SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-12
PETROQUEST ENERGY, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------
(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):
---------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------
(5) Total fee paid:
---------------------------------------------
[ ] 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: _______________________________________
(2) Form, Schedule or Registration Statement No.: _________________
(3) Filing Party: _________________________________________________
(4) Date Filed: ___________________________________________________
PETROQUEST ENERGY, INC.
400 E. KALISTE SALOOM ROAD, SUITE 6000
LAFAYETTE, LOUISIANA 70508
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 7, 2003
-----------------
Dear Stockholders:
We cordially invite you to attend our 2003 Annual Meeting of
Stockholders. The meeting will be held on Wednesday, May 7, 2003 at 9:00 a.m.
(Lafayette time), at the City Club at River Ranch at 1100 Camellia Blvd.,
Lafayette, Louisiana 70508. At the meeting we will:
1. Elect the Board of Directors; and
2. Transact any other business as may properly come before the
meeting.
Stockholders who owned our common stock at the close of business on
Friday, March 21, 2003 may attend and vote at the meeting. A stockholders' list
will be available at our offices at 400 E. Kaliste Saloom Road, Suite 6000,
Lafayette, Louisiana 70508 for a period of ten days prior to the meeting. If
you cannot attend the meeting, you may vote by mailing the Proxy Card in the
enclosed postage-prepaid envelope. Any stockholder attending the meeting may
vote in person, even though he or she has already returned a Proxy Card.
We look forward to seeing you at the meeting.
By order of the Board of Directors,
/s/ DANIEL G. FOURNERAT
Daniel G. Fournerat
Senior Vice President, General Counsel
and Secretary
Lafayette, Louisiana
April 4, 2003
PLEASE COMPLETE, SIGN AND DATE THE PROXY CARD AS PROMPTLY
AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE
PETROQUEST ENERGY, INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
Our Board of Directors is soliciting proxies for the 2003 Annual
Meeting of Stockholders to be held on Wednesday, May 7, 2003 at 9:00 a.m.
(Lafayette time) at the City Club at River Ranch at 1100 Camellia Blvd.,
Lafayette, Louisiana 70508, and at any adjournments or postponements of the
meeting. This Proxy Statement contains important information for you to
consider when deciding how to vote on the matters brought before the meeting.
Please read it carefully.
PetroQuest will pay the costs of soliciting proxies from stockholders.
Directors, officers and regular employees may solicit proxies on behalf of
PetroQuest, without additional compensation, personally or by telephone. Voting
materials, which include the Proxy Statement, Proxy Card and 2002 Annual
Report, will be mailed to stockholders on or about April 4, 2003.
QUESTIONS AND ANSWERS
Q: WHO CAN ATTEND AND VOTE AT THE MEETING?
A: The Board set March 21, 2003 as the record date for the meeting. You can
attend and vote at the meeting if you were a stockholder at the close of
business on the record date, March 21, 2003. On that date, there were
42,852,394 shares outstanding and entitled to vote at the meeting.
Q: WHAT PROPOSALS WILL BE VOTED ON AT THE MEETING?
A: The only proposal scheduled to be voted on at the meeting is the election
of directors.
Q: HOW WILL THE PROXIES VOTE ON ANY OTHER BUSINESS BROUGHT UP AT THE MEETING?
A: By submitting your Proxy Card, you authorize the proxies to use their
judgment to determine how to vote on any other matter brought before
the meeting. We do not know of any other business to be considered at
the meeting. The proxies' authority to vote according to their
judgment applies only to shares you own as a stockholder of record.
Q: HOW DO I CAST MY VOTE?
A: If you hold your shares as a stockholder of record, you can vote in person
at the annual meeting or you can vote by mail. If you are a street-name
stockholder, you will receive instructions from your bank, broker or other
nominee describing how to vote your shares.
The enclosed Proxy Card contains instructions for voting by mail. The
proxies identified on the back of the Proxy Card will vote the shares of
which you are the stockholder of record in accordance with your
instructions. If you submit a Proxy Card without giving specific voting
instructions, the proxies will vote those shares as recommended by the
Board of Directors.
Q: HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSAL?
A: The Board recommends you vote "FOR" each of the nominees to the Board of
Directors.
Q: CAN I REVOKE MY PROXY CARD?
A: Yes. You can revoke your proxy card by:
o Submitting a new proxy card with a later date;
o Giving written notice before the meeting to our Secretary stating
that you are revoking your Proxy Card; or
o Attending the meeting and voting your shares in person, or notifying
our Secretary orally at the meeting of your wish to revoke your
proxy.
Q: WHO WILL COUNT THE VOTE?
A: The inspector of election will count the vote. PetroQuest's Secretary will
act as the inspector of election.
Q: WHAT IS A "QUORUM?"
A: A quorum is the number of shares that must be present to hold the
meeting. The quorum requirement for the meeting is a majority of the
outstanding shares as of the record date, present in person or
represented by proxy. If you submit a valid Proxy Card or attend the
meeting, your shares will be counted to determine whether there is a
quorum. Abstentions and broker non-votes also count toward the quorum.
"Broker non-votes" occur when nominees (such as banks and brokers)
that hold shares on behalf of beneficial owners do not receive voting
instructions from the beneficial owners prior to the meeting and do
not have discretionary voting authority to vote those shares.
Q: WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
A: The nominees for director will be elected by a plurality of the votes cast
at the annual meeting. The seven nominees for election as directors at the
annual meeting who receive the greatest number of votes cast for election
by the stockholders will be elected as our directors. In the election of
directors, you may vote "FOR" all nominees, "AGAINST" all nominees or
withhold your vote for any one or more of the nominees. All other matters
to be considered at the meeting require the affirmative vote of a majority
of the shares entitled to vote and present in person or by proxy at the
meeting. In a plurality vote, abstentions and broker non-votes are not
considered a vote cast and will not affect the outcome. In a majority
vote, however, express abstentions and broker non-votes have the effect of
a vote against a particular proposal.
Q: WHAT SHARES ARE INCLUDED ON MY PROXY CARD?
A: Your Proxy Card represents all shares registered to your account in the
same social security number and address.
Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
A: Your shares are probably registered in more than one account. You should
vote each Proxy Card you receive. We encourage you to consolidate all your
accounts by registering them in the same name, social security number and
address.
Q: HOW MANY VOTES CAN I CAST?
A: On all matters you are entitled to one vote per share.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
A: The preliminary voting results will be announced at the meeting. The final
results will be published in our quarterly report on Form 10-Q for the
second quarter of 2003.
