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UNITED STATES
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
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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4) Proposed maximum aggregate value of transaction:
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5) Total fee 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.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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LOGO
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 18, 2001
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Burlington Resources Inc. will be
held on Wednesday, April 18, 2001, at 9:00 a.m. local time in the Ambassador
Room, The St. Regis Hotel, 1919 Briar Oaks Lane, Houston, Texas, for the
following purposes:
1. To elect nine 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 20, 2001
are entitled to notice of, and to vote at, the meeting and any adjournment
thereof.
By Order of the Board of Directors
JEFFERY P. MONTE
Corporate Secretary
/s/ JEFFERY P. MONTE
March 12, 2001
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BURLINGTON RESOURCES INC.
5051 WESTHEIMER
HOUSTON, TEXAS 77056-2124
Mailing Date:
March 12, 2001
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 18,
2001. Shares of common stock, par value $.01 per share, and the Voting Share, as
explained below, 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 Mr. Jeffery P. Monte, 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.
The Company has two outstanding classes of securities that entitle holders
to vote generally at meetings of the Company's stockholders: common stock, par
value $.01 per share (the "Common Stock"); and Special Voting Stock, par value
$.01 per share. A single share (the "Voting Share") of Special Voting Stock was
issued to CIBC Mellon Trust Company of Canada (the "Trustee") as trustee under a
Voting and Exchange Trust Agreement for the benefit of holders of exchangeable
shares issued by the Company's wholly-owned subsidiary, Burlington Resources
Canada Inc., in connection with the Company's November 1999 acquisition of Poco
Petroleums Ltd.
The Common Stock and the Voting Share vote together as a single class on
all matters except when Delaware law requires otherwise. Each share of Common
Stock outstanding on the record date is entitled to one vote. The Voting Share
is entitled to one vote for each exchangeable share outstanding on the record
date. The Trustee is required to vote the Voting Share in the manner that
holders of exchangeable shares instruct, and to abstain from voting in
proportion to the exchangeable shares for which the Trustee does not receive
instructions. Accordingly, references to "stockholders" in this Proxy Statement
include holders of Common Stock, the Trustee, and holders of exchangeable
shares. The Common Stock and the exchangeable shares are referred to
collectively as "voting stock". The procedures for holders of exchangeable
shares to instruct the Trustee about voting at the Annual Meeting are explained
in the "Voting Direction for Holders of Exchangeable Shares of Burlington
Resources Canada Inc." that is enclosed with this Proxy Statement only for
holders of exchangeable shares.
The record date for the stockholders entitled to notice of and to vote at
the Annual Meeting was the close of business on February 20, 2001. At the record
date, 211,005,221 shares of Common Stock and one Voting Share were outstanding
and entitled to be voted at the Annual Meeting. At the record date, 3,970,543
exchangeable shares were outstanding and entitled to give voting instructions to
the Trustee. Accordingly, 214,975,764 votes are eligible to be cast at the
Annual Meeting.
A plurality of the votes of the shares present in person or represented by
proxy and entitled to be voted at the Annual Meeting is required for the
election of Directors. An affirmative vote of a majority of the shares present
in person or represented by proxy and entitled to be voted at the Annual 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.
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INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors of the Company held 8 meetings during 2000. The
standing committees of the Board of Directors include an Audit Committee and a
Compensation and Nominating Committee. The Audit Committee held 6 meetings
during 2000. This Committee's primary purpose is to assist the Board of
Directors in overseeing management and the independent auditors in fulfilling
their responsibilities in the financial reporting process of the Company. The
Compensation and Nominating Committee held 5 meetings during 2000. 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 2000, each Director attended at least 75 percent of the
meetings of the Board of Directors and the committees thereof on which such
Director served.
The Compensation and Nominating Committee will consider proposals for
nominees for Directors from stockholders which are made in writing to Mr.
Jeffery P. Monte, Corporate Secretary, Burlington Resources Inc., 5051
Westheimer, Suite 1400, Houston, Texas 77056-2124.
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 as of December 31, 2000.
This information is based solely on the Company's review of Schedules 13G filed
by such beneficial owners with the Securities and Exchange Commission (the
"SEC").
PERCENT
NAME AND ADDRESS OF NUMBER OF OF
BENEFICIAL OWNER SHARES CLASS
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FMR Corp., Edward C. Johnson 3d and Abigail P. Johnson...... 22,235,190 10.67%
82 Devonshire Street
Boston, Massachusetts 02109
Janus Capital Corporation, Thomas H. Bailey................. 16,225,730 7.50%
100 Fillmore Street
Denver, Colorado 80206
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NOTES
(1) In its Schedule 13G filed February 14, 2001 with respect to its securities
as of December 31, 2000, FMR Corp. states that it has sole voting power as
to 2,243,518 shares and sole dispositive power with respect to 22,235,190
shares. Mr. Johnson and Ms. Johnson state that they each have sole voting
power with respect to no shares and sole dispositive power with respect to
22,235,190 shares.
(2) In its Schedule 13G filed February 15, 2001 with respect to its securities
as of December 31, 2000, Janus Capital Corporation, in its capacity as an
investment adviser to its managed portfolios, states that it has sole voting
power as to 16,225,730 shares and sole dispositive power with respect to
16,225,730 shares. Mr. Bailey states that he has sole voting power with
respect to 16,225,730 shares and sole dispositive power with respect to
16,225,730 shares.
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The following table sets forth the number of shares of Common Stock
beneficially owned as of February 20, 2001 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 percent or more of the Company's
outstanding Common Stock, nor do the Directors and executive officers as a
group.
