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.
VINTAGE PETROLEUM, INC.
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(Name of Registrant as Specified In Its Charter)
Not Applicable
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(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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VINTAGE PETROLEUM, INC.
110 West Seventh Street
Tulsa, Oklahoma 74119
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 8, 2001
To the Stockholders of
VINTAGE PETROLEUM, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Vintage Petroleum, Inc., a Delaware corporation (the "Company"), will be held in
the Tulsa Room on the 9th Floor, Bank of Oklahoma Tower, One Williams Center,
Tulsa, Oklahoma, on Tuesday, May 8, 2001, at 10:00 a.m., local time, for the
following purposes:
1. To elect two directors to Class II for three-year terms;
2. To consider and act upon a proposal to ratify the appointment of
Arthur Andersen LLP as the independent auditor of the Company
for 2001; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 23,
2001, as the record date for the meeting, and only holders of the Company's
Common Stock of record at such time will be entitled to vote at the meeting or
any adjournment thereof. A complete list of the stockholders entitled to vote at
the meeting will be open to the examination of any stockholder; for any purpose
germane to the meeting, during ordinary business hours for a period of 10 days
prior to the date of the meeting at the offices of the Company and at the time
and place of the meeting.
By Order of the Board of Directors,
William C. Barnes
Secretary
Tulsa, Oklahoma
March 30, 2001
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY AND
VOTE IN PERSON.
VINTAGE PETROLEUM, INC.
110 West Seventh Street
Tulsa, Oklahoma 74119
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 8, 2001
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Vintage Petroleum, Inc., a Delaware corporation (the
"Company"), of proxies to be voted at the Annual Meeting of Stockholders of the
Company to be held on May 8, 2001, or at any adjournment thereof (the "Annual
Meeting"), for the purposes set forth in the accompanying Notice of Annual
Meeting. This Proxy Statement and accompanying proxy were first forwarded on or
about March 30, 2001, to stockholders of record on March 23, 2001.
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Annual Meeting. If a stockholder
indicates in his or her proxy a choice with respect to any matter to be acted
upon, that stockholder's shares will be voted in accordance with such choice.
If no choice is indicated, such shares will be voted "FOR" (a) the election of
all of the nominees for directors listed below and (b) the ratification of the
appointment of the independent auditor. A stockholder giving a proxy may revoke
it by giving written notice of revocation to the Secretary of the Company at any
time before it is voted, by executing another valid proxy bearing a later date
and delivering such proxy to the Secretary of the Company prior to or at the
Annual Meeting, or by attending the Annual Meeting and voting in person.
The expenses of this proxy solicitation, including the cost of preparing
and mailing this Proxy Statement and accompanying proxy will be borne by the
Company. Such expenses will also include the charges and expenses of banks,
brokerage firms, and other custodians, nominees or fiduciaries for forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. Solicitation of proxies may be made by mail, telephone,
personal interviews or by other means by the Board of Directors or employees of
the Company who will not be additionally compensated therefor, but who may be
reimbursed for their out-of-pocket expenses in connection therewith.
STOCKHOLDERS ENTITLED TO VOTE
Stockholders of record at the close of business on March 23, 2001 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the
Record Date, there were issued and outstanding 62,961,966 shares of Common
Stock, par value $.005 per share (the "Common Stock"), of the Company. Each
share of Common Stock is entitled to one vote. There is no cumulative voting
with respect to the election of directors. The presence in person or by proxy of
the holders of a majority of the shares issued and outstanding at the Annual
Meeting and entitled to vote will constitute a quorum for the transaction of
business. Votes withheld from nominees for directors, abstentions and broker
non-votes will be counted for purposes of determining whether a quorum has been
reached. Votes will be tabulated by an inspector of election appointed by the
Board of Directors of the Company. With regard to the election of directors,
votes may be cast in favor of or withheld from each nominee; votes that are
withheld will have the effect of a negative vote. Abstentions, which may be
specified on all proposals except the election of directors, will have the
effect of a negative vote. Under applicable Delaware law, a broker non-vote will
have no effect on the outcome of the election of directors or the ratification
of the appointment of the independent auditor.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation (the "Charter") of the Company
provides that the Board of Directors of the Company (the "Board of Directors")
shall consist of not less than three nor more than fifteen directors, as
determined from time to time by resolution of the Board of Directors. The
number of directors is currently fixed at six. The Board of Directors is
divided into three approximately equal classes. The terms of such classes are
staggered so that only one class is elected at the annual meeting of
stockholders each year for a three-year term. The term of the Class II
directors, consisting of William L. Abernathy and Bryan H. Lawrence, will expire
at the Annual Meeting, and the accompanying proxy solicits your vote for two
Class II directors. The terms of the Class III directors and the Class I
directors will expire at the annual meeting of stockholders to be held in 2002
and 2003, respectively.
The Board of Directors has nominated William L. Abernathy and Bryan H.
Lawrence, for re-election as directors, each to hold office until the annual
meeting of stockholders in 2004 and until his successor is duly elected and
qualified, or until the earlier of his death, resignation or retirement. The
persons named as proxies in the accompanying proxy, who have been designated by
the Board of Directors, intend to vote, unless otherwise instructed in such
proxy, for the election of Messrs. Abernathy and Lawrence. Should any of the
nominees become unable for any reason to stand for election as a director of the
Company, it is intended that the persons named in such proxy will vote for the
election of such other person as the Board of Directors may recommend. The
Company knows of no reason why any of the nominees will be unavailable or unable
to serve.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy at the Annual Meeting and entitled to vote is required for
the election of directors. The Board of Directors recommends a vote "FOR" each
of the following nominees for directors.
