SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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240.14a-12
Range Resources Corporation
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(Name of Registrant as Specified in its Charter)
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[GRAPHIC OMITTED]
RANGE RESOURCES
April 17, 2002
Dear Fellow Stockholders:
On behalf of the Board of Directors, I am pleased to invite you to attend
our 2002 Annual Meeting. The meeting will be held at the Company's offices at
777 Main Street, Suite 800, in Fort Worth, Texas on Thursday, May 23rd at 9:00
a.m. Central time. The matters to be addressed are outlined in the enclosed
Notice of Annual Meeting and more fully described in the Proxy Statement.
Following the meeting, we plan to present a brief overview of the Company's
recent results and ongoing projects. Company officers and representatives of our
auditors will be present to respond to questions. Our 2001 Annual Report is also
enclosed for your review.
MacKenzie Partners, Inc. has been retained to assist the Company in the
soliciting process. If you have any questions regarding the meeting or require
assistance in voting your shares, please contact them at 800-322-2885 or call
them collect at 212-929-5500. Whether or not you expect to attend the meeting,
it is important that your shares are voted. Please sign and return the enclosed
proxy card at your earliest convenience to ensure that you will be represented.
You may revoke your proxy at the meeting and vote your shares in person if you
wish. In any case, your vote is important regardless of the number of shares you
own. Our thanks in advance for your prompt response.
Sincerely yours,
John H. Pinkerton
President
RANGE RESOURCES CORPORATION
777 Main Street, Suite 800
Fort Worth, Texas 76102
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 23, 2002
To the Stockholders of Range Resources Corporation:
The 2002 Annual Meeting of Stockholders (the "Meeting") of Range Resources
Corporation, a Delaware corporation (the "Company"), will be held at 777 Main
Street, Suite 800 in Fort Worth, Texas on Thursday, May 23rd at 9:00 a.m.
Central time. The purposes of the Meeting are:
1. To elect a board of eight Directors, each for a one-year term;
2. To consider and vote on a proposal to (a) amend the 1999 Stock Option
Plan increasing the number of shares of Common Stock authorized to be
issued from 3,400,000 to 6,000,000 and (b) solely for the purpose of
Section 162(m) of the Internal Revenue Code, setting the limit for the
number of awards granted to one individual from 250,000 during a
calendar year to 500,000; and
3. To transact such other business as may arise which can properly be
conducted at the Meeting or any adjournment.
This notice is being sent to holders of Common Stock of record at the close
of business on April 5, 2002. Each holder has the right to vote at the Meeting
or any adjournment or postponement. "Voting Rights" are described in more detail
in the attached Proxy Statement. The list of stockholders entitled to vote at
the Meeting will be open to the examination of any stockholder for any purpose
relevant to the Meeting during normal business hours for ten days prior to the
Meeting at the Company's offices. The list will also be available during the
Meeting for inspection by stockholders.
Whether or not you plan to attend the Meeting, please complete, date and
sign the enclosed proxy and return it in the envelope provided. You may revoke
your proxy at any time prior to its exercise. If present at the Meeting, you may
withdraw your proxy and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
Rodney L. Waller
Secretary
April 17, 2002
Fort Worth, Texas
RANGE RESOURCES CORPORATION
PROXY STATEMENT
Annual Meeting Of Stockholders
May 23, 2002
INTRODUCTION
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Range Resources Corporation, a Delaware corporation (the "Company"), for use
at the 2002 Annual Meeting of Stockholders (the "Meeting"). The Meeting will be
held Thursday, May 23, 2002 at 9:00 a.m. Central time, at the Company's offices
at 777 Main Street, Suite 800, Fort Worth, Texas 76102. The items to be
considered are summarized in the Notice of Annual Meeting of Stockholders (the
"Notice") and more fully described in this Proxy Statement. This Proxy Statement
and the proxy form were first mailed on or about April 17, 2002, to all holders
of record of the Company's Common Stock, $.01 par value (the "Common Stock") on
April 5, 2002 (collectively the "Stockholders"). Shares of the Common Stock
represented by proxies will be voted as described below or as specified by each
Stockholder. Any proxy given by a Stockholder may be revoked at any time prior
to the voting by delivering a written notice to the Secretary of the Company, by
executing and delivering a subsequently dated proxy or by attending the Meeting,
withdrawing the proxy and voting in person.
The persons named as proxies are John H. Pinkerton and Rodney L. Waller,
President and Secretary of the Company, respectively. The cost of preparing and
mailing this Proxy Statement and any other related material will be paid by the
Company. The Company has retained MacKenzie Partners, Inc., 105 Madison Avenue,
New York, New York 10016, to assist in the solicitation. For these services, we
will pay MacKenzie Partners a fee of $5,000 and reimburse it for certain
out-of-pocket expenses. In addition to the solicitation of proxies by use of the
mail, directors, officers and employees of the Company may solicit proxies
personally. The Company will request brokerage firms and other custodians,
nominees and fiduciaries to forward solicitation material to the beneficial
owners of the Common Stock and will reimburse them for their expenses.
VOTING RIGHTS
Voting Stock and Record Date
Only Stockholders of record for the Common Stock at the close of business
on April 5, 2002 will be entitled to vote at the Meeting. On April 5, 2002,
53,672,044 shares of Common Stock were outstanding with each share entitling the
holder to one vote on each matter. Shareholders of Common Stock are not entitled
to cumulative voting rights.
Quorum and Adjournments
The presence, in person or by proxy, of Stockholders holding a majority of
the votes eligible to be cast is necessary to constitute a quorum at the
Meeting. If a quorum is not present, the Stockholders entitled to vote who are
present at the Meeting have the power to adjourn the Meeting, without notice
other than an announcement at the Meeting, until a quorum is present. At an
adjourned meeting when a quorum is present in person or by proxy, any business
may be transacted that might have been acted on at the original Meeting.
1
Votes Required
Assuming a quorum is present in each case at the Meeting, the Stockholders
will elect directors by a plurality of the eligible votes present or represented
by proxy at the Meeting. As required by the 1999 Stock Option Plan, approval of
Proposal 2 requires an affirmative vote of Stockholders holding a majority of
the votes cast at the Meeting after considering any abstentions.
Broker Non-Votes and Abstentions
Proposals 1 and 2 are considered discretionary items, so the Company does
not anticipate that any broker non-votes will be recorded. Brokers who hold
shares in street name for customers are required to vote as the beneficial
owners instruct. A "broker non-vote" occurs when a broker does not have
discretionary voting power with respect to a proposal and has not received
instructions from the beneficial owner. Brokers are not permitted to vote on
non-discretionary items if they have not received instructions from the
beneficial owners. Brokers are permitted to indicate a "broker non-vote" on
non-discretionary items absent instructions from the beneficial owner.
Abstentions and broker non-votes will count in determining whether a quorum is
present at the Meeting. Both abstentions and broker non-votes will not have any
effect on the outcome of voting on director elections. For Proposal 2,
abstentions will be included in the number of shares voting. Abstentions will
have the effect of voting against Proposal 2.
Default Voting
A proxy that is properly completed and returned will be voted at the
Meeting in accordance with the instructions on the proxy. If you properly
complete and return a proxy but do not indicate any contrary voting
instructions, your shares will be voted "FOR" all Proposals listed in the Notice
and any other business that may properly come before the Meeting or any
adjournment or postponement. If the Company proposes to adjourn the Meeting,
proxy holders will vote all shares for which they have voting authority in favor
of adjournment. The Board of Directors knows of no matters other than those
stated in the Notice and described in this Proxy Statement to be presented for
consideration at the Meeting.
This Proxy Statement is dated April 17, 2002.
2
SECURITY OWNERSHIP
The following table reflects the beneficial ownership of the Company's
Common Stock based upon the 53,672,044 common shares outstanding as of April 5,
2002 by (i) each person known to the Company to be the beneficial owner of more
than 5% of the outstanding shares of the Common Stock, (ii) each Director and
each of the five Named Executive Officers (as defined under "Executive
Compensation - Summary Compensation Table"), and (iii) all Directors and
executive officers as a group. The business address of each individual listed
below is: c/o Range Resources Corporation, 777 Main Street, Suite 800, Fort
Worth, Texas 76102.
Common Stock
-----------------------------------
Number of Shares Percent
Owner Beneficially Owned of Class
---------------------------------------- -------------------- ----------
Thomas J. Edelman 1,930,431 (1) 3.6%
John H. Pinkerton 543,376 (2) 1.0%
Robert E. Aikman 151,566 (3) *
Anthony V. Dub 176,297 (4) *
V. Richard Eales 38,000 (5) *
Allen Finkelson 86,319 (6) *
Jonathan S. Linker - (7) *
Alexander P. Lynch 77,000 (8) *
Terry W. Carter 84,621 (9) *
Herbert A. Newhouse 209,287 (10) *
Rodney L. Waller 218,648 (11) *
All Directors and executive
officers as a group (13 individuals) 3,736,554 (12) 6.9%
Cannell Capital LLC 4,079,300 (13) 7.6%
150 California Street, Fifth Floor
San Francisco, California 94111
Strong Capital Management, Inc. 4,029,460 (14) 7.5%
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
Putnam Investments, LLC. 3,699,689 (15) 6.9%
One Post Office Square
Boston, Massachusetts 02109
Franklin Resources Inc. 3,490,279 (16) 6.1%
One Franklin Parkway
San Mateo, California 94403
Dimensional Fund Advisors Inc. 3,445,691 (17) 6.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
* Less than one percent
----------------
(1) Includes 99,375 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days; 610,636 shares held in IRA and KEOGH accounts; 577,726
shares held in the Company's deferred compensation plan; 74,116
shares owned by Mr. Edelman's spouse; and 112,550 shares owned by
his minor children to which Mr. Edelman disclaims beneficial
ownership.
(2) Includes 99,375 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days; 121,199 shares held in an IRA account; 183,001 shares
held in the Company's deferred compensation plan; 4,772 shares
owned by Mr. Pinkerton's minor children; and 3,499 shares owned
by Mr. Pinkerton's spouse, to which Mr. Pinkerton disclaims
beneficial ownership.
3
(3) Includes 6,000 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days; 14,500 shares owned by Mr. Aikman's family trust; and
14,366 shares owned by Mr. Aikman's spouse, to which Mr. Aikman
disclaims beneficial ownership.
(4) Includes 6,000 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days and 20,297 shares held in the Company's deferred
compensation plan.
(5) Includes 2,000 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days.
(6) Includes 6,000 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days and 25,319 shares held in the Company's deferred
compensation plan.
(7) Mr. Linker is a nominee for election to the Board of Directors at the
2002 Annual Meeting.
(8) Includes 2,000 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days.
(9) Includes 27,500 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days; 10,000 shares held in an IRA account; and 47,121 shares
held in the Company's deferred compensation plan.
(10) Includes 133,017 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days and 23,898 shares held in the Company's deferred
compensation plan.
