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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
PROXY STATEMENT
PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO SEC. 240.14A-11(C) OR SEC. 240.14A-12
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BURLINGTON RESOURCES INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
CALCULATION OF FILING FEE
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PER UNIT PRICE OR
OTHER UNDERLYING
VALUE OF TRANSACTION
COMPUTED
TITLE OF EACH CLASS OF AGGREGATE NUMBER OF PURSUANT TO PROPOSED MAXIMUM
SECURITIES TO WHICH SECURITIES TO WHICH EXCHANGE AGGREGATE VALUE OF TOTAL FEE
TRANSACTION APPLIES: TRANSACTION APPLIES: ACT RULE 0-11: TRANSACTION: PAID:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
Form, Schedule or
Registration Statement No.: Date Filed:
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[BURLINGTON RESOURCES LOGO]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 7, 1999
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Burlington Resources Inc. will be
held on Wednesday, April 7, 1999, at 9:00 a.m. in the Ambassador Room, The
Luxury Collection Hotel, 1919 Briar Oaks Lane, Houston, Texas, for the following
purposes:
1. To elect 12 directors, each to hold office for a term of one year.
2. To transact any other business which may be properly brought before the
meeting.
Only stockholders of record at the close of business on February 8, 1999
are entitled to notice of, and to vote at, the meeting and any adjournment
thereof.
By Order of the Board of Directors
WENDI S. ZERWAS
Corporate Secretary
March 8, 1999
3
BURLINGTON RESOURCES INC.
5051 WESTHEIMER
HOUSTON, TEXAS 77056-2124
Mailing Date:
March 8, 1999
PROXY STATEMENT
The enclosed proxy is solicited by the management of Burlington Resources
Inc. (the "Company") for use at the Annual Meeting of Stockholders on April 7,
1999. Shares of Common Stock, par value $.01 per share ("Common Stock"), of the
Company represented by a properly executed proxy will be voted at the meeting.
The proxy may be revoked at any time before its exercise by sending written
notice of revocation to Ms. Wendi S. Zerwas, Corporate Secretary, Burlington
Resources Inc., 5051 Westheimer, Suite 1400, Houston, Texas 77056-2124, or by
signing and delivering a proxy which is dated and received later, either
electronically or by mail, or, if the stockholder attends the meeting in person,
by giving notice of revocation to the Inspector of Election at the meeting.
February 8, 1999 was the record date for the determination of stockholders
entitled to notice of, and to vote at, the meeting. On that date there were
outstanding and entitled to vote 177,530,090 shares of Common Stock, which is
the Company's only class of voting securities. Each stockholder is entitled to
one vote for each share of Common Stock held of record. A plurality of the
shares of Common Stock present in person or represented by proxy at the meeting
is required for the election of Directors. An affirmative vote of a majority of
the shares of Common Stock present in person or represented by proxy and
entitled to vote at the meeting is required for approval of all other items
being submitted to the stockholders for their consideration. Abstentions are
counted in the number of shares present in person or represented by proxy and
entitled to vote for purposes of determining whether a proposal has been
approved, whereas broker nonvotes are not counted for those purposes.
INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors of the Company held five meetings during 1998. The
standing committees of the Board of Directors include an Audit Committee and a
Compensation and Nominating Committee. The Audit Committee held three meetings
during 1998. This Committee recommends the employment of the Company's
independent auditors and reviews with management and the independent auditors
the Company's financial statements, basic accounting and financial policies and
practices, audit scope, financial policies and practices and compliance with the
Company's code of business conduct. The Compensation and Nominating Committee
met four times during 1998. This Committee reviews and recommends to the Board
of Directors the compensation and promotion of senior officers, the size and
composition of the Board of Directors and nominees for Directors, and any
proposed employee benefit plans. This Committee also grants stock options and
other forms of long-term incentive compensation. During 1998, all Directors
attended at least 75 percent of the meetings of the Board of Directors and the
committees thereof.
The Compensation and Nominating Committee will consider proposals for
nominees for Directors from stockholders which are made in writing to Ms. Wendi
S. Zerwas, Corporate Secretary, Burlington Resources Inc., 5051 Westheimer,
Suite 1400, Houston, Texas 77056-2124.
4
STOCK OWNERSHIP OF MANAGEMENT
AND CERTAIN OTHER HOLDERS
The following table sets forth information about the only known beneficial
owners of more than 5% of the Company's Common Stock. This information is based
solely on Schedules 13G filed by such beneficial owners with the Securities and
Exchange Commission (the "SEC").
NAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS
------------------- ---------- --------
FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson............................................. 14,340,627(1) 8.09%
82 Devonshire Street
Boston, Massachusetts 02109
Wellington Management Company, LLP.................... 15,780,000(2) 8.90%
75 State Street
Boston, Massachusetts 02109
Vanguard/Windsor Funds, Inc........................... 15,187,900(3) 8.57%
P.O. Box 2600
Valley Forge, Pennsylvania 19482
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NOTES
(1) In its Schedule 13G, FMR Corp. states that it has sole voting power as to
643,034 shares and sole dispositive power with respect to 14,340,627 shares
and that Fidelity International Limited has sole voting and dispositive
power as to 100 shares. Mr. Johnson and Ms. Johnson state that they have
voting power with respect to no shares and dispositive power with respect
to 14,340,527 shares.
(2) In its Schedule 13G, Wellington Management Company, LLP ("WMC"), in its
capacity as investment adviser, states that it may be deemed to have
beneficial ownership of these shares, which are owned by numerous
investment advisory clients, only one of which, Vanguard/Windsor Fund, is
known to have more than 5% of the class. WMC reports that it had sole
voting power as to no shares, shared voting power as to 494,900 shares and
shared dispositive power as to 15,780,000 shares.
(3) Vanguard/Windsor Fund, Inc. reports that it has sole voting power and shared
dispositive power with respect to the reported shares. These shares are
also included in the shares beneficially owned by WMC, an investment
adviser for Vanguard/Windsor Fund, as explained in note 2.
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5
The following table sets forth the number of shares of Common Stock
beneficially owned as of February 8, 1999 by each Director (including all
nominees for Director), the executive officers of the Company named in the
Summary Compensation Table below, and by all Directors and executive officers as
a group. No individual Director (including nominees for Director) or named
executive officer beneficially owns 1% or more of the Company's outstanding
Common Stock, nor do the Directors and executive officers as a group.