Nominees for Directors
Class II
(Term Expires May 2004)
William L. Abernathy, age 49. Mr. Abernathy has been a Director since
October 1999, and an Executive Vice President and Chief Operating Officer of the
Company since December 1997. He was Senior Vice President - Acquisitions of the
Company from March 1994 to December 1997, Vice President - Acquisitions of the
Company from May 1990 to March 1994 and Manager - Acquisitions of the Company
from June 1987 to May 1990. From June 1976 to June 1987, Mr. Abernathy was
employed by Exxon Company USA, where he served at various times as Senior Staff
Engineer, Senior Supervising Engineer and in other engineering capacities, with
assignments in drilling, production and reservoir engineering in the Gulf Coast
and offshore. He has B.S. and M.S. Degrees in Mechanical Engineering from
Auburn University.
Bryan H. Lawrence, age 58. Mr. Lawrence has been a Director of the Company
since January 1987. He is a founder and has been a senior manager of Yorktown
Partners LLC, which manages certain investment partnerships, since September
1997. Mr. Lawrence had been employed by Dillon Read & Co. Inc., an investment
banking firm ("Dillon Read"), since 1966, serving most recently as a Managing
Director until the merger of Dillon Read with SBC Warburg in September 1997.
Mr. Lawrence also serves as a Director of Carbon Energy Corporation, D & K
Wholesale Drug, Inc., Hallador Petroleum Company and TransMontaigne Oil Company
(each a United States public company), Benson Petroleum Ltd. and Cavell Energy
Corp. (each a Canadian public company) and certain non-public companies in the
energy industry in which Yorktown partnerships hold equity interests including
Meenan Oil Co., Inc., PetroSantander Inc., Strega Energy, Inc., Savoy Energy,
L.P., Concho Resources Inc, Ricks Exploration, Inc., Athanor Resources, Inc.,
Camden Resources, Inc. and Crostex Energy Holdings, Inc. Mr. Lawrence is a
graduate of Hamilton College and also has an M.B.A. from Columbia University.
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Directors Continuing in Office
Class III
(Term Expires May 2002)
S. Craig George, age 48. Mr. George has been a Director since October
1991, President of the Company since September 1995 and Chief Executive Officer
of the Company since December 1997. He was also Chief Operating Officer of the
Company from March 1994 to December 1997, an Executive Vice President of the
Company from March 1994 to September 1995 and a Senior Vice President of the
Company from October 1991 to March 1994. From April 1991 to October 1991, Mr.
George was Vice President of Operations and International with Santa Fe
Minerals, Inc., an independent oil and gas company ("Santa Fe Minerals"). From
May 1981 to March 1991, he served in various other management and executive
capacities with Santa Fe Minerals and its subsidiary,Santa Fe-Andover Oil
Company (formerly Andover Oil Company), an independent oil and gas company
("Andover"). From December 1974 to April 1981, Mr. George held various
management and engineering positions with Amoco Production Company. He has a
B.S. Degree in Mechanical Engineering from the University of Missouri-Rolla.
Charles C. Stephenson, Jr., age 64. Mr. Stephenson, a co-founder of the
Company, has been a Director since June 1983 and Chairman of the Board of
Directors of the Company since April 1987. He was also Chief Executive Officer
of the Company from April 1987 to March 1994 and President of the Company from
June 1983 to May 1990. From October 1974 to March 1983, he was President of
Andover, and from January 1973 to October 1974, he was Vice President of
Andover. Mr. Stephenson also serves as a Director of AAON, Inc. Mr. Stephenson
has a B.S. Degree in Petroleum Engineering from the University of Oklahoma, and
has approximately 41 years of oil and gas experience.
Class I
(Term Expires May 2003)
William C. Barnes, age 46. Mr. Barnes, a certified public accountant, has
been a Director, Treasurer and Secretary of the Company since April 1987, an
Executive Vice President of the Company since March 1994 and Chief Financial
Officer of the Company since May 1990. He was also a Senior Vice President of
the Company from May 1990 to March 1994 and Vice President - Finance of the
Company from January 1984 to May 1990. From November 1982 to December 1983, Mr.
Barnes was an audit manager for Arthur Andersen & Co., an independent public
accounting firm, where he dealt primarily with clients in the oil and gas
industry. He was Assistant Controller - Finance of Andover from December 1980
to November 1982. From June 1976 to December 1980, he was an auditor with Arthur
Andersen & Co., where he dealt primarily with clients in the oil and gas
industry. Mr. Barnes has a B.S. Degree in Business Administration from Oklahoma
State University.
John T. McNabb, II, age 56. Mr. McNabb has been a Director of the Company
since October 1990. He has been Chairman of the Board of Directors of Growth
Capital Partners, Inc., an investment and advisory firm in Houston, Texas
serving privately held and public middle market companies based in the
Southwest, since March 1992. From June 1990 to January 1992, he was a Managing
Director of Bankers Trust Company, managing commercial banking, investment
banking and financial advisory activities in the Southwest for Bankers Trust
Company, and a director of BT Southwest, Inc., an affiliate of Bankers Trust New
York Corporation. From September 1984 to June 1990, Mr. McNabb was employed by
investment affiliates of The Prudential Insurance Company of America where he
provided a wide range of investment banking services and corporate finance
expertise to corporate clients. He holds undergraduate and graduate (M.B.A.)
degrees from Duke University.
Compensation of Directors
Employee directors receive no additional compensation for service on the
Board of Directors or any committee thereof. Non-employee directors
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receive an annual retainer of $25,000. Non-employee directors also automatically
receive non-qualified stock options under the Vintage Petroleum, Inc. Non-
Management Director Stock Option Plan (the "Director Plan"). Under the Director
Plan, an initial option to purchase up to 5,000 shares of Common Stock is
granted to any new non-employee director on the date of the organizational board
meeting (the board meeting immediately following the annual stockholders
meeting) at which he or she first serves as a member of the Board of Directors.