2
PROPOSAL
ELECTION OF DIRECTORS
At the meeting, seven directors are to be elected. Each director is to
hold office until the next annual meeting of stockholders or until his
successor is elected and qualified. The persons named in the accompanying Proxy
have been designated by the Board of Directors, and unless authority is
withheld, they intend to vote for the election of the nominees named below to
the Board of Directors. If any nominee should become unavailable for election,
the Proxy may be voted for a substitute nominee selected by the persons named
in the Proxy or the Board of Directors may be reduced accordingly; however, the
Board of Directors is not aware of any circumstances likely to render any
nominee unavailable.
NOMINEES
Certain information regarding the nominees is set forth below:
NAME AGE POSITION DIRECTOR SINCE
- ---- --- -------- --------------
Charles T. Goodson 47 Chairman of the Board, Chief Executive Officer and 1998
Director
Alfred J. Thomas, II 66 President, Chief Operating Officer and Director 1998
Ralph J. Daigle 55 Executive Vice President and Director 1998
Michael O. Aldridge 44 Senior Vice President, Chief Financial Officer, 2000
Treasurer and Director
William W. Rucks, IV (1)(2) 45 Director 1999
E. Wayne Nordberg (1)(2) 64 Director 2000
Jay B. Langner (1)(2) 73 Director 2000
- ------------------------
(1) Member, Audit Committee of the Board of Directors.
(2) Member, Compensation Committee of the Board of Directors.
Charles T. Goodson has served as our Chairman of the Board since May
2000, and has served as our Chief Executive Officer and as a member of our
Board of Directors since September 1998. He also served as our President from
September 1998 to May 2000. From 1995 to 1998, Mr. Goodson was President of
American Explorer, L.L.C., a private oil and gas exploration and production
company we subsequently acquired. Since 1985, he has served as President and
50% owner of American Explorer, Inc., an oil and gas operating company which
formerly operated properties for us. From 1980 to 1985 he worked for Callon
Petroleum Company, first as a landman, then district land manager and then
regional land manager. He began his career in 1978 as a landman for Mobil Oil
Corporation.
Alfred J. Thomas, II has served as our President since May 2000, and
has served as our Chief Operating Officer and as a member of our Board of
Directors since September 1998. From 1995 to 1998, Mr. Thomas was Chief
Executive Officer of American Explorer, L.L.C., a private oil and gas
exploration and production company we subsequently acquired. Since 1985, he has
served as Chief Executive Officer and 50% owner of American Explorer, Inc., an
oil and gas operating company which formerly operated properties for us. From
1976 through 1984 he was a partner in Petitfils, Thomas and Associates, an oil
and gas engineering consulting firm. He worked for the Superior Oil Company as
a petroleum engineer from 1959 to 1976.
Ralph J. Daigle has served as a member of our Board of Directors since
September 1998, and has served as our Executive Vice President since December
2001. He also served as our Senior Vice President of Exploration from September
1998 to December 2001. From 1995 to 1998, Mr. Daigle was Senior Vice President
of Exploration of American Explorer, L.L.C., a private oil and gas exploration
and production company we subsequently acquired. Since 1989, he has served as
the Senior Vice President of Exploration of American Explorer, Inc., an oil and
gas operating company which formerly operated properties for us. From 1984 to
1989, he worked as an independent geophysical consultant. From 1979 to 1984, he
was employed by X-Plor, an exploration and production consulting group. He
worked for Texas Pacific Oil Company as a geophysical interpreter of seismic
data from 1977 until 1979 and served in the same capacity with Union Oil
Company from 1973 to 1977.
3
Michael O. Aldridge has served as our Senior Vice President and Chief
Financial Officer and as a member of our Board of Directors since May 2000. He
has also served as our Treasurer since May 2001, and served as our Secretary
from May 2000 to May 2001. From 1992 to 1999, Mr. Aldridge served first as Vice
President - Controller and then as Vice President - Corporate Communications
for Ocean Energy, Inc., a public oil and gas exploration and development
company. From 1991 to 1992, he served as Chief Financial Officer for Fleet
Petroleum Partners, an independent exploration and production company. Prior to
this, he served the oil and gas industry for eleven years with Ernst & Young
LLP, where he attained the level of senior manager. Mr. Aldridge earned a
Bachelor of Science in accounting from Louisiana State University in 1980 and
is a certified public accountant.
William W. Rucks, IV has served as a member of our Board of Directors
since October 1999. Mr. Rucks has been a private venture capitalist-investor
since September 1996. He has served as a director of OMNI Energy Services,
Inc., a public oil and gas company, from 1997 to October 2001 and also served
as Chairman of the Board from February 2001 to October 2001. He served as
president and vice chairman of Ocean Energy, Inc. (formerly Flores & Rucks,
Inc.), a public oil and gas exploration and development company, from July 1995
until September 1996 and as its President and Chief Executive Officer from its
inception in 1992 until July 1995. From 1985 to 1992, Mr. Rucks served as
President of FloRuxco, Inc. Mr. Rucks earned a Bachelor of Science in Business
Administration from Louisiana State University in 1979.
E. Wayne Nordberg has served as a member of our Board of Directors
since April 2000. Since January 2003, he has served as a director of Ingalls &
Snyder LLC, a NYSE member and registered investment advisor, and since 1999, he
has served as Chairman of Hollow Brook Associates, the investment office for
the Lafayette College Endowment Fund. From 1998 to June 2002, Mr. Nordberg
served as Vice Chairman of the Board of KBW Asset Management, Inc. KBW is an
affiliate of Keefe, Bruyette, & Woods, Inc., a registered investment advisor
offering investment management services to institutions and high net worth
individuals. From 1988 to 1998, he served in various capacities for Lord, Abbet
& Co., a mutual fund company, including partner and director of their family of
funds. Mr. Nordberg is a member of the Financial Analysts Federation and The
New York Society of Security Analysts. He received a Bachelor of Arts in
Economics from Lafayette College, Easton, Pennsylvania, where he is a Trustee
Emeritus.
Jay B. Langner has served as a member of our Board of Directors since
April 2000. Since April of 1999, Mr. Langner has served as honorary chairman of
Hudson General Corporation, an aviation services company. From 1961 to 1999,
Mr. Langner served in various capacities for Hudson General, including Chairman
and Chief Executive Officer. He serves as Chairman of the Board of Montefiore
Medical Center and is a member of the board of directors of Orpheus Chamber
Orchestra and Gregorian University Foundation. Mr. Langner received a Bachelor
of Science in Economics from the Wharton School of the University of
Pennsylvania.