NUMBER OF SHARES
------------------------------------------
BENEFICIALLY DEFERRAL
NAME OWNED (1) PLANS (2) TOTAL
- ----------------------------------------------- ------------ --------- ---------
DIRECTORS
J. V. Byrne.................................... 10,903 1,534 12,437
S. P. Gilbert.................................. 17,053 1,534 18,587
L. I. Grant.................................... 7,762 3,703 11,465
J. T. LaMacchia................................ 8,000 1,532 9,532
J. F. McDonald................................. 12,653 1,534 14,187
K. W. Orce..................................... 31,877(3) 1,850 33,727
D. M. Roberts.................................. 18,000 6,558 24,558
J. F. Schwarz.................................. 12,588 2,031 14,619
W. Scott, Jr................................... 11,296(4) 5,051 16,347
B. S. Shackouls................................ 289,000 102,955 391,955
H. L. Steward.................................. 424,083 0 424,083
W. E. Wall..................................... 10,185 1,534 11,719
NAMED EXECUTIVE OFFICERS
J. E. Hagale................................... 152,673 24,146 176,819
R. L. Limbacher................................ 40,909 3,149 44,058
J. A. Williams................................. 93,693 0 93,693
ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (16 PERSONS)...................... 1,236,999 166,375 1,403,374
NOTES
(1) For purposes of this table, shares are considered to be "beneficially"
owned if the person directly or indirectly has sole or shared voting
and investment power with respect to such shares. In addition, a person
is deemed to beneficially own shares if that person has the right to
acquire such shares within 60 days of February 8, 1999; as a result,
the number of shares shown in this column include for Dr. Byrne, Mr.
Gilbert, Ms. Grant, Mr. LaMacchia, Mr. McDonald, Mr. Orce, Mr. Roberts,
Mr. Schwarz, Mr. Scott, Mr. Shackouls, Mr. Steward, Mr. Wall, Mr.
Hagale, Mr. Limbacher and Mr. Williams 9,553, 9,553, 5,000, 5,000,
9,553, 19,252, 8,000, 11,626, 9,553, 269,000, 280,342, 7,185, 130,385,
31,250 and 64,640 shares, respectively, and 957,632 shares for all
Directors and executive officers as a group, which such person (or
group) has the right to acquire within 60 days of February 8, 1999. For
Messrs. Shackouls, Steward, Hagale, Limbacher and Williams, includes
20,000, 6,000, 8,500, 6,000 and 9,500 shares of Common Stock,
respectively, subject to restrictions.
(2) These shares represent the economic equivalent of shares of Common
Stock, and were received as a result of grants under the Phantom Stock
Plan for Non-Employee Directors and elections to have certain deferred
compensation valued as if it were invested in Common Stock and subject
to fluctuations in the market price of Common Stock and/or to convert
restricted shares of Common Stock into phantom stock pursuant to the
Company's 1994 Restricted Stock Exchange Plan.
(3) Includes 3,000 shares of Common Stock owned by trusts of which Mr.
Orce's wife is trustee and their children are beneficiaries. Mr. Orce
disclaims beneficial ownership of these shares.
(4) Excludes 1,213,100 shares of Common Stock owned by a subsidiary of
Level 3 Communications, Inc., of which Mr. Scott is Chairman. Mr. Scott
disclaims beneficial ownership of these shares.
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6
ELECTION OF DIRECTORS
In accordance with the By-Laws of the Company, the Board of Directors has
fixed the number of Directors constituting the Board of Directors at 12 as of
the date of the Annual Meeting. It is proposed to elect 12 Directors, each to
hold office for a term of one year and until his or her successor shall have
been elected and qualified. Unless otherwise instructed by the stockholder, the
persons named in the enclosed form of proxy will vote the shares represented by
such proxy for the election of the nominees named in this Proxy Statement,
subject to the condition that if any of the named nominees should be unable to
serve, discretionary authority is reserved to vote for a substitute. No
circumstances are presently known which would render any nominee named herein
unable or unwilling to serve. Holders of the Common Stock may not cumulate their
votes in the election of Directors.
Each of the following nominees is a Director of the Company at the present
time:
JOHN V. BYRNE--Retired. Age--70. Chairman--Audit Committee. Dr. Byrne has
been retired since January 1996. From November 1984 to December 1995, Dr. Byrne
was President of Oregon State University. Dr. Byrne has been a Director of the
Company since 1988.
S. PARKER GILBERT--Retired. Age--65. Member--Compensation and Nominating
Committee. Mr. Gilbert has been retired since January 1991. Mr. Gilbert has been
a Director of the Company since 1990. Mr. Gilbert is also a director of ITT
Industries, Inc. and Taubman Centers, Inc.
LAIRD I. GRANT--Age--53. Member--Audit Committee. From January 1995 to
December 1998, Ms. Grant was President, Chief Executive Officer, Chief
Investment Officer, and Director, Rockefeller & Co., Inc. From June 1991 to
December 1994, Ms. Grant was Executive Vice President of United States Trust
Company of New York. Ms. Grant has been a Director of the Company since 1996.
JOHN T. LAMACCHIA--Retired. Age--57. Member--Compensation and Nominating
Committee and Executive Committee. From October 1993 through February 1999, Mr.
LaMacchia was President and Chief Executive Officer, Cincinnati Bell Inc. Mr.
LaMacchia has been a Director of the Company since 1996. Mr. LaMacchia is also a
director of Cincinnati Bell Inc., FORE Systems, Inc. and the Kroger Company.
JAMES F. MCDONALD--President and Chief Executive Officer,
Scientific-Atlanta, Inc., Norcross, Georgia--Telecommunications. Age--59.
Member--Audit Committee and Executive Committee. Since July 1993, Mr. McDonald's
principal occupation has been as shown above. Mr. McDonald has been a Director
of the Company since 1988. Mr. McDonald is also a director of American Business
Products, Inc., Scientific-Atlanta, Inc. and Frontier Corporation.
KENNETH W. ORCE--Senior Partner, Cahill Gordon & Reindel, New York, New
York--Law. Age--55. Member--Audit Committee. For more than five years, Mr.
Orce's principal occupation has been as shown above. Mr. Orce has been a
Director of the Company since 1997. Cahill Gordon & Reindel provides legal
services to the Company and its subsidiaries.
DONALD M. ROBERTS--Retired. Age--63. Member--Audit Committee. Mr. Roberts
has been retired since September 1995. From February 1990 until September 1995,
Mr. Roberts was Vice Chairman and Treasurer, United States Trust Company of New
York and its parent, U.S. Trust Corporation. Mr. Roberts has been a Director of
the Company since 1993. Mr. Roberts is also a director of York International
Corporation.
JOHN F. SCHWARZ--Chairman, President and Chief Executive Officer, Entech
Enterprises, Inc., Houston, Texas--Energy Investments. Age--62.
Member--Compensation and Nominating Committee. For more than five years, Mr.
