a national
quotation service. Certain policies and practices of the
securities industry relating to penny stocks may tend to
discourage individual brokers and brokerage firms from dealing in
these stocks. Some of these policies and practices involve time-
consuming procedures that make the handling of lower-priced
stocks economically unattractive. The brokerage commission on a
sale of penny stock may also represent a higher percentage of the
sale price than the brokerage commission on a higher priced
issue. Any reduction in brokerage commissions resulting from a
reverse split may be offset, however, in whole or in part, by
increased brokerage commissions required to be paid by
stockholders selling "odd lots" created by the reverse split.
In order to satisfy the listing requirement of the
Philadelphia Stock Exchange, Beard has determined that it is
necessary to complete the 3-for-4 reverse stock split. Subject
to the stock price requirement noted above, the Company believes
that it will meet all of the listing criteria of the Philadelphia
Stock Exchange upon the completion of the reverse stock split;
however, there can be no assurance that Beard will meet or
maintain these listing requirements in the future.
Amendment To Certificate Of Incorporation
In order to complete the reverse stock split, Beard's
Board of Directors has unanimously adopted resolutions approving
and recommending that stockholders authorize an amendment of
Beard's Certificate of Incorporation to (i) effect a 3-for-4
reverse split of Beard's outstanding shares of common stock,
decreasing the number of shares of common stock authorized to be
issued by the Company from 10,000,000 to 7,500,000 and increasing
the par value of the common stock from $0.001 to $0.001333, and
(ii) provide for the payment of cash in lieu of fractional shares
otherwise issuable in connection therewith.
If the reverse stock split is approved by the holders
of a majority of Beard's outstanding shares of common stock, the
Board of Directors will have authority to complete the reverse
split, pursuant to which each four shares of Beard's common stock
which are outstanding as of the record date would be converted
into three new shares of common stock. The Board of Directors
will have the authority to determine the exact timing of the
effective date of the reverse stock split without further
stockholder approval. The Board currently plans to effect the
reverse split by filing the amendment to its Certificate of
Incorporation immediately upon obtaining stockholder approval.
The Board of Directors also reserves the right,
notwithstanding stockholder approval and without further action
by stockholders, not to proceed with the reverse stock split if,
at any time prior to filing the amendment to the Certificate of
Incorporation with the Oklahoma Secretary of State, the Board of
Directors, in its sole discretion, determines that the reverse
split is no longer in the best interests of Beard and its
stockholders. The Board of Directors may consider a variety of
factors in determining whether or not to implement the reverse
stock split including, but not limited to, overall trends in the
stock market, recent changes and anticipated trends in the per
share market price of the common stock, and business and
transactional developments. Beard's Board of Directors presently
intends to complete the reverse split immediately upon obtaining
stockholder approval.
Certain Effects Of The Reverse Split
Common Stock. The reverse stock split will not change
the proportionate equity interests of Beard's stockholders, nor
will the respective voting rights and other rights of
stockholders be altered, except for possible immaterial changes
due to Beard's purchase of fractional shares. The common stock
issued pursuant to the reverse stock split will remain fully paid
and nonassessable. Beard will continue to be subject to the
periodic reporting requirements of the Securities Exchange Act of
1934, as amended.
The following table illustrates the principal effects
of the reverse split on Beard's common stock:
Prior To After
Reverse Reverse
Number of Shares Split Split
---------------- ---------- ----------
Authorized 10,000,000 7,500,000
Outstanding 2,438,724 1,829,043
Reserved for Issuance:
The Beard Company 1993 Stock
Option Plan 179,495 134,621
The Beard Group 401(k) Plan 61,700 46,275
The Beard Company Deferred Stock
Compensation Plan 92,801 69,600
Available for Future Issuance 7,561,276 5,670,957
This table gives effect to the reverse stock split as
if it occurred on the record date, subject to adjustment
resulting from the repurchase of fractional shares. Upon
effectiveness of the reverse stock split, each option issued
under the 1993 Stock Option Plan would entitle the holder to
acquire a number of shares equal to the number of shares which
the holder was entitled to acquire prior to the reverse split
multiplied by 0.75 at the exercise or conversion price in effect
immediately prior to the reverse split divided by 0.75.
Stockholders should recognize that if the reverse stock split is
effectuated they will own fewer shares of Beard common stock than
they presently own. For example, a stockholder who owns 100
shares of Beard's common stock on the record date will own 75
shares of Beard's common stock after the reverse stock split is
effective.
While Beard expects that the reverse stock split will
result in an increase in the market price of its common stock,
there can be no assurance that the reverse split will increase
the market price of the common stock or result in the permanent
increase in the market price (which is dependent upon many
factors, including Beard's performance and prospects). Also, if
the market price of Beard's common stock declines, the percentage
decline may be greater than would result in the absence of the
reverse split. The possibility also exists that liquidity in the
market price of the common stock could be adversely affected by
the reduced number of shares that would be outstanding after the
reverse split. In addition, the reverse split may increase the
number of stockholders of Beard who own less than 100 shares.
Stockholders who hold less than 100 shares typically will
experience an increase in the cost of selling their shares, as
well as greater difficulty in effecting such sales. There can be
no assurance that the reverse stock split will achieve the
desired results that have been outlined above.