BOARD AND COMMITTEE ACTIVITY, STRUCTURE AND COMPENSATION
In accordance with Delaware corporate law, our business is managed
under the direction of our Board of Directors. There are currently two standing
committees of the Board of Directors, the Audit Committee and the Compensation
Committee. The Board does not currently have a nominating committee. Committee
membership and the functions of those committees are described below.
During 2002, the Board of Directors held four meetings. All directors
attended at least 75% of the total meetings of the Board and the committees on
which they serve.
AUDIT COMMITTEE. The current members of the Audit Committee are Jay B.
Langner, E. Wayne Nordberg and William W. Rucks, IV. Under Rule 4200(a)(14) of
the National Association of Securities Dealers' listing standards, all of the
members of the committee are independent. The Audit Committee operates under a
written charter adopted by the Board of Directors. The committee met six times
during 2002. The committee is responsible for: reviewing the financial reports
and other financial information provided by us to any governmental body or the
public; reviewing our system of internal controls regarding finance,
accounting, legal compliance and ethics that management and the Board have
established, and our auditing, accounting and financial reporting processes
generally; reviewing the independence and performance of our independent
auditors; and providing an open avenue of communication among the independent
auditors, financial and senior management, and the Board. The committee also
has the sole authority and responsibility to appoint, select, evaluate, and,
where appropriate, replace our independent auditors.
4
COMPENSATION COMMITTEE. The current members of the Compensation
Committee are Jay B. Langner, E. Wayne Nordberg and William W. Rucks, IV. The
committee met five times during 2002. The committee recommends to the Board the
compensation to be paid to our officers and key employees and the compensation
of the Board of Directors. Except as otherwise provided in any specific plan
adopted by the Board of Directors, the committee is responsible for
administration of executive compensation plans, incentive stock plans and other
forms of compensation of officers and key employees. The committee has the
power and authority to authorize any of our officers to agree to such
documents, agreements and instruments related to such plans and compensation as
are approved by the committee.
DIRECTOR COMPENSATION. Our employee directors are not separately
compensated for their service as directors. Our non-employee directors are
entitled to receive stock option grants as consideration for their service as
directors. Each non-employee director who is reelected as a non-employee
director at PetroQuest's annual meeting of stockholders and who has served
PetroQuest as a non-employee director for at least one full calendar year, will
be granted on the date of such annual meeting a nonstatutory stock option to
purchase 20,000 shares of our common stock. The nonstatutory stock option will
have an exercise price equal to the fair market value of one share of our
common stock on such date with a term of ten years and will vest over a three
year period with one-third of the shares vesting on each of the first, second
and third anniversaries of the grant date. In April 2002, our non-employee
directors, Messrs. Langner, Nordberg and Rucks, received non-statutory stock
options to purchase 20,000 shares of our common stock each, at an exercise
price of $6.79 per share pursuant to this arrangement.
The members of the Board of Directors are entitled to reimbursement of
their expenses incurred in connection with the attendance at Board and
committee meetings in accordance with company policy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL SEVEN NOMINEES TO
OUR BOARD OF DIRECTORS.
5
OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table presents certain information as of March 21, 2003,
as to:
o each stockholder known by us to be the beneficial owner of
more than five percent of our outstanding shares of common
stock,
o each director,
o each executive officer named in the Summary Compensation
Table, and
o all directors and executive officers as a group.
SHARES BENEFICIALLY OWNED (1)
----------------------------------
PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER (2) NUMBER CLASS
- -------------------------------------------------------------------------- -------------- ---------------
Charles T. Goodson (3).................................................... 3,656,809 8.5%
Ralph J. Daigle (4)....................................................... 3,021,862 7.0%
Alfred J. Thomas, III (5)................................................. 2,234,000 5.2%
William W. Rucks, IV (6).................................................. 904,999 2.1%
E. Wayne Nordberg (7)..................................................... 675,492 1.6%
Michael O. Aldridge (8)................................................... 290,283 *
Jay B. Langner (9)........................................................ 283,332 *
Daniel G. Fournerat (10).................................................. 250,950 *
Stephen H. Green (11)..................................................... 84,917 *
Arthur M. Mixon, III (12)................................................. 45,000 *
Dalton F. Smith, III (13)................................................. 32,367 *
All directors and executive officers as a group (11 persons)(3 - 13)...... 11,246,011 25.5%
- ------------------------------
* Less than 1%
(1) Except as otherwise indicated, all shares are beneficially owned, and
the sole investment and voting power is held, by the person named.
This table is based on information supplied by officers, directors and
principal stockholders and reporting forms, if any, filed with the
Securities and Exchange Commission on behalf of such persons.
(2) Unless otherwise indicated, the address of all beneficial owners of
more than five percent of our shares of common stock set forth above
is 400 E. Kaliste Saloom Road, Suite 6000, Lafayette, Louisiana 70508.
(3) Includes (i) 3,509,412 shares of common stock directly held by Mr.
Goodson, (ii) 30,000 shares of common stock indirectly held by
American Explorer, Inc., a company in which Mr. Goodson has 50%
ownership, and (iii) 117,667 shares of common stock issuable on the
exercise of vested options.
(4) Includes (i) 2,878,995 shares of common stock directly held by Mr.
Daigle, (ii) 31,200 shares of common stock directly held by his
daughter, and (iii) 111,667 shares of common stock issuable on the
exercise of vested options.
(5) Includes (i) 1,574,445 shares of common stock directly held by Mr.
Thomas, (ii) 511,888 shares of common stock directly held by his wife,
(iii) 30,000 shares of common stock indirectly held by American
Explorer, Inc., a company in which Mr. Thomas has 50% ownership, and
(iv) 117,667 shares of common stock issuable on the exercise of vested
options.
(6) Includes (i) 610,000 shares of common stock directly held by Mr.
Rucks, (ii) four-year warrants to purchase 225,000 shares of common
stock at an exercise price of $1.25 per share, and (iii) 69,999 shares
of common stock issuable on the exercise of vested options.
6
(7) Includes (i) 295,000 shares of common stock directly held by Mr.
