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 under Rule 14a-12
EVERGREEN RESOURCES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name(s) 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
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/ / Fee paid previously with preliminary materials.
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the offsetting fee was paid previously. Identify the previous
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EVERGREEN RESOURCES, INC.
1401 17th Street, Suite 1200
Denver, Colorado 80202
303-298-8100
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2001
TO THE SHAREHOLDERS OF EVERGREEN RESOURCES, INC.:
NOTICE HEREBY IS GIVEN that the Annual Meeting of Shareholders of Evergreen
Resources, Inc., a Colorado corporation (the "Company"), will be held at The Top
of the Rockies, 555 Seventeenth Street, 37th floor, Denver, Colorado 80202, on
May 2, 2001, at 2:15 p.m., Mountain Daylight Time, and at any adjournment
thereof (the "Meeting"), for the purpose of considering and acting upon the
following matters:
1. The election of three directors of the Company.
2. The ratification of the appointment of BDO Seidman, LLP as independent
auditors for the year ending December 31, 2001.
3. The transaction of such other business as may properly come before the
Meeting.
This proxy statement and the accompanying proxy are being mailed to the
shareholders of the Company on or about March 30, 2001.
Only holders of record of the Company's common stock at the close of
business on March 19, 2001 are entitled to notice of and to vote at the Meeting.
All shareholders, whether or not they expect to attend the Meeting in
person, are urged to sign and date the enclosed proxy and return it promptly in
the enclosed postage-paid envelope, which requires no additional postage if
mailed in the United States. The granting of a proxy will not affect your right
to vote in person if you attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS.
KEVIN R. COLLINS
SECRETARY
Denver, Colorado
March 26, 2001
EVERGREEN RESOURCES, INC.
------------------------
PROXY STATEMENT
2001 ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Evergreen Resources, Inc., a Colorado corporation (the "Company" or
"Evergreen"), for use at the Company's Annual Meeting of Shareholders to be held
at The Top of the Rockies, 555 Seventeenth Street, 37th floor, Denver, Colorado
80202, on May 2, 2001, at 2:15 p.m., Mountain Daylight Time, and at any
adjournment thereof (the "Meeting"). This proxy statement and the accompanying
proxy are being mailed to the shareholders of the Company on or about March 30,
2001.
Any person signing and returning the enclosed proxy may revoke it at any
time before it is voted by giving written notice of revocation to the Company's
stock transfer agent or by voting in person at the Meeting. Any written notice
revoking a proxy should be sent to: Computershare Trust Company, 12039 West
Alameda Parkway, Suite Z-2, Lakewood, CO 80228. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing these proxy
materials, will be borne by the Company. It is anticipated that solicitations of
proxies for the Meeting will be made only by use of the mails; however, the
Company may use the services of its directors, officers and employees to solicit
proxies personally or by telephone, fax or Internet without additional salary or
compensation to them. Brokerage houses, custodians, nominees and fiduciaries
will be requested to forward the proxy soliciting materials to the beneficial
owners of the Company's shares held of record by such persons, and the Company
will reimburse such persons for their reasonable out-of-pocket expenses for that
purpose.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting. If no direction is made, validly executed and returned
proxies will be voted for the election of the nominees for director named below,
for ratification of the appointment of independent auditors and in the
discretion of the proxy holders with respect to any other matters properly
brought before the Meeting.
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 2000 is being mailed along with these proxy materials to the
Company's shareholders and contains financial information regarding the Company.
See "Financial Information."
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's no
par value common stock (the "Common Stock"), with each share entitled to one
vote. Only shareholders of record at the close of business on March 19, 2001 are
entitled to notice of and to vote at the Meeting. On March 19, 2001, the Company
had 18,424,535 shares of Common Stock outstanding, each of which is entitled to
one vote on all matters to be voted upon at the Meeting, including the election
of directors. No fractional shares are presently outstanding.
A majority of the outstanding shares of Common Stock represented in person
or by proxy will constitute a quorum at the Meeting. The three nominees for
director receiving the most votes for election will be elected director,
provided that a quorum is present. The proposal to ratify the appointment of the
independent auditors will be approved if the votes cast in favor of the proposal
exceed the votes cast against it, again provided that a quorum is present.
Abstentions and broker non-votes will have no effect on the election of
directors or the proposal to approve the appointment of the independent
auditors, but will be counted for purposes of determining if a quorum is
present.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding persons known
to the Company to beneficially own five percent or more of the Common Stock as
of March 1, 2001. This information is based upon filings made by such persons
with the Securities and Exchange Commission (the "SEC") and upon information
provided to the Company. Beneficial ownership is determined in accordance with
SEC rules. In computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares subject to options or warrants
held by that person that are currently exercisable or that are or may become
exercisable within 60 days of March 1, 2001 are deemed outstanding. These
shares, however, are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as indicated in the footnotes
to this table and under applicable community property laws, each shareholder
named in the table has sole voting and dispositive power with respect to the
shares set forth opposite the shareholder's name.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF CLASS
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
- ------------------- -------------------- ----------------
John Hancock Life Insurance Company......... 1,881,375(1) 10.15%
John Hancock Place
P.O. Box 111
Boston, MA 02117
Advisory Research, Inc...................... 1,101,965(2) 6.01%
Two Prudential Plaza
180 N. Stetson, Suite 5780
Chicago, IL 60601
Wellington Management Company, LLP.......... 993,960(3) 5.42%
75 State Street
Boston, MA 02109
- ------------------------
(1) Based on information included in a Schedule 13G filed with the SEC on
February 1, 2001. Consists of 905,660 shares owned directly and 975,715
shares (including 200,000 shares issuable pursuant to warrants) owned by
John Hancock Energy Resources Management, Inc., an indirect, wholly-owned
subsidiary. John Hancock Life Insurance Company is an indirect, wholly-owned
subsidiary of John Hancock Financial Services, Inc.
(2) Based on information included in a Schedule 13G filed with the SEC on
March 1, 2001.