(11) Includes 52,500 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days; 35,000 shares in an IRA account; 99,365 shares held in
the Company's deferred compensation plan; and 1,146 shares owned
by Mr. Waller's minor children, to which Mr. Waller disclaims
beneficial ownership.
(12) Includes 498,143 shares which may be purchased under currently
exercisable stock options or options that are exercisable within
60 days and 1,036,171 shares held in the Company's deferred
compensation plan.
(13) Based on Schedule 13G filed with the Securities and Exchange Commission
dated February 14, 2002.
(14) Based on Schedule 13G filed with the Securities and Exchange Commission
dated February 13, 2002.
(15) Based on Schedule 13G filed with the Securities and Exchange Commission
dated February 5, 2002.
(16) Based on Schedule 13G filed with the Securities and Exchange Commission
dated February 1, 2002. Reflects the number of common shares if
the holder converted its 1,640,400 shares of the Company's
convertible 5 3/4% Trust Preferred.
(17) Based on Schedule 13G filed with the Securities and Exchange Commission
dated January 30, 2002.
PROPOSAL 1 -- ELECTION OF DIRECTORS
Nomination and Election of Directors
The Board of Directors has nominated Messrs. Robert E. Aikman, Anthony V.
Dub, V. Richard Eales, Thomas J. Edelman, Allen Finkelson, Alexander P. Lynch,
and John H. Pinkerton (all of whom are currently members of the Board of
Directors) and Mr. Jonathan S. Linker to serve as Directors of the Company for
terms of one year expiring at the 2003 Annual Meeting of Stockholders or until
their successors have been elected and qualified. Mr. James E. McCormick has
elected to retire from the Board for personal reasons effective with the 2002
Annual Meeting. At that time, he will be designated a Director Emeritus. While
Mr. McCormick will no longer be a voting member of the Board, he will be invited
to attend Board meetings and will serve as a consultant to the Board and the
Company.
Unless otherwise specified, shares represented by proxies will be voted in
favor of the election of all of the nominees, except that, in the event any
nominee should not continue to be available for election, such proxies will be
voted for the election of such other persons as the Board of Directors may
recommend. Management does not presently contemplate that any of the nominees
will become unavailable for election for any reason.
The Board of Directors recommends a vote FOR the election of each of the
nominees.
Information Concerning Nominees
4
The following table sets forth the names of the nominees and certain
information with regard to each nominee.
Held
Name Age Office Since Position
---- --- ------------ --------
Robert E. Aikman 70 1990 Director
Anthony V. Dub 52 1995 Director
V. Richard Eales 66 2001 Director
Thomas J. Edelman 51 1988 Chairman and Chairman of the Board
Allen Finkelson 55 1994 Director
Jonathan S. Linker 53 2002 Director
Alexander P. Lynch 49 2000 Director
John H. Pinkerton 48 1988 President and Director
Robert E. Aikman became a Director in 1990. Mr. Aikman has more than 40
years experience in petroleum and natural gas exploration and production
throughout the United States and Canada. From 1984 to 1994 he was Chairman of
the Board of Energy Resources Corporation. From 1979 through 1984, he was the
President and principal shareholder of Aikman Petroleum, Inc. From 1971 to 1977,
he was President of Dorchester Exploration Inc. and from 1971 to 1980, he was a
director and a member of the Executive Committee of Dorchester Gas Corporation.
Currently, Mr. Aikman is Chairman of WhamTech, Inc., and President of The
Hawthorne Company, an entity that organizes joint ventures and provides advisory
services for the acquisition of oil and gas properties, including the financial
restructuring, reorganization and sale of companies. In addition, Mr. Aikman is
a director of the Panhandle Producers and Royalty Owners Association and a
member of the Independent Petroleum Association of America and American
Association of Professional Landmen. Mr. Aikman graduated from the University of
Oklahoma in 1952.
Anthony V. Dub became a Director in 1995. Mr. Dub is Chairman of Indigo
Capital, LLC, a financial advisory firm based in New York City. Prior to forming
Indigo Capital in 1997, he served as an officer of Credit Suisse First Boston,
an investment banking firm. Mr. Dub joined Credit Suisse First Boston in 1971
and was named a Managing Director in 1981. Mr. Dub received his Bachelor of Arts
Degree from Princeton University in 1971.
V. Richard Eales became a Director in 2001. Mr. Eales has over 35 years of
experience in the energy, high technology and financial industries. He is
currently a financial consultant serving energy and information technology
businesses. Mr. Eales was employed by Union Pacific Resources Group Inc. from
1991 to 1999 serving as Executive Vice President from 1995 through 1999. Prior
to 1991, Mr. Eales served in various financial capacities with Butcher & Singer
and Janney Montgomery Scott, investment banking firms, as CFO of Novell, Inc., a
technology company, and in the treasury department of Mobil Oil Corporation. Mr.
Eales received a Bachelor of Chemical Engineering from Cornell University and a
Masters in Business Administration from Stanford University.
Thomas J. Edelman, Chairman and Chairman of the Board of Directors, assumed
these positions in 1988. From 1981 to 1997, Mr. Edelman served as a director and
President of Snyder Oil Corporation ("SOCO"), a publicly traded independent oil
company. In 1996, Mr. Edelman became Chairman and Chief Executive Officer of
Patina Oil & Gas Corporation. Prior to 1981, Mr. Edelman was a Vice President of
The First Boston Corporation. From 1975 through 1980, Mr. Edelman was with
Lehman Brothers Kuhn Loeb Incorporated. Mr. Edelman received a Bachelor of Arts
Degree from Princeton University and a Masters Degree in Finance from Harvard
University's Graduate School of Business Administration. Mr. Edelman serves as
Chairman of Bear Cub Investments, LLC, a privately held marketer of natural gas
liquids and other petroleum products, and as a director of Star Gas Partners,
L.P., a publicly-traded master limited partnership that distributes fuel oil and
propane.
Allen Finkelson became a Director in 1994. Mr. Finkelson has been a partner
at Cravath, Swaine & Moore since 1977, with the exception of the period 1983
through 1985, when he was a Managing Director of Lehman Brothers Kuhn Loeb
Incorporated. Mr. Finkelson joined Cravath, Swaine & Moore in 1971. Mr.
Finkelson received a Bachelor of Arts Degree from St. Lawrence University and a
Doctor of Laws Degree from Columbia University School of Law.
Jonathan S. Linker is a nominee for election to the Board at the 2002
Annual Meeting. Mr. Linker served as a Director of the Company from August 1998
until October 2000. He has been active in the energy business since 1972. Mr.
Linker began
5
working with First Reserve Corporation, the largest private equity firm
investing exclusively in energy, in 1988 and was a Managing Director of the firm
from 1996 until July 2001. He is currently a consultant to First Reserve. Mr.
Linker has been President and a director of IDC Energy Corporation since 1987, a
director and officer of Sunset Production Corporation since 1991 serving
currently as Chairman, and Manager of Shelby Resources Inc., all small,
privately-owned exploration and production companies. He is a director of First
Wave Marine, Inc., a non-listed company providing shipyard and related services
in the Houston-Galveston area. Mr. Linker received a Bachelor of Arts degree in
Geology from Amherst College, a Master Degree in Geology from Harvard University
and a Master of Business Administration degree from the Harvard Business School.
Alexander P. Lynch became a Director in 2000. Mr. Lynch currently serves as
Managing Director of J.P. Morgan, a subsidiary of J.P. MorganChase & Co., and
Director of Patina Oil & Gas Corporation. Until its merger into J.P.
MorganChase, Mr. Lynch was a General Partner of The Beacon Group. Previously, he
was Co-President and Chief Executive Officer of The Bridgeford Group, a
financial advisory firm that was acquired by Beacon in 1997. Prior to 1991, Mr.
Lynch served as a Managing Director with Lehman Brothers, a division of Shearson
Lehman Brothers, Inc. Mr. Lynch received a Bachelor of Arts degree from the
University of Pennsylvania and a Masters Degree from the University of
Pennsylvania's Wharton School of Business.
John H. Pinkerton, President and a Director, became a Director in 1988. He
joined the Company and was appointed President in 1990. Previously, Mr.
Pinkerton was Senior Vice President-Acquisitions of SOCO. Prior to joining SOCO
in 1980, Mr. Pinkerton was with Arthur Andersen. Mr. Pinkerton received his
Bachelor of Arts Degree in Business Administration from Texas Christian
University and a Master of Arts Degree in Business Administration from the
University of Texas. Mr. Pinkerton is a director of Venus Exploration, Inc., a
publicly traded exploration and production company in which Range owned
approximately an 18% interest at December 31, 2001.
Information Concerning the Board and Board Committees
During 2001, the Board met four times and acted seven times by unanimous
written consent. Each Director participated in at least 75% of the meetings of
the Board and committees on which they served, except that Messrs. Lynch and
McCormick were unable to attend two Board meetings and two Compensation
Committee meetings. In addition, management frequently confers informally with
Directors.
The committees of the Board, the current members and their primary
functions are as follows:
Audit Committee. The Audit Committee reviews the professional services
provided by independent public accountants and the independence of such
accountants from management. This Committee also reviews the scope of the audit
coverage, the annual financial statements and such other matters with respect to
the accounting, auditing and financial reporting practices and procedures as it
may find appropriate or as have been brought to its attention. Messrs. Aikman,
Dub (Chairman), Eales and Lynch are the members of the Audit Committee. During
2001, the Audit Committee met twice.
Compensation Committee. The Compensation Committee reviews and approves
officers' salaries and administers the bonus, incentive compensation and stock
option plans. The Committee advises and consults with management regarding
benefits and significant compensation policies and practices. This Committee
also considers nominations of candidates for officer positions. The members of
the Compensation Committee are Messrs. Aikman (Chairman), Finkelson, Lynch and
McCormick. During 2001, the Compensation Committee met five times and acted two
times by written consent.
Dividend Committee. The Dividend Committee is authorized and directed to
approve the payment of dividends on all of the Company's securities at the same
rates paid in the previous quarter or as the Board may direct. The members of
the Dividend Committee are Messrs. Edelman (Chairman) and Pinkerton. During
2001, the Dividend Committee acted three times by written consent.
Executive Committee. The Executive Committee reviews and authorizes actions
required in the management of the business and affairs of the Company, which
would otherwise be determined by the Board, when it is not practicable to
convene the full Board. The members of the Executive Committee are Messrs.
Edelman (Chairman), Finkelson and Pinkerton. The Executive Committee did not
meet during 2001.
Nomination Committee. The Nomination Committee develops and reviews
background information for candidates for the Board of Directors and makes
recommendations to the Board regarding such candidates. The members of the
6
Nomination Committee are Messrs. Aikman, Finkelson, Lynch (Chairman) and
McCormick. The Nomination Committee was formed in May 2001 and did not meet
during the year. The Nomination Committee is not obligated to consider
nominations submitted from security holders.