Nordberg, (ii) 10,000 shares directly held by Hollow Brook Associates,
LLC Defined Benefit Plan, (iii) 72,160 shares of common stock directly
and indirectly held by his wife, (iv) 70,000 shares of common stock
directly held by the Olivia S. Nordberg Trust, (v) 80,000 shares of
common stock directly held by the Anna and Samuel Nordberg Trust, (vi)
four-year warrants to purchase 50,000 shares of common stock at an
exercise price of $1.25 per share directly held by Mr. Nordberg, (vii)
four-year warrants to purchase 25,000 shares of common stock at an
exercise price of $1.25 per share directly held by the Anna and Samuel
Nordberg Trust, (viii) 63,332 shares of common stock issuable on the
exercise of vested options, and (ix) four-year warrants to purchase
10,000 shares of common stock at an exercise price of $1.25 per share
directly held by his wife.
(8) Includes (i) 37,783 shares of common stock directly held by Mr.
Aldridge, (ii) 122,500 shares of common stock which may be directly
held by Mr. Aldridge on the exercise of a vested option to acquire
common stock from Messrs. Goodson, Thomas and Daigle, and (iii)
130,000 shares of common stock issuable on the exercise of vested
options.
(9) Includes (i) 170,000 shares of common stock directly held by Mr.
Langner, (ii) four-year warrants to purchase 50,000 shares of common
stock at an exercise price of $1.25 per share, and (iii) 63,332 shares
of common stock issuable on the exercise of vested options.
(10) Includes (i) 27,783 shares of common stock directly held by Mr.
Fournerat, (ii) 81,500 shares of common stock which may be directly
held by Mr. Fournerat on the exercise of a vested option to acquire
common stock from Messrs. Goodson, Thomas and Daigle, and (iii)
141,667 shares of common stock issuable in the exercise of vested
options.
(11) Includes (i) 2,250 shares of common stock directly held by Mr. Green's
son, (ii) 1,000 shares of common stock directly held by his daughter,
and (iii) 81,667 shares of common stock issuable on the exercise of
vested options.
(12) Includes 45,000 shares of common stock issuable on the exercise of
vested options.
(13) Includes (i) 700 shares of common stock directly held by Mr. Smith,
and (ii) 31,667 shares of common stock issuable on the exercise of
vested options.
7
EXECUTIVE OFFICERS
Our executive officers serve at the pleasure of the Board of Directors
and are subject to annual appointment by the Board at its first meeting
following the annual meeting of stockholders. All of our executive officers are
listed in the following table, and certain information concerning those
officers, except for Messrs. Goodson, Thomas, Daigle and Aldridge who are also
members of the Board of Directors, follows the table:
NAME AGE POSITION
- ---- --- --------
Charles T. Goodson........... 47 Chairman of the Board, Chief Executive Officer and
Director
Alfred J. Thomas, II ........ 66 President, Chief Operating Officer and Director
Ralph J. Daigle ............. 55 Executive Vice President and Director
Michael O. Aldridge.......... 44 Senior Vice President, Chief Financial Officer and
Treasurer
Daniel G. Fournerat.......... 49 Senior Vice President, General Counsel and Secretary
Arthur M. Mixon, III ........ 44 Senior Vice President - Operations
Dalton F. Smith, III......... 41 Senior Vice President - Business Development & Land
Stephen H. Green............. 47 Senior Vice President - Exploration
Daniel G. Fournerat has served as our Senior Vice President and
General Counsel since April 2001 and our Secretary since May 2001, and served
as a member of our Board of Directors from September 1998 to October 2001. He
also served as our outside counsel from September 1998 to April 2001. Mr.
Fournerat is an attorney-at-law who practiced oil and gas law with the Onebane
Law Firm, a Lafayette, Louisiana law firm, from 1977 to April 2001. Mr.
Fournerat earned a Bachelor of Science Degree in accounting from McNeese State
University in 1974 and a Juris Doctorate Degree from Louisiana State University
in 1976.
Arthur M. Mixon, III has served as our Senior Vice
President-Operations since January 1, 2001. From 1981 to 2001, Mr. Mixon
accumulated twenty years of experience with BP Amoco PLC, a public petroleum
and petrochemical company, in a variety of engineering, supervisory and
management positions in the United States, Trinidad and Tobago, and Venezuela.
He most recently served as Drilling and Completions Manager-Deepwater
Production Business Unit for BP Amoco PLC in Houston, Texas. Mr. Mixon is a
Registered Professional Engineer and a member of the Society of Petroleum
Engineers, and was 1999 Chairman of the Latin America Drilling Safety
Initiative. Mr. Mixon received a Bachelor of Science Degree in Petroleum
Engineering from Louisiana State University in 1980.
Dalton F. Smith, III has served as our Senior Vice President -
Business Development & Land since September 2001. He also served as our Vice
President - Business Development & Land from March 2001 to September 2001. From
March 1998 to September 1999, Mr. Smith first served as Land Manager - Gulf of
Mexico Shelf for UNOCAL Corporation, a major independent oil and gas
exploration and production company. From September 1999 to March 2001, Mr.
Smith's managerial oversight was expanded to include all of UNOCAL's lower 48
onshore land activities in addition to the Gulf of Mexico Shelf. Prior to his
employment with Unocal, Mr. Smith served fourteen years with Mobil Oil
Corporation. Mr. Smith earned a Bachelor of Science in Petroleum Land
Management from the University of Louisiana of Lafayette in 1984 and is a
certified professional landman.
Stephen H. Green has served as our Senior Vice President - Exploration
since December 2001. From September 1999 to December 2001, he served first as
our Business Development Manager and then as Vice President-Exploration. Mr.
Green served as Vice President of Exploration for Ocean Energy, Inc., a public
oil and gas development company, from September 1995 to April 1999. Mr. Green
earned a Bachelor of Science in Geology from the University of South Alabama in
1978 and a Masters of Science Degree in Geology from the University of
Louisiana Lafayette in 1980.