(3) Based on information included in a Schedule 13G filed with the SEC on
February 13, 2001. Consists of 916,850 shares over which the holder reported
shared voting power and 993,960 shares over which the holder reported shared
dispositive power.
2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of March 1, 2001,
regarding the Common Stock beneficially owned by each director, nominee for
director, each executive officer named in the summary compensation table below
(the "Named Executive Officers") and all directors and executive officers as a
group. Beneficial ownership is determined in accordance with SEC rules. In
computing the number of shares beneficially owned by a person and the percentage
ownership of that person, shares subject to options or warrants held by that
person that are currently exercisable or that are or may become exercisable
within 60 days of March 1, 2001 are deemed outstanding. These shares, however,
are not deemed outstanding for the purposes of computing the percentage
ownership of any other person. Except as indicated in the footnotes to this
table and under applicable community property laws, each shareholder named in
the table has sole voting and dispositive power with respect to the shares set
forth opposite the shareholder's name.
AMOUNT AND NATURE OF PERCENT OF CLASS
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
- ------------------------ -------------------- ----------------
Alain G. Blanchard.......................... 62,917(1) *
Dennis R. Carlton........................... 246,116(2) 1.33%
Kevin R. Collins............................ 156,800(3) *
Larry D. Estridge........................... 32,990(4) *
John J. Ryan III............................ 880,220(5) 4.79%
Mark S. Sexton.............................. 548,444(6) 2.95%
Scott D. Sheffield.......................... 19,030(7) *
Arthur L. Smith............................. -- --
All Directors and Executive Officers
As a Group (8 Persons).................... 1,946,517(8) 10.23%
- ------------------------
* Less than 1%
(1) Includes 22,540 shares issuable pursuant to stock options.
(2) Includes 199,750 shares issuable pursuant to stock options.
(3) Includes 146,500 shares issuable pursuant stock options.
(4) Includes 31,220 shares issuable pursuant to stock options.
(5) Includes 33,080 shares issuable pursuant to stock options.
(6) Includes 239,750 shares issuable pursuant to stock options. Also includes
225,000 shares held by CIS Oil and Gas, Inc. over which Mr. Sexton holds
voting power by proxy; Mr. Sexton has no power to sell or otherwise dispose
of these shares and disclaims any beneficial ownership of the shares.
(7) Includes 17,490 shares issuable pursuant to stock options.
(8) Includes 690,330 shares issuable pursuant to stock options. Also includes
225,000 shares held by CIS Oil and Gas, Inc. as described in Note 6.
3
PROPOSAL 1--ELECTION OF DIRECTORS
The Company's articles of incorporation provide that the members of the
Board of Directors shall be divided into three classes, as nearly equal in
number as possible, with one class being elected each year. Directors in each
class are elected for three-year terms. The articles of incorporation also
provide that the Board will be composed of at least six members. The Board
currently consists of seven members, of which three are to be elected at the
meeting.
The three nominees for director receiving the most votes for their election
will be elected directors, assuming a quorum is present. Abstentions and broker
non-votes will have no effect on the election of directors. Shareholders do not
have the right to cumulate their votes for directors. The persons named in the
enclosed form of proxy, unless otherwise directed therein, intend to vote such
proxy FOR the election of each of the nominees named below as director for the
term specified. If a nominee becomes unavailable for any reason, the persons
named in the proxy are expected to vote for such nominees as are recommended by
management or to reduce the number of persons to be elected (subject to the
requirements of the articles of incorporation). Management has no reason to
believe that the nominees will be unavailable or unwilling to serve if elected
to office.
The Board of Directors has nominated three persons for election as director
at the Meeting to serve for three-year terms. The nominees are currently serving
as directors and have consented to serve for the new terms if re-elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES IDENTIFIED BELOW AS A DIRECTOR FOR A THREE-YEAR TERM.
PRESENT DIRECTORS NOMINATED FOR RE-ELECTION
DIRECTOR TERM TO
NAME AGE POSITION SINCE EXPIRE
- ---- -------- ------------------------------------- -------- --------
Dennis R. Carlton....... 50 Sr. Vice President and Director 1995 2004
Mark S. Sexton.......... 45 President, CEO, Chairman and Director 1995 2004
Arthur L. Smith......... 48 Director 2000 2004
DIRECTORS CONTINUING IN SERVICE
DIRECTOR TERM TO
NAME AGE POSITION SINCE EXPIRE
- ---- -------- ------------------------------------- -------- --------
Alain G. Blanchard...... 60 Director 1989 2003
Larry D. Estridge....... 57 Director 1989 2002
John J. Ryan, III....... 73 Director 1989 2002
Scott D. Sheffield...... 48 Director 1996 2003
There are no family relationships among any directors, executive officers or
persons nominated or chosen by Evergreen to become a director or executive
officer.
4
Additional information regarding the nominees for election as directors and
the continuing directors of the Company follows:
NOMINEES
DENNIS R. CARLTON SENIOR VICE PRESIDENT--EXPLORATION AND OPERATIONS AND
DIRECTOR
PRESIDENT--EVERGREEN OPERATING CORPORATION
Mr. Carlton joined Evergreen in 1981 and was named a director in March 1995. He has been
Evergreen's Senior Vice President of Exploration and Operations since 1997. Mr. Carlton also
manages the daily activities of Evergreen's operating subsidiary, Evergreen Operating Corp.
("EOC"), and has served as President of EOC since 1995. He received a B.S. degree in geology
and a masters of science degree in geology from Wichita State University.
MARK S. SEXTON PRESIDENT, CEO, CHAIRMAN AND DIRECTOR
CEO--EOC
Mr. Sexton joined Evergreen in 1989 and initially managed the daily operating activities of
Evergreen's operating subsidiary, EOC. He has been a director of Evergreen since March 1995
and was named President and CEO in June 1995. Mr. Sexton is a registered professional
engineer in Colorado. He graduated from Stanford University with a B.S. degree in mechanical
engineering. He was previously employed in various technical, financial, and management
positions with Amoco Production Company, Norwest Bank and energy companies specifically
targeting coal bed methane development. Mr. Sexton is also a director of KFX Inc.