NUMBER OF SHARES
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BENEFICIALLY DEFERRAL
NAME OWNED (1) PLANS (2) TOTAL
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DIRECTORS
S. P. Gilbert.................................. 20,053 3,101 23,154
L. I. Grant.................................... 13,762 7,831 21,593
J. T. LaMacchia................................ 11,000 3,100 14,100
J. F. McDonald................................. 15,653 3,101 18,754
K. W. Orce..................................... 34,877(3) 4,551 39,428
D. M. Roberts.................................. 36,000 11,119 47,119
J. F. Schwarz.................................. 17,088(4) 5,037 22,125
W. Scott, Jr................................... 14,296 9,568 23,864
B. S. Shackouls................................ 569,874 115,932 685,806
NAMED EXECUTIVE OFFICERS
J. E. Hagale................................... 199,858 -- 199,858
L. D. Hanower.................................. 154,530 26,480 181,010
R. L. Limbacher................................ 119,761 19,364 139,125
J. A. Williams................................. 133,812 11,944 145,756
ALL DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (14 PERSONS)...................... 1,351,991 221,213 1,573,204
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 or
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 20, 2001; as a result,
the number of shares shown in this column includes for Mr. Gilbert, Ms.
Grant, Mr. LaMacchia, Mr. McDonald, Mr. Orce, Mr. Roberts, Mr. Schwarz,
Mr. Scott, Mr. Shackouls, Mr. Hagale, Mr. Hanower, Mr. Limbacher and
Mr. Williams and 12,553, 8,000, 8,000, 12,553, 22,252, 11,000, 14,626,
12,553, 509,000, 165,600, 133,943, 97,100, and 97,000 shares,
respectively, and 1,104,180 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 20, 2001. For Messrs. Shackouls,
Hanower, Limbacher and Williams, the number of shares shown in this
column includes 55,000, 12,500, 15,000 and 15,000 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 several deferred compensation plans
of the Company. These share equivalents are subject to Common Stock
market price fluctuations.
(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) Includes 1,200 shares of common stock owned by Entech Enterprises,
Inc., of which Mr. Schwarz is President and Chief Executive Officer.
Mr. Schwarz disclaims beneficial ownership of these shares.
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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 nine. It is
proposed to elect nine 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 voting 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:
S. PARKER GILBERT--Age--67. Member--Compensation and Nominating Committee.
Retired. 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 Taubman
Centers, Inc.
LAIRD I. GRANT--Age--55. Member--Audit Committee. Retired. From January
1995 to December 1998, Ms. Grant was President, Chief Executive Officer, Chief
Investment Officer, and Director, Rockefeller & Co., Inc. a registered
investment advisor. Ms. Grant has been a Director of the Company since 1996.
JOHN T. LAMACCHIA--Age--59. Member--Compensation and Nominating Committee.
Retired. From May 1999 to May 2000, Mr. LaMacchia was President and Chief
Executive Officer of Cellnet Data Systems, Inc. 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 Broadwing, Inc. (formerly Cincinnati
Bell Inc.), Geneva Steel Holdings Corp. and The Kroger Company. Cellnet Data
Systems Inc. filed a voluntary petition for bankruptcy under Chapter 11 of the
United States Bankruptcy Code in connection with the acquisition of the
company's assets and assumption of certain debt by Schlumberger Limited.
JAMES F. MCDONALD--Age--61. Member--Audit Committee. Chairman, President
and Chief Executive Officer, Scientific-Atlanta, Inc., Norcross,
Georgia--Telecommunications. Since November 2000, Mr. McDonald's principal
occupation has been as shown above. From July 1993 to November 2000 Mr. McDonald
was President and Chief Executive Officer, Scientific-Atlanta, Inc. Mr. McDonald
has been a Director of the Company since 1988. Mr. McDonald is also a director
of Global Crossing Ltd. and National Data Corporation.
KENNETH W. ORCE--Age--57. Chairman--Audit Committee. Senior Partner, Cahill
Gordon & Reindel, New York, New York--Law. 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--Age--65. Member--Audit Committee. Retired. 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--Age--64. Member--Compensation and Nominating Committee.
Chairman, President and Chief Executive Officer, Entech Enterprises, Inc.,
Houston, Texas--Energy Investments. For more than five years, Mr. Schwarz'
principal occupation has been as shown above. Mr. Schwarz has been a Director of
the Company since 1997.
WALTER SCOTT, JR.--Age--69. Chairman--Compensation and Nominating
Committee. Chairman, Level 3 Communications, Inc., Omaha,
Nebraska -- Telecommunications and Internet Services. 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., Commonwealth Telephone Enterprises, Inc.,
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ConAgra, Inc., RCN Corporation, Valmont Industries, Inc., Peter Kiewit Sons'
Inc. and Kiewit Materials Company.
BOBBY S. SHACKOULS--Age--50. Chairman of the Board, President and Chief
Executive Officer, Burlington Resources Inc., Houston, Texas. 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. Mr. Shackouls has been a Director of the Company since 1995. Mr.
Shackouls is also a director of The Kroger Company.
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 2000 Stock Option Plan for Non-Employee Directors provides
for the annual grant of a nonqualified option for 2,000 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 5,000 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 the fair
market value (as defined in the plan) of the Common Stock on the date the option
is granted. During 2000, an annual option for 2,000 shares of Common Stock was
granted to Ms. Grant and to Messrs. Gilbert, LaMacchia, McDonald, Orce, Roberts,
Schwarz, and Scott 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 1,000 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.