8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table provides information
concerning compensation paid during the fiscal years ended December 31, 2002,
2001 and 2000 to our Chief Executive Officer and our executive officers,
including the next four most highly compensated executive officers determined
at the end of the last fiscal year:
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------------------------ ------------------------------
NAME AND OTHER ANNUAL NUMBER ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OF OPTIONS COMPENSATION ($)
- -------------------------------- ------ ----------------- --------- ---------------- ---------- ----------------
Charles T. Goodson ......... 2002 0 (1) - 36,234(2) - -
Chief Executive Officer 2001 0 (1) - 25,988(3) 5,000 -
2000 (4)
322,931 (5) - 75,000
Alfred J. Thomas, II ....... 2002 0 (1) - 33,111(6) - -
President and Chief Operating 2001 0 (1) - 25,988(3) 5,000 -
Officer 2000 322,931 (4)(5) - - 75,000 -
Ralph J. Daigle ............ 2002 0 (1) - 36,234(2) - -
Executive Vice President 2001 0 (1) - 25,988 (3) 5,000 -
2000 272,695 (4)(7) - - 75,000 -
Michael O. Aldridge......... 2002 180,000 54,000 - - -
Senior Vice President, Chief 2001 180,001 - - 15,000 -
Financial Officer & Treasurer 2000 112,569 (8) 36,000 - 137,500 75,000 (9)
Daniel G. Fournerat......... 2002 180,000 54,000 - - -
Senior Vice President, 2001 124,962 (8) - - 115,000 37,500 (10)
General Counsel & Secretary 2000 - - - 30,000 -
Arthur M. Mixon, III........ 2002 175,000 54,000 - - 9,573 (9)
Senior Vice President - 2001 174,926 (8) 40,000 - 75,000 30,901 (9)
Operations 2000 - - - - -
Dalton F. Smith, III........ 2002 175,000 54,000 - - -
Senior Vice President - 2001 131,475 (8) - - 55,000 -
Business Development & Land 2000 - - - - -
Stephen H. Green............ 2002 180,000 54,000 - - -
Senior Vice President - 2001 131,250 - - 15,000 -
Exploration 2000 122,423 25,000 - 35,000 -
(1) Messrs. Goodson's, Thomas' and Daigle's employment agreements provide for
annual salaries of $210,000, $210,000 and $180,000, respectively; however
at their initiative, Messrs. Goodson, Thomas and Daigle agreed to forgo
their annual salaries and bonuses for fiscal years 2001 and 2002. See
"Employment Agreements."
(2) Includes $25,988 for automobile allowances, and $10,246 for health
insurance premiums.
(3) These amounts were payable to Messrs. Goodson, Thomas and Daigle as
automobile allowances.
(4) In 2000, Messrs. Goodson, Thomas and Daigle agreed to temporarily reduce
their salaries payable under their employment agreements. See "Employment
Agreements."
(5) $31,636 of this amount is attributable to 22,000 shares of common stock
granted in January 2000 as compensation for his salary reduction in 1999.
$123,438 of this amount is attributable to 39,500 shares of common stock
granted in December 2000 as compensation for his reduction in salary in
1999 and 2000.
(6) Includes $25,988 for automobile allowances, and $7,123 for health
insurance premiums.
(7) $26,603 of this amount is attributable to 18,500 shares of common stock
granted in January 2000 as compensation for his salary reduction in 1999.
$104,688 of this amount is attributable to 33,500 shares of common stock
granted as compensation for his reduction in salary in 1999 and 2000.
(8) Messrs. Aldridge, Fournerat, Mixon and Smith joined PetroQuest on May 8,
2000, April 20, 2001, January 1, 2001 and March 12, 2001, respectively.
9
(9) These amounts were paid to Messrs. Aldridge and Mixon for reimbursement of
relocation expenses.
(10) This amount was paid to Mr. Fournerat to offset expenses and costs
associated with Mr. Fournerat's transition from his former employer to
PetroQuest.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION
VALUES. The following table provides information concerning the number of
unexercised options and the value of in-the-money options held by the executive
officers named in the Summary Compensation Table as of December 31, 2002:
VALUE OF UNEXERCISED
SHARES VALUE NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS (1)
ACQUIRED ON REALIZED OPTIONS AT FY-END (#) AT FY-END ($)
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- ----------- ----------- ------------- ----------- ------------
Charles T. Goodson....... - - 117,667 28,333 269,189 25,625
Alfred J. Thomas, II..... - - 117,667 28,333 269,189 25,625
Ralph J. Daigle.......... - - 111,667 28,333 249,376 25,625
Michael O. Aldridge...... - - 96,667 55,833 198,126 99,062
Daniel G. Fournerat...... - - 108,334 86,666 185,605 10,250
Arthur M. Mixon, III..... - - 25,000 50,000 8,000 16,000
Dalton F. Smith, III..... - - 18,334 36,666 0 0
Stephen H. Green......... - - 78,334 21,666 168,184 16,341
(1) Value of in-the-money options is calculated based on the closing price
per share of our common stock at December 31, 2002 ($4.15 per share)
as reported by The Nasdaq Stock Market.
EMPLOYMENT AGREEMENTS. We have employment agreements with our
executive officers Charles T. Goodson, Alfred J. Thomas, II, Ralph J. Daigle,
Michael O. Aldridge, Daniel G. Fournerat, Arthur M. Mixon and Dalton F. Smith,
III providing for annual salaries of $210,000, $210,000, $180,000, $180,000,
$180,000, $175,000 and $175,000, respectively. Each of the employment
agreements has a term of three years with automatic one-year renewals
thereafter unless terminated, provides for termination with or without cause,
with 12 months severance provided in the event of termination without cause,
and contains a non-competition agreement prohibiting the executive from
competing with PetroQuest during his employment and for one year after
termination of the agreement for cause or by the executive for any reason.
In January 1999, on their own initiative, Messrs. Goodson, Thomas and
Daigle agreed to temporarily reduce their annual salaries payable under the
employment agreements by one-third for an undetermined period of time due to
the then economic conditions in the oil and gas exploration and production
industry. In January 2000, our Board of Directors granted Messrs. Goodson,
Thomas and Daigle 22,000, 22,000 and 18,500 shares of our common stock,
respectively, and $22,000, $22,000 and $18,500 in cash, respectively, as
compensation for their reduction in salary in 1999. In addition, in December
2000, the Board granted Messrs. Goodson, Thomas and Daigle 39,500, 39,500 and
33,500 shares of our common stock, respectively, and $2,088, $2,088 and $2,615
in cash, respectively, as compensation for their reduction in salary in 1999
and 2000. On their own initiative, Messrs. Goodson, Thomas and Daigle agreed to
forgo their annual salaries and bonuses payable under the employment agreements
for fiscal years 2001 and 2002.
TERMINATION AGREEMENTS. We have agreements with Messrs. Goodson,
Thomas, Daigle, Aldridge, Fournerat, Mixon and Smith providing for the payment
of severance benefits upon a "change in control" and termination of the
executive's employment. Each of the agreements has a term of three years after
January 1 of the year following the year of execution with automatic one-year
renewals unless, not later than September 30 of the preceding year, we give
notice of our intent not to extend any of the agreements. Even if we timely
give notice, each of the agreements will automatically be extended for 24
months beyond its term if a "change in control" occurred during the term of any
of the agreements. If an executive's employment is terminated following a
"change in control" other than for cause or by an executive for good reason,
the executive will be entitled to (i) a lump sum cash payment equal to two
multiplied by the sum of the executive's then annual base salary and the
executive's most recent annual bonus, (ii) life insurance, health, disability
and other welfare benefits for a 24-month period and (iii) if applicable, an
additional cash payment to make the executive whole for certain tax
liabilities. The executive is not entitled to any benefits under each of the
agreements if the executive's employment terminates due to executive's
retirement at age 65, executive's total and permanent disability, or
executive's death.