Outside Directors receive fees of $25,000 per annum, are granted 8,000
options per year to purchase Common Stock under the Outside Directors Stock
Option Plan, are granted rights to purchase Common Stock under the 1997 Stock
Purchase Plan, and are reimbursed for expenses in attending Board and committee
meetings. The Directors receive no compensation for attending committee
meetings. Directors who are officers of the Company are not paid for serving on
the Board and committees.
EXECUTIVE OFFICERS
Information regarding the executive officers of the Company as of April
5, 2002 is summarized below:
Name Age Officer Since Position
---- --- ------------- --------
Thomas J. Edelman 51 1988 Chairman
John H. Pinkerton 48 1990 President
Terry W. Carter 49 2001 Executive Vice President - Exploration and Production
Eddie M. LeBlanc, III 53 2000 Senior Vice President and Chief Financial Officer
Herbert A. Newhouse 57 1998 Senior Vice President - Gulf Coast
Chad L. Stephens 47 1990 Senior Vice President - Southwest
Rodney L. Waller 52 1999 Senior Vice President and Secretary
For biographical information with respect to Messrs. Edelman and Pinkerton,
see "Election of Directors - Information Concerning Nominees" above.
Terry W. Carter, Executive Vice President-Exploration and Production,
joined the Company in January 2001. From 1999 to 2001, Mr. Carter provided
consulting services to independent oil companies. From 1976 to 1999, Mr. Carter
was employed by Oryx Energy Company, holding a variety of positions including
Planning Manager, Development Manager and Manager of Drilling. Mr. Carter
received a Bachelor of Science degree in Petroleum Engineering from Tulsa
University.
Eddie M. LeBlanc III, Senior Vice President and Chief Financial Officer,
joined the Company in 2000. Previously, Mr. LeBlanc was a founder of Interstate
Natural Gas Company, which merged into Coho Energy in 1994. At Coho, Mr. LeBlanc
served as Senior Vice President and Chief Financial Officer. Mr. LeBlanc's
twenty-six years of experience include assignments in the oil and gas
subsidiaries of Celeron Corporation and Goodyear Tire and Rubber. Prior to his
industry experience, Mr. LeBlanc was with a national accounting firm. Mr.
LeBlanc is a certified public accountant, a chartered financial analyst, and
received a Bachelor of Science degree from University of Southwestern Louisiana.
Herbert A. Newhouse, Senior Vice President - Gulf Coast, joined the Company
in 1998. Previously, Mr. Newhouse served as Executive Vice President of Domain
Energy Corporation. Prior to joining Domain, Mr. Newhouse was with Tenneco for
over 17 years. He has over 30 years of operational and managerial experience in
oil and gas exploration and production. Mr. Newhouse received a Bachelor of
Science degree in Chemical Engineering from Ohio State University.
Chad L. Stephens, Senior Vice President - Southwest, joined the Company in
1990. Previously, Mr. Stephens was with Duer Wagner & Co., an independent oil
and gas producer, since 1988. Prior thereto, Mr. Stephens was an independent oil
operator in Midland, Texas for four years. From 1979 to 1984, Mr. Stephens was
with Cities Service Company and HNG Oil Company. Mr. Stephens received a
Bachelor of Arts Degree in Finance and Land Management from the University of
Texas.
Rodney L. Waller, Senior Vice President and Secretary, joined the Company
in 1999. Previously, Mr. Waller had been with Snyder Oil Corporation, now part
of Devon Energy Corporation, since 1977, where he served as a Senior Vice
President. Before joining SOCO, Mr. Waller was employed by Arthur Andersen. Mr.
Waller is a certified public accountant and petroleum landman. He received a
Bachelor of Arts degree from Harding University.
7
EXECUTIVE COMPENSATION
The following table summarizes the total compensation awarded to, earned or
paid by the Company to the Chairman of the Company and the four most highly
compensated executive officers who were serving as executive officers at the end
of the Company's last completed fiscal year for services rendered in all
capacities during the years ended December 31, 2001, 2000 and 1999. In this
Proxy Statement, these individuals are referred to as "Named Executive
Officers."
Summary Compensation Table
Long-term
Annual Compensation Compensation
----------------------------- ------------------
Name and Stock Option All Other
Principal Position Year Salary ($) Bonus ($) Awards (#) Compensation ($)(a)
-------------------------------------------------------------------------------------------------------------------
Thomas J. Edelman 2001 $ 347,519 $600,000 (b) 60,000 $ 120,465
Chairman 2000 316,539 500,000 (c) 60,000 73,368
1999 260,000 (d) 145,313 (e) 72,500 67,122
John H. Pinkerton 2001 347,519 260,000 60,000 45,340
President 2000 335,000 217,500 (f) 60,000 40,555
1999 335,000 (d) 50,000 72,500 32,357
Terry W. Carter (g) 2001 207,693 150,000 (h) 110,000 48,275
Executive Vice President
Rodney L. Waller (i) 2001 163,875 70,000 (j) 30,000 54,560
Senior Vice President 2000 157,708 105,000 (k) 30,000 38,161
1999 60,508 40,000 (l) 60,000 19,235
Herbert A. Newhouse 2001 171,359 70,000 (m) 30,000 15,340
Senior Vice President 2000 164,738 78,300 (n) 30,000 15,040
1999 159,994 25,000 31,250 21,107
(a) Represents the Company's contribution to the 401(k) and deferred
compensation plans along with the value, if any, attributable to
participation in the Stock Purchase Plan.
(b) Bonus awarded in the form of 154,143 shares of restricted Common Stock
valued at 75% of the stock's fair market value at the time of the
transaction. The restricted stock will not vest until January 2, 2003.
(c) Bonus awarded in the form of 100,000 shares of restricted Common Stock
valued at 75% of the stock's fair market value at the time of the
transaction. The award delayed vesting until January 1, 2002.
(d) In 1999, Messrs. Edelman and Pinkerton elected to take $195,000 and
$50,000, respectively, of their salaries in restricted Common Stock.
The Company issued 133,333 shares to Mr. Edelman and 34,188 shares to
Mr. Pinkerton. The number of shares issued was calculated by taking
the salary foregone and dividing it by 60% of the stock's fair market
value at the time of the election.
(e) Bonus awarded in the form of 100,000 shares of restricted Common Stock
valued at 75% of the stock's fair market value at the time of the
transaction.
(f) Bonus composed of $125,000 in cash and 18,500 shares of restricted
Common Stock valued at 75% of the stock's fair market value at the time
of the transaction. The restricted stock delayed vesting until January
1, 2002.
(g) Mr. Carter joined the Company in January 2001.
(h) Bonus composed of $75,000 in cash and 22,573 shares of restricted
Common Stock valued at 75% of the stock's fair market value at the time
of the transaction. The restricted stock will not vest until January 2,
2003.
(i) Mr. Waller joined the Company in August 1999.
(j) Bonus composed of $40,000 in cash and 9,029 shares of restricted Common
Stock valued at 75% of the stock's fair market value at the time of the
transaction. The restricted stock will not vest until January 2, 2003.
(k) Bonus composed of 21,000 shares of restricted Common Stock valued at
75% of the stock's fair market value at the time of the transaction of
which 12,000 shares delayed vesting until January 1, 2002.
8
(l) Bonus composed of $20,000 in cash and 13,764 shares of restricted
Common Stock valued at 75% of the stock's fair market value at the time
of the transaction.
(m) Bonus composed of $40,000 in cash and 9,029 shares of restricted Common
Stock valued at 75% of the stock's fair market value at the time of the
transaction. The restricted stock will not vest until January 2, 2003.
(n) Bonus composed of $45,000 in cash and 6,660 shares of restricted Common
Stock valued at 75% of the stock's fair market value at the time of the
transaction. The restricted stock delayed vesting until January 1,
2002.
Stock Option Grants and Exercises
The following table reflects the stock options granted to the Named
Executive Officers for the year ended December 31, 2001. The stock options are
granted at the market price of the Common Stock on the date of grant and vest
25% on each anniversary over four years. No stock appreciation rights have been
granted.
Stock Options Granted in 2001
Individual Grants
---------------------------------------------------------- Potential Realizable Value
Number of Percent of at Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to for Option Term (a)
Options Employees in Exercise Expiration ----------------------------
Name Granted (#) Fiscal Year Price Date 5% 10%
--------------------------------------------------------------------------------------------------------------------
Thomas J. Edelman 60,000 7.2% $ 6.67 2/12/11 $ 251,684 $ 637,816
John H. Pinkerton 60,000 7.2% 6.67 2/12/11 251,684 637,816
Terry W. Carter 110,000 13.2% 6.40 1/29/11 442,742 1,121,995
Rodney L. Waller 30,000 3.6% 6.67 2/12/11 125,842 318,908
Herbert A. Newhouse 30,000 3.6% 6.67 2/12/11 125,842 318,908
(a) The Securities and Exchange Commission prescribes the annual rates of
stock price appreciation used in showing the potential realizable
value of stock option grants. Actual realized value of the options may
be significantly greater or less than that assumed.
The following table reflects the stock options exercised during 2001 and
the stock options held by the Named Executive Officers as of December 31, 2001.
The value of "in-the-money" options represents the spread between the exercise
price of the stock options and the year-end Common Stock price of $4.55.
Option Exercises in 2001 and Year-End Option Values
Number of Shares Value of Unexercised
Underlying Unexercised Options In-the-Money Options at
Shares at Year-End 2001 Year-End 2001
Acquired on Value (Unexercisable (U)/ (Unexercisable (U)/
Name Exercise (#) Realized Exercisable (E)) Exercisable(E))
------------------------------------------------------------------------------------------------------------------
Thomas J. Edelman -0- $ -0- 141,250 U $ 187,344 U
51,250 E 108,969 E
John H. Pinkerton -0- -0- 141,250 U 187,344 U
51,250 E 108,969 E
Terry W. Carter -0- -0- 110,000 U -0- U
-0- E -0- E
Rodney L. Waller -0- -0- 82,500 U 58,781 U
37,500 E 19,594 E
Herbert A. Newhouse 68,329 443,038 74,374 U 88,857 U
110,205 E 124,152 E
9
Employment and Change in Control Agreements
There are no employment agreements currently in effect between the Company
and any Named Executive Officer. The Company has agreed to pay the Named
Executive Officers the following salaries effective March 1, 2002: Thomas J.
Edelman - $350,000, John H. Pinkerton - $350,000, Terry W. Carter - $240,000,
Herbert A. Newhouse - $176,000 and Rodney L. Waller - $169,000.