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 percent 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 by the
Company's executive officers, Directors, and persons who own more than 10
percent of a registered class of the Company's equity securities, all persons
subject to the reporting requirements of Section 16(a) filed the required
reports on a timely basis.
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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 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. In 2000, executive
base salaries were at the median 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. For 2001, executive
base salaries will be positioned approximately at the median of the comparator
group.
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. Through
2000, the plan allowed for maximum awards of up to 100 percent of base salary
and, in evaluating the Company's performance, the Committee considered a
combination of strategic, operating and financial objectives, which were not
specifically weighted, including oil and gas production levels, reserve
additions and reserve finding costs, earnings per share, operating income and
operating cash flow. Beginning in 2001, the plan allows for maximum awards of up
to 150 percent of base salary. In determining the size of the annual bonus, no
single performance factor or formula is used. In evaluating the Company's
performance, the Committee considers a combination of strategic, operating and
financial objectives, including Return on Capital Employed, growth in Appraised
Net Worth per share, EBITDAX, Production and Reserve Replacement Cost. These
measures are specifically weighted and are considered to be critical to the
Company's fundamental goal of building shareholder value. In addition, the
Committee has the discretion to override the result of these measures based upon
the Company's Total Shareholder Return as compared to the Dow Jones Secondary
Oil Index.
The Company's long-term incentive program consists of the 1993 Stock
Incentive Plan (the "Stock Incentive Plan") and the 2001 Performance Share Unit
Plan (the "PSU Plan"). With the completion of the four year performance cycle
under the Company's 1997 PSU Plan in December 2000, the Board approved the 2001
PSU Plan, which is based on a four year performance cycle ending in December
2004. The Committee's objective is to structure the executives' long-term
incentive compensation opportunity at approximately the seventy-fifth percentile
of long-term compensation provided by the comparator group of energy companies
and to emphasize equity as the cornerstone of the Company's long-term incentive
compensation program. Long-term incentive benefits are dependent on the
Company's achievement of its strategic, operating and financial
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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. Restricted stock is
also granted to this group of employees. The restrictions on this stock
generally lapse on the third anniversary of the date of grant. Stock purchase
rights are also 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 PSU Plan occurs over a four year performance
period ending in December 2004 and is dependent on the Company's achievement of
its strategic, operating and financial objectives and the Company's relative
Total Shareholder Return.
The deferred compensation provisions of the Company's compensation plans,
including the 1997 PSU Plan, permit participants to allocate all or a portion of
their deferred compensation in a variety of investment funds, including phantom
shares of the Company's Common Stock. As an inducement for executives to
increase their exposure to the Company's Common Stock, and to provide a benefit
similar to the stock purchase rights program available under the Stock Incentive
Plan, the Committee has granted executives the opportunity to invest their
deferred 1997 PSU Plan pay-out in phantom shares at 75 percent of the fair
market value of the Company's Common Stock, provided that such funds may not be
transferred to another investment fund for three years or until termination of
employment.
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 2000 were
excellent. Natural gas production exceeded 1.9 billion cubic feet per day, and
oil production was approximately 78.2 thousand barrels per day. The Company
performed slightly below the operational objectives for the year. Through
internal development, the Company replaced 101 percent of production for the
year at reserve replacement costs that were better than the objective.
Basic earnings per share, operating income and operating cash flow all
exceeded objectives for the year. The Company's Total Shareholder Return was
above the median for the Dow Jones Secondary Oil Index.
In view of these results, the Committee awarded Mr. Shackouls an annual
incentive award of $819,018, which represents 90 percent of the maximum award
that was available under the Incentive Compensation Plan. Similarly, the
Committee awarded the other executive officers 90 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
responsibilities. The executive salaries were adjusted in January 2000 to
approximately the median for the comparator group.
Long-Term Incentive Plan Payout
The Company's performance, for purposes of the 1997 PSU Plan, was evaluated
over a four year period, beginning January 1, 1997 and ending December 31, 2000.
The Committee determined that the Company's performance exceeded all of its
operational and financial objectives on a cumulative basis over the four year
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period. Strategic accomplishments such as the acquisition of The Louisiana Land
and Exploration Company and Poco Petroleums Ltd. have repositioned the Company
to provide for future profitable growth. The Committee also determined that the
Company's Total Shareholder Return for the same period was below the Dow Jones
Secondary Oil Index. Previously, the Committee approved the vesting of 50
percent of the units granted and eligible to vest under the 1997 PSU Plan for
each of the previous three years. The Committee approved the vesting of 50
percent of the eligible units based upon the Company's performance for 2000 or
9,375 units for Mr. Shackouls and 12,047 units for the other executive officers.
In addition, in connection with the completion of the 1997 PSU Plan cycle, based
on the Company's operating, financial and strategic results, and the Total
Shareholder Return relative to the Dow Jones Secondary Oil Index, for the four
year performance period from January 1, 1997 to December 31, 2000, the Committee
approved the vesting of an additional 11,250 units for Mr. Shackouls and 11,798
units for the other executive officers. For the entire four year program, the
Committee vested in aggregate 65 percent of the units granted, or 48,750 units
for Mr. Shackouls and 51,123 units for the other executive officers.
Pay-out under the 1997 PSU Plan, which occurred in January 2001, was based
on the number of vested units multiplied by the average closing price of the
Company's Common Stock for the 20 trading days prior to December 31, 2000.
Aggregate payments under this four year plan consisted of $2,265,842 to Mr.