ARTHUR L. SMITH DIRECTOR
Mr. Smith was named a director of Evergreen in June 2000. Since 1984, Mr. Smith has been
Chairman and Chief Executive Officer of John S. Herold, Inc., an energy research and
consulting firm based in Norwalk, Connecticut. Prior to joining John S. Herold, Inc., he was
involved in institutional equity research and corporate finance for Oppenheimer and
Co., Inc., The First Boston Corp. and Argus Research Corp. Mr. Smith received a B.A. from
Duke University and an MBA from New York University's Stern School of Business. Mr. Smith is
also a director of Cabot Oil & Gas Corporation and Plains All American Inc.
CONTINUING DIRECTORS
ALAIN G. BLANCHARD DIRECTOR
Mr. Blanchard was named a director of Evergreen in May 1989. A resident of Cannes, France, he
has managed discretionary funds for private and institutional clients for over 20 years.
Mr. Blanchard graduated from the University of Paris with a doctorate in economics and a
degree in political science.
LARRY D. ESTRIDGE DIRECTOR
Mr. Estridge was named a director of Evergreen in May 1989. He resides in Greenville, South
Carolina, and is a partner in the law firm Womble Carlyle Sandridge & Rice, PLLC.
Mr. Estridge joined Womble Carlyle in January 1999. Prior to January 1999, he was a partner
with Wyche, Burgess, Freeman & Parham, P.A. from July 1972 through December 31, 1998. He has
represented Evergreen and a number of affiliated companies for over 14 years. Mr. Estridge
received an A.B. degree from Furman University and a J.D. from Harvard University School of
Law.
5
JOHN J. RYAN, III DIRECTOR
Mr. Ryan was named a director of Evergreen in May 1989. Since 1972 he has been engaged in
international tax and investment activities through Corporate Investment Services S.A.,
Geneva, of which he is a principal. Mr. Ryan is a resident of London, England. Mr. Ryan
serves as a director of Vail Resorts, Inc.
SCOTT D. SHEFFIELD DIRECTOR
Mr. Sheffield was named a director of Evergreen in September 1996. Since April 1985,
Mr. Sheffield has served as Chairman, President and Chief Executive Officer of Pioneer
Natural Resources Company, an energy company traded on the New York Stock Exchange, and its
predecessor company, Parker & Parsley Petroleum Company. From 1979 to April 1985 he was
employed by Parker & Parsley in various engineering positions, including serving from
1981-1985 as Vice President of Engineering. Mr. Sheffield obtained a bachelor of science
degree in petroleum engineering from the University of Texas.
MEETINGS OF DIRECTORS AND COMMITTEES
The Company's Board of Directors held six meetings during 2000. All
directors attended substantially all of such meetings. The Company has
established Audit, Compensation, and Nominating committees. Certain information
about these committees is provided below.
The Audit Committee is presently composed of Alain G. Blanchard, Larry D.
Estridge and John J. Ryan, III. This committee recommends to the Board the firm
to be retained as the Company's independent auditors and consults with and
reviews the reports of the Company's independent auditors and the Company's
internal financial staff. Six meetings were held during 2000, at which all
members were present. See "Audit Committee Report" and "Proposal 2--Ratification
of Appointment of BDO Seidman, LLP as Independent Auditors for 2001," below.
The Compensation Committee is presently composed of Alain G. Blanchard,
Larry D. Estridge, Scott D. Sheffield and Arthur L. Smith. The Compensation
Committee assists the Board in establishing compensation for key employees. Two
meetings were held during 2000, at which all members were present. See
"Compensation Committee Report on Executive Compensation," below.
The Nominating Committee is presently composed of Alain G. Blanchard, Mark
S. Sexton and Scott D. Sheffield. This committee evaluates the performance of
incumbent directors and recommends to the Board and shareholders nominees to
serve as directors. For information on procedures by which shareholder
nominations for directors may be made, see "Date for Receipt of Shareholder
Proposals." The Nominating Committee held one meeting during 2000, at which all
members were present.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of three directors
who are considered independent under applicable New York Stock Exchange Rules.
The Committee operates under a written charter adopted by the Board in
June 2000. A copy of the Audit Committee charter is attached to this proxy
statement as Appendix A.
The primary purpose of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. The Audit Committee annually reviews and
recommends to the Board the selection of the Company's independent accountants,
subject to shareholder ratification.
Management is responsible for preparing the Company's financial statements.
The independent accountants are responsible for performing an independent audit
of the Company's audited financial statements in accordance with generally
accepted auditing standards and to issue a report thereon. The Committee's
responsibility is to monitor and oversee these processes.
6
In this context, the Committee has reviewed and discussed the audited
financial statements with management and the independent accountants. The
Committee also has discussed with the independent accountants the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Company's independent accountants also provided to the Committee the
written disclosures and letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees), and the Committee
discussed with the independent accountants that firm's independence. The
Committee whether the independent accountants' provision of non-audit services
is compatible with the independence of the accountants.
Based on the above discussions and review with management and the
independent accountants, the Committee recommended to the Board of Directors
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2000 for filing with the SEC.
RESPECTFULLY SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS:
Alain G. Blanchard
Larry D. Estridge
John J. Ryan, III
BUSINESS EXPERIENCE OF OTHER EXECUTIVE OFFICERS
The following provides certain information concerning the executive officer
of the Company who is not also a director:
KEVIN R. COLLINS VICE PRESIDENT--FINANCE, CHIEF FINANCIAL OFFICER, TREASURER
AND SECRETARY
Mr. Collins, age 44, has served as Evergreen's Vice President, Chief Financial Officer and
Treasurer since June 1995 and as Secretary since 1999. He has over 13 years of public
accounting experience. Mr. Collins received a B.S. in business administration and accounting
from the University of Arizona, and, before joining Evergreen, was employed by BDO Seidman,
LLP, where he was a senior manager.