Each non-employee director also receives annually an option to purchase 1,000
shares of Common Stock on the date of the organizational board meeting next
following the date on which such director received an initial option and on the
date of each succeeding organizational board meeting during the period of such
director's incumbency. The option exercise price of each option granted under
the Director Plan is equal to the fair market value of the Common Stock on the
date of grant. A total of 60,000 shares of Common Stock are available for
issuance under the Director Plan. As of March 1, 2001, there were 18,000 shares
available for future grants of options under the Director Plan. During fiscal
2000, Messrs. Lawrence and McNabb were each granted an option to purchase 1,000
shares of Common Stock at an exercise price of $22.9375 per share. No options
have been exercised under the Director Plan. Non-employee directors are also
eligible to receive awards under the Company's 1990 Stock Plan. During fiscal
2000, Messrs. Lawrence and McNabb were each granted an option to purchase 4,000
shares of Common Stock at an exercise price of $19.5625 per share (being the
fair market value of the Common Stock on the date of grant) under the Company's
1990 Stock Plan. All directors are reimbursed by the Company for out-of-pocket
expenses incurred by them in connection with their service on the Board of
Directors and any committee thereof.
Meetings and Committees of the Board of Directors
During 2000, the Board of Directors held three meetings. All of the
directors were present at each meeting. In addition, the Board of Directors
took action 11 times during 2000 by unanimous written consent. The Board of
Directors has a standing Audit Committee and a standing Compensation Committee.
The Audit Committee is composed of Messrs. Lawrence and McNabb. Each of
these individuals qualifies as an "independent" director under the current
listing standards of the New York Stock Exchange. The Audit Committee has
adopted a charter and it is attached to this Proxy Statement as Exhibit A. The
Audit Committee annually considers the qualifications of the independent auditor
of the Company and the independence of the auditor and makes recommendations to
the Board of Directors on the engagement of the independent auditor. The Audit
Committee has considered whether the provisions of the services by Arthur
Andersen LLP as described in this Proxy Statement under the caption "All Other
Fees" under Proposal Two below is compatible with maintaining the independence
of Arthur Andersen LLP. The Audit Committee also reviews (a) any transactions
between the Company and its officers, directors and principal stockholders, (b)
the plans for and results of audits of the Company, and (c) the results of any
internal audits, compliance with any of the Company's written policies and
procedures and the adequacy of the Company's system of internal accounting
controls. The Audit Committee met three times during 2000. All of the members
of the Audit Committee were present at each meeting. The Chairman of the Audit
Committee also met once with the independent auditor of the Company. The Audit
Committee took action twice during 2000 by unanimous written consent.
The Compensation Committee is composed of Messrs. Stephenson, Lawrence and
McNabb. The Compensation Committee reviews the compensation of officers of the
Company and makes recommendations to the Board of Directors regarding such
compensation and reviews the Company's executive compensation policies and
practices. The Compensation Committee also administers generally the Company's
1990 Stock Plan, except that the Board of Directors administers such Plan with
respect to certain matters pertaining to officers and non-employee directors of
the Company. The Compensation Committee met once during 2000. All of the
members of the Compensation Committee were present at such meeting.
The Company does not have a standing Nominating Committee. The Company's
Charter provides that nominations of candidates for election as directors of the
Company may be made at a meeting of stockholders by or at the direction of the
Board of Directors or by any stockholder entitled to vote at such
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meeting who complies with the advance notice procedures set forth therein. These
procedures require any stockholder who intends to make a nomination for director
at the meeting to deliver notice of such nomination to the Secretary of the
Company not less than 45 nor more than 90 days before the meeting. The notice
must contain all information about the proposed nominee as would be required to
be included in a proxy statement soliciting proxies for the election of such
nominee, including such nominee's written consent to serve as a director if so
elected. If the Chairman of the meeting determines that a person is not
nominated in accordance with the nomination procedure, such nomination will be
disregarded. The Company's By-laws provide that the annual meeting of
stockholders to be held each year will be on the second Tuesday in May.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP as the independent auditor of the Company for the
fiscal year ending December 31, 2001. Arthur Andersen LLP has been the
independent auditor of the Company since the Company's inception in 1983. A
proposal will be presented at the Annual Meeting asking the stockholders to
ratify the appointment of Arthur Andersen LLP as the Company's independent
auditor. If the stockholders do not ratify the appointment of Arthur Andersen
LLP, the Board of Directors will reconsider the appointment.
The affirmative vote of the holders of a majority of the shares present in
person or by proxy at the Annual Meeting and entitled to vote is required for
the adoption of this proposal. The Board of Directors recommends a vote "FOR"
the ratification of Arthur Andersen LLP as independent auditor for 2001.
A representative of Arthur Andersen LLP will be present at the Annual
Meeting. Such representative will be given the opportunity to make a statement
if he desires to do so and will be available to respond to appropriate
questions.
Audit Fees
The aggregate fees billed by Arthur Andersen LLP for professional services
rendered for the audit of the Company's annual financial statements for the
fiscal year ended December 31, 2000, and for the reviews of the financial
statements included in the Company's Quarterly Reports on Form 10-Q for that
fiscal year were $257,000.
Financial Information Systems Design and Implementation Fees
The Company did not engage Arthur Andersen LLP for professional services
relating to financial information systems design and implementation for the
fiscal year ended December 31, 2000.
All Other Fees
The aggregate fees billed by Arthur Andersen LLP for services rendered to
the Company, other than the services described above under "Audit Fees" for the
fiscal year ended December 31, 2000, were $333,670.
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of March 15, 2001,
regarding the ownership of the Company's Common Stock by (a) all persons known
by the Company to be beneficial owners of more than five percent of such stock,
(b) each director and nominee for director of the Company, (c) each of the
executive officers of the Company named in the Summary Compensation Table below,
and (d) all executive officers and directors of the Company as a group. Unless
otherwise noted, the persons named below have sole voting and investment power
with respect to such shares.