Shackouls and $2,376,136 to the other executive officers, of which the executive
officers deferred $2,237,350, or 48 percent of the total pay-out, into phantom
shares of the Company's Common Stock.
Long-Term Incentive Plan Awards
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 in
January 2001 granted Mr. Shackouls 100,000 stock options and 20,000 shares of
restricted stock. The Committee also granted the other executive officers an
aggregate of 100,000 stock options and an aggregate of 20,000 shares of
restricted stock. The grant of restricted stock vests in three years. In
connection with the implementation of the 2001 PSU Plan, the Committee granted
Mr. Shackouls the opportunity to earn up to 200,000 units and the other
executive officers the opportunity to earn up to an aggregate of 200,000 units.
Vesting of performance share units is dependent on the Company's relative Total
Shareholder Return and the achievement of its strategic, operating and financial
goals. Units may vest in equal increments over the next four years, and any
unvested units may vest at the end of the four year performance cycle. Payment
under this plan will be made annually based on the price of the Company's Common
Stock at that time. 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 did not consider currently outstanding long-term
incentive awards.
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 20, 2001, 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
8
11
Comparison of 5-Year Cumulative Total Shareholder Return(1)
[PERFORMANCE GRAPH]
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
Burlington Resources(2).......... $100 $114 $148 $133 $108 $101
S & P 500........................ 100 137 169 225 289 350
Secondary Oil.................... 100 116 143 152 111 125
YEAR ENDED DECEMBER 31
Comparison of Cumulative Total Shareholder Return
Since the Company's Initial Public Offering(1)
[PERFORMANCE GRAPH]
7/8/88 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Burlington
Resources(2) $100 $129 $194 $155 $146 $197 $211 $177 $201 $262
S & P 500............ 100 105 138 133 174 187 206 209 287 353
Secondary. Oil 100 101 137 114 112 113 125 121 140 173
12/31/97 12/31/98 12/31/99
-------- -------- --------
Burlington
Resources(2) $236 $191 $179
S & P 500............ 470 604 731
Secondary. Oil 184 134 152
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, 1995 and July 8, 1988, 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.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31,
2000, 1999 and 1998 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 2000 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
NAME AND PRINCIPAL OTHER ANNUAL RESTRICTED UNDERLYING ---------------
POSITION YEAR SALARY BONUS(1) COMPENSATION(5) STOCK AWARDS(2) OPTIONS LTIP PAYOUTS(3)
- ------------------------- ---- -------- -------- --------------- --------------- ---------- ---------------
Bobby S. Shackouls 2000 $910,020 $819,018 $ 67,010 $862,500 50,000 $2,265,842
Chairman of the Board, 1999 $825,000 $618,750 $109,309 $352,500 40,000 --
President and Chief 1998 $825,000 $412,500 $119,440 -- -- --
Executive Officer
John E. Hagale(6) 2000 $425,040 $382,536 $ 58,364 $172,500 12,000 $ 755,281
Senior Vice President 1999 $400,020 $300,015 $ 4,414 $176,250 20,000 --
1998 $370,020 $185,010 $ 5,944 -- -- --
John A. Williams(7) 2000 $375,000 $337,500 $ 45,561 $172,500 12,000 $ 555,143
Senior Vice President, 1999 $350,040 $262,530 $ 25,491 $176,250 20,000 $ 47,068
Exploration 1998 $325,020 $262,510 $ 2,654 -- 25,000 $ 56,317
Randy L. Limbacher 2000 $375,000 $337,500 $ 4,794 $172,500 12,000 $ 527,209
Senior Vice President, 1999 $300,000 $225,000 $ 2,065 $176,250 20,000 --
Production 1998 $250,020 $125,010 $ 1,284 -- 36,600 --
L. David Hanower 2000 $325,020 $292,518 $ 16,526 $172,500 12,000 $ 538,503
Senior Vice President, 1999 $275,040 $206,280 $ 9,506 $ 88,125 5,000 --
Law and Administration 1998 $248,790 $124,395 $ 10,332 -- 33,125 --
NAME AND PRINCIPAL ALL OTHER
POSITION COMPENSATION(4)
- ------------------------- ---------------
Bobby S. Shackouls $100,057
Chairman of the Board, $ 79,595
President and Chief $ 93,108
Executive Officer
John E. Hagale(6) $319,651
Senior Vice President $ 54,285
$ 56,346
John A. Williams(7) $189,909
Senior Vice President, $160,420
Exploration $128,092
Randy L. Limbacher $226,544
Senior Vice President, $ 34,239
Production $ 31,022
L. David Hanower $222,005
Senior Vice President, $ 26,258
Law and Administration $ 23,414
- ---------------
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 on the date
of grant. On December 31, 2000, Messrs. Shackouls, Hagale, Williams,
Limbacher and Hanower held 35,000, 10,000, 10,000, 10,000 and 7,500 shares,
respectively, of restricted Common Stock, having a market value, based on
the closing price of the Common Stock on such date, of $1,767,500, $505,000,
$505,000, $505,000 and $378,750, respectively. Dividends are paid on
restricted Common Stock at the same rate as paid to all stockholders.
(3) Long-term incentive plan payout pursuant to the Company's 1997 Performance
Share Unit Plan ("1997 PSU Plan") for the performance period which began
January 1, 1997 and ended on December 31, 2000. Under the terms of the 1997
PSU Plan, this payment is equal to the number of vested units multiplied by
the average closing price of the Company's Common Stock for the 20 business
days immediately preceding the end of the performance period. Units vested
under the 1997 PSU Plan throughout the four year performance cycle. In
aggregate, 65% of the Units granted under the 1997 PSU Plan vested. Of this
amount, Messrs. Hagale, Limbacher and Hanower deferred 100% of their
payments, and Mr. Williams deferred $416,357, into phantom shares of the
Company's Common Stock.