In 1997, the Board adopted a change in control plan pursuant to which
officers and certain key employees (the "Management Group") may be entitled to
receive certain payments and benefits if there is a change in control and a
member of the Management Group is terminated or demoted. All other employees
(the "Employee Group") may be entitled to receive more limited payments and
benefits under similar conditions. Upon a change in control all non-vested
securities automatically vest. If any person in the Management Group is (i)
terminated within one year of a change in control or (ii) if their
responsibilities or compensation is materially altered within one year of such
change of control, they will receive a lump sum payment (the "Management
Payment") equal to (i) their total annual salary and benefits, plus (ii) the
average of their past two bonuses. If any person in the Employee Group is
terminated within one year of a change in control, they will receive a lump sum
payment (the "Employee Payment") equal to (i) six months of their total annual
salary and benefits, plus (ii) one-half of the average of their past two
bonuses. Except in the case of Messrs. LeBlanc and Waller, the amount of a
Management Payment or an Employee Payment (collectively, the "Payment") is
reduced if an employee has been with the Company for less than three years. An
employee would receive one-third of the Payment if they have been employed by
the Company for less than two years and two-thirds of the payment if they have
been employed between two and three years.
As a part of Mr. Carter's employment, the Board approved a modification to
the existing change in control plan to provide that if a change in control
occurred, Mr. Carter would be paid two times his annual salary and the average
of his last two bonuses regardless of the length of employment.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board has responsibility for overseeing
all compensation arrangements affecting executive officers. The Committee's
duties include approving salaries, setting incentive compensation and bonus
targets and administering all compensation plans.
General Compensation Philosophy
The Compensation Committee believes that executive officers' ("Executives")
salaries and overall compensation should be competitive with similar oil and gas
companies after taking into account an Executive's performance. The Committee
uses stock options and other equity-based incentives to help retain and motivate
employees with the goal of improving long-term performance and aligning
employee's interests with those of the stockholders.
Components of Compensation
The key elements of Executive compensation are salary, bonus and stock
options. In determining each component of compensation, the Compensation
Committee considers an Executive's total compensation package, recommendations
of the Chairman and President, and other objective and subjective criteria that
the Committee deems appropriate.
10
Salaries
The Compensation Committee reviews the salary of each Executive annually
and makes adjustments when the Committee thinks they are appropriate. The
Committee considers each Executive's responsibilities, specific experience and
performance, compensation practices of similarly situated companies and the
Executive's overall contribution to the Company.
Bonuses
Executive bonuses are discretionary and based on each Executive's specific
performance during the year taken in context of the Company's overall
performance.
Stock Options
The Board of Directors adopted the 1999 Stock Option Plan, which was
approved by the Stockholders at the 1999 Annual Meeting (the "Stock Option
Plan"). The Stock Option Plan replaced the 1989 Stock Option Plan, which expired
in March 1999. Employees and Directors may receive awards under the Stock Option
Plan. The Compensation Committee uses the Stock Option Plan to help attract,
motivate and retain personnel and to reward them for contributions to the
Company. The Compensation Committee administers the Stock Option Plan in full
compliance with Rule 16b-(3) under the Securities Exchange Act of 1934. The
Compensation Committee determines the incentive awards granted to each
participant and the terms, conditions and limitations applicable to each award.
Section 162 of the Internal Revenue Code
The Company's attempts to take all proper tax deductions while maintaining
the ability to pay compensation which is deemed to be in the Company's interest,
but which may not be deductible. Section 162 of the Internal Revenue Code
generally imposes a $1 million per person annual limit on the amount of
compensation paid to its officers unless the compensation is performance based.
Compensation of the Chairman and the President
The Compensation Committee considered the Company's overall performance as
well as the individual contributions of the Chairman and President in
determining their 2001 bonuses and reviewing their salaries. The Committee noted
a number of achievements in 2001. The Company reported increasing production
during the year. Cash flow increased 37% to $132 million. Net income totaled $9
million in 2001. Excluding the $42 million impairment and reserve for bad debts
caused by falling commodity prices at year-end, the Company would have reported
a record net income of $42 million after considering deferred income taxes. In
the course of the year, $71 million of debt and convertible securities were
retired, eliminating 15% of the Company's fixed income securities. Stockholders'
equity rose 33% to $245 million. In light of these and other factors, Mr.
Edelman was awarded 154,143 shares of restricted Common Stock in lieu of a cash
bonus, which were placed in his deferred compensation account. The restricted
shares will vest on January 2, 2003. The bonus was awarded in recognition of Mr.
Edelman's substantial involvement in directing the Company and the strategy
employed to allow it to recover from the financial reversals of the past few
years. Mr. Edelman's salary was maintained at $350,000. On April 1, 2002, Mr.
Edelman was granted 250,000 options with a $5.19 exercise price under the Stock
Option Plan. Mr. Pinkerton was awarded a $260,000 cash bonus. Mr. Pinkerton's
bonus was awarded in recognition of his role in the success of the Great Lakes
joint venture and numerous improvements made in the Company's performance during
the year. Mr. Pinkerton's salary was maintained at $350,000. On April 1, 2002,
Mr. Pinkerton was granted 175,000 options with a $5.19 exercise price under the
Stock Option Plan.
Decisions on the bonuses and salary increases for other Executives were
influenced by the Company's overall performance as well as the performance of
the individual Executive and their success in attaining performance goals.
Additional stock options were granted to Messrs. Edelman and Pinkerton by the
Committee in 2002 over the amounts granted in prior years in order to (i) align
Executive compensation with the same interests as the stockholders, (ii) place
more of the Executive's compensation in the form of incentive compensation, and
(iii) increase the incentive portion of compensation in alignment with other
peer companies. The Committee intends to review the option awards to other
employees of the Company in view of the compensation arrangements of peer
companies and may grant additional options to other employees. Based upon
historical data of peer companies, it appears that the Company has not granted
stock options in the same proportion as other peer companies as part of its
compensation arrangements.
11
This report has been furnished by the members of the Compensation
Committee.
Robert E. Aikman, Chairman
Allen Finkelson
Alexander P. Lynch
James E. McCormick
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following graph is included in accordance with the SEC's executive
compensation disclosure rules. This historic stock price performance is not
necessarily indicative of future stock performance. The graph compares the
change in the cumulative total return of the Common Stock, the Dow Jones
Secondary Oils Index, and the S&P 500 Index for the five years ended December
31, 2001. The graph assumes that $100 was invested in Common Stock and each
index on December 31, 1996.
Comparison of Five Year Cumulative Return
[GRAPHIC OMITTED]
As of December 31
1996 1997 1998 1999 2000 2001
--------- ---------- ---------- -------- --------- ---------
Range Resources Corporation $ 100 $ 95 $ 20 $ 19 $ 40 $ 27
DJ Secondary Oils 100 105 75 83 71 64
S&P 500 100 131 166 199 178 155
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors is responsible for monitoring
the integrity of the Company's consolidated financial statements, its system of
internal controls and the independence and performance of its independent
auditors. The Committee is composed of four non-employee directors and operates
under a written charter adopted and approved by the Board of Directors. The
Board, in its business judgment, has determined that all members of the
Committee are "independent" as required by the NYSE.
Management is responsible for the financial reporting process, including
the system of internal controls, and for the preparation of consolidated
financial statements in accordance with generally accepted accounting
principles. The
12
Company's independent auditors, Arthur Andersen LLP, are responsible for
performing an audit of the consolidated financial statements in accordance with
generally accepted auditing standards.
The Committee held two meetings during 2001. The meetings were designed,
among other things, to facilitate and encourage communication between the
Committee, management and Arthur Andersen. We discussed with the auditors the
overall scope and plans for their audit. We met with the auditors, with and
without management present, to discuss the results of their examinations and
their evaluations of the Company's internal controls. We have reviewed and
discussed the audited consolidated financial statements for the year ended
December 31, 2001 with management and Arthur Andersen. We also discussed with
the 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 the Company's consolidated financial
statements and the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended, Communication with Audit Committees. The auditors
provided to us the written disclosures and the letter required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
and we discussed with them their independence from the Company. When considering
Arthur Andersen's independence, we considered whether their provision of
services to the Company beyond those rendered in connection with their audit and
review of the consolidated financial statements was compatible with maintaining
their independence. We also reviewed, among other things, the amount of fees
paid to Arthur Andersen for audit and non-audit services.
Based on our review and these meetings, discussions and reports, and
subject to the limitations on our role and responsibilities discussed in this
report and in the Audit Committee Charter, we recommended to the Board of
Directors that the Company's audited consolidated financial statements for the
year ended December 31, 2001, be included in the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the Committee rely without independent verification on the information provided
to them and on the representations made by management and the independent
auditors. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and financial reporting principles or appropriate internal controls
and procedures designed to assure compliance with accounting standards and
applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
Range Resources Corporation's financial statements has been carried out in
accordance with generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that Arthur Andersen LLP is in fact "independent."
This report has been furnished by the members of the Audit Committee.
Anthony V. Dub, Chairman
Robert E. Aikman
V. Richard Eales
Alexander P. Lynch
Independent Accountants
The Company and the Audit Committee have not made a final decision
concerning the selection of independent auditors for 2002. The Company and the
Committee continue to consult with Arthur Andersen concerning their ability to
continue to perform such services. As in past years, it is not the Company's
practice to have the Stockholders approve a recommendation for independent
accountants since such approval is not required by the SEC and is a direct
responsibility of the Audit Committee, the members of which are all independent
outside directors. The Audit Committee expects to make a recommendation to the
Board of Directors with respect to the Company's independent auditors for 2002
during the second or third quarter of this year. The Audit Committee will make
its recommendation to the Board, in consultation with management of the Company,
based on a number of factors, including, among others, the expertise and
experience Arthur Andersen has with independent exploration and production
companies, the caliber of the personnel working on the Company's engagement and
the cumulative specific experience gained by Arthur Andersen with the Company
and its operations over the last twenty years.
Audit Fees
13
The aggregate fees for professional services rendered by Arthur Andersen
LLP in connection with their audit of the Company's consolidated financial
statements and reviews of the consolidated financial statements included in the
Company's Quarterly Reports on Form 10-Q (including its pro rata part of similar
fees charged to Great Lakes) for the 2001 fiscal year were $237,500.
Financial Information Systems Design and Implementation Fees
There were no professional services rendered by Arthur Andersen LLP in 2001
relating to financial information systems design and implementation.
All other fees
The aggregate fees for all other services rendered by Arthur Andersen LLP
in 2001 were $221,590 and were related to tax planning and compliance matters
and accounting and tax loan staff.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Edelman, Chairman of the Company, also serves as an executive officer
and is a major shareholder of Patina Oil & Gas Corporation, a publicly traded
independent oil company headquartered in Denver, Colorado. In addition, Mr.
Edelman is Chairman of Bear Cub Investments, LLC, a privately-held marketer of
natural gas liquids and other petroleum products also headquartered in Denver.
The Company, Patina and Bear Cub have never had any business dealings and have
never held interests in any of the same properties or operations.