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Shares
Beneficially Percentage
Name of Owner or Identity of Group Owned of Class(1)
- ----------------------------------------- ---------------- -------------
Charles C. Stephenson, Jr.(2)............ 10,748,000 (3) 17.1%
Forstmann-Leff Associates, LLC(4)........ 3,162,991 (4) 5.0
William C. Barnes........................ 1,057,144 (5) 1.7
William L. Abernathy..................... 637,356 (6) 1.0
S. Craig George.......................... 563,511 (7) *
William E. Dozier........................ 315,273 (8) *
Larry W. Sheppard........................ 197,477 (9) *
Bryan H. Lawrence........................ 65,900 (10) *
John T. McNabb, II....................... 37,744 (11) *
All executive officers and directors as
a group (13 persons)................ 14,523,567 (12) 22.3
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* Represents less than 1% of the Common Stock outstanding.
(1) Shares of Common Stock which were not outstanding but which could be
acquired by a person upon exercise of an option within sixty days of March
15, 2001, are deemed outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned by such person. Such
shares, however, are not deemed to be outstanding for the purpose of
computing the percentage of outstanding shares beneficially owned by any
other person.
(2) The stockholder's address is 110 West Seventh Street, Tulsa, Oklahoma
74119.
(3) Includes (a) 9,737,400 shares held by Stephenson Equity Co., a general
partnership controlled by Mr. Stephenson ("SECO"), and (b) 218,800 shares
held by the Stephenson Family Charitable Foundation, of which Mr.
Stephenson and his wife are co-trustees. Mr. Stephenson and his wife do
not have a pecuniary interest in the shares held by the Foundation. Does
not include 200 shares owned by Mr. Stephenson's wife. Mrs. Stephenson has
full rights of ownership over such shares, including sole voting and
investment power. Mr. Stephenson disclaims beneficial ownership of such
shares.
Mr. Stephenson has advised the Company that in 1999 SECO deposited
8,000,000 of the 9,737,400 shares held by SECO (or approximately 12.7% of
the Company's issued and outstanding shares of Common Stock at March 15,
2001) into an investment program offered by Credit Bancorp. SECO retained
full beneficial ownership of the shares under the terms of the agreement
between SECO and Credit Bancorp and the agreement placed explicit and
unequivocal limitations on the transferability or use of the shares.
Subsequent to the date of deposit, the Securities and Exchange Commission
(the "SEC") began an investigation of Credit Bancorp and obtained an order
temporarily restraining Credit Bancorp from making fraudulent offers, sales
and purchases of securities in connection with the investment program. The
SEC also received a court order freezing the assets of Credit Bancorp, and
since then, a receiver has been appointed for Credit Bancorp. Mr.
Stephenson has informed the Company that the 8,000,000 shares are subject
to the freeze order and that, although none of the 8,000,000 shares have
been sold, a substantial portion of these shares have been margined by
Credit Bancorp without his consent and in violation of the agreement that
SECO entered into with Credit Bancorp. SECO has requested, and has filed a
lawsuit against Credit Bancorp requesting, Credit Bancorp to return the
shares to SECO, as the rightful owner of the shares. Mr. Stephenson has
indicated that certain insurance coverage exists that should be available
to cover losses, if any, resulting from the unauthorized activities of
Credit Bancorp with respect to the shares and that SECO has filed a notice
of claim in the event of any such loss. Mr. Stephenson has further advised
the Company that SECO will be able to vote the 8,000,000 shares at the
Annual Meeting. The Company
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cannot predict the effect, if any, that this matter may ultimately have on
Mr. Stephenson's ownership of shares of the Company.
(4) Information is as of December 31, 2000, and is based on the Schedule 13G
dated February 12, 2001, which was filed by Forstmann-Leff Associates, LLC
("Forstmann"), FLA Asset Management, LLC ("FLA Asset"), FLA Advisers L.L.C.
("FLA Advisers") and Peconic Partners, LLC ("Peconic"), all of whom are
registered investment advisers. Their address is 590 Madison Avenue, New
York, New York 10022. FLA Asset is a subsidiary of Forstmann. The members
of Forstmann's Investment Committee are also the managers of FLA Advisers.
FLA Advisers is the parent company of Peconic. Forstmann beneficially owns
the 3,162,991 shares, which includes shares beneficially owned by FLA Asset
and FLA Advisers. Of these shares, Forstmann has sole voting power over
1,217,760 shares, shared voting power over 1,207,080 shares, sole
dispositive power over 1,484,391 shares and shared dispositive power over
1,678,600 shares. FLA Asset has shared voting power over 726,850 shares
and shared dispositive power over 1,208,650 shares. FLA Advisers has
shared voting and dispositive power over 469,950 shares. Peconic does not
have voting or dispositive power over any shares.
(5) Includes 405,050 shares subject to stock options which are currently
exercisable at an average exercise price of $12.22 per share, and 4,694
shares held by the Vintage Petroleum, Inc. 401(k) Plan (the "401(k) Plan")
and allocated to the account of Mr. Barnes.
(6) Includes 349,604 shares subject to stock options which are currently
exercisable at an average exercise price of $12.02 per share, and 9,966
shares held by the 401(k) Plan and allocated to the account of Mr.
Abernathy.
(7) Includes 484,070 shares subject to stock options which are currently
exercisable at an average exercise price of $12.52 per share, and 11,441
shares held by the 401(k) Plan and allocated to the account of Mr. George.
(8) Includes 245,850 shares subject to stock options which are currently
exercisable at an average exercise price of $13.01 per share, and 20,223
shares held by the 401(k) Plan and allocated to the account of Mr. Dozier.
(9) Includes 190,050 shares subject to stock options which are currently
exercisable at an average exercise price of $13.87 per share, and 7,427
shares held by the 401(k) Plan and allocated to the account of Mr.
Sheppard.
(10) Includes 25,000 shares subject to stock options which are currently
exercisable at an average exercise price of $11.64 per share.
(11) Includes 25,000 shares subject to stock options which are currently
exercisable at an average exercise price of $11.64 per share.