(4) Includes matching contributions made by the Company during 2000 in the
Company's Retirement Savings Plan and Supplemental Benefits Plan for Messrs.
Shackouls, Hagale, Williams, Limbacher and Hanower of $91,726, $58,004,
$51,002, $48,000 and $42,504, respectively. Includes matching contributions
made by the Company during 1999 in the Company's Retirement Savings Plan and
Supplemental Benefits Plan for Messrs. Shackouls, Hagale, Williams,
Limbacher and Hanower of $74,250, $46,802, $41,004, $34,001 and $26,258,
respectively. Includes matching contributions made by the Company during
1998 in the Company's Retirement Savings Plan and Supplemental Benefits Plan
for Messrs. Shackouls, Hagale, Williams, Limbacher and Hanower of $91,365,
$54,403, $29,757, $29,624, and $23,414, respectively. Includes for Mr.
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 amount of $98,335.
(5) For Mr. Shackouls, includes $41,177 and $46,587 attributed for personal use
of Company airplanes in 1999 and 1998, respectively.
(6) Mr. Hagale served as Executive Vice President and Chief Financial Officer of
the Company until October 18, 2000. He served as Senior Vice President until
January 18, 2001.
(7) Mr. Williams' bonus includes amounts payable pursuant to the LL&E annual
incentive program. His 1998 bonus includes a 1997 special incentive bonus
paid in March 1998 in the amount of $100,000.
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OPTIONS GRANTED IN 2000
The following information is furnished for the year ended December 31, 2000
with respect to the named executive officers for stock options which were
granted in January 2000 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 2000(1) IN 2000 PER SHARE DATE(1) VALUE(2)
---- ---------- ------------ --------- ---------- ----------
B. S. Shackouls.......................... 47,100(3) 4.1% $34.2813 1/18/10 $627,372
2,900(4) 1.1% $34.2813 1/17/10 $ 44,399
J. E. Hagale............................. 9,100(3) .8% $34.2813 1/18/10 $121,212
2,900(4) 1.1% $34.2813 1/17/10 $ 44,399
J. A. Williams........................... 9,100(3) .8% $34.2813 1/18/10 $121,212
2,900(4) 1.1% $34.2813 1/17/10 $ 44,399
R. L. Limbacher.......................... 9,100(3) .8% $34.2813 1/18/10 $121,212
2,900(4) 1.1% $34.2813 1/17/10 $ 44,399
L. D. Hanower............................ 9,100(3) .8% $34.2813 1/18/10 $121,212
2,900(4) 1.1% $34.2813 1/17/10 $ 44,399
- ---------------
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 date of
January 18, 2000, with an option price of $34.2813, it assumed a stock price
volatility of 33.69 percent, a risk-free rate of return of 6.66 percent and
a dividend of $0.55 per year. The value has been reduced by approximately
17.81 percent 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) Nonqualified stock options which become exercisable on January 18, 2001.
(4) Incentive stock options which become exercisable on January 18, 2001.
AGGREGATED OPTION EXERCISES IN 2000 AND YEAR-END VALUES
The following information is furnished for the year ended December 31, 2000
with respect to the named executive officers for stock option exercises which
occurred during 2000.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SECURITIES AT DECEMBER 31, 2000 AT DECEMBER 31, 2000(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
B. S. Shackouls....... -- -- 459,000 50,000 $1,768,344 $810,935
J. E. Hagale.......... 14,473 $172,121 177,018 12,000 $1,150,302 $194,624
J. A. Williams........ 20,000 $181,250 85,000 12,000 $ 610,780 $194,624
R. L. Limbacher....... 22,000 $169,962 85,100 12,000 $ 509,480 $194,624
L. D. Hanower......... 10,000 $200,461 121,943 12,000 $ 924,412 $194,624
11
14
- ---------------
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 exercise price for that option and
$50.50, the closing price of the Common Stock on the New York Stock Exchange
on December 29, 2000.
LONG-TERM INCENTIVE PLAN AWARDS IN 2000
No awards under the Performance Share Unit Plan were granted during 2000.
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........... $ 94,095 $125,460 $ 156,825 $ 188,190 $ 219,555
$ 600,000........... $142,095 $189,460 $ 236,825 $ 284,190 $ 331,555
$ 800,000........... $190,095 $253,460 $ 316,825 $ 380,190 $ 443,555
$1,000,000........... $238,095 $317,460 $ 396,825 $ 476,190 $ 555,555
$1,200,000........... $286,095 $381,460 $ 476,825 $ 572,190 $ 667,555
$1,400,000........... $334,095 $445,460 $ 556,825 $ 668,190 $ 779,555
$1,600,000........... $382,095 $509,460 $ 636,825 $ 764,190 $ 891,555
$1,800,000........... $430,095 $573,460 $ 716,825 $ 860,190 $1,003,555
$2,000,000........... $478,095 $637,460 $ 796,825 $ 956,190 $1,115,555
$2,300,000........... $550,095 $733,460 $ 916,825 $1,100,190 $1,283,555
$2,400,000........... $574,095 $765,460 $ 956,825 $1,148,190 $1,339,555
$2,500,000........... $598,095 $797,460 $ 996,825 $1,196,190 $1,395,555
$2,600,000........... $622,095 $829,460 $1,036,825 $1,244,190 $1,451,555
$2,700,000........... $646,095 $861,460 $1,076,825 $1,292,190 $1,507,555
$2,750,000........... $658,095 $877,460 $1,096,825 $1,316,190 $1,535,555
- ---------------
NOTE
(1) Average pension earnings for a given year include salary and bonus payments.