Schwarz' principal occupation has been as shown above. From 1989 to 1994, Mr.
Schwarz was President, Chief Executive Officer and Director of Energy
Development Corporation. Mr. Schwarz has been a Director of the Company since
1997.
WALTER SCOTT, JR.--Chairman, Level 3 Communications, Inc., Omaha,
Nebraska -- Telecommunications and Internet Services. Age--67.
Chairman--Compensation and Nominating Committee. Mem-
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ber -- Executive Committee. Since April 1998, Mr. Scott's principal occupation
has been as shown above. From 1979 through March 1998, Mr. Scott was Chairman
and President of Peter Kiewit Sons', Inc. Mr. Scott has been a Director of the
Company since 1988. Mr. Scott is also a director of Berkshire Hathaway Inc.,
CalEnergy Company, Inc., Commonwealth Telephone Enterprises, Inc., ConAgra,
Inc., Level 3 Communications, Inc., Peter Kiewit Sons', Inc., RCN Corporation,
U.S. Bancorp and Valmont Industries, Inc.
BOBBY S. SHACKOULS--Chairman of the Board, President and Chief Executive
Officer, Burlington Resources Inc., Houston, Texas. Age--48. Member -- Executive
Committee. Since July 1997, Mr. Shackouls' principal occupation has been as
shown above. From December 1995 to July 1997, Mr. Shackouls was President and
Chief Executive Officer of the Company. Since October 1994, Mr. Shackouls has
been President and Chief Executive Officer of Burlington Resources Oil & Gas
Company (formerly known as Meridian Oil Inc.), a wholly owned subsidiary of the
Company. From June 1993 to October 1994, Mr. Shackouls was Executive Vice
President and Chief Operating Officer of Meridian Oil Inc. Mr. Shackouls has
been a Director of the Company since 1995. Mr. Shackouls is also a director of
American Residential Services, Inc.
H. LEIGHTON STEWARD--Vice Chairman of the Board, Burlington Resources Inc.,
Houston, Texas. Age--64. Chairman--Executive Committee. Since October 1997, Mr.
Steward's principal occupation has been as shown above. From 1989 to October
1997, Mr. Steward was Chairman of the Board and Chief Executive Officer of The
Louisiana Land and Exploration Company ("LL&E"), which is now a wholly owned
subsidiary of the Company, and was President of LL&E from 1985 to 1995 and from
January to October 1997. Mr. Steward has been a Director of the Company since
1997.
WILLIAM E. WALL--Of Counsel, Siderius Lonergan, Seattle, Washington--Law.
Age--70. Member--Compensation and Nominating Committee. For more than five
years, Mr. Wall's principal occupation has been as shown above. Mr. Wall has
been a Director of the Company since 1992.
DIRECTORS' COMPENSATION
Directors who are not officers or employees of the Company receive an
annual retainer of $55,000. Directors who are also officers or employees of the
Company do not receive any compensation for duties performed as Directors.
Directors who are not officers or employees of the Company may defer all or part
of their compensation.
The Company's 1992 Stock Option Plan for Non-Employee Directors provides
for the annual grant of a nonqualified option for 1,000 shares of Common Stock
immediately following the Annual Meeting of Stockholders to Directors who are
not salaried officers of the Company. In addition, an option for 3,000 shares is
granted upon a Director's initial election or appointment to the Board of
Directors. The exercise price per share with respect to each option is 100% of
the fair market value (as defined in the plan) of the Common Stock on the date
the option is granted. During 1998, an annual option for 1,000 shares of Common
Stock was granted to Dr. Byrne, to Ms. Grant and to Messrs. Gilbert, LaMacchia,
McDonald, Orce, Roberts, Schwarz, Scott and Wall pursuant to this plan.
The Company's Phantom Stock Plan for Non-Employee Directors provides that
immediately following each Annual Meeting of Stockholders, a memorandum account
established for each of the Directors who is not a salaried officer of the
Company will be credited with 500 shares of phantom stock. Dividends paid on
Common Stock are deemed to be reinvested in additional phantom stock pursuant to
the plan. Amounts credited to the memorandum accounts pursuant to this plan are
unfunded obligations of the Company. Upon termination of service as a Director,
phantom shares credited in the memorandum account will be valued at the fair
market value of the Company's Common Stock at that time and paid in cash.
The Company has established a Charitable Award Program for Directors who
have served on the Board of Directors for at least two years. Upon the death of
a Director, the Company will donate $1 million to one or more educational
institutions or private foundations nominated by the Director.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and Directors and persons who own more than 10% of a
registered class of the Company's equity securities to file initial reports of
ownership and changes in ownership with the SEC and the New York Stock Exchange.
Such officers, Directors and stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms furnished to the Company and
written representations from the Company's executive officers and Directors, all
persons subject to the reporting requirements of Section 16(a) filed the
required reports on a timely basis.
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9
REPORT ON EXECUTIVE COMPENSATION
BY THE COMPENSATION AND NOMINATING COMMITTEE
The Compensation and Nominating Committee of the Board of Directors (the
"Committee") is composed entirely of Directors who are not employees of the
Company. The Committee is responsible for establishing and administering the
Company's executive compensation program.
COMPENSATION PHILOSOPHY AND OBJECTIVES
The philosophy underlying the development and administration of the
Company's annual and long-term compensation plans is the alignment of the
interests of the Company's executives with those of the shareholders. Key
elements of this philosophy are:
- Establishing compensation plans which strengthen the Company's ability to
attract and retain executives and key employees and to deliver pay
commensurate with the Company's performance, as measured by strategic,
operating and financial objectives.
- Providing significant equity-based incentives for executives to ensure
that they are motivated over the long term to respond to the Company's
business challenges and opportunities as owners rather than just as
employees.
- Rewarding executives for superior performance and when shareholders
receive an above-average return on their investment over the long term.
One of the Committee's objectives is to position executive base salaries to
be competitive with other companies in the energy sector. At the beginning of
1998, executive base salaries were positioned between the fiftieth and
seventy-fifth percentiles when compared to a group of oil and gas companies.
This comparator group includes many of the companies currently in the Dow Jones
Secondary Oil Index, which is used in the Comparison of Cumulative Total
Shareholder Return, together with certain other independent and integrated oil
and gas companies. The performance of the companies in the comparator group is
not considered in establishing executive base salaries.
The Incentive Compensation Plan, or annual bonus plan, is the program by
which executives can earn additional compensation based on individual and
Company performance relative to certain annual objectives. At maximum award
levels, total annual cash compensation for the Company's executives is in the
top quartile of the comparator group's total annual cash compensation. The plan
allows for maximum awards of up to 100 percent of base salary. In determining
the size of the annual bonus, no single performance factor or formula is used.