(12) Includes 2,280,642 shares subject to stock options which are currently
exercisable at an average exercise price of $12.84 per share, and 87,665
shares held by the 401(k) Plan and allocated to the accounts of such
individuals.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to the
compensation of the Company's Chairman of the Board of Directors, the Company's
Chief Executive Officer and each of the Company's four most highly compensated
executive officers other than the Chief Executive Officer, based on salary and
bonus earned during fiscal 2000, for services in all capacities to the Company
and its subsidiaries during each of the Company's last three fiscal years.
Long-Term Compensation
----------------------------------
Annual Compensation Awards Payouts
---------------------------------------- ------------------------ ---------
Securities
Restricted Underlying Long-Term
Other Annual Stock Options/ Incentive All Other
Name and Salary Bonus Compensation Award(s) SARs Payouts Compensation
Principal Position Year ($) ($)(1) ($)(2) ($) (#)(3) ($) ($)(4)
- ------------------------------- ----- ------- ------- ------------ ---------- ---------- --------- ------------
Charles C. Stephenson, Jr., 2000 200,000 -0- -0- -0- -0- -0- -0-
Chairman of the Board of 1999 50,000(5) -0- -0- -0- -0- -0- -0-
Directors 1998 50,000(5) -0- -0- -0- -0- -0- -0-
S. Craig George, 2000 312,000 124,800 -0- -0- 80,000 -0- 10,200
President and Chief 1999 256,250 153,750 -0- -0- 115,000 -0- 9,600
Executive Officer 1998 225,000 -0- -0- -0- 100,000 -0- 9,600
William C. Barnes, 2000 260,000 104,000 -0- -0- 65,000 -0- 10,200
Executive Vice President 1999 220,833 132,500 -0- -0- 95,000 -0- 9,600
and Chief Financial Officer 1998 200,000 -0- -0- -0- 80,000 -0- 9,600
William L. Abernathy, 2000 208,000 83,200 -0- -0- 65,000 -0- 10,200
Executive Vice President 1999 178,417 107,050 -0- -0- 80,000 -0- 9,600
and Chief Operating Officer 1998 163,000 -0- -0- -0- 70,000 -0- 9,600
William E. Dozier, 2000 192,400 57,720 -0- -0- 40,000 -0- 10,200
Senior Vice President- 1999 167,500 67,000 -0- -0- 65,000 -0- 9,019
Operations 1998 155,000 -0- -0- -0- 60,000 -0- 9,290
Larry W. Sheppard, 2000 189,000 56,700 -0- -0- 40,000 -0- 4,253
Vice President- 1999 157,833 63,133 -0- -0- 55,000 -0- 4,143
International 1998 142,000 -0- -0- -0- 45,000 -0- 4,143
- ----------------
(1) Represents bonuses awarded under the Company's Discretionary Performance
Bonus Program. For additional information regarding this Program, see
"Report on Executive Compensation -Discretionary Performance Bonus
Program."
(2) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not exceed
the lesser of $50,000 or 10 percent of the total amount of annual salary
and bonus for any named individual.
(3) Consists solely of options to acquire shares of Common Stock at exercise
prices equal to fair market value on the date of grant.
(4) Represents Company contributions to the 401(k) Plan.
(5) During 1999 and 1998, Mr. Stephenson was entitled to receive an annual base
salary of $100,000 pursuant to his employment agreement with the Company.
He has waived this right to receive any unpaid portion of base salary for
1999 and 1998, as the case may be.
-8-
Option/SAR Grants In Last Fiscal Year
The following table sets forth certain information with respect to options
granted to the named executive officers of the Company during fiscal 2000. The
Company has never granted any stock appreciation rights.
Individual Grants
- ------------------------------------------------------------------------------------
Number of % of Total Potential Realizable Value
Securities Options/ at Assumed Annual Rates
Underlying SARs of Stock Price
Options/ Granted to Exercise Appreciation
SARs Employees or for Option Term(3)
Granted in Fiscal Base Price Expiration -----------------------
Name (#)(1) Year ($/Sh)(2) Date 5%($) 10%($)
- ---------------------------- ---------- ---------- ---------- ---------- ------- ---------
Charles C. Stephenson, Jr. -0- -0- -0- -0- -0- -0-
S. Craig George 80,000(4) 9.5 19.5625 7/5/10 984,220 2,494,207
William C. Barnes 65,000(4) 7.7 19.5625 7/5/10 799,679 2,026,543
William L. Abernathy 65,000(4) 7.7 19.5625 7/5/10 799,679 2,026,543
William E. Dozier 40,000(4) 4.7 19.5625 7/5/10 492,110 1,247,103
Larry W. Sheppard 40,000(4) 4.7 19.5625 7/5/10 492,110 1,247,103
_____________________________
(1) Consists solely of options to acquire shares of Common Stock. The options
were granted for a term of 10 years, subject to earlier termination in
certain events related to termination of employment. Under the terms of the
Company's 1990 Stock Plan, the Compensation Committee retains discretion,
subject to plan limits, to modify the terms of the options and to reprice
the options. The Company, however, has never repriced options previously
granted. In the event of a Change in Control, as defined in the Company's
1990 Stock Plan, the options become fully exercisable immediately.
(2) The exercise price of the options is equal to the fair market value of the
Common Stock on the date of grant.
(3) Potential realizable value illustrates the value that might be realized
upon exercise of the options immediately prior to the expiration of their
term (10 years from the date of grant), assuming that the Common Stock
appreciates in value from the date of grant to the end of the option term
at rates of 5% and 10%, respectively, compounded annually.
(4) These options become exercisable in full on July 6, 2003. The option
exercise price may be paid in cash, by delivery of already-owned shares, or
a combination thereof, or, at the discretion of the Compensation Committee,
by a promissory note. Tax withholding obligations, if any, related to
exercise may be paid by offset of the underlying shares, subject to certain
conditions.
Aggregated Option/SAR Exercises In Last Fiscal Year
and FY-End Option/SAR Values
The following table sets forth certain information with respect to options
exercised by the named executive officers of the Company during fiscal 2000, and
the number and value of unexercised options held by such executive officers at
the end of the fiscal year. The Company has never granted any stock
appreciation rights.