Each officer of the Company holds office until his successor is duly elected
and qualified or until his earlier death, resignation or removal. Any officer
elected or appointed by the Board of Directors may be removed by the Board of
Directors if in its judgment it is in the best interests of the Company.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31,
2000, 1999 and 1998, for the Company's Chief Executive Officer and the two other
executive officers of the Company whose salary and bonus exceeded $100,000
during 2000 (as defined above, the "Named Executive Officers").
ANNUAL LONG TERM
COMPENSATION COMPENSATION
------------------- ------------
AWARDS
------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND SALARY BONUS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) (#) ($)(1)
- ------------------ -------- -------- -------- ------------ ------------
Mark S. Sexton............................. 2000 225,000 150,000 103,000 28,344
President and CEO 1999 160,600 75,000 70,000 25,000
1998 154,600 -- 64,000 28,700
Dennis R. Carlton.......................... 2000 200,000 150,000 103,000 24,500
Sr. Vice President 1999 162,200 75,000 70,000 25,000
1998 154,500 -- 64,000 28,700
Kevin R. Collins........................... 2000 140,000 100,000 90,000 4,525
Vice President, CFO and Treasurer 1999 107,700 50,000 70,000 4,000
1998 100,000 -- 64,000 6,500
- ------------------------
(1) Amounts for 2000 include premiums and contributions made by the Company to
split dollar life insurance policies of which the Named Executive Officers
or their estates are the beneficiaries as follows: Mr. Sexton, $20,000; and
Mr. Carlton, $20,000. The balance of the amounts for 2000 represent the
dollar value of contributions made by the Company to the account of each
Named Executive Officer under the Company's 401(k) plan.
The following table sets forth information with respect to the Named
Executive Officers concerning the value of unexercised options held as of the
end of the last fiscal year. None of the Named Executive Officers exercised any
options during fiscal 2000.
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
DECEMBER 31, 2000 (#) AT DECEMBER 31, 2000 ($)(1)
--------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ------------- -------------
Mark S. Sexton................................ 196,500 180,500 $5,874,625 $3,529,500
President and CEO
Dennis R. Carlton............................. 156,500 180,500 $4,665,875 $3,529,500
Senior Vice President
Kevin R. Collins.............................. 106,500 167,500 $3,084,625 $3,267,875
Vice President, CFO and Treasurer
- ------------------------
(1) Based on the difference between the closing price of the Common Stock on
December 29, 2000 ($38.63) and the option exercise price.
8
The following table sets forth information concerning options to purchase
Common Stock granted to the Named Executive Officers in the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
---------------------------------------------------------- AT ASSUMED
PERCENT OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE
SECURITIES GRANTED APPRECIATION FOR
UNDERLYING TO EMPLOYEES EXERCISE OPTION TERM(1)
OPTIONS IN PRICE PER EXPIRATION ---------------------------
NAME GRANTED (#) FISCAL 2000 SHARE ($/SH) DATE 5% 10%
- ---- ----------- ---------------- ------------ ---------- ----------- -------------
Mark S. Sexton........... 53,000(2) 7.80% $18.50 2/06/10 $616,627 $1,562,662
President and CEO 50,000(3) 7.36% $27.38 11/30/10 $860,950 $2,181,830
Dennis R. Carlton........ 53,000(2) 7.80% $18.50 2/06/10 $616,627 $1,562,662
Senior Vice President 50,000(3) 7.36% $27.38 11/30/10 $860,950 $2,181,830
Kevin R. Collins......... 40,000(2) 5.89% $18.50 2/06/10 $465,379 $1,179,368
Vice President, CFO and 50,000(3) 7.36% $27.38 11/30/10 $860,950 $2,181,830
Treasurer
- ------------------------
(1) The potential realizable value is calculated based on the term of the option
at its time of grant and is calculated by assuming that the stock price on
the date of grant appreciates at the indicated annual rate compounded
annually for the entire term of the option and that the option is exercised
and sold on the last day of its term for the appreciated price. The 5% and
10% assumed rates of appreciation are derived from the rules of the SEC and
do not represent the Company's estimate or projection of the future Common
Stock price.
(2) Such options vest and become exercisable in four equal installments on
February 6 of each of 2001, 2002, 2003 and 2004, provided the optionee
remains an employee of the Company.
(3) Such options vest and become exercisable in four equal installments on
November 30 of each of 2001, 2002, 2003 and 2004, provided the optionee
remains an employee of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation program for its executive officers is composed of
three principal components: base salary, annual incentive compensation and
long-term incentive compensation in the form of stock-based awards. Evergreen's
compensation policy has been to offer conservative base salaries and to provide
performance-based incentives in the form of annual bonuses and stock awards in
order to provide an overall competitive compensation package for executive
officers. The goal of the Compensation Committee (the "Committee") is to ensure
that the Company retains qualified, experienced executives whose financial
interests are aligned with those of the shareholders. The Committee considers
general industry practice, tax effects and other factors in structuring
executive compensation.
BASE SALARIES: Base salaries for each of the Company's executives are
determined by taking into consideration performance, length of tenure with the
Company and compensation paid by industry competitors to persons holding
comparable positions. In order to determine comparable salary levels paid within
the industry, the Committee reviews various surveys and publicly filed
information regarding its competitors.
ANNUAL BONUS INCENTIVES: Performance by executives is measured by several
criteria which are considered important to the Company's success. These criteria
are not specifically weighted in the
9
determination of salary increases and bonuses, since the relative importance of
such criteria may change from year to year and the relative responsibilities of
each executive in the achievement of the objectives may differ. Examples of
criteria considered are: (i) quantity of oil and gas reserves and increases in
such reserves; (ii) increases in production and cash flow; (iii) finding costs
of oil and gas reserves; (iv) controls exerted over lifting costs and resulting
stabilization or reduction of lifting costs; (v) discovery and investigation of
prospective new projects; and (vi) overall financial management. Of particular
importance in determining 2000 bonus payments were substantial increases in
proved reserves, production and cash flow. Though the Committee did not
establish specific numeric formulas for determining the amount of bonuses based
on these increases, increases in these criteria were important factors in the
Committee's compensation decisions because the Committee believed that the
experience, skill, good judgment and management practices of the executives
contributed substantially to these increases.