The Committee believes that the rigid application of quantitative performance
measures would eliminate the consideration of important qualitative factors
critical to long-term strategic performance. In evaluating the Company's
performance, the Committee considers a combination of strategic, operating and
financial objectives, including oil and gas production levels, reserve additions
and reserve finding costs, earnings per share, operating income and operating
cash flow. These measures, which are not specifically weighted, are considered
to be critical to the Company's fundamental goal of building shareholder value.
Beginning in 1999, the Committee may consider growth in appraised net worth in
addition to the strategic, operating and financial objectives described above.
The Company's long-term incentive compensation program consists of the
Stock Incentive Plan and the Performance Share Unit Plan (the "PSU Plan"). The
Committee's objective is to target the executives' long-term incentive
compensation opportunity at approximately the seventy-fifth percentile of
long-term incentive compensation provided by the comparator group of oil and gas
companies. Long-term incentive value is dependent on the Company's achievement
of its strategic, operating and financial goals, the Company's total shareholder
return as compared to the Dow Jones Secondary Oil Index, and the price of the
Company's Common Stock.
Under the Stock Incentive Plan, stock options are granted to executives,
managers and key employees. The options vest no earlier than one year after the
grant date, have a term of ten years and have an exercise price equal to the
fair market value of the Common Stock on the day of grant. Stock purchase rights
granted
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10
under the Stock Incentive Plan are made available to the same group of
employees. They give the employee a one-time opportunity to purchase, with all
or a portion of his or her after-tax annual bonus or PSU Plan pay-out, the
Company's Common Stock at a discount of up to 25 percent of fair market value.
Stock purchased under the Plan cannot be sold for at least three years or until
termination of employment.
Vesting of units under the 1997 PSU Plan occurs over a four year
performance period ending in December 2000 and is dependent on the Company's
achievement of its strategic, operating and financial objectives and the
Company's total shareholder return as compared to the Dow Jones Secondary Oil
Index.
The Omnibus Budget Reconciliation Act of 1993 places a limit on the amount
of certain types of compensation for each of the executive officers which may be
tax deductible by the Company. The Company's policy is, primarily, to design and
administer compensation plans which support the achievement of long-term
strategic objectives and enhance shareholder value. Where it is consistent with
this compensation philosophy, the Committee will also attempt to structure
compensation programs that are tax-deductible by the Company.
COMPANY PERFORMANCE AND COMPENSATION
Annual Incentive Award
The Company's strategic, operating and financial results in 1998 were
considered to be acceptable in view of prevailing conditions. During 1998,
natural gas production, at 1,647 million cubic feet per day, decreased by 1
percent from the prior year. Oil production decreased by 5 percent to 83
thousand barrels per day. Through internal development, the Company replaced 129
percent of production for the year at very attractive finding costs. Reserves
grew 1 percent to 8,019 billion cubic feet of natural gas equivalent as of
December 31, 1998.
However, because of the sharp decline in oil prices and the moderate
decline in natural gas prices, earnings per share and operating income were
below the objectives for the year. Operating cash flow decreased from $1,122
million in 1997 to $770 million in 1998. Operating income decreased from $583
million in 1997 to $218 million in 1998, and basic earnings per share decreased
from $2.02 in 1997 (excluding special items) to $.48 in 1998.
Considering the strategic, operating and financial results of the Company,
which were not specifically weighted, the Committee awarded Mr. Shackouls an
annual incentive award of $412,500, which represents 50 percent of the maximum
award available under the Incentive Compensation Plan. Similarly, the Committee
awarded the other executive officers 50 percent of the maximum awards available
under that plan.
In general, the Committee reviews the base salaries for the executive group
every year and in connection with promotions or significant changes in
responsibility. The only executive officer salary increases approved in 1998
were as a result of promotions or the assumption of new responsibilities. At the
end of 1998, the group's base salary is approximately at the median when
compared with the comparator group.
Long-Term Incentive Plan Vesting
The Company's performance, for purposes of the PSU Plan, is evaluated over
a four year interval, beginning January 1, 1997 and ending December 31, 2000.
The Committee determined that the Company's performance was acceptable in view
of prevailing conditions when reviewing its strategic, operating and financial
objectives during the performance period of January 1, 1998 to December 31,
1998. The Committee also determined that the Company's Total Shareholder Return
for the same period was below the return for the Dow Jones Secondary Oil Index.
Based upon such determinations, the Committee approved the vesting of 50 percent
of the units eligible for vesting for 1998, or 9,375 units for Mr. Shackouls and
13,899 units for the other executive officers. The Committee also approved the
vesting of 58 percent of the performance shares granted under a predecessor LL&E
incentive plan for the 1996-1998 performance period, or 3,979 shares for Mr.
Steward and 1,592 shares for Mr. Williams.
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11
Long-Term Incentive Plan Awards
In December 1996, the Committee established a four year long-term incentive
compensation program consisting of stock options, which vest in four equal
annual installments, and the PSU Plan, which has a four year performance cycle
ending in December 2000. An aggregate of 94,725 stock options which will vest in
three equal installments were granted to certain executive officers who were
promoted or assumed significantly greater responsibilities during 1998. In
addition, these executive officers were granted the opportunity to earn up to an
aggregate of 23,150 units under the PSU Plan for the performance cycle ending in
December 2000. In accordance with his employment agreement, Mr. Steward was
granted 25,000 stock options to vest in one year.
As an incentive for future performance and consistent with the objective of
targeting long-term incentive compensation at the seventy-fifth percentile when
compared to the comparator group of oil and gas companies, the Committee granted
Mr. Shackouls 40,000 stock options and 10,000 shares of restricted stock. The
Committee also granted the other executive officers an aggregate of 65,000 stock
options and an aggregate of 17,500 shares of restricted stock. These awards
provide incentive for the Company's executive officers to continue to build
shareholder value over the long term. In making these grants, the Committee
considered the current outstanding long-term incentive awards. The grant of
restricted stock vests in three years. These stock option and restricted stock
awards were granted in January 1999.
STOCK OWNERSHIP
The Committee established stock ownership guidelines in 1993 to more
closely align executive management's personal financial interests with the
interests of all shareholders. The guidelines require executives, depending upon
their position, to hold the equivalent of one to four times their base pay in
the Company's stock. These targets were to be achieved by the end of 1998 or,
for new incumbents, within five years of their appointment to the position. As
of February 8, 1999, the record date for the Annual Meeting, each of the
Company's executive officers had attained the stock ownership targets currently
required by the guidelines.