Under the Pension Plan, the maximum benefit payable in 2001 is $140,000 and
the maximum amount of compensation that may be considered is $170,000.
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 percent of the highest three-year average
earnings, plus 0.5 percent 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 percent of the highest
12
15
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 percent 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, Williams, Limbacher, and Hanower would be 22, 35, 23, 37, and
34, respectively.
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 at a minimum annual salary of $825,000, effective for three years
from the date the Company notifies him that it does not wish to extend the term.
The Agreement shall terminate automatically on the date of the Company's Annual
Meeting of Stockholders following Mr. Shackouls' 60th birthday. This agreement
provides that upon termination of employment within two years after a Change in
Control of the Company, Mr. Shackouls will be entitled to the greater of the
benefits under the employment agreement or the Company's Executive Change in
Control Severance Plan (the "Change in Control Severance 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 prior to age 55.
The Change in Control Severance Plan provides severance benefits following
a Change in Control for certain officers of the Company and its subsidiaries in
an amount equal to (i) three times the sum of annual salary plus the bonus
amount defined in the plan and (ii) a pro rata bonus amount for the year in
which the change in control occurs. The Change in Control Severance Plan also
provides for the continuation of life, health, survivor benefit and long-term
disability insurance for a period of up to 36 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 Change in Control Severance 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,
instituted by the employee for other than good reason or the employee is offered
employment with a divested operating unit of the Company. The Change in Control
Severance Plan also provides that the Company will pay legal fees and expenses
incurred by a participant to enforce rights or benefits under this plan.
The Company also has an agreement with Mr. Williams under which he waived
his rights under the termination agreement he previously executed while at LL&E.
The agreement provides that if Mr. Williams' employment is terminated under
certain defined circumstances prior to September 30, 2002, he will be paid $3
million, reduced by $83,333 a month for every month he is employed after
September 1999. Any benefits paid under this agreement are not payable in
addition to any other severance or termination benefits, but will be reduced by
the payments under any other termination or severance plan.
The Company has also agreed to provide certain employees formerly employed
in the Company's Seattle, Washington office, including John E. Hagale and L.
David Hanower, with additional pension related benefits based on projected
compensation if their employment terminates prior to eligibility for early
retirement.
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 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 and Medicare tax on the Gross-Up Payment, an amount equal to the
Severance Payments.
13
16
REPORT BY AUDIT COMMITTEE
The primary responsibility of the Audit Committee of the Board of Directors
is to assist the Board of Directors in overseeing management and the independent
auditors in fulfilling their responsibilities in the financial reporting process
of the Company. The Audit Committee is composed of four independent directors
and operates under a written charter adopted and approved by the Board of
Directors on April 19, 2000, attached as Schedule A to this Proxy Statement.
During the fiscal year 2000, the Audit Committee held six meetings.
It is not the responsibility of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are in all
material respects complete and accurate in accordance with generally accepted
accounting principles. This is the responsibility of management and the
independent auditors. It is also not the responsibility of the Audit Committee
to assure compliance with laws and regulations and the Company's Code of
Conduct.
Based on the Audit Committee's review of the audited financial statements,
its discussions with management regarding the audited financial statements, its
receipt of written disclosures and the letter from independent auditors required
by Independence Standards Board Standard No. 1, its discussions with the
independent auditors regarding such auditor's independence, the audited
financial statements, the matters required to be discussed by the Statement on
Auditing Standards 61 as amended and other matters the Audit Committee deemed
relevant and appropriate, the Audit Committee recommended to the Board of
Directors that the audited financial statements for the fiscal year ended
December 31, 2000 be included in the Company's Annual Report on Form 10-K for
such fiscal year.
AUDIT COMMITTEE
Kenneth W. Orce, Chairman
Laird I. Grant
James F. McDonald
Donald M. Roberts
AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers L.L.P. ("PWC")
as independent public accountants for the year ending December 31, 2001.
Representatives of PWC will be present at the Annual Meeting with the
opportunity to make a statement and to respond to appropriate questions.
AUDIT FEES
The aggregate fees billed for professional services rendered by PWC for the
audit of the Company's financial statements for the fiscal year ended December
31, 2000, and the reviews of the financial statements included in the Company's
Forms 10-Q for such fiscal year were $1,693,233.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PWC did not provide the Company any financial information systems design
and implementation services as used in Paragraph (c)(4)(ii) of Rule 2-01 of
Regulation S-X for the fiscal year ended December 31, 2000.
14
17
ALL OTHER FEES
The aggregate fees billed for services rendered by PWC, other than for
audit services and financial information systems design and implementation
services, for the fiscal year ended December 31, 2000 were $2,031,144.
GENERAL
The Audit Committee of the Company's Board of Directors has considered
whether the provision of services by PWC covered by "Financial Information
Systems Design and Implementation Fees" and "All Other Fees" above is compatible
with maintaining PWC's independence.
Less than 50% of the hours expended on PWC's engagement to audit the
Company's financial statements for the fiscal year ended December 31, 2000, were
attributed to work performed by persons other than PWC's full-time, permanent
employees.
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 2000 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 Mr.
Jeffery P. Monte, Corporate Secretary, Burlington Resources Inc., 5051
Westheimer, Suite 1400, Houston, Texas 77056-2124, telephone (713) 624-9500.