STOCK-BASED AWARDS: The Committee also utilizes restricted stock and/or
stock options as incentives for executives. In determining the number of shares
and/or share options to be awarded to each executive, the Committee considers
the individual performance of each executive, his level of responsibility, his
base salary, and the number of restricted shares and options already owned by
the executives as a group relative to the total number of outstanding shares and
stock options owned by all shareholders. During 2000, the Committee granted Mark
S. Sexton, Dennis R. Carlton and Kevin R. Collins non-qualified stock options to
purchase 53,000, 53,000 and 40,000 shares of Common Stock, respectively, under
the Company's Key Employee Equity Plan. In addition, the Committee granted each
of these individuals incentive stock options to purchase 50,000 shares of Common
Stock under the Company's 2000 Stock Incentive Plan. No restricted stock awards
were made to executive officers in 2000.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER: During the fiscal year ended
December 31, 2000, Mark S. Sexton, President and CEO, received compensation of
$233,344 for his services. This includes a salary of $225,000 and deferred
compensation pursuant to the Company's 401(k) plan in the amount of $8,344. In
setting the salary for Mr. Sexton for 2000, the Committee considered all of the
criteria described above in this Report, along with information indicating that
his previous salary was in the mid-to-low range of CEOs of comparable companies.
Because the performance of the Company in the key areas of measurement
referenced above, along with its earnings for 2000 as compared to previous
years, substantially exceeded the performance of most peer companies, the
Committee determined that a bonus payment in the amount of $150,000 to
Mr. Sexton was appropriate.
RESPECTFULLY SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Larry D. Estridge
Scott D. Sheffield
Alain G. Blanchard
Arthur L. Smith
COMPENSATION COMMITTEE INTERLOCKS,
INSIDER PARTICIPATION AND TRANSACTIONS WITH MANAGEMENT
Since January 1999, Mr. Estridge has been a member of the law firm of Womble
Carlyle Sandridge & Rice, PLLC in Greenville, South Carolina, which provided
legal services to the Company from time to time during 2000 at customary rates.
Total legal fees paid to Womble Carlyle during 2000 were $139,000.
On February 9, 2001, Evergreen closed a transaction with KFx Inc. ("KFx")
under which KFx sold to Evergreen a portion of its convertible preferred stock
investment in its Pegasus Technologies, Inc. subsidiary ("Pegasus"),
representing an approximate 8.8% as-converted interest in Pegasus, for
$1,500,000. KFx is obligated to repurchase this preferred stock for $2,000,000
on January 31, 2002, or
10
January 31, 2003 under certain elections available to Evergreen to purchase from
KFx an additional interest in Pegasus. In certain circumstances, Evergreen can
elect to exchange this interest in Pegasus, valued at $2,000,000, and any
subsequently acquired interest in Pegasus, for common stock of KFx at $3.65 per
share, subject to certain adjustments. In addition, Evergreen was provided with
a five-year warrant to purchase 1,000,000 shares of KFx common stock at $3.65
per share, subject to certain adjustments. Mark S. Sexton, the President, Chief
Executive Officer and Chairman of the Company, is on the board of directors of
KFx. Also, Kevin R. Collins, the Chief Financial Officer of the Company, has
been appointed to the board of directors of Pegasus.
COMPENSATION OF DIRECTORS
Directors of the Company are entitled to receive fees of $100 per meeting
for their attendance at Board meetings. All Board members have currently waived
these fees. All directors are reimbursed for reasonable out-of-pocket expenses
incurred in connection with attending Board and shareholder meetings. Directors
who are not officers or are not salaried employees of the Company
("Non-Executive Directors") each receive a $30,000 annual retainer fee in the
form of cash, Common Stock and/or options to purchase Common Stock, as elected
by the director. Such options have an exercise price equal to the fair market
value of the Common Stock on the date on grant, vest fully at the time of grant
and have a term of 5 years. The Non-Executive Directors also received annual
compensation for participation in 2000 on the Audit ($10,000) and Compensation
($3,000) Committees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, during the fiscal year ended December 31, 2000,
the Company's ten percent shareholders, officers and directors timely complied
with all applicable filing requirements under Section 16(a) of the Securities
Exchange Act of 1934, as amended. This statement is based solely on a review of
the copies of such reports furnished to the Company by such reporting persons
and their written representations that such reports accurately reflect all
reportable transactions.