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
current members of the Compensation Committee are Jay B. Langner, E. Wayne
Nordberg and William W. Rucks, IV.
Mr. Langner holds an ownership interest in CRM Exploration, LLC, an
affiliate of Cramer Rosenthal McGlynn, LLC, a beneficial owner of more than
five percent of our common stock during 2002. Cramer Rosenthal McGlynn, LLC is
not currently a beneficial owner of more than five percent of our common stock.
CRM Exploration has entered into a participation agreement with us to
participate in certain of our energy exploration programs. See "Certain
Relationships and Related Transactions."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. The
Compensation Committee is comprised of three non-employee directors whose
primary duties and functions are to review and recommend to the Board of
Directors the annual base and bonus compensation of our executive officers and
other employees and to oversee the administration of our amended and restated
1998 Incentive Plan.
The committee's goal with respect to executive compensation is to
attract, motivate and retain executives who demonstrate the ability to lead
PetroQuest in the achievement of its business objectives in a highly
competitive industry. The committee seeks to provide adequate base compensation
and annual cash bonus compensation based on PetroQuest's performance and
profitability, while providing incentive compensation that serves to align the
interests of the executive officers with those of the stockholders.
To achieve these goals, the committee believes that the compensation
of all employees, including executive officers, should include the following
components:
o A base salary that is competitive with salaries offered by
similar oil and gas exploration, exploitation and production
companies.
o Discretionary annual cash bonus incentive compensation based
on PetroQuest's performance and profitability that rewards
individual productivity, responsibility and impact on
results.
o Incentive stock option grants designed to encourage
commitment to PetroQuest, motivate superior performance and
align the long-term personal interests of our officers and
other employees with those of our stockholders, while
enabling them to share in the long term growth and success of
PetroQuest.
The committee believes that PetroQuest has encouraged executive
officer retention and, ultimately, the long term growth of PetroQuest through
utilization of employment agreements that establish a base salary subject to
upward adjustment by the Board of Directors and that create opportunities for
the executive officers to participate in our incentive compensation programs.
Currently, Charles T. Goodson, Chairman of the Board and Chief
Executive Officer, Alfred J. Thomas, II, President and Chief Operating Officer,
Ralph J. Daigle, Executive Vice President, Michael O. Aldridge, Senior Vice
President, Chief Financial Officer and Treasurer, Daniel G. Fournerat, Senior
Vice President, General Counsel and Secretary, Arthur M. Mixon, III, Senior
Vice President-Operations, and Dalton F. Smith, III, Senior Vice President -
Business Development and Land, are compensated pursuant to employment
agreements. See "Executive Compensation - Employment Agreements."
Chief Executive Officer Compensation. Pursuant to our employment
agreement with Charles T. Goodson, Mr. Goodson's annual base salary was
maintained during 2000 at the 1999 level of $210,000; however, in January 1999,
at his initiative, Mr. Goodson's base salary was temporarily reduced by
one-third during 1999 and 2000 due to the then existing economic conditions in
the oil and gas exploration and production industry. In January 2000, the Board
of Directors granted Mr. Goodson 22,000 shares of our common stock and $22,000
in cash as compensation for his reduction in salary during 1999. In addition,
in December 2000, the Board granted Mr. Goodson 39,500 shares of our common
stock pursuant to our amended and restated 1998 Incentive Plan and $2,088 in
cash as compensation for his reduction in salary during 1999 and 2000. Mr.
Goodson also received an incentive stock option grant in December 2000 to
purchase 75,000 shares of our common stock pursuant to our incentive plan at an
exercise price of $3.125 per share which vest one-third per year for the three
years following the grant date. In awarding the incentive options, the
committee considered the reduction and deferral of Mr. Goodson's base
compensation on his initiative during a time of company growth and depressed
oil and gas prices, the successful closing of a significant private placement
of equity during the year and the growth PetroQuest experienced during 2000
under his leadership.
11
At his initiative, Mr. Goodson agreed to forgo his annual salary and
bonus payable under his employment agreement for fiscal year 2001. In September
2001, Mr. Goodson received an incentive stock option grant to purchase 5,000
shares of our common stock pursuant to our incentive plan at an exercise price
of $4.95 per share, which vest one-third per year for the three years following
the grant date. In awarding the incentive options, the committee considered the
company's successful drilling program and improved financial performance, Mr.
Goodon's agreement to forgo his annual salary and bonus, and his leadership of
the company in 2001.
Mr. Goodson has again, at his initiative, agreed to forgo his annual
salary and bonus payable under his employment agreement for fiscal year 2002.
COMPENSATION COMMITTEE
E. Wayne Nordberg, Chairman
Jay B. Langner
William W. Rucks, IV
12
PERFORMANCE GRAPH. The following graph illustrates the yearly
percentage change in the cumulative stockholder return on our common stock,
compared with the cumulative total return on The Nasdaq Stock Market (U.S.
Companies) Index and the Nasdaq Stocks - Crude Petroleum and Natural Gas
Extraction Index, for the five years ended December 31, 2002.
PETROQUEST STOCK PRICE VS. NASDAQ AND NASDAQ E&P INDICES
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
VALUE OF INVESTMENT OF $100 ON DECEMBER 31, 1997
[PERFORMANCE GRAPH]
YEAR ENDING
---------------------------------------------
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
PetroQuest Energy, Inc........ 100 72.2 141.7 377.8 472.9 368.9
Nasdaq........................ 100 141.0 261.5 157.4 124.9 86.3
Nasdaq E&P.................... 100 48.6 50.2 104.3 78.1 77.5
13
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets forth information regarding our equity
compensation plans as of December 31, 2002:
EQUITY COMPENSATION PLAN INFORMATION
NUMBER OF SECURITIES
NUMBER OF SECURITIES REMAINING AVAILABLE FOR
TO BE ISSUED UPON WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER
EXERCISE OF EXERCISE PRICE OF EQUITY COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS REFLECTED IN COLUMN (A))
- ---------------------------------- ----------------------- ---------------------- ----------------------------
(a) (b) (c)
Equity compensation
plans approved by
security holders (1)....... 2,197,353 $3.14 770,208
Equity compensation
plans not approved by
security holders........... 0 0 0
Total.........................