Preferred Stock. Beard's Certificate of Incorporation
provides that, in the event of a reverse stock split, the
conversion ratio of the Company's Series A Convertible Redeemable
Preferred Stock (the "Preferred Stock") will be adjusted. Prior
to the proposed 3-for-4 stock split, each share of the Preferred
Stock would have been convertible on January 1, 2003 into
5.129425 shares of the Company's Common Stock. If the
shareholders approve the proposed split, the conversion ratio
will be adjusted to 3.84706875. The following table gives effect
to the adjustment if the proposal is approved:
CONVERTIBLE INTO THE
PREFERRED SHARES FOLLOWING NUMBER OF COMMON SHARES
Outstanding PRE-SPLIT POST-SPLIT
----------- --------- ----------
27,838 142,792 107,094
Procedure For Effecting Reverse Split and Exchange of Stock
Certificates
Upon stockholder approval of the amendment to the
Certificate of Incorporation to effect the reverse stock split,
and if the Board of Directors still believes that the reverse
split is in the best interests of Beard and its stockholders,
Beard will file the amendment to its Certificate of Incorporation
with the Oklahoma Secretary of State at such time as the Board of
Directors has determined the appropriate effective date for the
reverse stock split. The reverse split will become effective on
the date of filing the amendment. The Board of Directors
presently anticipates that the effective date will be
approximately September 1, 2000. The amendment to the
Certificate of Incorporation which will effect the reverse stock
split requires approval of a majority of the issued and
outstanding shares of Beard's common stock.
Beginning on the effective date of the reverse split,
each certificate representing shares of Beard common stock
outstanding prior to the effective date will be deemed for all
corporate purposes to evidence ownership of new shares. After
the reverse split, stockholders holding shares on the record date
will not be required to exchange their current certificates
representing old shares to certificates representing new shares.
New certificates will be issued in place of old certificates upon
being presented for transfer or exchange; provided that
stockholders may, at their option, exchange their old
certificates for new certificates at any time by delivering the
current certificate(s) to the Company's transfer agent duly
endorsed for transfer and with proper instructions.
Please note that all stock certificates sent to the
Company's transfer agent should be duly endorsed for transfer;
otherwise, they will be returned to you.
Fractional Shares
No certificates will be issued for fractional shares
that result in connection with the reverse stock split.
Stockholders who would be entitled to receive fractional shares
after the reverse stock split is effected will be entitled to a
cash payment in lieu of the fractional shares. In order to
receive the cash payment, stockholders must surrender any
certificates representing fractional shares to the Company, which
will then issue a new certificate representing the whole number
of shares to which the holder is entitled as a result of the
reverse split plus a cash payment in place of the fractional
shares at a price equal to the fraction to which the stockholder
would otherwise be entitled multiplied by the average of the
closing prices of the common stock, as reported in the Wall
Street Journal for the last ten (10) trading days prior to the
effective date (or if such price is not available, the average of
the last bid and ask prices of the common stock on such days or
other price determined by the Board of Directors). The ownership
of a fractional interest will not give the holder thereof any
voting, dividend or other rights except to receive payment
therefor as described herein.
Stockholders should be aware that, under the escheat
laws of the various jurisdictions where stockholders reside,
where Beard is domiciled and where the funds will be deposited,
sums due for fractional interests that are not timely claimed
after the effective date may be required to be paid to the
designated agent for each such jurisdiction, unless
correspondence has been received by Beard or the exchange agent
concerning ownership of such funds within the time permitted in
such jurisdiction. Thereafter, stockholders otherwise entitled
to receive such funds will have to seek to obtain them directly
from the state to which they were paid.
Federal Income Tax Consequences Of The Reverse Split
The following is a summary of certain material U.S.
federal income tax consequences of the reverse split and does not
purport to be complete. It does not discuss any state, local,
foreign or minimum income or other U.S. federal tax consequences.
Also, it does not address the tax consequences to stockholders
that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding
companies, foreign entities, nonresident alien individuals,
broker-dealers and tax-exempt entities. The discussion is based
on the provisions of the U.S. federal income tax law as of the
date hereof, which is subject to change retroactively as well as
prospectively. This summary also assumes that the old shares
were, and the new shares will be, held as a "capital asset," as
defined in the Internal Revenue Code of 1986, as amended. The
tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of such stockholder.
Each Stockholder Should Consult With Such Stockholder's
Own Tax Advisor With Respect To The Consequences Of The Reverse
Split.
The reverse stock split is an isolated transaction and
is not part of a plan to periodically increase any stockholder's
proportionate interest in the assets or earnings and profits of
Beard. As a result, no gain or loss should be recognized by a
stockholder of Beard upon the conversion of such stockholder's
old shares for new shares pursuant to the reverse split (except
to the extent of any cash received in lieu of a fractional new
share).
Cash payments in lieu of a fractional new share should
be treated as if the fractional share were issued to the
stockholder and then redeemed by Beard for cash. A Company
stockholder receiving such payment should recognize gain or loss
equal to the difference, if any, between the amount of cash
received and the stockholder's basis in the fractional share
(determined as provided below). Such gain or loss will be
capital gain or loss with respect to a stockholder provided the
payment of cash in lieu of the fractional share is a mere
mechanical rounding off of fractions and not separately bargained
for consideration and the payment is otherwise "not essentially
equivalent to a dividend."
For this purpose, a payment is not essentially
equivalent to a dividend if it results in a "meaningful
reduction" in the stockholder's percentage interest in Beard,
taking into account the constructive ownership rules and
redemptions of fractional shares from all of the stockholders.
The Internal Revenue Services has ruled publicly that any
reduction in the percentage interest of a small minority
stockholder in a publicly-held corporation who exercises no
control over corporate affairs should constitute a meaningful
reduction. The aggregate tax basis of the new shares received in
the reverse split (including any fraction of a new share deemed
to have been received) will be the same as the stockholder's
aggregate tax basis in the old shares exchanged therefor.