PROPOSAL 2 - APPROVAL OF AN AMENDMENT
TO THE COMPANY'S 1999 STOCK OPTION PLAN
Proposed Amendment
Subject to Stockholder approval, the Board of Directors has approved an
amendment to Article V(a) of the 1999 Stock Option Plan (the "Stock Option
Plan") to (a) increase the number of shares of common stock authorized to be
issued under the Stock Option Plan from 3,400,000 shares to 6,000,000 and (b)
solely for the purpose of Section 162(m) of the Internal Revenue Code, setting
the limit for the number of awards granted to one individual from 250,000 during
a calendar year to 500,000. A complete copy of the proposed amendment is
attached as Exhibit A and a full copy of the Amended and Restated 1999 Stock
Option Plan is attached as Exhibit B. The statements made in this Proxy
Statement regarding the amendment to the Company's Stock Option Plan should be
read in conjunction with and are qualified in their entirety by reference to
Exhibits A and B.
Description of the Stock Option Plan
All employees, directors and consultants of the Company are eligible to
receive awards consisting of stock options and stock appreciation rights
(collectively the "Incentive Awards") under the Stock Option Plan. The Plan does
not include restricted stock awards. The Stock Option Plan is intended as an
incentive to attract and help retain key personnel and to reward them for making
contributions to the Company. Currently, an aggregate of 3,400,000 shares of
Common Stock may be issued under the Stock Option Plan. Further, solely for
Section 162(m) purposes of the Internal Revenue Code, no more than 250,000
shares of Common Stock may be subject to Incentive Awards granted to any one
individual during any calendar year under the Plan. The preceding numbers may be
adjusted upon a reorganization, stock split, recapitalization or other change in
the Company's capital structure.
Administration
14
The Compensation Committee of the Board administers the Stock Option Plan.
The Committee complies with Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Committee consists of two or more
outside directors (within the meaning of Section 162(m) of the Code). Subject to
the provisions of the Stock Option Plan, the Committee is authorized to
determine the type or types of Incentive Awards made to each participant and the
terms, conditions and limitations applicable to each. In addition, the Committee
has the power to interpret the Stock Option Plan, to adopt such rules and
regulations as it may deem necessary or appropriate in keeping with the
objectives of the Stock Option Plan. When granting Incentive Awards, the
Committee considers such factors as an individual's duties and their present and
potential contributions to the success of the Company.
Eligibility
The selection of eligible participants is at the discretion of the
Committee. Currently, approximately 150 employees, five outside directors and an
undetermined number of consultants would be eligible to participate in the Stock
Option Plan.
Termination
The Stock Option Plan was effective on March 24, 1999. No further awards
may be granted under the Stock Option Plan after ten years, and the Plan will
terminate once all Incentive Awards have been satisfied or have expired. The
Board may, however, terminate the Stock Option Plan at any time without
prejudice to the holders of any then outstanding Incentive Awards.
Benefits Offered
An option is the right to purchase a share of Common Stock at a price (the
"Exercise Price") fixed at date of grant. Options granted pursuant to the Plan
may either be "incentive stock options" within the meaning of Section 422 of the
Code or options that do not constitute incentive stock options ("non-qualified
stock options"). Options become exercisable on dates established by the
Committee (but not more than ten years from date of grant in the case of
incentive stock options). The Exercise Price and the number of options is
determined by the Committee but the Exercise Price may not be set at less than
fair market value of the Common Stock on the date of grant. If an incentive
stock option is granted to an employee who then owns, directly or by attribution
under the Code, shares possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or a subsidiary, the term of
the option will not exceed five years, and the Exercise Price will be at least
110% of the fair market value of the Common Stock on date of grant. The
Committee designates whether options are incentive stock options or
non-qualified stock options at date of grant. If, however, the aggregate fair
market value (determined as of the date of grant) of shares with respect to
which incentive stock options become exercisable for the first time by an
employee exceeds $100,000 in any calendar year, the options with respect to the
excess shares must be non-qualified stock options. The Exercise Price may, at
the discretion of the Committee, be paid in cash, other shares of Common Stock,
or by a combination of cash and Common Stock. The Plan also allows the
Committee, to establish procedures pursuant to which a recipient may affect a
"cashless" exercise of options through a brokerage firm. All options are
evidenced by written agreements containing provisions consistent with the Plan
and such other provisions as the Committee deems appropriate. No incentive stock
option is transferable other than by will or the laws of descent and
distribution, and only the employee or his guardian or legal representative may
exercise any option during the employee's lifetime.
Stock appreciation rights are rights to receive, without payment to the
Company, cash or shares of Common Stock with a value determined by reference to
the difference between the exercise price of the stock appreciation right and
the fair market value of the Common Stock at date of exercise. The exercise
price of a stock appreciation right must be determined by the Committee but at
no less than the fair market value of the Common Stock on date of grant (or such
greater exercise price as may be required in regard to a stock appreciation
right granted in connection with an incentive stock option). A stock
appreciation right may be exercised at such times as determined by the
Committee.
Transferability of Benefit
Unless otherwise determined by the Committee, Incentive Awards (other than
incentive stock options) are not transferable except by will or by laws of
descent and distribution or by a qualified domestic relations order. Incentive
stock options may only be transferred by will or the laws of descent and
distribution. The Plan provides that stock options and stock appreciation rights
may be granted in substitution for stock options held by officers and employees
of other corporations who are about to, or who have, become employees of the
Company or an affiliate as a result of a merger, consolidation, acquisition of
assets or similar transaction by the Company or a subsidiary.
15
Amendment to the Plan
The Board has the right to amend, modify, suspend or terminate the Plan,
except that it may not, (a) amend the Plan to increase the number of shares of
Common Stock that may be issued under the Plan or (b) change the class of
individuals eligible to receive Incentive Awards, without an affirmative vote of
a majority of the votes cast at a Stockholder meeting; provided, further under
NYSE rules that the total vote cast at the meeting represents over 50% of all
the securities entitled to vote on the proposal.
Change of Control
The Plan provides that, upon a Change of Control (as hereinafter defined),
and except as provided in any Incentive Award agreement, outstanding Incentive
Awards immediately vest and become exercisable or satisfiable, as applicable.
Any Incentive Award that is a stock option will continue to be exercisable for
the remainder of its applicable option term. However, the Compensation Committee
in its discretion may cancel Incentive Awards and make payments in cash or
adjust the Incentive Awards to reflect the Change of Control. The Plan provides
that a Change in Control occurs if the Company (a) is dissolved and liquidated,
(b) is not the surviving entity in any merger or consolidation, (c) sells,
leases or exchanges or agrees to sell, lease or exchange all or substantially
all of its assets, (d) if any person, entity or group acquires or gains
ownership or control of more than 50% of the outstanding shares of the Company's
voting stock or (e) if after a contested election of directors, the persons who
were directors before the election cease to constitute a majority of the Board.
Federal Income Tax Consequences
The following discussion of tax considerations relating to options
describes only certain U.S. federal income tax matters. No consideration has
been given to the effects of state, local or other tax laws on the Stock Option
Plan or Incentive Award recipients. The discussion is general in nature and does
not take into account a number of considerations that may apply to a particular
recipient's circumstances.
Non-Qualified Stock Options and Stock Appreciation Rights. As a general
rule, no federal income tax is imposed on the recipient upon the grant of a
non-qualified stock option (whether or not including a stock appreciation right)
and the Company is not entitled to a tax deduction by making a grant. Generally,
upon the exercise of a non-qualified stock option, the recipient will be treated
as receiving compensation taxable as ordinary income in the year of exercise in
an amount equal to the fair market value of the shares on the date of exercise
less the option price paid. In the case of the exercise of a stock appreciation
right, the recipient will be treated as receiving compensation taxable as
ordinary income in the year of exercise in an amount equal to the cash received
plus the fair market value of the shares distributed to the recipient. Upon the
exercise of a non-qualified stock option or a stock appreciation right, and
subject to the application of Section 162(m) of the Code as discussed below, the
Company may claim a deduction for compensation paid at the same time and in the
same amount as compensation income is recognized to the recipient assuming any
federal income tax reporting requirements are satisfied. Upon a subsequent
disposition of the shares received when a non-qualified stock option or a stock
appreciation right is exercised, any appreciation after the date of exercise
should qualify as capital gain. If the shares received upon the exercise of an
option or a stock appreciation right are transferred to the recipient subject to
certain restrictions, then the taxable income realized, unless the recipient
elects otherwise, and the Company's tax deduction (assuming any federal income
tax reporting requirements are satisfied) is deferred and is calculated based on
the fair market value of the shares when the restrictions lapse. The
restrictions imposed on officers, directors and 10% shareholders by Section
16(b) of the Exchange Act is a restriction if other shares have been purchased
within six months of the exercise of a non-qualified stock option or stock
appreciation right.
Incentive Stock Options. The incentive stock options under the Stock Option
Plan are intended to constitute "incentive stock options" within the meaning of
Section 422 of the Code. Incentive stock options are subject to special federal
income tax treatment. No federal income tax is imposed on the recipient upon the
grant or the exercise of an incentive stock option if the recipient does not
dispose of shares acquired within the two-year period beginning on the date the
option was granted or within the one-year period beginning on the date the
option was exercised (collectively, the "holding period"). In such event, the
Company would not be entitled to any deduction for federal income tax purposes
in connection with the grant or exercise of the option or the disposition of the
shares.
The holder of an incentive stock option may be subject to the alternative
minimum tax ("AMT") in the year the incentive stock option is exercised. The
difference between the fair market value of the stock on the exercise date and
the
16
exercise price is defined as preference income by the Code and are subject to an
AMT calculation. The AMT calculation is made in the same tax year as the
regular, ordinary income tax calculation. The option holder is required to
generally pay the greater of the AMT or the ordinary income tax. In addition at
the time the option holder sells the incentive stock option shares, the holder
will (assuming the shares are held one year or more) be required to pay capital
gains tax on the difference between the sale and exercise prices. This is true
whether or not the recipient paid ordinary income tax or AMT during the year the
option was exercised. If the recipient exercises an incentive stock option and
disposes of the shares received in the same year and the amount realized is less
than the fair market value of the shares on the date of exercise, the amount
included in alternative minimum taxable income will not exceed the amount
realized over the adjusted basis of the shares.
Upon disposition of the shares received upon exercise of an incentive stock
option after the holding period, any appreciation of the shares above the
exercise price should constitute capital gain. If a recipient disposes of shares
acquired by the exercise of an incentive stock option prior to the end of the
holding period, the recipient will be treated as having received, at the time of
disposition, compensation taxable as ordinary income. In this event, and subject
to the application of Section 162(m) of the Code as discussed below, the Company
may claim a deduction for compensation paid at the same time and in the same
amount as compensation recognized by the recipient. The amount treated as
compensation is the fair market value of the shares at the time of exercise (or
in the case of a sale in which a loss would be recognized, the amount realized
on the sale if less) less the exercise price; any amount realized in excess of
the fair market value of the shares at the time of exercise would be treated as
short-term or long-term capital gain, depending on the holding period of the
shares.