11
PERFORMANCE GRAPHS
Through September 7, 2000, the Common Stock was traded on the Nasdaq
National Market. The following performance graph reflects yearly percentage
change in the cumulative, five-year total shareholder return on the Common Stock
as compared with the cumulative, five-year total return of (i) the National
Securities Dealers Automated Quotation System ("NASDAQ") Stock Market Index of
U.S. Companies and (ii) a peer group index. The NASDAQ index and the peer group
index were supplied by the Center for Research in Security Prices ("CRSP"), an
independent third-party source. The peer group index is composed of
approximately 173 companies traded on Nasdaq and categorized under the Standard
Industrial Classification Number 13 (Oil and Gas Extraction) applicable to the
Company. All cumulative returns are calculated on a fiscal year basis ending on
December 31 of each year.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPANY INDEX MARKET INDEX PEER INDEX
12/29/95 100 100 100
1/31/96 107.5 100.5 102.043
2/29/96 107.5 104.333 105.562
3/29/96 115 104.681 109.871
4/30/96 122.5 113.35 122.222
5/31/96 135 118.551 125.97
6/28/96 115 113.21 130.171
7/31/96 120 103.14 120.34
8/30/96 132.5 108.926 125.637
9/30/96 125 117.248 135.196
10/31/96 130 115.944 149.497
11/29/96 130 123.132 157.308
12/31/96 165 123.027 163.649
1/31/97 155 131.756 169.196
2/28/97 155 124.464 144.137
3/31/97 152.5 116.348 149.431
4/30/97 152.5 119.975 142.638
5/30/97 185 133.563 160.574
6/30/97 205 137.67 169.439
7/31/97 217.5 152.174 181.948
8/29/97 270 151.946 196.376
9/30/97 322.5 160.951 226.786
10/31/97 360 152.565 226.213
11/28/97 311.25 153.371 197.415
12/31/97 310 150.682 176.957
1/30/98 327.5 155.455 163.434
2/27/98 327.5 170.062 165.467
3/31/98 342.5 176.348 179.807
4/30/98 392.5 179.329 182.795
5/29/98 361.25 169.362 163.199
6/30/98 375 181.198 150.072
7/31/98 382.5 179.076 126.684
8/31/98 275 143.576 95.605
9/30/98 440 163.494 107.797
10/30/98 452.5 170.677 107.717
11/30/98 377.5 188.03 92.729
12/31/98 355 212.459 80.171
1/29/99 310 243.297 77.56
2/26/99 313.75 221.509 67.505
3/31/99 400 238.271 78.489
4/30/99 455 245.946 91.379
5/28/99 445 239.134 89.148
6/30/99 503.75 260.65 96.786
7/30/99 522.5 255.95 102.034
8/31/99 486.25 266.773 107.421
9/30/99 481.25 267.138 106.879
10/29/99 432.5 288.544 97.632
11/30/99 420 323.638 99.777
12/31/99 395 394.821 99.183
1/31/00 445.625 380.208 105.693
2/29/00 445 452.483 115.563
3/31/00 483.75 443.166 141.833
4/28/00 462.5 372.76 135.399
5/31/00 550 327.793 150.631
6/30/00 592.5 385.309 162.915
7/31/00 547.5 364.433 146.766
8/31/00 583.75 407.492 174.611
9/29/00 695 354.535 187.08
10/31/00 550 325.33 166.257
11/30/00 547.5 250.817 153.583
12/29/00 772.5 237.368 199.463
12
On September 8, 2000, the Common Stock commenced trading on the New York
Stock Exchange ("NYSE"). The following performance graph reflects yearly
percentage change in the cumulative, five-year total shareholder return on the
Common Stock as compared with the cumulative, five-year total return of
(i) NYSE Stock Market Index of U.S. Companies and (ii) a peer group index. The
NYSE index and the peer group index were supplied by the CRSP. The peer group
index is composed of approximately 121 companies traded on the NYSE and
categorized under the Standard Industrial Classification Number 13 (Oil and Gas
Extraction) applicable to the Company. All cumulative returns are calculated on
a fiscal year basis ending on December 31 of each year.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
EVERGREEN RESOURCES, INC. NYSE STOCK MARKET (US COMPANIES)
12/29/95 100 100
1/31/96 107.5 103.275
2/29/96 107.5 104.55
3/29/96 115 105.825
4/30/96 122.5 107.15
5/31/96 135 109.616
6/28/96 115 109.9
7/31/96 120 104.908
8/30/96 132.5 107.706
9/30/96 125 112.967
10/31/96 130 115.146
11/29/96 130 122.839
12/31/96 165 121.208
1/31/97 155 127.286
2/28/97 155 128.734
3/31/97 152.5 123.473
4/30/97 152.5 129.302
5/30/97 185 137.317
6/30/97 205 143.877
7/31/97 217.5 154.095
8/29/97 270 147.208
9/30/97 322.5 155.626
10/31/97 360 151.016
11/28/97 311.25 157.054
12/31/97 310 161.123
1/30/98 327.5 161.248
2/27/98 327.5 172.217
3/31/98 342.5 181.382
4/30/98 392.5 183.044
5/29/98 361.25 179.496
6/30/98 375 184.606
7/31/98 382.5 180.322
8/31/98 275 154.205
9/30/98 440 162.105
10/30/98 452.5 174.942
11/30/98 377.5 184.438
12/31/98 355 193.324
1/29/99 310 195.334
2/26/99 313.75 191.084
3/31/99 400 196.634
4/30/99 455 206.78
5/28/99 445 203.061
6/30/99 503.75 211.591
7/30/99 522.5 204.354
8/31/99 486.25 199.646
9/30/99 481.25 193.319
10/29/99 432.5 204.322
11/30/99 420 206.066
12/31/99 395 211.62
1/31/00 445.625 202.313
2/29/00 445 192.885
3/31/00 483.75 212.171
4/28/00 462.5 211.524
5/31/00 550 211.65
6/30/00 592.5 211.26
7/31/00 547.5 211.074
8/31/00 583.75 222.659
9/29/00 695 220.888
10/31/00 550 222.137
11/30/00 547.5 211.566
12/29/00 772.5 220.437
NYSE STOCKS (SIC 1300-1399 US COMPANIES) OIL AND GAS EXTRACTION
12/29/95 100
1/31/96 101.614
2/29/96 103.701
3/29/96 110.847
4/30/96 117.316
5/31/96 116.586
6/28/96 119.844
7/31/96 112.24
8/30/96 118.636
9/30/96 121.89
10/31/96 131.07
11/29/96 137.691
12/31/96 136.464
1/31/97 140.744
2/28/97 125.679
3/31/97 127.384
4/30/97 125.137
5/30/97 138.893
6/30/97 140.377
7/31/97 153.855
8/29/97 161.334
9/30/97 173.63
10/31/97 173.893
11/28/97 158.329
12/31/97 155.727
1/30/98 140.309
2/27/98 146.97
3/31/98 155.227
4/30/98 161.091
5/29/98 146.882
6/30/98 136.135
7/31/98 113.713
8/31/98 86.368
9/30/98 104.632
10/30/98 109.109
11/30/98 93
12/31/98 89.409
1/29/99 83.722
2/26/99 80.403
3/31/99 104.594
4/30/99 120.54
5/28/99 117.779
6/30/99 124.377
7/30/99 128.254
8/31/99 133.171
9/30/99 125.926
10/29/99 120.4
11/30/99 117.605
12/31/99 119.914
1/31/00 115.217
2/29/00 117.877
3/31/00 142.575
4/28/00 146.86
5/31/00 166.691
6/30/00 156.822
7/31/00 148.649
8/31/00 173.227
9/29/00 171.294
10/31/00 154.473
11/30/00 143.999
12/29/00 178.748
13
PROPOSAL 2--RATIFICATION OF APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT
AUDITORS FOR 2001
The Audit Committee of the Board of Directors has, subject to shareholder
ratification, reappointed the firm of BDO Seidman, LLP as independent auditors
to examine the books of the Company and its subsidiaries for the year ending
December 31, 2001, and to report on the consolidated balance sheets, statements
of income and other related statements of the Company and its subsidiaries. BDO
Seidman has served as independent auditors for the Company continuously since
1989. Representatives of BDO Seidman are expected to be present at the Meeting,
will have an opportunity to make a statement if they desire to do so and are
expected to be available to respond to questions posed by the shareholders.