Lack Of Appraisal Rights
Pursuant to the Oklahoma General Corporation Act,
dissenting stockholders will not have appraisal rights if the
proposed reverse split is effected.
Resolution To Be Adopted
In connection with the proposed reverse split,
resolutions in substantially the following form will be adopted
by the written consent of the holders of a majority of Beard's
issued and outstanding shares of common stock:
RESOLVED, that the Board of Directors is hereby
authorized, in its discretion, at any time prior to
November 1, 2000, to effect a reverse split pursuant to
which each four (4) shares of Beard's common stock
shall be exchanged for three (3) shares of reclassified
common stock; and
FURTHER RESOLVED, that the Directors and Officers of
Beard are hereby authorized and directed to execute,
deliver and file, as appropriate, such documents, if
any, as may be necessary or convenient with the
Secretary of State of the State of Oklahoma and such
other federal, state and local authorities, and to take
such other steps as are in their sole judgment
necessary or appropriate, to give effect to such
reclassification of shares; and
FURTHER RESOLVED, that if the reverse split is
effectuated by the Board of Directors, it shall be
implemented on the following terms and under the
following procedures:
a. Immediately upon the reverse split becoming effective, the
shares of common stock outstanding prior to the reverse split
shall be converted at a ratio of four-to-three into shares of
fully-paid and non-assessable common stock. Any owner of less
than a single full share of new stock shall be entitled to
receive, in lieu of any interest in new stock in such fractional
interest, a cash payment from Beard in an amount equal to the
fair value of such fraction of a share equal to (i) the amount of
such fraction, multiplied by (ii) the average of the closing
prices of the common stock, as reported in the Wall Street
Journal, for the last ten (10) trading days prior to the
effective date of the reverse split or, if such prices are not
available, the average of the last bid and ask prices of the
common stock on such days or other price as determined by the
Board of Directors, multiplied by (iii) 1.3333.
b. From and after the effective date of the reverse split,
certificates representing shares of old stock shall be deemed to
represent only the right to receive either (i) shares of new
stock to which an individual shareholder would be entitled, or
(ii) payment in cash of the fair value of the fractional shares
represented by such old stock.
FURTHER RESOLVED, that the officers of Beard are hereby
authorized and directed to do all other things and
execute and file all documents which in their sole
judgment are deemed to be necessary and proper to carry
out the intent of the foregoing resolutions.
ELECTION OF DIRECTORS
(Proposal No. 2)
The Company's Certificate of Incorporation (the
"Certificate") provides for a Board of Directors of not more than
nine nor less than three directors, including one director
elected by the preferred stockholders, as determined from time to
time by the Board. The Certificate also provides that the
portion of the Board of Directors which is elected by the Beard
common stockholders shall be divided into three classes as nearly
equal in number as possible, with the term of office of one class
expiring each year.
At the meeting, two directors are to be elected by the
common stockholders for a three-year term expiring at the date of
the Annual Meeting of Stockholders in 2003. The terms of Messrs.
Allan R. Hallock and Ford C. Price expire this year, and they
will be the two nominees for terms expiring in 2003. The Beard
preferred stockholders filled the directorship vacancy which they
were entitled to fill in February 1994 by the election of Michael
E. Carr, who will continue to serve in such capacity until his
successor has been elected.
It is the intention of the persons named in the accompanying
form of Proxy to vote Proxies for the election of the above-named
nominees. Each nominee has served continuously as director of
the Company or of its predecessors since first elected. In the
event that any of the nominees should for some reason, presently
unknown, fail to stand for election, the resulting vacancy would
be filled at such time as the board finds a suitable candidate.
The election of directors at this meeting will be by plurality
vote. The directors elected at the Annual Meeting will serve for
three-year terms and until their respective successors are
elected and qualified, in accordance with the provisions of the
Certificate and the Company's By-Laws.
Certain information with respect to the nominees for
director and four directors whose terms do not expire this year
is as follows:
Nominees for Election for a Term of Three Years Expiring in 2003:
Nominee (age), year first became a Director of Beard or Beard
Oil:
Allan R. Hallock (71), 1986
- ---------------------------
Allan R. Hallock was elected a director of Beard in July
1993. He served as a director of Beard Oil Company ("Beard
Oil"), the predecessor to Beard, from December 1986 until October
1993. Mr. Hallock is currently an independent consulting
geologist. He served as Vice President and Exploration Manager
of Gemini Corporation from 1970 until December 1986.
Ford C. Price (63), 1988
- ------------------------
Ford C. Price was elected a director of Beard in July 1993.
He served as a director of Beard Oil from June 1987 until October
1993. From 1961 until 1986 Mr. Price served in various
capacities with The Economy Company, a privately-held schoolbook
publishing company, last serving as its Chairman of the Board and
Chief Executive Officer. Mr. Price is a private investor.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
THE ABOVE NOMINEE.
Directors to Continue in Office with Terms Expiring in 2001:
Harlon E. Martin, Jr. (52), 1997
- --------------------------------
Harlon E. Martin, Jr. was elected a director of Beard in
October 1997 to fill the directorship vacancy created by the
death of W. R. Plugge. Mr. Martin has served as the principal of
H. E. Martin & Company, a Houston investment banking firm, since
its founding in 1990. He was a co-founder of GTM Securities
Corp. in 1985 and served as a principal of such firm until 1989.
H. E. Martin & Company is not a parent, subsidiary, or other
affiliate of Beard.