Section 162(m) of the Code. Section 162(m) of the Code precludes a public
corporation from taking a deduction for annual compensation in excess of $1
million paid to its chief executive officer or any of its four other
highest-paid officers. However, compensation that qualifies under Section 162(m)
of the Code as "performance-based" is specifically exempt from the deduction
limit. Based on Section 162(m) of the Code and the regulations, the Company's
ability to deduct compensation income generated in connection with the exercise
of stock options or stock appreciation rights granted under the Stock Option
Plan should not be limited by Section 162(m) of the Code.
Inapplicability of ERISA. Based upon current law and published
interpretations, the Company does not believe the Stock Option Plan is subject
to any of the provisions of the Employee Retirement Income Security Act of 1974.
Outstanding Plan Benefits
As of April 5, 2002, 56,875 shares have been issued pursuant to the
exercise of options granted under the Plan. A total of 2,380,975 options have
been granted and are outstanding under the Plan of which 300,258 are currently
exercisable.
1999 Stock Option Plan
Number of Options Average Exercise
Name and Position Granted Price
----------------------------------------------------------- ------------------ ----------------
Thomas J. Edelman, Chairman $ 4.90
370,000
John H. Pinkerton, President $ 4.83
295,000
Terry W. Carter, Executive Vice President $ 5.46
210,000
Herbert A. Newhouse, Senior Vice President $ 4.35
95,000
Rodney L. Waller, Senior Vice President $ 4.84
155,000
Executive Group (7 persons) $ 4.78
1,345,000
Non-Executive Officers/Employee Group (162 persons) $ 4.42
1,272,800
Reason for the Proposed Amendment
The purpose of increasing the number of options that may be granted under
the Plan is to maintain the Company's ability to attract and retain experienced
and knowledgeable employees. Providing an equity interest in the Company gives
them an incentive to perform and excel. The Board believes that equity-based
incentives align the interests of management, employees and stockholders. Stock
options are an important element in attracting and retaining employees. All
full-time employees of the Company participate in the Stock Option Plan.
17
Given the intense competition for talented individuals, the Company's
ability to offer competitive compensation packages, including those with
equity-based incentives is particularly important.
If the Stockholders approve the amendment, the number of shares of Common
Stock reserved for issuance under the Plan would be increased by 2,600,000
shares to a total of 6,000,000 shares. It is the Company's practice to grant
options to new professionals and executives as they are hired and to all
full-time employees when the annual performance-based compensation review is
completed, generally in February or March of each year. During 1999, 2000, 2001
and so far during 2002, the Board has approved the issuance of 964,150, 643,200,
774,350, 1,140,250 options, respectively, under Plan. The Compensation Committee
specifically approves all option grants to officers and the total of all stock
options allowable to be granted each year to other employees. As of April 5,
2002, 56,875 shares have been issued pursuant to exercise of options granted
under the Plan and 2,380,975 options have been granted and are currently
outstanding under the Stock Option Plan.
The increase in the number of authorized shares under the Plan is needed to
allow it to continue to function and empower the Board with the ability to
administer the Plan on a long-term basis by having a sufficient number of
options available to develop a long-term compensation strategy. The Board
believes that stock options clearly align the interest of the employee with the
stockholder and only rewards the employee if the common stock grows in value.
From an analysis of our peer companies, the number of stock options awarded to
our executive officers is well below the average. The Board would like the
ability to make larger, long-term awards to executives so that a significant
portion of their compensation would be aligned with the stockholder in the form
of stock options. Based upon historical data of peer companies, it appears that
the Company has not granted stock options in the same proportion as other peer
companies as part of its compensation arrangements. The Stockholders have
approved increases in the total number of shares issuable under the Company's
stock option plans by 5.4 million from 1995 through 2001. Given the 54 million
shares currently outstanding, an increase of 2,600,000 million shares a year
would constitute a maximum potential dilution of less than 5%.
The 250,000 share limitation in the Plan for one individual during a
calendar year is solely used in determining whether any compensation realized by
an individual would be included in the amount in determining if an executive's
annual compensation exceeds the $1,000,000 deductibility limitation under
Section 162(m) of the Code. The exercise of stock options which have been
granted within the limitations approved by Stockholders are not counted toward
the deductibility limitation. The number of shares recommended to be included in
the Plan is arbitrary and the number is not specified in the Code. However, with
the 250,000 share limitation each year, the Board does not feel that there is
sufficient flexibility to accomplish its compensation objectives and has
requested the change in the limitation for individual grants. The individual
limitation does not preclude the Board from granting options in excess of the
limit. Any options granted in excess of the limit when exercised could limit the
amount of compensation that the Company could deduct for Federal income tax
purposes. Therefore, if the limitation is not raised, the Company could lose the
tax benefit of compensation paid to an executive.
Required Vote and Recommendation
The affirmative vote of a majority of the Stockholders at the Meeting is
required after considering any abstentions. See "Votes Required" and "Broker
Non-Votes and Abstentions" for further details on voting procedures.
The Board believes adoption of the Amendment is in the Company's best
interest and recommends that the Stockholders vote FOR it.
SECURITY HOLDERS SHARING AN ADDRESS
Only a single copy of the proxy statement is being delivered to multiple
stockholders sharing a common address unless the Company receives contrary
instructions from stockholders sharing a common address. Upon a written request
to the Secretary of the Company at 777 Main Street, Suite 800, Fort Worth, Texas
76102, or an oral request made to Karen Giles at (817) 810-1938, the Company
will deliver promptly a separate copy of the proxy statement to a stockholder at
a
18
shared address to which a single copy of this proxy statement was delivered. By
written request to the same address or an oral request to the above telephone
extension (i) a stockholder may direct a notification to the Company that the
stockholder wishes to receive a separate annual report or proxy statement in the
future or (ii) stockholders who are sharing an address and who are receiving
delivery of multiple copies of the Company's annual reports or proxy statements
can request delivery of only a single copy of these documents to their shared
address.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors and persons who beneficially own more than ten percent of
the Company's stock to file initial reports of ownership and reports of changes
of ownership with the Securities and Exchange Commission. Copies of such reports
are required to be furnished to the Company.
Based solely on a review of such forms furnished to the Company and certain
written representations from the executive officers and directors, the Company
believes that all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than 10% beneficial owners were complied with on
a timely basis during 2001.
OTHER BUSINESS
Management knows of no other business that will be presented for
consideration at the Meeting, but should any other matters be brought before the
Meeting, it is intended that the persons named in the accompanying proxy will
vote such proxy at their discretion.
It is expected that representatives of Arthur Andersen LLP will be present
at the Meeting with an opportunity to make a statement if they wish and to
respond to questions from Stockholders.
ANNUAL REPORT
The Annual Report for the year ended December 31, 2001 accompanies this
Proxy Statement. The Annual Report is not a part of the proxy soliciting
material.
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Any Stockholder desiring to present a Stockholder proposal at the 2003
Annual Meeting and to have the proposal included in our proxy statement must
send it to the Secretary of the Company at 777 Main Street, Suite 800, Fort
Worth, Texas 76102 so that it is received on or before December 23, 2002. All
such proposals should be in compliance with the Securities and Exchange
Commission regulations. We will only include in the proxy materials those
Stockholder proposals that we receive prior to the deadline and that are proper
for Stockholder action.
Any Stockholder who desires to present proposals to our Annual Meeting in
2003 but does not wish to have the proposals included in our proxy statement for
the meeting must submit those proposals to the Secretary of the Company no later
than March 6, 2003. If we do not receive proposals by that time, the persons
named in the proxies we solicit for the 2003 Annual Meeting will vote their
proxies in their discretion in regard to the proposals.
BY ORDER OF THE BOARD OF DIRECTORS
Rodney L. Waller
Secretary
19
Exhibit A
WITH RESPECT TO THE
COMPANY'S 1999 STOCK OPTION PLAN
RESOLVED, that, subject to Stockholder approval, the Board of Directors
authorizes and approves an amendment to Article V(a) of the 1999 Stock Option
Plan to (a) increase the amount of Common Stock reserved for issuance under the
Plan from 3,400,000 to 6,000,000 shares and (b) solely for the purpose of
Section 162(m) of the Internal Revenue Code, setting the limit for the number of
awards granted to one individual from 250,000 during a calendar year to 500,000.
The Board recommends approval of the amendment at the next regular Stockholders'
meeting:
V. GRANT OF AWARDS;
SHARES SUBJECT TO THE PLAN
(a) Stock Grant and Award Limits. The Committee may from time to time grant
Awards to one or more employees, Consultants or Directors determined by it to be
eligible for participation in the Plan in accordance with the provisions of
Paragraph VI. Subject to adjustment in the same manner as provided in Paragraph
IX with respect to shares of Stock subject to Awards then outstanding, the
aggregate number of shares of Stock that may be issued under the Plan shall not
exceed 6,000,000 shares. Shares shall be deemed to have been issued under the
Plan only (i) to the extent actually issued and delivered pursuant to an Award,
or (ii) to the extent an Award is settled in cash. To the extent that an Award
lapses or the rights of its Holder terminate, any shares of Stock subject to
such Award shall again be available for the grant of an Award. For the sole
purpose of complying with the compensation deduction limitations set forth in
section 162(m) of the Code, no single individual may, in any given calendar
year, receive Awards which relate to in excess of 500,000 shares of Stock
(subject to adjustment in the same manner as provided in Paragraph IX with
respect to shares of Stock subject to Awards then outstanding). The limitation
set forth in the preceding sentence shall be applied in a manner which will
permit compensation generated under the Plan to constitute "performance-based"
compensation for purposes of section 162(m) of the Code, including, without
limitation, counting against such maximum number of shares, to the extent
required under section 162(m) of the Code and applicable interpretive authority
thereunder, any shares subject to Awards that are canceled or repriced.
A-1
Exhibit B
RANGE RESOURCES CORPORATION
AMENDED AND RESTATED 1999 STOCK OPTION PLAN
I. PURPOSE
The purpose of the RANGE RESOURCES CORPORATION AMENDED AND RESTATED 1999
STOCK OPTION PLAN (the "Plan") is to provide a means through which RANGE
RESOURCES CORPORATION, a Delaware corporation (the "Company"), and its
affiliates may attract able persons to serve as directors or to enter the employ
of the Company and its affiliates and to provide a means whereby those
individuals upon whom the responsibilities of the successful administration and
management of the Company rest, and whose present and potential contributions to
the welfare of the Company and its affiliates are of importance, can acquire and
maintain stock ownership, thereby strengthening their concern for the welfare of
the Company and its affiliates. A further purpose of the Plan is to provide such
individuals with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company and its affiliates. Accordingly,
the Plan provides for granting Incentive Stock Options (subject to the
provisions of Paragraph VII(c)), options which do not constitute Incentive Stock
Options, Stock Appreciation Rights or any combination of the foregoing, as is
best suited to the circumstances of the particular employee, consultant or
director as provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
(a) "Affiliate" means any corporation, partnership, limited liability
company or partnership, association, trust or other organization in
which the Company owns, directly or indirectly, a 50% or more
beneficial ownership interest.