- ------------------------
(1) Consists solely of the 1998 Incentive Plan, as amended and restated
effective December 1, 2000.
(2) The total number of shares of common stock available for issuance
under the 1998 Incentive Plan is equal to the greater of (i) 10% of
the number of issued and outstanding shares of our common stock as of
the first day of our then-current fiscal quarter or (ii) 3,000,000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PARTICIPATION IN WORKING INTERESTS. In the fourth quarter of 1999, we
reached an understanding with CRM Investors, Inc. that allows CRM Investors to
participate in certain of our energy exploration programs through PetroQuest
Energy, L.L.C., one of our subsidiaries formerly known as PetroQuest Energy
One, L.L.C, and CRM Exploration, LLC. CRM Investors holds a 1% ownership
interest in and is the managing member of CRM Exploration. Certain of the
remaining 99% ownership interests in CRM Exploration are held by our current
director, Jay B. Langner, or by affiliates of Cramer Rosenthal McGlynn, LLC, a
beneficial owner of more than five percent of our common stock during 2002.
Cramer Rosenthal McGlynn, LLC is not currently a beneficial owner of more than
five percent of our common stock. CRM Investors and CRM, Inc. are beneficially
owned by the same stockholders although in different proportions. In turn, CRM,
Inc. holds a 44% ownership interest in Cramer Rosenthal McGlynn, LLC. As a
result of the understanding, CRM Exploration purchased an undivided seven
percent interest in our Vermilion Block 376 prospect, an undivided five percent
interest in our Valentine Field prospect, an undivided five percent interest in
our Ship Shoal Block 79 prospect, an undivided seven percent interest in our
Eugene Island Blocks 147 and 146 prospects, an undivided seven percent interest
in our Orca prospect, and an undivided five percent interest in our Berry Lake
prospect. CRM Exploration also acquired an undivided six percent interest in
our Turtle Bayou #16 well. PetroQuest Energy, L.L.C. and CRM Exploration may
enter into additional agreements, under which CRM Exploration will purchase
various interests in the energy exploration programs. We entered into the
understanding with CRM Investors and the agreements with CRM Exploration to
obtain additional capital to finance our energy exploration programs. We
believe that the understanding and the terms of the agreements were negotiated
on an arm's length basis and were made on terms no less favorable than could
have been obtained from other third parties.
BOARD OF DIRECTORS APPOINTMENT. In connection with a private placement
to accredited investors in August of 1999, we agreed to appoint William W.
Rucks, IV or his designee to our Board of Directors. Mr. Rucks was
14
subsequently appointed to serve on our Board of Directors effective October
1999. We have no continuing obligation to either appoint or nominate Mr. Rucks
in the future.
WORKING INTEREST AND OVERRIDING ROYALTY INTEREST OWNERS. Certain of
our executive officers and directors or their respective affiliates are working
interest owners or overriding royalty interest owners in particular properties.
In their capacity as working interest owners, they are required to pay their
proportionate share of all costs and are entitled to receive their
proportionate share of revenues in the normal course of business. As overriding
royalty interest owners they are entitled to receive their proportionate share
of revenues in the normal course of business.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is responsible for:
reviewing the financial reports and other financial information provided by us
to any governmental body or the public; reviewing our system of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established, and our auditing, accounting and
financial reporting processes generally; reviewing the independence and
performance of our independent auditors; and providing an open avenue of
communication among the independent auditors, financial and senior management,
and the Board. The committee also has the sole authority and responsibility to
appoint, select, evaluate, and, where appropriate, replace our independent
auditors.
Management is responsible for the financial reporting process,
including the system of internal control, and for the preparation of
consolidated financial statements in accordance with generally accepted
accounting principles. Our independent auditors are responsible for auditing
those financial statements. The committee's responsibility is to monitor and
review these processes. However, the members of the committee are not
professionally engaged in the practice of accounting or auditing and are not
experts in the fields of accounting or auditing. The committee relies, without
independent verification, on the information provided to it and on the
representations made by management and the independent auditors.
The committee has met with our independent auditors, Ernst & Young
LLP, and discussed the overall scope and plans for their audit. The committee
met with the independent auditors, with and without management present, to
discuss the results of their examinations and their evaluations of PetroQuest's
internal controls. The committee also discussed with the independent auditors
matters required to be discussed with audit committees under generally accepted
auditing standards, including, among other things, matters related to the
conduct of the audit of PetroQuest's consolidated financial statement and the
matters required to be discussed by Statement of Auditing Standards No. 61, as
amended.
Our independent auditors also provided to the committee the written
disclosures and the letter required by Independence Standards Board Standard
No. 1, and the committee discussed with the independent auditors their
independence from PetroQuest. When considering Ernst & Young's independence,
the committee considered the non-audit services provided to PetroQuest by the
independent auditors and concluded that such services are compatible with
maintaining the auditors' independence.
The committee has reviewed and discussed the audited consolidated
financial statements for the fiscal year ended December 31, 2002 with
management and Ernst & Young. Based on the committee's review of the audited
consolidated financial statements and the meetings and discussions with
management and the independent accountants, and subject to the limitations on
the committee's role and responsibilities referred to above and in the Audit
Committee Charter, the committee recommended to the Board of Directors that
PetroQuest's audited consolidated financial statements be included in
PetroQuest's Annual Report on Form 10-K to be filed with the Securities and
Exchange Commission.
AUDIT COMMITTEE
William W. Rucks, IV, Chairman
Jay B. Langner
E. Wayne Nordberg
15
AUDITORS
On June 28, 2002, we dismissed our independent certified public
accountants, Arthur Andersen LLP, and engaged the services of Ernst & Young LLP
as our new independent auditors for our fiscal year ending December 31, 2002.
The decision to dismiss Arthur Andersen and retain Ernst & Young was approved
by our Audit Committee.
The audit report of Arthur Andersen on our consolidated financial
statements as of and for the fiscal year ended December 31, 2001 did not
contain an adverse opinion or a disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the fiscal year ended December 31, 2001, and the subsequent
interim period through June 28, 2002, there were no disagreements between us
and Arthur Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to Arthur Andersen's satisfaction, would have
caused Arthur Andersen to make reference to the subject matter of the
disagreement in connection with its reports.