Herb Mee, Jr. (72), 1974
- ------------------------
Herb Mee, Jr. has served as Beard's President since October
1989 and as its Chief Financial Officer since June 1993. He has
served as Beard Oil's President since its incorporation, and as
its Chief Financial Officer since June 1993. He has also served
as a director of Beard and Beard Oil since their incorporation.
Mr. Mee served as President of Woods Corporation, a New York
Stock Exchange diversified holding company, from 1968 to 1972 and
as its Chief Executive Officer from 1970 to 1972.
Director to Continue in Office with Term Expiring in 2002:
W. M. Beard (71), 1974
- ----------------------
W.M. Beard has served Beard as its Chairman of the Board and
Chief Executive Officer since December 1992. He previously
served as Beard's President and Chief Executive Officer from the
Company's incorporation in October 1974 until January 1985. He
has served Beard Oil as its Chairman of the Board and Chief
Executive Officer since its incorporation. He has also served as
a director of Beard and Beard Oil since their incorporation. Mr.
Beard has been actively involved since 1952 in all management
phases of Beard and Beard Oil from their inception, and as a
partner of their predecessor company.
Director Elected to Represent the Class of Preferred Stockholders
Michael E. Carr (65), 1994
- --------------------------
Michael E. Carr was elected in February 1994 by the preferred
stockholders to fill the directorship vacancy which they are
entitled to fill. He served as Senior Vice President of Beard
Oil from December 1986 until October 1993. He served as
President of Sensor Oil & Gas, Inc. from October 1993 until
August 1996. He presently serves as President of Mica Energy
Corp. Mica Energy Corp. is not a parent, subsidiary, or other
affiliate of Beard.
Mr. Carr will serve as a director of the Company until his
successor has been elected and has qualified in such office or
until such time as all of the preferred stock has been converted
or redeemed.
There is no family relationship between any of the directors
or executive officers of the Company.
Committees of the Board of Directors
The Company has standing Audit and Compensation Committees.
Mr. Price serves as chairman and Messrs. Hallock, Martin and
Carr serve as members of the Audit Committee which met twice in
1999. Mr. Hallock serves as chairman and Messrs. Martin, Price
and Carr serve as members of the Compensation Committee which met
once in 1999. During 1999, the Board of Directors met six times.
All of the directors attended more than 75% of the aggregate of
all meetings of the Board of Directors and Committees on which
they served during 1999.
The principal responsibilities of the Company's Audit
Committee (the "Committee") are set forth in its formal written
charter (the "Charter"), a copy of which is attached hereto as
Exhibit "A." In addition to the responsibilities enumerated
therein, the Committee shall: (1) at least annually cause an
audit to be made of the Company and its consolidated subsidiaries
by auditors responsible only to the Committee and the Board; (2)
examine the reports and consult with the outside audit firm
employed by the Company or any of its subsidiaries; (3) report on
a regular basis to the Board of Directors concerning all matters
under its jurisdiction; and (4) coordinate its functions with the
Compensation Committee, and any other committee, when necessary.
The principal functions of the Company's Compensation
Committee are: (1) to review the objectives, structure, cost and
administration of the Company's major compensation and benefit
policies and programs; (2) to review and make recommendations
concerning remuneration arrangements for senior management,
including the specific relationship of corporate performance to
executive compensation; (3) to review the Company's performance
versus the CEO's compensation and establish measures of the
Company's performance upon which the CEO's compensation is based;
and (4) to administer the Company's compensation, benefit and
incentive plans.
The Company does not have a Nominating Committee; the Board of
Directors has nominated the directors to stand for election at
the annual meeting. Each of the persons nominated presently
serves as a director.
Executive Officers
Certain information concerning the executive officers of the
Company is set forth below:
In addition to W. M. Beard, the Company's Chairman and Chief
Executive Officer, and Herb Mee, Jr., the Company's President and
Chief Financial Officer, the following are considered to be
executive officers of the Company:
Jack A. Martine, age 51, was elected as Controller, Chief
Accounting Officer and Tax Manager of Beard in October 1996. Mr.
Martine served as tax manager for Beard from June 1989 until
October 1993 at which time he joined Sensor Oil & Gas, Inc. in a
similar capacity. Mr. Martine is a certified public accountant.
Sensor Oil & Gas, Inc. is not a parent, subsidiary, or other
affiliate of Beard.
Rebecca G. Witcher, age 40, has served as Corporate Secretary
of the Company and Beard Oil since October 1993, and has served
as Treasurer of such companies since July 1997.
All executive officers serve at the pleasure of the Board of
Directors.
Significant Employees
Marc A. Messner, age 38, has served as President and Chief
Executive Officer of starpay.com, inc. since April 1999. He has
also served as Vice President - Corporate Development of Beard
since August 1998. Mr. Messner is the inventor of starpay's
proprietary payment system. From 1993 to 1998 he served as
President of Horizontal Drilling Technologies, Inc., a company he
founded in 1993 which was acquired by Beard in May 1996.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who
own more than ten percent (10%) of a registered class of the
Company's equity securities (collectively "reporting persons"),
to file with the Securities and Exchange Commission and the
American Stock Exchange initial reports of ownership and reports
of changes in ownership of common stock and other equity
securities of the Company. Reporting persons are required by the
SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.
The William M. Beard and Lu Beard 1988 Charitable Unitrust, of
which Mr. Beard and his wife are Trustees, had one late Form 3
filing during the past fiscal year. The Form 3 that was filed
late was not for a transaction that had been missed, but was for
failure to report that the Unitrust had become a holder of 10% of
the common stock of the Company.