(b) "Award" means, individually or collectively, any Option or Stock
Appreciation Right.
(c) "Award Agreement" means any Option Agreement or Stock Appreciation
Rights Agreement.
(d) "Board" means the Board of Directors of the Company.
(e) "Change of Control" means the occurrence of any of the following
events: (i) the Company shall not be the surviving entity in any
merger, consolidation or other reorganization (or survives only as a
subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company), (ii) the Company sells, leases or
exchanges all or substantially all of its assets to any other person
or entity (other than a wholly-owned subsidiary of the Company), (iii)
the Company is to be dissolved and liquidated, (iv) any person or
entity, including a "group" as contemplated by Section 13(d)(3) of the
1934 Act, acquires or gains ownership or control (including, without
limitation, power to vote) of more than 50% of the outstanding shares
of the Company's voting stock (based upon voting power), or (v) as a
result of or in connection with a contested election of directors, the
persons who were directors of the Company before such election shall
cease to constitute a majority of the Board.
(f) "Change of Control Value" shall mean (i) the per share price offered to
Stockholders of the Company in any merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the
price per share offered to Stockholders of the Company in any tender
offer or exchange offer whereby a Change of Control takes place, or
(iii) if the Change of Control occurs other than pursuant to a tender
or exchange offer, the Fair Market Value per share of the shares into
which Awards are exercisable, as determined by the Committee. In the
event that the consideration offered to Stockholders of the Company in
a Change of Control consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the portion of
the consideration offered which is other than cash.
B-1
(g) "Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations
under such section.
(h) "Committee" means the Compensation Committee of the Board which shall
be (i) constituted so as to permit the Plan to comply with Rule 16b-3
and (ii) comprised solely of two or more "outside directors," within
the meaning of section 162(m) of the Code and applicable interpretive
authority thereunder.
(i) "Company" means Range Resources Corporation, a Delaware corporation.
(j) "Consultant" means any person who is not an employee and who is
providing advisory or consulting services to the Company or any
Affiliate.
(k) "Director" means an individual elected to the Board by the Stockholders
of the Company or by the Board under applicable corporate law who is
serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.
(l) An "employee" means any person (including an officer or a Director) in
an employment relationship with the Company or any Affiliate.
(m) "Fair Market Value" means, as of any specified date, the mean of the
high and low sales prices of the Stock reported on the New York Stock
Exchange Composite Tape on that date, or if no prices are reported on
that date, on the last preceding date on which such prices of the Stock
are so reported. In the event Stock is not publicly traded at the time
a determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee
in such manner as it deems appropriate.
(n) "Holder" means an employee, Consultant or Director who has been granted
an Award.
(o) "Incentive Stock Option" means an incentive stock option within the
meaning of section 422 of the Code.
(p) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(q) "Option" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Stock and Options
that do not constitute Incentive Stock Options to purchase Stock.
(r) "Option Agreement" means a written agreement between the Company and a
Holder with respect to an Option.
(s) "Plan" means the Range Resources Corporation 1999 Stock Option Plan, as
amended from time to time.
(t) "Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934 Act, as
such may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or a similar function.
(u) "Spread" means, in the case of a Stock Appreciation Right, an amount
equal to the excess, if any, of the Fair Market Value of a share of
Stock on the date such right is exercised over the exercise price of
such Stock Appreciation Right.
(v) "Stock" means the common stock, par value $0.01 per share, of the
Company.
(w) "Stockholder" means a holder of Stock or other security of the Company,
and with respect to any matter requiring Stockholder approval, the term
"Stockholder" shall mean a holder of Stock or other Company security
entitled to vote on such matter.
(x) "Stock Appreciation Right" means an Award granted under Paragraph VIII
of the Plan.
(y) "Stock Appreciation Rights Agreement" means a written agreement between
the Company and a Holder with respect to a Stock Appreciation Right.
B-2
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided the Plan is approved by the Stockholders of the Company within twelve
months thereafter. Notwithstanding any provision in the Plan or in any Award
Agreement, no Option or Stock Appreciation Right granted on or after the
effective date of the Plan shall be exercisable prior to such Stockholder
approval. No further Awards may be granted under the Plan after the expiration
of ten years from the date of its adoption by the Board. The Plan shall remain
in effect until all Awards granted under the Plan have been satisfied or
expired.
IV. ADMINISTRATION
(a) Committee. The Plan shall be administered by the Committee.
(b) Powers. Subject to the express provisions of the Plan, the Committee
shall have sole authority, in its discretion, to determine which employees,
Consultants or Directors shall receive an Award, the time or times when such
Award shall be made, the type of Award, and the number of shares of Stock which
may be issued under each Option or Stock Appreciation Right. In making such
determinations the Committee may take into account the nature of the services
rendered by the respective employees, Consultants or Directors, their present
and potential contribution to the success of the Company and its Affiliates and
such other factors as the Committee in its discretion shall deem relevant.
(c) Additional Powers. The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective Award Agreements executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award Agreement in the manner
and to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Paragraph IV
shall be conclusive.
V. GRANT OF AWARDS;
SHARES SUBJECT TO THE PLAN
(a) Stock Grant and Award Limits. The Committee may from time to time grant
Awards to one or more employees, Consultants or Directors determined by it to be
eligible for participation in the Plan in accordance with the provisions of
Paragraph VI. Subject to adjustment in the same manner as provided in Paragraph
IX with respect to shares of Stock subject to Awards then outstanding, the
aggregate number of shares of Stock that may be issued under the Plan shall not
exceed 3,400,000 shares. Shares shall be deemed to have been issued under the
Plan only (i) to the extent actually issued and delivered pursuant to an Award,
or (ii) to the extent an Award is settled in cash. To the extent that an Award
lapses or the rights of its Holder terminate, any shares of Stock subject to
such Award shall again be available for the grant of an Award. Notwithstanding
any provision in the Plan to the contrary, the maximum number of shares of Stock
that may be subject to Awards granted to any one individual during any calendar
year may not exceed 250,000 shares of Stock (subject to adjustment in the same
manner as provided in Paragraph IX with respect to shares of Stock subject to
Awards then outstanding). The limitation set forth in the preceding sentence
shall be applied in a manner which will permit compensation generated under the
Plan to constitute "performance-based" compensation for purposes of section
162(m) of the Code, including, without limitation, counting against such maximum
number of shares, to the extent required under section 162(m) of the Code and
applicable interpretive authority thereunder, any shares subject to Awards that
are canceled or repriced.
(b) Stock Offered. The Stock to be offered pursuant to the grant of an
Award may, at the discretion of the Committee, be authorized but unissued Stock
or Stock previously issued and outstanding and reacquired by the Company.
B-3
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are
employees (including officers and Directors who are also employees) Consultants
or Directors. An Award may be granted on more than one occasion to the same
person, and, subject to the limitations set forth in the Plan, such Award may
include an Incentive Stock Option or an Option that is not an Incentive Stock
Option, a Stock Appreciation Right or any combination thereof.
VII. STOCK OPTIONS
(a) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant.
(b) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.
(c) Special Limitations on Incentive Stock Options. An Incentive Stock
Option may be granted only to an individual who is an employee of the Company or
any parent or subsidiary corporation (as defined in section 424 of the Code) at
the time the Option is granted. To the extent that the aggregate Fair Market
Value (determined at the time the respective Incentive Stock Option is granted)
of Stock with respect to which Incentive Stock Options granted after 1986 are
exercisable for the first time by an individual during any calendar year under
all incentive stock option plans of the Company and its parent and subsidiary
corporations exceeds $100,000, such Incentive Stock Options shall be treated as
Options which do not constitute Incentive Stock Options. The Committee shall
determine, in accordance with applicable provisions of the Code, Treasury
Regulations and other administrative pronouncements, which of a Holder's
Incentive Stock Options will not constitute Incentive Stock Options because of
such limitation and shall notify the Holder of such determination as soon as
practicable after such determination. No Incentive Stock Option shall be granted
to an individual if, at the time the Option is granted, such individual owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of its parent or subsidiary corporation, within the
meaning of section 422(b)(6) of the Code, unless (i) at the time such Option is
granted the option price is at least 110% of the Fair Market Value of the Stock
subject to the Option and (ii) such Option by its terms is not exercisable after
the expiration of five years from the date of grant. An Incentive Stock Option
shall not be transferable otherwise than by will or the laws of descent and
distribution, and shall be exercisable during the Holder's lifetime only by such
Holder or the Holder's guardian or legal representative. Notwithstanding any
provision in the Plan or in any Option Agreement, (1) no Incentive Stock Option
shall be granted after the expiration of 12 months from the date of the adoption
of the Plan by the Board unless the Plan has been approved by the Stockholders
of the Company within such 12-month period in a manner that satisfies the
requirements of section 422 of the Code and (2) any Option granted prior to the
expiration of such 12-month period that was intended to constitute an Incentive
Stock Option shall constitute an Option that is not an Incentive Stock Option if
the Plan has not been approved by the Stockholders of the Company within such
12-month period in a manner that satisfies the requirements of section 422 of
the Code.
(d) Option Agreement. Each Option shall be evidenced by an Option Agreement
in such form and containing such provisions not inconsistent with the provisions
of the Plan as the Committee from time to time shall approve, including, without
limitation, provisions to qualify an Incentive Stock Option under section 422 of
the Code. Each Option Agreement shall specify the effect of termination of
employment or membership on the Board, as applicable, on the exercisability of
the Option. An Option Agreement may provide for the payment of the option price,
in whole or in part, (i) in cash or (ii) by the delivery of a number of shares
of Stock (plus cash if necessary) having a Fair Market Value equal to such
option price. Moreover, an Option Agreement may provide for a "cashless
exercise" of the Option pursuant to procedures established by the Committee (as
the same may be amended from time to time). Such Option Agreement may also
include, without limitation, provisions relating to (1) subject to the
provisions hereof accelerating such vesting on a Change of Control, vesting of
Options, (2) tax matters (including provisions (A) permitting the delivery of
additional shares of Stock or the withholding of shares of Stock from those
acquired upon exercise to satisfy federal, state or local income tax withholding
requirements and (B) dealing with any other applicable employee wage withholding
requirements), and (3) any other matters not inconsistent with the terms and
provisions of this Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Option Agreements need not
be identical.
(e) Option Price and Payment. The price at which a share of Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but,
subject to adjustment as provided in Paragraph IX, such purchase price shall not
be less than the Fair Market Value of a share of Stock on the date such Option
is granted. The Option or portion thereof may be exercised by delivery of an
irrevocable notice of exercise to the Company in a manner specified by the
Committee. The purchase price of the Option or portion thereof shall be paid in
full in the manner prescribed by the Committee. Separate stock certificates
shall be issued by the Company for those shares acquired pursuant to the
exercise of an Incentive Stock
B-4
Option and for those shares acquired pursuant to the exercise of any Option that
does not constitute an Incentive Stock Option.