15
18
SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 2002 ANNUAL MEETING
Stockholder proposals for inclusion in the Proxy Statement to be issued in
connection with the 2002 Annual Meeting of Stockholders must be mailed to Mr.
Jeffery P. Monte, 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 11, 2001.
Stockholder proposals submitted outside of the procedures set forth above,
including nominations for Directors, must be mailed to Mr. Jeffery P. Monte,
Corporate Secretary, at the address above and must be received by the Corporate
Secretary on or before January 10, 2002. If a proposal is received after that
date, the Company's proxy for the 2002 Annual Meeting may confer discretionary
authority to vote on such matter without any discussion of such matter in the
proxy statement for the 2002 Annual Meeting.
By Order of the Board of Directors
/s/ JEFFERY P. MONTE
JEFFERY P. MONTE
Corporate Secretary
16
19
SCHEDULE A
BURLINGTON RESOURCES, INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION
The Board of Directors shall designate annually an Audit Committee
comprised of three or more Directors, each of whom is independent of management
and the Company and free of any relationship which, in the opinion of the Board
of Directors, would interfere with the Director's exercise of independent
judgment as a Committee member. The Audit Committee shall comply with the rules
and regulations of the New York Stock Exchange applicable to the composition and
responsibilities of audit committees generally.
PURPOSE
The primary purpose of the Audit Committee is to assist the Board of
Directors in overseeing management and the independent auditors in fulfilling
their responsibilities in the financial reporting process of the Company. It is
not the responsibility of the Audit Committee to plan or conduct audits or to
determine that the Company's financial statements are in all material respects
complete and accurate and in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditors. It is also not the responsibility of the Audit Committee to assure
compliance with laws and regulations and the Company's Code of Conduct.
MEETINGS
The Committee shall meet at least four times each year, or more frequently
as circumstances dictate. In order to foster open communications, the Committee
shall meet at least annually with management, the director of the internal audit
department and the independent auditors in separate executive sessions to
discuss any matters that the Committee or each of these groups believes should
be discussed privately.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Company's independent auditors are ultimately accountable to the Board
of Directors and the Audit Committee, and the Board of Directors and the Audit
Committee have the ultimate authority and responsibility to select, evaluate,
and, where appropriate, replace the independent auditors. Additionally, the
Audit Committee shall:
- Obtain from the independent auditors each year a formal written statement
delineating all relationships between the auditors and the Company;
- Periodically engage in a dialogue with the independent auditors regarding
any disclosed relationships or services which may impact the objectivity
and independence of the auditors; and
- Recommend that the Board of Directors take appropriate action in response
to the outside auditor's report to satisfy itself of the outside
auditor's independence.
RESPONSIBILITIES
The Audit Committee shall:
1. Review with Company management and the independent auditors the proposed
overall scope of the Company's annual audit, the adequacy and integrity
of the Company's system of internal controls, and the Company's audited
financial statements and related disclosures.
2. Discuss with the independent auditors their judgments about the quality,
not just the acceptability, of the Company's accounting principles as
applied in its financial reporting.
17
20
3. Review annually with management and the independent auditors the
Company's Code of Conduct, which prohibits unethical or illegal
activities by the Company's employees, as well as review the actions
taken to monitor compliance with the Code of Conduct.
4. Review any material exceptions to the Company's Code of Conduct and the
actions management has taken to resolve the exceptions.
5. Review with the Company's counsel any legal, regulatory and
environmental matters that may have a material impact on the Company's
financial statements.
6. Review the activities of the Company's internal audit department,
including the proposed annual audit plan, periodic progress reports on
the status of the plan, and summaries of any significant issues raised
during the performance of internal audits.
7. Review and assess the adequacy of the Audit Committee Charter on an
annual basis.
8. Review and assess compliance with all applicable rules and regulations
of the Securities and Exchange Commission and the New York Stock
Exchange specifically applicable to the composition and responsibilities
of the Audit Committee.
9. Perform such other activities as the Committee or the Board of Directors
may from time to time deem necessary or appropriate.
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21
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 ST. REGIS HOTEL,
1919 BRIAR OAKS LANE
HOUSTON, TEXAS
APRIL 18, 2001
9:00 A.M.
332-PS-00
22
BURLINGTON
RESOURCES
March 12, 2001
To our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at 9:00 a.m., local time, on Wednesday, April 18, 2001, in the Ambassador
Room of The St. Regis 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. The Company has 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,
/s/ BOBBY S. SHACKOULS
Bobby S. Shackouls
Chairman of the Board,
President and Chief Executive Officer
DETACH HERE
PROXY
SOLICITED BY THE BOARD OF DIRECTORS
BURLINGTON RESOURCES INC. ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 2001
The undersigned hereby appoints Bobby S. Shackouls and L. David
Hanower, and each or either of them, with full power of substitution, as the
proxy or the proxies (the "Proxies") of the undersigned 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 St. Regis Hotel, 1919 Briar Oaks Lane, Houston, Texas on
April 18, 2001 at 9:00 a.m. local time, and at any adjournment or postponement
of such meeting with all powers which the undersigned would possess if present
at such Annual Meeting. In the election of directors, this proxy will be voted
in the manner directed on the reverse side. If no direction is given, this proxy
will be voted FOR Proposal 1. Said proxies shall have 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.