COMPENSATION AND NOMINATING COMMITTEE
Walter Scott, Jr., Chairman
S. Parker Gilbert
John T. LaMacchia
John F. Schwarz
William E. Wall
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12
Comparison of 5-Year Cumulative Total Shareholder Return(1)
[CHART]
Measurement Period Burlington Secondary
(Fiscal Year Covered) Resources S&P 500 Oil
1993 100 100 100
1994 84 101 97
1995 95 139 112
1996 124 171 138
1997 112 228 147
1998 90 293 107
YEAR ENDED DECEMBER 31
Comparison of Cumulative Total Shareholder Return
Since the Company's Initial Public Offering(1)
[CHART]
Burlington
Measurement Period Resources Secondary
(Fiscal Year Covered) (2) S&P 500 Oil
7/1988 100 100 100
1988 129 105 101
1989 194 138 137
1990 155 133 114
1991 146 174 112
1992 197 187 113
1993 211 206 125
1994 177 209 121
1995 201 287 140
1996 262 353 173
1997 236 470 184
1998 191 604 134
YEAR ENDED DECEMBER 31
- ------------------
NOTES
(1) Assumes that the value of the investment in the Company's Common Stock and
in each index was $100 on December 31, 1993 and July 8, 1988, respectively,
and that all dividends were reinvested.
(2) The Company's Common Stock return assumes that the .24 share of El Paso
Natural Gas Company ("EPNG") common stock distributed to the Company's
stockholders on June 30, 1992 was sold and the proceeds were reinvested in
the Company's Common Stock.
10
13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31,
1998, 1997 and 1996 with respect to the Company's Chief Executive Officer and
each of the four other most highly compensated executive officers of the Company
and its subsidiaries during 1998 whose salary and bonus exceeded $100,000
("named executive officers"). Annual compensation includes amounts deferred at
the officer's election.
LONG-TERM COMPENSATION
-------------------------------------------
AWARDS
ANNUAL COMPENSATION ----------------------------
------------------------------------- SECURITIES PAYOUTS
OTHER ANNUAL RESTRICTED UNDERLYING ------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION STOCK AWARDS(2) OPTIONS LTIP PAYOUTS
- --------------------------- ---- -------- -------- ------------ --------------- ---------- ------------
Bobby S. Shackouls 1998 $825,000 $412,500 $119,440(4) -- -- --
Chairman of the Board, 1997 $697,748 $697,748 $142,312 $438,130 50,000 --
President and Chief 1996 $600,000 $600,000 $ 19,178 -- 300,000 $4,172,283
Executive Officer
H. Leighton Steward(5) 1998 $450,000 $535,000 $165,352(4) -- 25,000 $ 140,757
Vice Chairman of the 1997 $ 86,538 $600,000 $ 9,888 $262,878 40,000 --
Board
John E. Hagale 1998 $370,020 $185,010 $ 5,944 -- -- --
Executive Vice President 1997 $310,020 $310,020 $ 2,958 $153,346 10,000 --
and Chief Financial 1996 $270,000 $270,000 $ 2,754 -- 95,000 $1,504,748
Officer
John A. Williams(5) 1998 $325,020 $262,510 $ 2,654 -- 25,000 $ 56,317
President and 1997 $ 51,000 $260,000 $ 2,661 $197,156 60,000 --
Chief Executive Officer,
BR International
Randy L. Limbacher 1998 $250,020 $125,010 $ 1,284 -- 36,600 --
President and
Chief Executive Officer,
BR North America
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION(3)
- --------------------------- ---------------
Bobby S. Shackouls $ 91,365
Chairman of the Board, $ 87,284
President and Chief $1,460,714
Executive Officer
H. Leighton Steward(5) $ 413,685
Vice Chairman of the $ 367,964
Board
John E. Hagale $ 54,403
Executive Vice President $ 46,162
and Chief Financial $ 297,554
Officer
John A. Williams(5) $ 128,092
President and $ 106,607
Chief Executive Officer,
BR International
Randy L. Limbacher $ 29,624
President and
Chief Executive Officer,
BR North America
- ---------------
NOTES
(1) Unless otherwise noted, bonus payments are reported for the year in which
the related services were performed.
(2) The value of restricted stock reported in this column is based on the
closing price of the Common Stock on the New York Stock Exchange, Inc. on
the date of grant. On December 31, 1998, Messrs. Shackouls, Steward, Hagale,
Williams and Limbacher held 10,000, 6,000, 3,500, 4,500 and 1,000 shares,
respectively, of restricted Common Stock, having a market value, based on
the closing price of the Common Stock on such date, of $358,125, $214,875,
$125,344, $161,156, and $35,813, respectively. Dividends are paid on
restricted Common Stock at the same rate as paid to all stockholders.
(3) Includes matching contributions made by the Company during 1998 in the
Company's Retirement Savings Plan and Supplemental Benefits Plan for Messrs.
Shackouls, Steward, Hagale, Williams and Limbacher of $91,365, $39,397,
$54,403, $29,757 and $29,624, respectively. Includes matching contributions
made by the Company during 1997 in the Company's Retirement Savings Plan and
Supplemental Benefits Plan for Messrs. Shackouls and Hagale of $77,757 and
$46,162, respectively. Includes for Messrs. Steward and Williams
contributions and allocations made by the Company for 1997 in the LL&E
Savings Plan and Compensatory Benefits and Supplemental Excess Plan in the
amounts of $61,054 and $25,866, respectively. Includes for Messrs. Steward
and Williams interest accrued during 1998 in excess of 120% of the
applicable federal interest rate with respect to salary and bonus deferrals
pursuant to the LL&E Deferred Compensation Arrangement in the amounts of
$374,288 and $98,335, respectively. Includes for Messrs. Steward and
Williams interest accrued during 1997 in excess of 120% of the applicable
federal interest rate with respect to salary and bonus deferrals pursuant to
the LL&E Deferred Compensation Arrangement in the amounts of $306,910 and
$80,741, respectively. Includes matching contributions made by the Company
during 1996 in the Company's Retirement Savings Plan and Supplemental
Benefits Plan for Messrs. Shackouls and Hagale of $51,678 and $28,125,
respectively. Includes in 1996 for Messrs. Shackouls and Hagale, $1,409,036
and $269,429, respectively, with respect to the discount credited to PSU
deferrals into the phantom stock fund. During 1997, Mr. Shackouls received
additional compensation of $9,527 in connection with the relocation of his
home.
(4) For Mr. Shackouls, includes $46,587 and $59,710 attributed for personal use
of Company airplanes in 1998 and 1997, respectively, and for tax gross-up
payments, primarily in connection with his use of Company airplanes. For Mr.