Ratification of the reappointment of BDO Seidman as the Company's independent
auditors requires the affirmative vote of a majority of the shares of Common
Stock voting on such matter. Abstentions and shares held by a broker, as
nominee, that are not voted on this matter will not be included in determining
the number of votes cast.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSAL TO
RATIFY THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY'S INDEPENDENT AUDITORS
FOR 2001.
FEES PAID TO INDEPENDENT AUDITORS
AUDIT FEES
Aggregate fees, including out-of-pocket expenses, for professional services
rendered by BDO Seidman in connection with the audit of the Company's
consolidated financial statements as of and for the year ended December 31, 2000
and the limited reviews of the Company's quarterly unaudited condensed
consolidated interim financial statements during 2000 were $138,300.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During the year ended December 31, 2000, BDO Seidman rendered no
professional services to the Company in connection with the design and
implementation of financial information systems.
ALL OTHER FEES
In addition to the audit fees described above, aggregate fees, including
out-of-pocket expenses, of $226,900 were paid to BDO Seidman during the year
ended December 31, 2000, consisting of the following non-audit professional
services: tax-related services ($30,500); acquisition audit and follow-on
offering assistance ($180,800); and other non-recurring services ($15,600).
OTHER BUSINESS
As of the date of this proxy statement, management of the Company is not
aware of any matter to be presented at the Meeting other than as set forth
herein. However, if any other matters are properly brought before the Meeting,
the shares represented by valid proxies will be voted with respect to such
matters in accordance with the judgment of the persons voting them.
FINANCIAL INFORMATION
The Company's Annual Report to Shareholders for the year ended December 31,
2000, is enclosed. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO ANY SHAREHOLDER OF
RECORD OR BENEFICIAL OWNER OF COMMON STOCK A COPY OF THE COMPANY'S 2000 ANNUAL
REPORT TO SHAREHOLDERS OR THE 2000 ANNUAL REPORT ON FORM 10-K (WITHOUT
EXHIBITS), INCLUDING FINANCIAL STATEMENTS FILED WITH THE SEC. Any such request
should be directed to Evergreen Resources, Inc. P.O. Box 660, Denver, CO
80201-0660, Attention: John Kelso, Manager of Investor Relations.
14
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be included in the Company's proxy
materials for the Company's 2002 annual meeting must be received at the offices
of the Company, P.O. Box 660, Denver, Colorado 80201-0660, no later than
November 30, 2001. Pursuant to the Company's bylaws, shareholder proposals
(other than director nominations) must be submitted to the Company no later than
the close of business on the 60th day before the first anniversary of the date
of the preceding year's annual meeting and no earlier than the 90thday prior to
such date. Such proposals must be made in accordance with established
procedures. Shareholder nominations for director must be received by the Company
no later than the close of business on the 30th day before the annual meeting of
shareholders at which directors are to be elected and no earlier than the 60th
day before the meeting. Such nominations must also be made in accordance with
established procedures. A shareholder may obtain a copy of such procedures from
the Company's Secretary.
KEVIN R. COLLINS
SECRETARY
Denver, Colorado
March 26, 2001
15
APPENDIX A
EVERGREEN RESOURCES, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation to
any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting and legal compliance that management and
the Board have established; and the Corporation's auditing, accounting and
financial reporting processes generally. Consistent with this function, the
Audit Committee should encourage continuous improvement of, and should foster
adherence to, the corporation's policies, procedures and practices at all
levels. The Audit Committee's primary duties and responsibilities are to:
- Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
- Review and appraise the audit efforts of the Corporation's independent
accountants.
- Provide an open avenue of communication among the independent accountants,
financial and senior management and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities discussed in Section IV. of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall meet the independence requirements
of applicable Nasdaq and New York Stock Exchange rules, and be free from any
relationship that, in the opinion of the Board, would interfere with exercise of
his or her independent judgment as a member of the Committee. All members of the
Committee shall have a working familiarity with basic finance and accounting
practices and be financially liberate, and at least one member of the Committee
shall have accounting or related financial management expertise, all as required
by applicable Nasdaq and New York Stock Exchange rules. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Corporation or an outside consultant.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board and until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee shall meet at least annually with management, and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or either of these groups believe should be discussed privately. In
addition, the Committee or at least its Chair shall meet with the independent
accountants and management quarterly to review the Corporation's periodic
reports consistent with IV.3 below. The Audit Committee
A-1
shall have the authority to retain special legal, accounting or other
consultants as it deems necessary to advise the Committee. The Audit Committee
may request any officer or employee of the Corporation or the Corporation's
outside counsel or independent auditor to attend a meeting of the Committee with
or without the presence of management or to meet with any members of, or
consultants to, the Committee.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review, reassess the adequacy of and update this Charter periodically, at
least annually, as conditions dictate.