Except for the above, to the Company's knowledge, based solely
on a review of Forms 3, 4 and 5 furnished to the Company and
information received from each reporting person which includes
written representations that no other reports were required
during the fiscal year ended December 31, 1999, all Section 16(a)
filing requirements applicable to its reporting persons were
complied with.
Compensation of Executive Officers
The following table sets forth sets forth the compensation
paid or accrued during each of the last three fiscal years by the
Company and its subsidiaries to the Company's Chief Executive
Officer and each of the Company's other most highly compensated
executive officers (hereafter referred to as the named executive
officers), whose aggregate salary and bonus exceeded $100,000,
for any of the fiscal years ended December 31, 1999, 1998, and
1997:
SUMMARY COMPENSATION TABLE
Long Term
Compensation
--------------------
Annual Compensation Awards Payouts
- --------------------------------------------- ------ -------
Securities
Underlying All Other
Name and Options/ LTIP Compen-
Principal Salary(A) Bonus SAR's Payouts sation(C)
Position Year ($) ($) (#) ($) ($)
-------- ---- --- --- --- --- ---
W.M. Beard 1999 122,375(D) 2,300(B) -0- 9,625(D) 6,234
Chairman & CEO 1998 99,000(D) -0-(D) -0- 35,250(D) 5,503(D)
1997 99,000(D) 18,750(D)(E) -0- 41,450(D)(E) 5,501(D)
Herb Mee, Jr. 1999 132,000 1,300(B) -0- -0- 6,665
President & CFO 1998 132,000 1,250(B) -0- -0- 7,288
1997 132,000 26,200(B)(E) -0- -0- 7,285
__________________
(A) Amounts shown include cash compensation earned and received
by executive officers as well as amounts earned but deferred
pursuant to the Company's 401(k) Plan at the election of those
officers. Amounts shown exclude cash compensation earned but
deferred pursuant to the Company's Deferred Stock Compensation
Plan.
(B) Bonus for length of service with Beard or Beard Oil.
(C) Consists of the Company's contribution to the Company's
401(k) Plan.
(D) In 1999 Mr. Beard deferred one-fourth ($9,625) of his salary
for 3-1/2 months; in 1998 Mr. Beard deferred one-fourth ($33,000)
of his salary and all ($2,250) of his length of service bonus for
the year; in 1997 Mr. Beard deferred one-fourth ($33,000) of his
salary and all ($2,200) of his length of service bonus for the
year pursuant to the Company's Deferred Stock Compensation Plan.
(E) In 1997 Messrs. Beard and Mee each received a special bonus
of $25,000, of which $12,500 was paid in 1997 and $12,500 in
1998. Mr. Beard deferred one-fourth of such bonus in both 1997
($3,125) and 1998 ($3,125).
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information, with respect
to the named executive officers, concerning the exercise of
options during the Company's last fiscal year and
unexercised options held as of the end of the last fiscal
year:
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
---- --------------- ------------ ------------- -------------
W. M. Beard -0- $ -0- 12,500/-0- $-0-/-0-
Herb Mee, Jr. 8,055 $ 14,096 24,495/-0- $-0-/-0-
Compensation of Directors
Mr. Carr received compensation of $9,280 for services rendered
during 1999 as a director of Beard. Messrs. Hallock, Martin and
Price received $14,069, $9,147 and $12,405, respectively, of
deferred fees under the Company's Deferred Stock Compensation
Plan (the "Plan"). Under the Plan, the electing officers and
directors can defer fees and compensation until termination of
service or termination of the Plan, at which time the accounts
will be settled by distribution of a number of shares of the
Company's common stock equal to the number of Units credited
under the Plan. A Unit is equal to the amount deferred divided
by the fair market value of a share of common stock on the date
of deferral. Currently, the non-management directors each
receive $500 per month for their services, and also receive the
following fees for directors' meetings which they attend: annual
and 1-1/2 day meetings -- $750; regular meeting -- $500;
telephone meeting -- $100 to $300 depending upon length of
meeting. The non-management directors also receive a small year-
end bonus depending upon their length of service as directors of
Beard and Beard Oil. Accordingly, Messrs. Hallock, Martin,
Price, and Carr received $550, $100, $550 and $250, respectively,
in 1999. All of the directors except Mr. Carr deferred such
bonuses pursuant to the Plan. Beard also provides health and
accident insurance benefits for its non-management directors who
are not otherwise covered and the value of these benefits is
included in the above compensation amounts. None of the
directors received additional compensation in 1999 for their
committee participation.
The two eligible non-management directors (Messrs. Hallock and
Price) were each granted 5,000 phantom stock units (the "Units")
under the Company's 1994 Phantom Stock Units Plan on November 1,
1994. Mr. Carr was awarded 5,000 Units when he became eligible
on February 22, 1995. All of these awards were based on an award
price of $2.00 per share and vested over a five year period at
the rate of 20% per year. Messrs. Hallock, Martin, Price and
Carr were each granted 5,000 Units on October 23, 1997 at an
award price of $5.00 per share, the market value of the stock on
such date. The 1997 awards vest over a four year period at the
rate of 25% per year. Each participant has the option of
receiving payment for his award: (i) as it vests; (ii) at the
conclusion of the award period; or (iii) 50% as it vests, with
the other 50% deferred to the conclusion of the award period.