Steward, includes a $50,000 housing allowance pursuant to his Employment
Agreement, $37,378 for life insurance and home security, and for tax
gross-up payments, primarily in connection with his use of Company airplanes
for 1998.
(5) Messrs. Steward and Williams commenced employment with the Company in
October 1997. Their bonuses include amounts payable pursuant to the LL&E
annual incentive program. Their 1998 bonuses include a 1997 special
incentive bonus paid in March 1998 to Messrs. Steward and Williams in the
amounts of $310,000 and $100,000, respectively.
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OPTIONS GRANTED IN 1998
The following information is furnished for the year ended December 31, 1998
with respect to the named executive officers for stock options which were
granted in July and November 1998 under the Stock Incentive Plan.
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED EXERCISE GRANT DATE
GRANTED IN TO EMPLOYEES PRICE EXPIRATION PRESENT
NAME 1998(1) IN 1998 PER SHARE DATE(1) VALUE(2)
---- ---------- ------------ --------- ---------- ----------
B. S. Shackouls................... -- -- -- -- --
H. L. Steward..................... 22,300(3) 8.38% $ 36.25 11/30/2008 $280,757
2,700(3) 1.01% $ 36.25 11/29/2008 $ 39,069
J. E. Hagale...................... -- -- -- -- --
J. A. Williams.................... 25,000(4) 9.39% $ 42.72 7/8/2008 $324,000
R. L. Limbacher................... 36,600(4) 13.75% $ 42.72 7/8/2008 $474,336
- ---------------
NOTES
(1) Under the terms of the Stock Incentive Plan, options are granted at fair
market value and generally may not be exercised until the employee has
completed one year of continuous employment with the Company or its
subsidiaries from the grant date. Options have a term of ten years and
generally terminate one year following an optionee's death or three years
after termination of employment, disability, retirement, termination in
certain events following a "Change in Control" of the Company, as defined in
the Stock Incentive Plan (a "Change in Control"), or other termination
except that the Compensation and Nominating Committee may terminate options
earlier following such other termination of employment of the named
executive officers.
(2) The value has been calculated using a variation of the Black-Scholes stock
option valuation methodology. The applied model used the grant dates of July
8, 1998, with an option price of $42.72; and November 30, 1998, with an
option price of $36.25. In addition, for the July 8, 1998 grant date it
assumed a stock price volatility of 24.71%, a risk-free rate of return of
5.46% and a dividend of $.55 per year. For the November 30, 1998 grant date,
the additional assumptions were a stock price volatility of 32.44%, a risk-
free rate of return of 4.83% and a dividend of $.55 per year. The value has
been reduced by approximately 25% for the July grant and 18% for the
November grant to reflect the probability of forfeiture due to termination
of employment prior to vesting or of a shortened option term due to
termination of employment prior to the expiration date.
(3) Stock options which become exercisable on November 30, 1999.
(4) Stock options which become exercisable on July 8, 1999.
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15
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END VALUES
The following information is furnished for the year ended December 31, 1998
with respect to the named executive officers for stock option exercises which
occurred during 1998.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SECURITIES AT DECEMBER 31, 1998 AT DECEMBER 31, 1998(2)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
B. S. Shackouls....... -- -- 269,000 150,000 $ 43,594 --
H. L. Steward......... 127,242 $2,471,988 260,517 44,825 $2,245,059 $57,546
J. E. Hagale.......... 9,280 $ 187,639 140,955 47,500 $ 249,696 --
J. A. Williams........ 52,462 $1,274,308 55,490 67,483 $ 119,851 $26,559
R. L. Limbacher....... -- -- 31,250 55,850 -- --
- ---------------
NOTES
(1) This amount is the aggregate of the market value of the Common Stock at the
time each stock option was exercised minus the exercise price for that
option.
(2) This amount is the aggregate of the number of in-the-money options
multiplied by the difference between the closing price of the Common Stock
on the New York Stock Exchange on December 31, 1998 and the exercise price
for that option.
LONG-TERM INCENTIVE PLAN AWARDS IN 1998
The following information is furnished for the year ended December 31, 1998
with respect to the named executive officers for grants under the PSU Plan which
occurred during 1998.
NUMBER OF UNITS PERFORMANCE PERIOD MAXIMUM
NAME GRANTED IN 1998 UNTIL PAYOUT FUTURE PAYOUT(1)
---- --------------- ------------------ ----------------
B. S. Shackouls............................. -- -- --
H. L. Steward............................... -- -- --
J. E. Hagale................................ -- -- --
J. A. Williams.............................. 6,875 12/31/2000 6,875
R. L. Limbacher............................. 8,450 12/31/2000 8,450
- ---------------
NOTE
(1) Maximum future payout is stated as the number of vested PSUs at the end of
the performance period. At the end of the performance period, participants
receive a cash payment equal to the number of vested PSUs multiplied by the
average closing price of the Common Stock for the 20 business days
immediately preceding the end of the performance period. Under the terms of
the PSU Plan, a portion of the granted PSUs may vest with respect to each
year during the performance period and any remaining unvested PSUs may vest
at the end of the performance period on December 31, 2000. In determining
whether to vest PSUs, the Committee evaluates the Company's total
shareholder return versus the Dow Jones Secondary Oil Index and the
Company's performance based on a combination of strategic, operating and
financial measures, including oil and gas production levels, reserve
additions and reserve finding costs, earnings per share, operating income
and operating cash flow. PSUs vest to the extent that the Compensation and
Nominating Committee determines that the Company has achieved its budget
targets for these performance measures each year. Under the terms of the PSU
Plan, the Compensation and Nominating Committee does not establish
thresholds or targets with respect to the vesting of PSUs at the time of the
initial grant. In the event of a Change in Control of the Company, 25
percent of the total PSUs originally granted fully vests, together with a
proportionate share of PSUs granted after the original
13
16
grant date. If a participant is terminated other than for cause, death or
disability, or voluntarily terminates employment for good reason within two
years after a Change in Control but subsequent to the year in which the
Change in Control occurs, an additional 25 percent of the PSUs originally
granted will vest, together with a proportionate share of PSUs granted after
the original grant date. After a Change in Control, the value of PSUs is
calculated based on the greater of (i) the highest price at which the Common
Stock traded during the 60-day period ending on the date of the Change in
Control or (ii) the highest price per share paid in connection with such
Change in Control. The term "Change in Control" means in general (i) an
accumulation by any person or group of 20% or more of the Company's voting
securities, (ii) a purchase pursuant to a tender or exchange offer for
voting securities of the Company, other than a tender or exchange offer made
by the Company, (iii) a merger, consolidation, liquidation or dissolution of
the Company or sale of all or substantially all of the assets of the Company
which is approved by stockholders, or (iv) an unapproved change in the
constitution of the majority of the Board of Directors within a two-year
period.