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SEE REVERSE SEE REVERSE
SIDE (IMPORTANT-TO BE SIGNED AND DATED ON REVERSE SIDE) SIDE
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23
BURLINGTON
RESOURCES
C/O EQUISERVE
P.O. BOX 9398
BOSTON, MA 02205-9398
- -------------------
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
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
- --------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
- --------------------------------------------------------
1. Election of Directors.
NOMINEES: (01) S.P. Gilbert, (02) L.I. Grant, (03) J.T. LaMacchia,
(04) J.F. McDonald, (05) K.W. Orce, (06) D.M. Roberts,
(07) J.F. Schwarz, (08) W. Scott, Jr., (09) B.S. Shackouls
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 appears. If
acting as attorney, executor, trustee or in other
representative capacity, sign name and title.
Joint owners should each sign.
Signature: ______________________________________ Date:_____________________
Signature:_______________________________________ Date:_____________________
24
BURLINGTON
RESOURCES
TO HOLDERS OF EXCHANGEABLE SHARES OF
BURLINGTON RESOURCES CANADA INC.
Enclosed are proxy solicitation materials relating to the Annual Meeting of
Stockholders of Burlington Resources Inc. The exchangeable shares of Burlington
Resources Canada Inc. are the economic equivalent of common stock of Burlington
Resources Inc., and have essentially identical rights, including voting rights,
to the common stock of Burlington Resources Inc. Therefore, as a holder of the
exchangeable shares, you are entitled to vote at the Annual Meeting of the
Shareholders of Burlington Resources Inc. Details of the business of the meeting
and the procedures to vote at the meeting are set out in the enclosed Proxy
Statement.
25
BURLINGTON RESOURCES INC.
VOTING DIRECTION FOR
HOLDERS OF EXCHANGEABLE SHARES OF
BURLINGTON RESOURCES CANADA INC.
The undersigned holder (the "Holder") of exchangeable shares of Burlington
Resources Canada Inc. ("BR Canada") has the right to instruct CIBC Mellon Trust
Company (the "Trustee") in respect of the exercise of their votes at the meeting
of the stockholders of Burlington Resources Inc. ("BR") to be held on April 18,
2001, as follows:
- To instruct the Trustee to exercise the votes to which the Holder is
entitled as indicated below; OR
- To instruct the Trustee to appoint a representative of BR's management as
proxy to exercise the votes to which the Holder is entitled as indicated
below; OR
- To instruct the Trustee to appoint the Holder, or the Holder's designee as
a proxy to exercise personally the votes to which the Holder is entitled
as indicated below.
- --------------------------------------------------------------------------------
The Holder directs that their Exchangeable Shares be voted as follows:
- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS
Nominees: S. Parker Gilbert, Laird I. Grant, John T.
LaMacchia, James F. McDonald, Kenneth W. Orce, Donald M.
Roberts, John F. Schwarz, Walter Scott, Jr., and Bobby S.
Shackouls.
[ ] FOR [ ] WITHHELD [ ] [ ]
---------------------------------------
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE.
- --------------------------------------------------------------------------------
PLEASE SELECT ONE OF THE FOLLOWING:
- --------------------------------------------------------------------------------
[ ] DIRECT THE TRUSTEE TO VOTE EXCHANGEABLE SHARES
The Holder hereby directs the Trustee to vote as indicated
above.
- --------------------------------------------------------------------------------
[ ] APPOINTMENT OF BR MANAGEMENT AS PROXY
The Holder hereby appoints Bobby S. Shackouls and L. David Hanower, and
each or either of them, with power of substitution, proxies for the Holder
and authorizes them to represent and vote, as indicated above, all of the
exchangeable shares of BR Canada which the Holder may be entitled to vote
at the meeting of the stockholders of BR on April 18, 2001, and at any
adjournment or postponement of such meeting, and with discretionary
authority as to any other matters that may properly come before the
meeting.
- --------------------------------------------------------------------------------
[ ] APPOINTMENT OF THE HOLDER, OR THE HOLDER'S DESIGNEE AS PROXY
The Holder hereby appoints ________________________________ as proxy for
the Holder and authorizes them to represent and vote, as indicated above,
all of the exchangeable shares of BR Canada which the Holder may be
entitled to vote at the meeting of the stockholders of BR on April 18,
2001, and at any adjournment or postponement of such meeting, and with
discretionary authority as to any other matters that may properly come
before the meeting.
- --------------------------------------------------------------------------------
IF THE HOLDER DOES NOT COMPLETE ONE OF THE FOREGOING, COMPLETES MORE THAN ONE
OF THE FOREGOING OR COMPLETES THE THIRD SELECTION BUT DOES NOT SPECIFY A
DESIGNEE, THE HOLDER WILL BE DEEMED TO HAVE DIRECTED THE TRUSTEE TO VOTE THEIR
EXCHANGEABLE SHARES AS INDICATED IN ITEM 1.
- --------------------------------------------------------------------------------
DATED: ______________________, 2001.
--------------------------------------
Signature of Exchangeable Shareholder
--------------------------------------
Name of Exchangeable Shareholder
--------------------------------------
Number of Exchangeable Shares Held
NOTES:
1. This voting direction must be received by CIBC Mellon Trust Company,
Attention: Proxy Department, 200 Queens Quay East Unit #6 Toronto, Ontario
M5A-4K9 by not later than April 17th, 2000, or if the meeting is adjourned,
by the close of business on the day (excluding Saturdays, Sundays, and
Holidays) prior to the day of the adjourned meeting.
2. If this voting direction is not signed by the holder of the exchangeable
shares, the votes to which the holder of the exchangeable shares is entitled
will not be exercised.
3. By completing this voting direction, the holder of the exchangeable shares
revokes any previously given voting direction.