-9-
Value of Unexercised
Shares Number of Securities In-the-Money
Acquired Underlying Unexercised Options/SARs at FY-End
on Value Options/SARs at FY-End(#) ($)(1)(2)
Exercise Realized -------------------------- --------------------------
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------- --------- --------- ----------- ------------- ----------- -------------
Charles C. Stephenson, Jr. -0- -0- -0- -0- -0- -0-
S. Craig George 80,000 1,223,125 437,570 301,450 5,041,761 1,963,700
William C. Barnes -0- -0- 393,550 246,450 4,709,425 1,623,387
William L. Abernathy -0- -0- 278,104 221,450 3,189,815 1,396,512
William E. Dozier -0- -0- 184,350 171,450 1,977,375 1,121,200
Larry W. Sheppard -0- -0- 143,550 146,450 1,358,175 959,012
- ----------------------------
(1) Market value of the underlying securities at exercise date or fiscal year-
end, as the case may be, minus the option exercise price.
(2) The closing price for the Common Stock on the New York Stock Exchange on
December 31, 2000, the last trading day of the fiscal year, was $21.50.
Employment Agreements and Change
in Control Arrangements
The Company has an employment agreement with one of the named executive
officers of the Company.
On January 7, 1987, the Company entered into an employment agreement with
Mr. Stephenson, now Chairman of the Board of the Company. The agreement
provides for (a) an annual base salary of $100,000, subject to review and
adjustment (upwards only) by the Board of Directors, and (b) such other
compensation and benefits as determined by the Board of Directors. The initial
term of the agreement extended through December 31, 1991, and is automatically
extended for additional periods of one year until terminated by either the
employee or the Company. The agreement further provides that in the event of
termination of the employee's employment prior to expiration of the term of such
agreement (a) by the Company for any reason other than death, disability, cause
or the employee's material breach of such agreement, or (b) by the employee as a
result of a material breach of such agreement by the Company, the employee will
be entitled to receive his base salary and other compensation and benefits to
which he is entitled for the balance of such term.
All outstanding awards under the Vintage Petroleum, Inc. 1990 Stock Plan,
regardless of any limitations or restrictions, become fully exercisable and free
of all restrictions, in the event of a Change in Control of the Company, as
defined in such Plan. In such event, with certain exceptions, participants will
receive cash payments equal to the value of their outstanding awards based on
the "change of control price" as defined in such Plan.
Report on Executive Compensation
The Compensation Committee of the Board of Directors administers the
Company's executive compensation program, except that the Board of Directors is
generally responsible for administering the Company's 1990 Stock Plan with
respect to the executive officers of the Company. During 2000, the Committee
was comprised of the two outside directors of the Company (Messrs. Lawrence and
McNabb) and the Chairman of the Board of Directors of the Company (Mr.
Stephenson). All decisions of the Committee relating to the compensation of the
executive officers of the Company are reviewed by the full Board of Directors.
-10-
Overall Executive Compensation Policy. The overall policy of the Company's
executive compensation program is to attract, retain and reward executives who
are capable of leading the Company in achieving its business objectives and
strategies in a highly competitive industry. The executive compensation program
basically consists of three elements: salary, stock options, and, beginning in
1999, a discretionary bonus program tied to annual financial and operating
performance targets.
Section 162(m) of the Internal Revenue Code of 1986, as amended, provides
that no publicly-held company shall be permitted to deduct from its income taxes
compensation exceeding $1 million paid to its chief executive officer or any of
its four other highest paid executive officers unless (a) the compensation is
payable solely on account of the attainment of performance goals, (b) the
performance goals are determined by a compensation committee of two or more
outside directors, (c) the material terms under which the compensation is paid
are disclosed to and approved by the stockholders, and (d) the compensation
committee certifies that the performance goals were met. Neither the Committee
nor the Company expects this Section to have an impact, or result in the loss of
a material deduction, with respect to compensation paid to such executive
officers, including stock options granted to such executive officers.
Salary. The Committee reviews each executive officer's salary annually.
The employment agreement of one of the executive officers of the Company sets a
minimum salary level for such officer. The Committee believes there is
necessarily some subjectivity in setting the salaries of the Company's executive
officers and does not follow specific objective performance criteria when
setting such salaries. In determining appropriate salary levels for 2000, the
Committee primarily considered the individual's past performance, the past
performance of the Company and the individual's contribution to that
performance. The Committee also considered the executive's level and scope of
responsibility, experience, internal equity of the Company's executive
compensation program, and the compensation practices of other companies in the
oil and gas industry for executives of similar responsibility.
Discretionary Performance Bonus Program. The Board of Directors has
adopted the Vintage Petroleum, Inc. Discretionary Performance Bonus Program.
The purpose of this Program is to enhance stockholder value by providing
eligible employees of the Company, including executive officers, with an added
incentive to achieve specific annual Company targets and goals. This Program
also allows the Company to remain competitive with its peers in attracting and
retaining qualified personnel. The targets and goals are approved by the Board
of Directors and are intended to be aligned with the Company's mission so that
bonus payments are made only if stockholder interests are advanced. In 2000,
the Company's executive officers and all other U.S. employees were eligible for
cash incentive awards under this Program. Each executive officer of the Company
was eligible to earn an individual award expressed as a percentage of base
salary paid during the Program year. Executive officer incentive award
opportunities varied by level of responsibility. There was no minimum incentive
award. The maximum percentage of base salary payable as an incentive award was
40% or 60%, depending on the executive officer's position. Total bonus awards
to all eligible employees for a given Program year may not exceed 5% of net
income of the Company. Awards may be granted if specified financial and
operating performance targets are achieved and/or the Board of Directors
determines to grant such bonuses. During 2000, financial and operating
performance targets were based on the Company's production, reserves, finding
costs, lease operating costs, general and administrative costs, year-end net
debt to book capitalization ratio and year-end stock price. Although the 2000
targets were only met in part, the Company reported record financial results for
2000 and set new highs for proved reserves and production. Accordingly, the
Board of Directors granted to the executive officers of the Company (and other
eligible employees) bonus awards under the Program, albeit at a reduced rate for
executive officers (30% or 40% of base salary, depending on an executive
officer's position). Once granted, the bonuses to executive officers are
generally payable over a two and one half-year period and are subject to
forfeiture under certain circumstances. Such bonus payments may also be
postponed under certain circumstances.