PENSION PLAN
Benefit accruals under the qualified pension plan of the Company and its
subsidiaries (the "Pension Plan") and the nonqualified Supplemental Benefits
Plan (the "Supplemental Benefits Plan") are based on the gross amount of
earnings, including incentive bonuses, but excluding all commissions and other
extra or added compensation or benefits of any kind or nature. Estimated annual
benefit levels under the Plans, based on earnings and years of credited service
at age 65, are as follows:
PENSION PLAN TABLE
AVERAGE YEARS OF SERVICE AT AGE 65
PENSION ---------------------------------------------------------
EARNINGS(1) 15 20 25 30 35
- --------------------- -------- -------- -------- -------- ----------
$ 400,000........... $ 94,290 $125,720 $157,150 $188,580 $ 220,010
$ 600,000........... $142,290 $189,720 $237,150 $284,580 $ 332,010
$ 800,000........... $190,290 $253,720 $317,150 $380,580 $ 444,010
$1,000,000........... $238,290 $317,720 $397,150 $476,580 $ 556,010
$1,200,000........... $286,290 $381,720 $477,150 $572,580 $ 668,010
$1,400,000........... $334,290 $445,720 $557,150 $668,580 $ 780,010
$1,600,000........... $382,290 $509,720 $637,150 $764,580 $ 892,010
$1,800,000........... $430,290 $573,720 $717,150 $860,580 $1,004,010
$2,000,000........... $478,290 $637,720 $797,150 $956,580 $1,116,010
- ---------------
NOTE
(1) Average pension earnings for a given year include salary and bonus payments.
Under the Pension Plan, the maximum benefit payable in 1998 is $130,000 and
the maximum amount of compensation that may be considered is $160,000.
Pension Plan benefits are not reduced by Social Security benefits.
The Pension Plan formula (as amended as of January 1, 1999) for normal
retirement benefits at age 65 is 1.1% of the highest three-year average
earnings, plus .5% of the highest three-year average earnings in excess of
one-third of the FICA taxable wage base in effect during the year of
termination, times the number of years of credited service. An early retirement
supplement equal to 1% of the highest three-year average earnings up to
one-third of the FICA taxable wage base in effect in the year of termination,
times the number of years of credited service, is payable until age 65. Both the
basic benefit and the early retirement supplement are reduced by 2% for each
year the employee's actual retirement date precedes the date the employee would
have attained age 65. Years of credited service under the Pension Plan at age 65
for Messrs. Shackouls, Hagale, Limbacher and Williams would be 22, 35, 37 and
23, respectively. Mr. Steward is entitled to comparable benefits under the LL&E
Pension Plan and the nonqualified Compensatory Benefits and Supplemental Excess
Plan. Years of credited service at age 65 for Mr. Steward would be 17. Mr.
Steward is entitled to supplemental
14
17
pension payments as if he had been in the employ of the Company since the date
he joined a former employer (1962). These benefits will be reduced by the amount
of any similar benefits paid to Mr. Steward by his former employer.
EMPLOYMENT AGREEMENTS AND SEVERANCE PLANS
The Company has an agreement with Mr. Shackouls which provides for his
employment as Chairman of the Board, President and Chief Executive Officer of
the Company through July 9, 2002 at a minimum annual salary of $750,000. The
Company also has an employment agreement with Mr. Steward which provides for his
employment as Vice Chairman of the Board of the Company through December 1, 1999
at a minimum annual salary of $450,000. These agreements provide that upon
termination of employment within two years after a Change in Control of the
Company, Messrs. Shackouls and Steward will be entitled to the greater of the
benefits under the employment agreement or the Key Executive Severance
Protection Plan (the "Severance Protection Plan"). Pursuant to this agreement,
Mr. Shackouls is entitled to additional years of credited service under the
Supplemental Benefits Plan if he remains employed by the Company until age 55 or
is terminated by the Company after age 50.
The Severance Protection Plan provides severance benefits following a
Change in Control for officers of the Company and its subsidiaries in an amount
equal to three times annual salary, including maximum bonus amounts. The
Severance Protection Plan also provides for the continuation of life and health
insurance for a period of up to 18 months subsequent to a participant's
termination of employment following a Change in Control as well as a
supplemental pension payable under the Supplemental Benefits Plan calculated by
adding three years of additional credited pension service and certain other
benefits. Benefits are payable under the Severance Protection Plan for any
termination of employment within two years of the date of a Change in Control,
except where termination is by reason of death, disability, for cause, or
instituted by the employee for other than good reason. The Severance Protection
Plan also provides that the Company will pay legal fees and expenses incurred by
a participant to enforce rights or benefits under this plan.
In addition, Messrs. Williams and Steward, who joined the Company from
LL&E, will continue to be eligible to receive severance benefits under their
termination agreements with LL&E. In general, the LL&E termination agreements
provide benefits comparable to those available under the Company's Severance
Protection Plan. Benefits are payable under the LL&E termination agreements for
any termination of employment within five years (in the case of Mr. Steward) or
two years (in the case of Mr. Williams) of the date of a Change in Control,
except where termination is for cause. Any benefits paid under the LL&E
termination agreements will correspondingly reduce the benefits, if any, payable
under the Company's Severance Protection Plan.
The Company also has a Key Executive Retention Plan which provides, among
other things, that certain employees formerly employed in the Company's Seattle,
Washington office will receive at termination additional pension benefits based
on projected compensation.
The Internal Revenue Code of 1986, as amended (the "Code"), imposes an
excise tax on payments to certain employees following a Change in Control if the
payments meet certain requirements and exceed certain limits set forth in the
Code. If payments under the Severance Protection Plan (the "Severance Payments")
are subject to this excise tax, the Company will pay an additional amount to the
participant (the "Gross-Up Payment") such that the participant retains, after
payment of the excise tax on the Severance Payments and the Gross-Up Payment and
any income tax on the Gross-Up Payment, an amount equal to the Severance
Payments.
15
18
AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers L.L.P. as
independent public accountants for the year ending December 31, 1999.
Representatives of PricewaterhouseCoopers L.L.P. will be present at the
Annual Meeting with the opportunity to make a statement and to respond to
appropriate questions.