Payments are based upon appreciation in the market value of the
Company's common stock during the appropriate time interval
selected. Mr. Carr received a cash payment of $1,123 in 2000 for
1,000 Units which vested on February 22, 2000, $1,987 in 1999 for
1,000 Units which vested on February 22, 1999, $3,046 in 1998 for
1,000 Units which vested on February 22, 1998 and $3,808 in 1997
for 2,000 Units which vested on February 22, 1997. Messrs.
Hallock and Price received $8,630 each in 2000 for 5,000 Units
which vested on November 1, 1999.
Compensation Committee Interlocks and Insider Participation
Michael E. Carr, who has been elected by the preferred
shareholders to serve as their representative on the Board of
Directors, was elected to serve as a member of the Compensation
Committee on April 26, 1994. Mr. Carr served as Senior Vice
President of Beard Oil from December 1986 until October 1993.
RELATED PARTY TRANSACTIONS
In April 2000, William M. Beard and Lu Beard, as trustees of
the William M. Beard and Lu Beard 1988 Charitable Unitrust (the
"Trustees") agreed to provide a $1 million revolving line of
credit to the Company. The Trustees agreed to make a 15-month
loan at 10% interest to the Company subject to the terms of a
promissory note dated April 3, 2000 and a letter loan agreement
of corresponding date. As of June 30, 2000, $720,000 had been
advanced on the credit line.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of
Directors (the "Board") establishes the general compensation
policies of the Company. The Committee meets once each year to
establish specific compensation levels for the chairman/chief
executive officer ("CEO") and the president/chief financial
officer ("CFO") and to review the executive officers'
compensation generally. (The compensation for executive officers
other than the CEO and CFO is actually determined by the CEO and
CFO).
The Committee's goal in setting executive compensation is to
motivate, reward and retain management talent who support the
Company's goals of increasing shareholder value. This goal is to
provide competitive levels of compensation that relate to the
Company's long-term performance goals and objectives, reward
outstanding corporate performance and recognize individual
initiative and achievement. The Committee endeavors to achieve
these objectives through a combination of base salary, cash
bonuses and stock options.
The Committee believes that the total compensation of its CEO,
CFO and other executive officers should be tied to the Company's
success in achieving long-term growth in earnings, cash flow and
stock price per share. The Committee also believes that the
total cash compensation of such officers should, to the extent
possible, be similar to the total cash compensation of similarly
situated executives of peer group public companies. To date
neither the Company nor the Committee has been able to establish
a peer group which they feel is comparable enough in size,
financial structure and diversity of operations to establish a
valid comparison.
No executive officer's compensation for 1998 exceeded the $1
million deduction limit under Section 162(m) of the Internal
Revenue Code, as amended, and the same result is anticipated for
2000. The Committee does not anticipate that any executive
officer's compensation would approach the threshold level in the
foreseeable future.
Base Salaries. No salary increases have been granted to the
Company's top two executive officers since September of 1990.
Management totally restructured the Company during the period
from 1993 to 1998. As a result there was a significant
improvement in financial results which restored the Company to
profitability in 1993 and 1994. 1995 and 1996 were disappointing
years profit-wise. 1997 was highly profitable due to the sale of
substantially all of the assets of the Company's dry ice
subsidiary, Carbonic Reserves ("Carbonics"). Two additional
disappointing years profit-wise followed in 1998 and 1999. No
changes in base salary are currently under consideration for the
CEO and CFO.
Cash Bonuses. All employees of the Company receive a small
year-end bonus depending upon their length of service as
employees of Beard or Beard Oil. Because of the overall
financial results, no other cash bonuses have been paid to
present executive officers during the last five fiscal years,
except for a special bonus paid to all employees of the parent
company for their efforts related to the Carbonics sale in late
1997. Such bonus included $25,000 each paid to the CEO and CFO,
and a total of $17,175 paid to two other executive officers of
the Company.
Beard Group 401(k) Plan. One of the investment options
available under the Company's 401(k) Plan (the "401(k) Plan") is
the option for each participant to invest all or part of his
investment account in Company common stock ("The Beard Company
Stock Fund Investment Option"). Because the bank trustee of this
portion of the 401(k) Plan was having difficulty purchasing
sufficient shares of such stock in the open market, the 401(k)
Plan was amended in September of 1995 to permit the bank to
purchase authorized shares of Beard common stock directly from
the Company, and the Company reserved 150,000 shares of its
authorized but unissued common stock for such purpose. The
Committee felt that this step was extremely important because it
enabled key management members to significantly increase their
ownership in the Company, further aligning their interests with
those of the shareholders. Since the amendment was approved, the
bank trustee has purchased 88,300 shares from the Company, with
more than 75% of such shares being purchased for the accounts of
present executive officers of the Company.
Stock Options. The Committee desires to reward long-term
strategic management practices and enhancement of shareholder
value through the award of stock options. The Committee believes
that stock options encourage increased performance by the
Company's key employees by providing incentive to employees to
elevate the long-term value of the Company's common stock, thus
aligning the interests of the Company's employees with the
interests of its shareholders. Additionally, stock options build
stock ownership and provide employees with a long-term focus.
The Committee and the Board have placed particular emphasis
upon stock options in structuring the compensation package for
senior management, in the belief that the interests of senior
management and the Company's shareholders should be as closely
aligned as possible.
CEO Compensation
W. M. Beard has been Chairman and CEO of the Company and its
predecessors since 1974. Mr. Beard's 1998 base salary was
$132,000, and has not increased since 1990. He receives, along
with all other Beard employees, a small year-end bonus based on
length of service with Beard or Beard Oil. He received $25,000
(25% of which he elected to defer) as part of a special 1997
bonus paid to all employees of the parent company for their
efforts related to the Carbonics sale. The 1994 stock option
grant of 50,000 shares to Mr. Beard reflected the Committee's
desire to provide significant incentives which link long-term
executive compensation to long-term growth in equity for all
shareholders, as described above. The award also reflected Mr.