-11-
Stock Options. The Board of Directors relies heavily upon stock options to
compensate the executive officers of the Company. The Board of Directors
believes that stock options encourage and reward effective management that
results in long-term corporate financial success, as measured by stock price
appreciation. Options granted by the Board of Directors are subject to a vesting
schedule and in most instances are not exercisable until after three years from
the date of grant. In addition, the exercise price of options granted by the
Board of Directors equals the fair market value of the Common Stock on the date
of grant. The Board of Directors believes that granting options in this manner
aligns the interests of the Company's executives with those of the Company's
stockholders since the value of an option bears a direct relationship to the
Company's stock price.
Options granted to executive officers during 2000 were based on the
subjective evaluation of the executive's ability to influence the Company's
long-term growth and profitability and to reward outstanding past individual
performance and contributions to the Company.
CEO Compensation. During 2000, Mr. George served as President and Chief
Executive Officer of the Company. His base salary for 2000 and options granted
to him during 2000 were determined in the same manner utilized by the Committee
and the Board of Directors when determining salaries and option grants for the
Company's other executive officers as described above. His bonus for 2000 was
granted under the Discretionary Performance Bonus Program described above.
Under this Program, the maximum amount that Mr. George may earn is 60% of his
base salary. He was awarded 40% of his base salary for 2000 under this Program.
Board of Directors Compensation Committee
------------------ ----------------------
William L. Abernathy Bryan H. Lawrence
William C. Barnes John T. McNabb, II
S. Craig George Charles C. Stephenson, Jr.
Bryan H. Lawrence
John T. McNabb, II
Charles C. Stephenson, Jr.
The Report on Executive Compensation shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
Compensation Committee Interlocks and Insider Participation
During 2000, Charles C. Stephenson, Jr., an executive officer of the
Company, was a member of the Compensation Committee and participated in
deliberations concerning executive officer compensation. The other two members
of the Compensation Committee during 2000 were the two outside directors of the
Company, Bryan H. Lawrence and John T. McNabb, II.
Mr. Stephenson is a director of Growth Capital Partners, Inc. and GCP
Securities, Inc. Mr. McNabb is an executive officer of these entities.
Performance Graph
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the period
commencing January 1, 1996, and ending on December 31, 2000, with the cumulative
total return on the S&P 500 Index and an index of peer companies
-12-
(weighted by market capitalization) selected by the Company. Companies in the
peer group are as follows: Apache Corporation, Barrett Resources Corporation,
Cabot Oil & Gas Corporation, Cross Timbers Oil Company, Devon Energy
Corporation, Forest Oil Corporation, Noble Affiliates, Inc., Nuevo Energy
Company, Ocean Energy, Inc., Pioneer Natural Resources Company and Pogo
Producing Company. Santa Fe Snyder Corporation no longer appears in the peer
group because it was acquired by Devon Energy Corporation who continues to
appear in the peer group. The comparison assumes $100 was invested on December
31, 1995, in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
---- ---- ---- ---- ---- ----
1995 1996 1997 1998 1999 2000
VINTAGE $100 $154 $170 $78 $109 $195
S&P 500 $100 $123 $164 $211 $255 $232
PEER GROUP $100 $142 $124 $69 $85 $169
Source: S&P Compustat Services
The above performance graph shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed with management the
Company's audited financial statements as of and for the year ended December 31,
2000.
The Audit Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended, by the Auditing Standards Board
of the American Institute of Certified Public Accountants.
-13-
The Audit Committee has received and reviewed the written disclosures and
the letter from the independent auditors required by Independence Standard No.
1, Independence Discussions with Audit Committees, as amended, by the
Independence Standards Board, and have discussed with the auditors the auditors'
independence.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the financial statements referred to
above be included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.
Audit Committee
---------------
Bryan H. Lawrence
John T. McNabb, II
The Report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
CERTAIN TRANSACTIONS
Since January 1, 2000, certain executive officers of the Company have been
indebted to the Company in amounts in excess of $60,000 under various notes.
The following table sets forth, as to the persons shown, the largest amounts of
their indebtedness outstanding during such period and the interest rates,
maturity dates and the outstanding balances of such indebtedness as of March 15,
2001:
Largest Range of Outstanding
Amount of Maturity Balance at
Name Indebtedness(1)(2) Dates of Notes March 15, 2001 (1)(2)
- ------------------------ ------------------ ------------------ ---------------------
S. Craig George......... $ 467,054 8/11/01 $ 467,054
William C. Barnes....... 1,125,488 5/11/01 to 5/18/02 500,689
William L. Abernathy.... 1,487,080 4/7/01 to 7/10/02 1,487,080
William E. Dozier....... 507,737 7/27/02 507,737
Michael F. Meimerstorf.. 444,920 8/12/01 242,463
Robert E. Phaneuf....... 360,025 8/11/02 120,008
Martin L. Thalken....... 429,635 2/3/03 362,893
____________
(1) This indebtedness was incurred to fund the purchase of shares of Common
Stock upon exercise of options under the Company's Stock Option Plans and
is secured by shares of Common Stock.
(2) This indebtedness bears interest at Mellon Bank, N.A. prime rate.