EXPENSES OF SOLICITATION
The expenses of preparing and mailing this Proxy Statement and the
accompanying form of proxy and the cost of solicitation of proxies on behalf of
the management will be borne by the Company. In addition, D. F. King & Co. has
been retained to aid in the solicitation at an estimated fee of $10,000. Proxies
may be solicited by personal interview, mail and telephone. Brokerage houses,
other custodians and nominees will be asked whether other persons are beneficial
owners of the shares which they hold of record and, if so, they will be supplied
with additional copies of the proxy materials for distribution to such
beneficial owners. The Company will reimburse parties holding stock in their
names or in the names of their nominees for their reasonable expenses in sending
proxy material to their principals.
ELECTRONIC PROXY VOTING
Registered shareholders can vote their shares via (1) a toll-free telephone
call from the U.S. and Canada; or (2) the Internet; or (3) by mailing their
signed proxy card. The telephone and Internet voting procedures are designed to
authenticate shareholders' identities, to allow shareholders to vote their
shares and to confirm that their instructions have been properly recorded. The
Company has been advised by counsel that the procedures which have been put in
place are consistent with the requirements of applicable law. Specific
instructions to be followed by any registered shareholder interested in voting
via telephone or the Internet are set forth on the enclosed proxy card.
OTHER MATTERS
Management knows of no other matters which are likely to be brought before
the meeting. However, if any other matters, not now known or determined, come
before the meeting, the persons named in the enclosed form of proxy or their
substitutes will vote such proxy in accordance with their judgment in such
matters.
ANNUAL REPORT
A copy of the Company's 1998 Annual Report to Stockholders is being mailed
with this Proxy Statement to each stockholder of record. Stockholders not
receiving a copy of such Annual Report may obtain one by writing or calling Ms.
Wendi S. Zerwas, Corporate Secretary, Burlington Resources Inc., 5051
Westheimer, Suite 1400, Houston, Texas 77056-2124, telephone (713) 624-9500.
16
19
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 2000 ANNUAL MEETING
Stockholder proposals for inclusion in the Proxy Statement to be issued in
connection with the 2000 Annual Meeting of Stockholders must be mailed to Ms.
Wendi S. Zerwas, Corporate Secretary, Burlington Resources Inc., 5051
Westheimer, Suite 1400, Houston, Texas 77056-2124, and must be received by the
Corporate Secretary on or before November 8, 1999.
Stockholder proposals submitted outside of the procedures set forth above,
including nominations for Directors, must be mailed to Ms. Wendi S. Zerwas,
Corporate Secretary, at the address above and must be received by the Corporate
Secretary on or before December 8, 1999. If a proposal is received after that
date, the Company's proxy for the 2000 Annual Meeting may confer discretionary
authority to vote on such matter without any discussion of such matter in the
proxy statement for the 2000 Annual Meeting.
By Order of the Board of Directors
WENDI S. ZERWAS
Corporate Secretary
17
20
[BURLINGTON RESOURCES LOGO]
YOUR VOTE IS IMPORTANT NOTICE OF
YOUR MANAGEMENT WILL APPRECIATE THE PROMPT ANNUAL MEETING
RETURN OF YOUR SIGNED PROXY SO THE SHARES YOU OF STOCKHOLDERS
OWN WILL BE REPRESENTED AT THE ANNUAL MEETING OF AND
STOCKHOLDERS. PROXY STATEMENT
- --------------------------------------------------------------------------------
TO BE HELD IN THE AMBASSADOR ROOM,
THE LUXURY COLLECTION HOTEL,
1919 BRIAR OAKS LANE
HOUSTON, TEXAS
APRIL 7, 1999
9:00 A.M.
21
[BURLINGTON RESOURCES LOGO]
March 8, 1999
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at 9:00 a.m. on Wednesday, April 7, 1999, in the Ambassador Room of the
Luxury Collection Hotel, 1919 Briar Oaks Lane, Houston, Texas. Detailed
information about the meeting is contained in the accompanying Notice of Annual
Meeting and Proxy Statement.
Regardless of whether you plan to attend the meeting, it is important that your
shares be voted. This year the Company has added Internet and telephone voting
options for your convenience. We ask that you vote as soon as possible, by using
either the Internet or telephone options or by signing and returning your proxy
by mail in the envelope provided.
Sincerely,
Bobby S. Shackouls
Chairman of the Board,
President and Chief Executive Officer
PLEASE DETACH PROXY CARD
PROXY SOLICITED BY THE BOARD OF DIRECTORS
BURLINGTON RESOURCES INC. ANNUAL MEETING OF STOCKHOLDERS
APRIL 7, 1999
The undersigned hereby appoints Bobby S. Shackouls and L. David Hanower, and
each or either of them, with power of substitution, proxies for the undersigned
and authorizes them to represent and vote, as designated, all of the shares of
stock of the Company which the undersigned may be entitled to vote at the Annual
Meeting of Stockholders to be held in the Ambassador Room, The Luxury Collection
Hotel, 1919 Briar Oaks Lane, Houston, Texas on April 7, 1999 and at any
adjournment or postponement of such meeting for the following purposes and with
discretionary authority as to any other matters that may properly come before
the meeting, in accordance with and as described in the Notice of Annual Meeting
of Stockholders and Proxy Statement. If no direction is given, this proxy will
be voted FOR proposal 1.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE) SEE REVERSE SIDE
The Board of Directors recommends a vote FOR proposal 1.
1. Election of Directors
Nominees: J. V. Byrne, S. P. Gilbert, L. I. Grant, J. T. LaMacchia,
J. F. McDonald, K. W. Orce, D. M. Roberts, W. Scott, Jr.,
J. F. Schwarz, B. S. Shackouls, H. L. Steward, W. E. Wall
[ ] FOR [ ] WITHHELD [ ] _________________________
FOR all nominees except
as noted above
Mark here for address change and note at left [ ]
Mark here for comments [ ]
Please sign exactly as your name ___________________________ Date ___________________________
appears. If acting as attorney, Signature
executor, trustee or in other
representative capacity, sign name and
title.
___________________________ Date ___________________________
Signature
22
VOTE BY TELEPHONE
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE or 1-877-779-8683
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number -- 1-877-PRX-VOTE (1-877-779-8683).
3. Enter your 14-digit Control Number located on your Proxy Card above
your name.
4. Follow the recorded instructions.
YOUR VOTE IS IMPORTANT! -- CALL 1-877-PRX-VOTE ANYTIME.
VOTE BY INTERNET
It's fast, convenient, and your vote is immediately confirmed and posted.
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Go to the website -- http://www.eproxyvote.com/br
3. Enter your 14-digit Control Number located on your Proxy Card above
your name.
4. Follow the instructions provided.
YOUR VOTE IS IMPORTANT!
GO TO HTTP://WWW.EPROXYVOTE.COM/BR ANYTIME.
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING
BY TELEPHONE OR INTERNET