Beard's position and level of responsibility within the Company,
the Committee's qualitative analysis of his performance in
managing the Company, and the importance of the role he plays in
determining the Company's strategic direction. Based on the
Company's profitability, the granting of any additional stock
options to Mr. Beard or other key management members was not
considered by the Committee in 1999. A significant portion of the
Company's outstanding options were exercised in 1998, including
75% of his outstanding option by Mr. Beard. The Committee may
consider the awarding of additional options to key management
members, including Mr. Beard, in 2000 and subsequent years. Any
such grants will depend upon the Company's profitability, the
outlook for its various businesses and the Committee's
determination of the need to provide additional incentives to
management.
COMPENSATION COMMITTEE
Allan R. Hallock, Chairman
Harlon E. Martin, Jr.
Ford C. Price
Michael E. Carr
STOCK PERFORMANCE
The following performance graph compares The Beard Company's
cumulative total stockholder return on its common stock against
the cumulative total return of the American Stock Exchange Market
Value Index and the SIC Code Index of the Bituminous Coal,
Surface Mining Industry compiled by Media General Financial
Services for the period from December 31, 1994 through December
31, 1999. The performance graph assumes that the value of the
investment in The Beard Company stock and each index was $100 on
December 31, 1994 and that any dividends were reinvested. The
Beard Company has never paid dividends on its common stock.
December December December December December December
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
The Beard Company 100.00 130.77 176.92 323.08 200.00 115.38
Bituminous Coal,
Surface Mining
Industry Index 100.00 104.63 153.40 124.98 77.48 55.31
AMEX Market Index 100.00 128.90 136.01 163.66 161.44 201.27
The Industry Index chosen consists of the following
companies: Arch Coal, Inc., Consol Energy, Inc., Covol
Technologies Inc., Westmoreland Coal Co. and Yanzhou Coal Mining
Co.
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal No. 3)
Cole & Reed, P.C., Independent Certified Public
Accountants, have been selected to be the independent auditors of
the Company for 2000. Although not formally required,
stockholders' approval of such appointment is requested.
Representatives of Cole & Reed, P.C. are expected to be
present at the meeting. They will have the opportunity to make a
statement if they so desire and are expected to be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO APPROVE THE APPOINTMENT OF COLE & REED, P.C.
In the event the appointment of Cole & Reed, P.C. should not
be approved by the stockholders, the Board of Directors will make
another appointment, to be effective at the earliest feasible
time.
VOTE REQUIRED
The holders of shares entitled to cast a majority of the
votes, present in person or by proxy, constitute a quorum for the
transaction of business at the meeting. The affirmative vote of
holders of the Company's stock entitled to cast a majority of the
votes represented at the meeting will be required for the
approval of the appointment of Cole & Reed, P.C. as independent
auditors of the Company for 2000. The election of directors
shall be by a plurality of the vote of the shares present in
person or represented by proxy at the meeting and entitled to
vote on the election of directors.
The office of the Company's Secretary appoints an inspector
of election to tabulate all votes and to certify the results of
all matters voted upon at the special meeting. Neither the
corporate law of the State of Oklahoma, the state in which the
Company is incorporated, nor the Company's Certificate of
Incorporation or By-Laws have any specific provisions regarding
the treatment of abstentions and broker non-votes. It is the
Company's policy to count abstentions or broker non-votes for
purposes of determining the presence of a quorum at the meeting;
to treat abstentions as votes not cast but to treat them as
shares represented at the meeting for determining results on
actions requiring a majority vote; and to consider neither
abstentions or broker non-votes in determining results of
plurality votes.
STOCKHOLDER PROPOSALS
The Board of Directors anticipates that next year's annual
meeting will be held during the first week of June 2001. Any
proposals of stockholders intended to be presented at the 2001
Annual Meeting of Stockholders must be received by the Company
not later than February 2, 2001 in order for the proposals to be
included in the proxy statement and proxy card relating to such
meeting. For any other proposal that a shareholder wishes to
have considered at the 2001 annual meeting, the Company must
receive written notice of such proposal not later than April 18,
2001. Proposals that are not received by this date will be
considered untimely. In addition, proposals must comply with the
Company's bylaws and the rules and regulations of the Securities
and Exchange Commission. It is suggested that proponents submit
their proposals by certified mail, return receipt requested. No
stockholder proposals were received for inclusion in this Proxy
Statement.
OTHER MATTERS
Management knows of no other matters to be brought before
the Annual Meeting of Stockholders; however, if any additional
matters are properly brought before the meeting, the persons
named in the enclosed proxy will vote the proxies in their
discretion in the manner they believe to be in the best interest
of the Company.
The accompanying form of proxy has been prepared at the
direction of the Company, of which you are a stockholder, and is
sent to you at the request of the Board of Directors. The
proxies named herein have been designated by your Board of
Directors.
Management urges you, even if you presently plan to attend
the meeting in person, to execute the enclosed proxy and mail it
as indicated immediately. If a proxy is properly signed and is
not revoked by the shareholder, the shares it represents will be
voted according to the instructions of the shareholder; provided,
however, if no specific instructions are given, the shares will
be voted as recommended by the Board of Directors. A shareholder
may revoke his or her proxy any time before it is voted at the
meeting. A shareholder who attends the meeting and wishes to
vote in person may revoke his or her proxy at the meeting.