2. Review the Corporation's annual financial statements and any reports or
other financial information submitted to any governmental body, or the
public, including any certification, report, opinion, or review rendered by
the independent accountants.
3. Review with financial management and the independent accountants each
Quarterly Report on Form 10-Q and each Annual Report on Form 10-K prior to
its filing with the Securities and Exchange Commission and each earnings
announcement prior to its release. The Chair of the Committee may represent
the entire Committee for purposes of this review.
4. Prepare the reports required to be included in the Corporation's annual
proxy materials.
INDEPENDENT ACCOUNTANTS
5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness, and approve the
fees and other compensation to be paid to the independent accountants. The
Committee shall ensure that the independent accountants submit on a periodic
basis (at least annually) to the Committee a formal written statement
delineating all relationships between the accountants and the Corporation;
actively engage in a dialogue with the independent accountants with respect
to any disclosed relationships or services that may impact their objectivity
and independence; and recommend that the Board take appropriate action in
response to the independent accountants' report to satisfy itself of their
independence.
6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
7. Periodically consult with the independent accountants out of the presence of
management about internal controls and the fullness and accuracy of the
Corporation's financial statements.
FINANCIAL REPORTING PROCESS
8. In consultation with the independent accountants, review the integrity of
the Corporation's financial reporting processes.
9. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in its
financial reporting.
10. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants and management.
A-2
PROCESS IMPROVEMENT
11. Establish regular and separate systems of reporting to the Audit Committee
by each of management and the independent accountants regarding any
significant judgments made in management's preparation of the financial
statements and the view of each as to appropriateness of such judgments.
12. Following completion of the annual audit, review separately with each of
management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on
the scope of work or access to required information.
13. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial statements.
14. Review with the independent accountants and management the extent to which
changes or improvements in financial or accounting practices, as approved by
the Audit Committee, have been implemented. (This review should be conducted
at an appropriate of time subsequent to implementation of changes or
improvements, as decided by the Committee.)
OTHER
15. Review and advise the Board with respect to the Corporation's policies and
procedures regarding compliance with applicable laws and regulations.
16. Review with the Corporation's outside counsel legal matters that may have a
material impact on the financial statements, the Corporation's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
17. Meet periodically with management to review the Corporation's major
financial risk exposures and the steps management has taken to monitor and
control such exposures and to determine the adequacy of financial reserves.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
auditing or to determine that the Corporation's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations, to
resolve disagreements, if any, between management and the independent auditor or
to ensure compliance with laws and regulations. The Corporation's independent
accountants are ultimately accountable to the Board of Directors and the Audit
Committee, and the Committee and the Board have the ultimate authority and
responsibility for selecting, evaluating and, where appropriate, replacing the
independent accountants (or for nominating the independent accountants to be
proposed for shareholder approval in any proxy statement).
A-3
PROXY EVERGREEN RESOURCES, INC. PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 2, 2001
The undersigned hereby constitutes and appoints Mark S. Sexton and Kevin R.
Collins, and each of them, the true and lawful attorneys and proxies of the
undersigned, with full power of substitution and appointment, for and in the
name, place and stead of the undersigned, to act for and vote all of the
undersigned's shares of no par value common stock of Evergreen Resources, Inc.,
a Colorado corporation (the "Company"), at the Annual Meeting of Shareholders to
be held at The Top of the Rockies, 555 Seventeenth Street, 37th floor, Denver,
Colorado, at 2:15 p.m., Mountain Daylight Time, on May 2, 2001, and any and all
adjournments thereof (the "Meeting"), for the purposes of considering and acting
upon the following matters:
1. The election of three directors of the For all nominees listed
Company to serve three-year terms (EXCEPT AS MARKED TO THE CONTRARY BELOW) / /
expiring in 2004.
1. Withhold authority
to vote for all nominees / /
Nominees: Dennis R. Carlton Mark S. Sexton Arthur L. Smith
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE FOLLOWING SPACE):
- --------------------------------------------------------------------------------
2. Ratification of the appointment of BDO Seidman, LLP as independent auditors
for the year ending December 31, 2001
/ / FOR / / AGAINST / / ABSTAIN
3. Such other business as properly may come before the Meeting
APPROVAL OF EACH MATTER LISTED ABOVE IS NOT CONTINGENT UPON THE APPROVAL OF
ANY OTHER MATTER LISTED ABOVE. (CONTINUED ON OTHER SIDE)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED ABOVE, FOR
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS AND IN THE DISCRETION OF
THE PROXY HOLDERS NAMED HEREIN WITH RESPECT TO OTHER MATTERS THAT PROPERLY COME
BEFORE THE MEETING.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE
WITH THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY WITH RESPECT TO MATTERS RELATED TO THE MEETING ABOUT WHICH THE COMPANY
DOES NOT RECEIVE TIMELY AND PROPER NOTICE AND WITH RESPECT TO MATTERS INCIDENT
TO THE CONDUCT OF THE MEETING.
The undersigned hereby acknowledges
receipt of the Notice of Annual
Meeting of Shareholders, Proxy
Statement and the Company's Annual
Report to Shareholders for the
fiscal year ended December 31,
2000, furnished therewith.
Dated: ______________________, 2001
___________________________________
___________________________________
Signature(s) should agree with the
name(s) hereon. Executors,
administrators, trustees, guardians
and attorneys should indicate when
signing. Attorneys should submit
power of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF EVERGREEN
RESOURCES, INC. PLEASE SIGN AND RETURN THIS PROXY TO COMPUTERSHARE TRUST
COMPANY, 12039 WEST ALAMEDA PARKWAY, SUITE Z-2, LAKEWOOD, CO 80228. THE GRANTING
OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
March 26, 2001