No formal action is proposed to be taken at the annual meeting with
respect to the continued employment of Ernst & Young inasmuch as no such action
is legally required. Representatives of Ernst & Young plan to attend the annual
meeting and will be available to answer appropriate questions. Its
representatives also will have an opportunity to make a statement at the
meeting if they so desire, although it is not expected that any statement will
be made.
The following table sets forth the fees incurred by us in fiscal year
2002 for services performed by Ernst & Young:
Audit Fees........................................................$79,000
Financial Information Systems Design and Implementation Fees...... 0
All Other Fees(1).................................................$34,850
- -----------
(1) Including $23,000 of fees incurred by us in connection with the review of
a registration statement filed in 2002.
In addition, we incurred $13,850 in Audit Fees and $24,142 in All Other
Fees, including $22,382 of fees incurred by us in connection with the review of
a registration filed in 2002, for services performed by Arthur Andersen LLP in
fiscal year 2002 through June 28, 2002. We did not incur any Financial Systems
Design and Implementation Fees for services performed by Arthur Andersen LLP in
fiscal year 2002 through June 28, 2002.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our directors and executive officers, and persons who own more than
10% of our equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
our common stock. Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish us with copies of all Section 16(a)
reports they file.
To our knowledge, based solely on review of the copies of such reports
furnished to us and written representations that no other reports were
required, during the fiscal year ended December 31, 2002, our officers,
directors and greater than 10% beneficial owners timely filed all required
Section 16(a) reports, except that the following individuals failed to file
timely reports for such fiscal year: Michael O. was late in filing a
Form 5 disclosing one transaction; Arthur M., III was late in filing a
Form 5 disclosing one transaction; and E. Wayne was late in filing a
Form 4 disclosing one transaction.
16
OTHER MATTERS
The Annual Report to Stockholders on Form 10-K covering the fiscal
year ended December 31, 2002 has been mailed to each stockholder entitled to
vote at the annual meeting. Investors may request our Form 10-K, Form 10-Qs and
other information by calling (337) 232-7028 or writing to the address below:
PetroQuest Energy, Inc.
Corporate Communications
400 E. Kaliste Saloom Road, Suite 6000
Lafayette, Louisiana 70508
The persons designated to vote shares covered by the Board of
Directors' proxies intend to exercise their judgment in voting such shares on
other matters that may properly come before the meeting. Management does not
expect that any matters other than those referred to in this Proxy Statement
will be presented for action at the meeting.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
If you want us to consider including a proposal in our Proxy Statement
for our 2004 Annual Meeting of Stockholders you must deliver a copy of your
proposal to PetroQuest's Secretary at our principal executive offices at 400 E.
Kaliste Saloom Road, Suite 6000, Lafayette, Louisiana 70508 no later than
December 6, 2003.
If you intend to present a proposal at our 2004 Annual Meeting of
Stockholders, but you do not intend to have it included in our 2004 Proxy
Statement, you must deliver a copy of your proposal to PetroQuest's Secretary
at our principal executive offices listed above no later than March 8, 2004 and
no earlier than January 8, 2004. If the date of PetroQuest's 2004 Annual
Meeting of Stockholders is more than 30 calendar days before or after the date
of our 2003 Annual Meeting, your notice of a proposal will be timely if we
receive it by the close of business on the tenth day following the earlier of
the date on which a written statement setting forth the date of such meeting
was mailed to the stockholders or the date on which it is first disclosed to
the public. If we do not receive notice of your proposal within this time
frame, our management will use its discretionary authority to vote the shares
it represents as the Board of Directors may recommend.
Sincerely,
/s/ DANIEL G. FOURNERAT
Daniel G. Fournerat
Senior Vice President, General Counsel
and Secretary
April 4, 2003
PETROQUEST ENERGY, INC.
THE BOARD OF DIRECTORS SOLICITS THIS PROXY FOR THE
ANNUAL MEETING ON MAY 7,2003
The undersigned stockholder of PetroQuest Energy, Inc. (the "Company")
hereby appoints Charles T. Goodson, Michael O. Aldridge and Daniel G. Fournerat,
or either of them, the true and lawful attorneys, agents and proxies of the
undersigned, each with full power of substitution, to vote on behalf of the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the City Club at River Ranch, located at 1100 Camellia Blvd., Lafayette,
Louisiana 70508, on Wednesday, May 7, 2003, at 9:00 a.m., Lafayette time, and at
any adjournments of said meeting, all of the shares of the Company's common
stock in the name of the undersigned or which the undersigned may be entitled to
vote.
(THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE.)
ANNUAL MEETING OF STOCKHOLDERS OF
PETROQUEST ENERGY, INC.
MAY 7, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
* Please detach and mail in the envelope provided. *
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
- --------------------------------------------------------------------------------
1. THE ELECTION OF DIRECTORS
NOMINEES
[ ] FOR ALL NOMINEES ( ) Charles T. Goodson
( ) Ralph J. Dalgle
[ ] WITHHOLD AUTHORITY ( ) William W. Rucks, IV
FOR ALL NOMINEES ( ) Jay B. Langner
( ) Alfred J. Thomas, II
[ ] FOR ALL EXCEPT ( ) Michael O. Aldridge
(SEE INSTRUCTIONS BELOW) ( ) E. Wayne Nordberg
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and fill in the circle next
to each nominee you wish to withhold, as shown here: (X)
To change the address on your account, please check the box at [ ]
right and indicate your new address in the address space
above. Please note that changes to the registered name(s) on
the account may not be submitted via this method.
FOR AGAINST ABSTAIN
2. In their discretion, upon such other matters [ ] [ ] [ ]
as may properly come before the meeting;
hereby revoking any proxy or proxies
heretofore given by the undersigned.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES ABOVE, AND IN ACCORDANCE WITH THE
DISCRETION OF THE PERSONS DESIGNATED ABOVE WITH RESPECT TO ANY OTHER BUSINESS
PROPERLY BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the Proxy Statement furnished herewith.
PLEASE MARK, SIGN, DATE AND RETURN IN THE ENVELOPE ENCLOSED.
<Table>
Signature of Stockholder Date: Signature if held jointly Date:
------------------------ ------------ --------------------- ---------
</Table>
NOTE: THIS PROXY MUST BE SIGNED EXACTLY AS THE NAME APPEARS HEREON. WHEN SHARES
ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN. WHEN SIGNING AS EXECUTOR,
ADMINISTRATOR, ATTORNEY, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF
THE SIGNER IS A CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY DULY AUTHORIZED
OFFICER, GIVING FULL TITLE AS SUCH. IF SIGNER IS A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.