Otherwise, a shareholder must advise the secretary of the Company
in writing of revocation of his or her proxy.
THE BEARD COMPANY
By Order of the Board of Directors
Rebecca G. Witcher
Secretary
Oklahoma City, Oklahoma
August 7, 2000
Exhibit "A"
THE BEARD COMPANY
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the board of directors to be known
as the audit committee. The audit committee shall be composed of
directors who are independent of the management of the
corporation and are free of any relationship that, in the opinion
of the board of directors, would interfere with their exercise of
independent judgment as a committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate
directors in fulfilling their responsibility to the shareholders,
potential shareholders, and investment community relating to
corporate accounting, reporting practices of the corporation, and
the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit
committee to maintain free and open means of communication
between the directors, the independent auditors and the financial
management of the corporation.
Responsibilities
In carrying out its responsibilities, the audit committee
believes its policies and procedures should remain flexible, in
order to best react to changing conditions and to ensure to the
directors and shareholders that the corporate accounting and
reporting practices of the corporation are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
o Review and recommend to the directors the independent
auditors to be selected to audit the financial statements of the
corporation and its divisions and subsidiaries.
o Meet with the independent auditors and financial management
of the corporation to review the scope of the proposed audit for
the current year and the audit procedures to be utilized, and at
the conclusion thereof review such audit, including any comments
or recommendations of the independent auditors.
o Review with the independent auditors and financial and
accounting personnel, the adequacy and effectiveness of the
accounting and financial controls of the corporation, and elicit
any recommendations for the improvement of the corporation's
internal control procedures or particular areas where new or more
detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal
controls to expose any payments, transactions, or procedures that
might be deemed illegal or otherwise improper. Further, the
committee periodically should review company policy statements to
determine their adherence to the code of conduct.
o Review the proposed audit plans for the coming year, and the
coordination of such plans with the independent auditors.
o Review the financial statements contained in the annual
report to shareholders with management and the independent
auditors to determine that the independent auditors are satisfied
with the disclosure and content of the financial statements to be
presented to the shareholders. Any changes in accounting
principles should be reviewed.
o Provide sufficient opportunity for the independent auditors
to meet with the members of the audit committee without members
of management present. Among the items to be discussed in these
meetings are the independent auditors' evaluation of the
corporation's financial and accounting personnel, and the
cooperation that the independent auditors received during the
course of the audit.
o Review accounting and financial human resources and succession
planning within the company.
o Submit the minutes of all meetings of the audit committee to, or
discuss the matters discussed at each committee meeting with, the
board of directors.
o Investigate any matter brought to its attention within the scope
of its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
o Make certain that the Corporation satisfies all Securities and
Exchange Commission rules applicable to audit committees, including
the requirement to disclose in the company's proxy statement for
its annual meeting of shareholders that it has adopted a formal
written charter and that it has satisfied its responsibilities
during the prior year in compliance with its charter, which charter
shall be disclosed at least triennially in the annual report to
shareholders or proxy statement and in the next annual report to
shareholders or proxy statement after any significant amendment to
the charter.
PROXY
THE BEARD COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR STOCKHOLDERS MEETING ON SEPTEMBER 1, 2000
The undersigned stockholder of The Beard Company, an
Oklahoma corporation, hereby appoints W. M. Beard and Herb Mee,
Jr. or either of them, with full power of substitution, as true
and lawful agents and proxies to represent the undersigned and
vote all shares of stock of The Beard Company owned by the
undersigned in all matters coming before the 2000 Special Meeting
in Lieu of Annual Meeting of Stockholders (or any adjournment
thereof) of The Beard Company to be held at the Hilton Inn
Northwest, 2945 Northwest Expressway, Oklahoma City, Oklahoma
73112, on Friday, September 1, 2000 at 9:00 a.m. local time. The
Board of Directors recommends a vote "FOR" the following matters,
all as more specifically set forth in the Proxy Statement:
1. Approval of actions necessary to effect a 3-for-4 reverse
split of the Company's common stock.
FOR AGAINST ABSTAIN
2. Election of Directors. FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below:
Allan R. Hallock - three year term expiring in 2003
Ford C. Price - three year term expiring in 2003
3. Approval of Appointment of Cole & Reed, P.C. as independent
certified public accountants for fiscal 2000.
FOR AGAINST ABSTAIN
(Continued from other side)
4. In their discretion, the Proxies are authorized to vote with
respect to any other matters that may come before the Meeting or
any adjournment thereof, including matters incident to its
conduct.
I/WE RESERVE THE RIGHT TO REVOKE THE PROXY AT ANY TIME BEFORE
THE EXERCISE THEREOF. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE
VOTED IN THE MANNER SPECIFIED ABOVE BY THE STOCKHOLDER. TO THE
EXTENT CONTRAY SPECIFICATIONS ARE NOT GIVEN, THIS PROXY WILL BE
VOTED "FOR" ITEMS 2 AND 3 AND "FOR" THE ELECTION OF THE DIRECTORS
NOMINATED.
Dated: ___________, 2000
___________________________
(Signature)
___________________________
(Signature if held jointly)
Please sign exactly as your
name appears on your stock
certificate, indicating
your official position or
representative capacity, if
applicable, if shares are
held jointly, each owner
should sign.
IMPORTANT: PLEASE SIGN,
DATE AND RETURN THIS PROXY
BEFORE THE DATE OF THE
ANNUAL MEETING IN THE
ENCLOSED ENVELOPE.