-14-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than 10
percent of the Common Stock, to report their initial ownership of the Common
Stock and any subsequent changes in that ownership to the SEC and the New York
Stock Exchange, and to furnish the Company with a copy of each such report. SEC
regulations impose specific due dates for such reports, and the Company is
required to disclose in this Proxy Statement any failure to file by these dates
during and with respect to fiscal 2000.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during and with respect to fiscal 2000, all Section 16(a)
filing requirements applicable to its officers, directors and more than 10
percent stockholders were complied with, except that Messrs. Cox and Phaneuf,
officers of the Company, each inadvertently reported late one transaction
relating to an exercise of an employee stock option.
OTHER MATTERS
Matters Which May Come Before the Annual Meeting
The Board of Directors knows of no matters other than those described in
this Proxy Statement which will be brought before the Annual Meeting for a vote
of the stockholders. If any other matter properly comes before the Annual
Meeting for a stockholder's vote, the persons named in the accompanying proxy
will vote thereon in accordance with their best judgment. The Company's By-laws
require that for business to be properly brought before a meeting of
stockholders by a stockholder, notice must be received by the Secretary of the
Company not less than 45 nor more than 90 days before the meeting. The notice
must contain a brief description of the business proposed to be brought before
the meeting.
Proposals of Stockholders
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, proposals
of stockholders intended to be presented at the Company's 2002 Annual Meeting of
Stockholders must be received at the principal executive offices of the Company,
110 West Seventh Street, Tulsa, Oklahoma 74119, on or before November 30, 2001,
to be considered for inclusion in the Company's proxy statement and accompanying
proxy for that meeting.
In accordance with the Company's By-laws, any stockholder who intends to
present a proposal at the Company's 2002 Annual Meeting of Stockholders and has
not sought inclusion of the proposal in the Company's proxy statement and
accompanying proxy pursuant to Rule 14a-8, must provide the Company with notice
of such proposal no later than March 24, 2002, in order for such proposal to be
properly brought before the meeting.
By Order of the Board of Directors,
William C. Barnes
Secretary
March 30, 2001
Tulsa, Oklahoma
-15-
EXHIBIT A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
VINTAGE PETROLEUM, INC.
Purpose. The Audit Committee is appointed by the Board to assist the Board
in monitoring the integrity of the financial statements of the Company and the
independence and performance of the Company's internal, if any, and external
auditors.
Composition and Independence. The members of the Audit Committee shall
meet the independence and experience requirements of the New York Stock
Exchange. The members of the Audit Committee shall be appointed by the Board.
Authority. The Audit Committee shall have the authority to retain special
legal, accounting or other consultants to advise the Committee. The Audit
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
Reports. The Audit Committee shall make regular reports to the Board.
Functions. The Audit Committee shall perform the following functions.
These functions are set forth as a guide with the understanding that the Audit
Committee may diverge from this guide as appropriate given the circumstances.
1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management,
including major issues regarding accounting and auditing principles and
practices as well as the adequacy of internal controls that could significantly
affect the Company's financial statements.
3. Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in connection with
the preparation of the Company's financial statements.
4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the filing of its Form 10-Q. The
Chairman of the Audit Committee may represent the entire Audit Committee, either
in person or by telephone conference call, for purposes of this review.
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor and
control such exposures.
6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor, internal
auditors, if any, or management.
7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Audit Committee and the Board.
8. Approve the fees to be paid to the independent auditor.
A-1
9. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, and if so
determined by the Audit Committee, recommend that the Board take appropriate
action to satisfy itself of the independence of the auditor.
10. Evaluate together with the Board the performance of the independent
auditor and, if so determined by the Audit Committee, recommend that the Board
replace the independent auditor.
11. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
12. Obtain from the independent auditor assurance that Section 10A (Audit
Requirements) of the Securities Exchange Act of 1934 has not been implicated.
13. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the conduct of
the audit.
14. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the auditor
and the Company's response to the letter. Such review should include any
difficulties encountered in the course of the audit work, including any
restrictions on the scope of activities or access to required information.
15. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy statement.
16. Review with the Company's General Counsel legal matters that may have
a material impact on the financial statements.
17. Meet at least annually with the chief financial officer, the senior
internal auditing executive, if any, and the independent auditor in separate
executive sessions.
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
audits or to determine that the Company'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
assure compliance with laws and regulations.
A-2
VINTAGE PETROLEUM, INC.
[Logo]
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders to be held May 8, 2001
The undersigned hereby appoints Charles C. Stephenson, Jr., S. Craig George
and William C. Barnes, and each of them, with full power of substitution, as
proxies to represent and vote all of the shares of Common Stock the undersigned
is entitled to vote at the Annual Meeting of Stockholders of Vintage Petroleum,
Inc. to be held on the 8th day of May, 2001, at 10:00 a.m., local time, in the
Tulsa Room on the 9th Floor, Bank of Oklahoma Tower, One Williams Center, Tulsa,
Oklahoma, and at any and all adjournments thereof, on all matters coming before
said meeting.
PLEASE MARK, SIGN AND DATE THE PROXY ON THE OTHER SIDE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(continued on other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE STOCKHOLDER. IF NO DIRECTION IS MADE, Please mark
THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. yor votes as
indicated in [X]
this example
THE BOARD RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of Directors.
FOR WITHHOLD Nominees: Bryan H. Lawrence and William L. Abernathy as Class II Directors.
all nominees listed to the AUTHORITY
right (except as marked to vote for all INSTRUCTIONS: To withhold authority to vote for any individual nominee,
to the contrary in the nominees listed write that nominee's name in the space provided.
space provided). to the right.
[ ] [ ] ____________________________________________________________________________
2. Ratification of Arthur Andersen LLP as independent auditor of the Company for 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and at any and all
adjournments thereof.
__________________________________________________________________________
Signature
__________________________________________________________________________
Signature if held jointly
Dated: ____________________________________________________________, 2001
Please sign exactly as name appears herein, date
and return promptly. When shares are held by
joint tenants, both must sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
duly authorized officer and give title of officer.
If a partnership, please sign in partnership name
by authorized person and give title or capacity of
person signing.