(f) Stockholder Rights and Privileges. The Holder shall be entitled to all
the privileges and rights of a Stockholder only with respect to such shares of
Stock as have been purchased under the Option and for which certificates of
stock have been registered in the Holder's name.
(g) Options and Rights in Substitution for Stock Options Granted by Other
Corporations. Options and Stock Appreciation Rights may be granted under the
Plan from time to time in substitution for stock options held by individuals
employed by corporations who become employees as a result of a merger or
consolidation of the employing corporation with the Company or any Affiliate, or
the acquisition by the Company or an Affiliate of the assets of the employing
corporation, or the acquisition by the Company or an Affiliate of stock of the
employing corporation with the result that such employing corporation becomes an
Affiliate.
VIII. STOCK APPRECIATION RIGHTS
(a) Stock Appreciation Rights. A Stock Appreciation Right is the right to
receive an amount equal to the Spread with respect to a share of Stock upon the
exercise of such Stock Appreciation Right. Stock Appreciation Rights may be
granted in connection with the grant of an Option, in which case the Option
Agreement will provide that exercise of Stock Appreciation Rights will result in
the surrender of the right to purchase the shares of Stock under the Option as
to which the Stock Appreciation Rights were exercised. Alternatively, Stock
Appreciation Rights may be granted independently of Options in which case each
Award of Stock Appreciation Rights shall be evidenced by a Stock Appreciation
Rights Agreement which shall contain such terms and conditions as may be
approved by the Committee. The terms and conditions of the respective Stock
Appreciation Rights Agreements need not be identical. The Spread with respect to
a Stock Appreciation Right may be payable either in cash, shares of Stock with a
Fair Market Value equal to the Spread or in a combination of cash and shares of
Stock. Each Stock Appreciation Rights Agreement shall specify the effect of
termination of employment or membership on the Board, as applicable, on the
exercisability of the Stock Appreciation Rights.
(b) Exercise Price. The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price (i) shall not be
less than the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is granted (or such greater exercise price as may be required
if such Stock Appreciation Right is granted in connection with an Incentive
Stock Option that must have an exercise price equal to 110% of the Fair Market
Value of the Stock on the date of grant pursuant to Paragraph VII(c)), and (ii)
shall be subject to adjustment as provided in Paragraph IX.
(c) Exercise Period. The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant.
(d) Limitations on Exercise of Stock Appreciation Right. A Stock
Appreciation Right shall be exercisable in whole or in such installments and at
such times as determined by the Committee. In the case of any Stock Appreciation
Right that is granted in connection with an Incentive Stock Option, such right
shall be exercisable only when the Fair Market Value of the Common Stock exceeds
the price specified therefor in the Option or the portion thereof to be
surrendered.
IX. RECAPITALIZATION OR REORGANIZATION
(a) The shares with respect to which Awards may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Award theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Award may thereafter be exercised or satisfied, as
applicable, (i) in the event of an increase in the number of outstanding shares
shall be proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price per
share shall be proportionately increased. Any fractional share resulting from
such adjustment shall be rounded up to the next whole share.
(b) If the Company recapitalizes, reclassifies its capital stock, or
otherwise changes its capital structure (a "recapitalization"), the number and
class of shares of Stock covered by an Award theretofore granted shall be
adjusted so that such Award shall thereafter cover the number and class of
shares of Stock and other securities to which the Holder would
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have been entitled pursuant to the terms of the recapitalization if, immediately
prior to such recapitalization, the Holder had been the holder of record of the
number of shares of Stock then covered by such Award.
(c) In the event of a Change of Control, and except as provided in any
Award Agreement, outstanding Awards shall immediately vest and become
exercisable or satisfiable, as applicable, and any Awards that are Options shall
continue to be exercisable for the remainder of the applicable Option term.
Notwithstanding the foregoing, the Committee, in its discretion, may determine
that upon the occurrence of a Change of Control, each Award outstanding
hereunder shall terminate within a specified number of days after notice to the
Holder, and such Holder shall receive, with respect to each share of Stock
subject to such Award, cash in an amount equal to the excess, if any, of the
Change of Control Value over the exercise price, if applicable, under such Award
for such share. The provisions contained in this paragraph shall not terminate
any rights of the Holder to further payments pursuant to any other agreement
with the Company following a Change of Control.
(d) In the event of changes in the outstanding Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
split-ups, split-offs, spin-offs, exchanges, a Change of Control or other
relevant changes in capitalization or distributions to the holders of Stock
occurring after the date of the grant of any Award and not otherwise provided
for by this Paragraph IX, any outstanding Awards and any Award Agreements shall
be subject to adjustment by the Committee at its discretion as to the number and
price of shares of Stock or other consideration subject to such Awards. In the
event of any such change in the outstanding Stock or distribution to the holders
of Stock, the aggregate number of shares available under the Plan (and the
aggregate number of shares that may be granted to any one individual) may be
appropriately adjusted by the Committee, whose determination shall be
conclusive.
(e) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the Stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's or any Affiliate's capital structure or its
business, any merger or consolidation of the Company or any Affiliate, any issue
of debt or equity securities ahead of or affecting Stock or the rights thereof,
the dissolution or liquidation of the Company or any Affiliate or any sale,
lease, exchange or other disposition of all or any part of its assets or
business or any other corporate act or proceeding.
(f) Any adjustment provided for in the above Subparagraphs shall be subject
to any required Stockholder action.
(g) Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefore, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Awards theretofore granted or the purchase price per
share, if applicable.
X. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares of Stock for which Awards have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided that no change in any Award theretofore granted may be
made that would materially impair the rights of the Holder without the consent
of the Holder and provided, further, that the Board may not, without approval of
the Stockholders holding a majority of the votes cast at a duly called meeting
of Stockholders, amend the Plan (a) to increase the maximum aggregate number of
shares of Stock that may be issued under the Plan, (b) to change the class of
individuals eligible to receive Awards under the Plan or (c) amend the
provisions of this Paragraph X.
XII. MISCELLANEOUS
(a) No Right to an Award. Neither the adoption of the Plan by the Company
nor any action of the Board or the Committee shall be deemed to give an employee
or Director any right to be granted an Award or any other rights hereunder
except as may be evidenced by an Option Agreement or Stock Appreciation Rights
Agreement duly executed on behalf of the Company, and then only to the extent
and on the terms and conditions expressly set forth therein. The Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of funds or assets to assure the payment
of any Award.
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(b) No Employment Rights Conferred. Nothing contained in the Plan shall (i)
confer upon any employee any right with respect to continuation of employment
with the Company or any Affiliate or (ii) interfere in any way with the right of
the Company or any Affiliate to terminate his or her employment at any time.
Nothing contained in the Plan shall confer on any Director any right with
respect to continuation of membership on the Board.
(c) Other Laws; Withholding. The Company shall not be obligated to issue
any Stock pursuant to any Award granted under the Plan at any time when the
shares covered by such Award have not been registered under the Securities Act
of 1933 and such other state and federal laws, rules or regulations as the
Company or the Committee deems applicable and, in the opinion of legal counsel
for the Company, there is no exemption from the registration requirements of
such laws, rules or regulations available for the issuance and sale of such
shares. No fractional shares of Stock shall be delivered. The Company shall have
the right to deduct in connection with all Awards any taxes required by law to
be withheld and to require any payments required to enable it to satisfy its
withholding obligations.
(d) No Restriction on Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company or any Affiliate from taking any corporate
action which is deemed by the Company or such Affiliate to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan. No employee, Director, beneficiary or
other person shall have any claim against the Company or any Affiliate as a
result of any such action.
(e) Restrictions on Transfer. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a "qualified domestic
relations order" as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with
the written consent of the Committee, which may be granted in the discretion of
the Committee in accordance with any applicable transfer restrictions under the
Securities Act of 1933.
(f) Rule 16b-3. It is intended that the Plan and any grant of an Award made
to a person subject to Section 16 of the 1934 Act meet the requirements of Rule
16b-3 so that any transaction under the Plan involving a grant, award, or other
acquisition from the Company or disposition to the Company is exempt from
Section 16(b) of the 1934 Act. If any provision of the Plan or any such Award
would result in any such transaction not being exempt from Section 16(b) of the
1934 Act, such provision or Award shall be construed or deemed amended so that
such transaction will be exempt from Section 16(b) of the 1934 Act.
(g) Facsimile Signature. Any Award Agreement or related document may be
executed by facsimile signature. If any officer who shall have signed or whose
facsimile signature shall have been placed upon any such Award Agreement or
related document shall have ceased to be such officer before the related Award
is granted by the Company, such Award may nevertheless be issued by the Company
with the same effect as if such person were such officer at the date of grant.
(h) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Delaware.
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Form of proxy card
FRONT:
------
PROXY PROXY
RANGE RESOURCES CORPORATION
Proxy Solicited on Behalf of the Board of Directors
For The Annual Meeting of Stockholders - May 23, 2002
The undersigned hereby appoints John H. Pinkerton and Rodney L. Waller, and each
of them, his/her true and lawful agents and proxies with full power of
substitution and revocation, to vote, as designated on the reverse side hereof,
all the Common Stock of Range Resources Corporation which the undersigned has
power to vote, with all powers which the undersigned possess if personally
present, at the Annual Meeting of Shareholders of Range Resources Corporation to
be held on May 23, 2002, and at any adjournments thereof.
1. To elect a board of eight Directors, each for a one-year term: The nominees
of the Board of Directors are:
Robert E. Aikman, Anthony V. Dub, V. Richard Eales, Thomas J. Edelman,
Allen Finkelson, Jonathan S. Linker, Alexander P. Lynch, and John H.
Pinkerton.
2. Approval of the Amendment to the Company's 1999 Stock Option Plan.
You are encouraged to specify your choice by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. Your shares cannot be voted unless
you sign and return this card.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side)
REVERSE SIDE:
-------------
RANGE RESOURCES CORPORATION
The Board of Directors recommends a vote FOR Proposals 1 and 2
1. Election of Directors For Withheld For All
(see reverse) All All Except _________________
2. Approval of an Amendment to the Company's For Against Abstain
1999 Stock Option Plan.
--- --- ---
Area reserved for
Name & Address
Date: 2002
------------------------,
Signature(s)
----------------------------------------
Signature(s)
----------------------------------------
A proxy that is properly completed and returned will be voted at the Meeting in
accordance with the instructions on the proxy. If you properly complete and
return a proxy but do not indicate any contrary voting instructions, your shares
will be voted "FOR" both Proposals listed in the Notice of Annual Meeting of
Stockholders and any other business as may properly come before the Meeting or
any adjournment or postponement thereof. If the Company proposes to adjourn the
Meeting, the proxy holders will vote all shares for which they have voting
authority in favor of adjournment. The Board of Directors knows of no matters
other than those stated in the Notice of Annual Meeting of Stockholders and
described in this Proxy Statement to be presented for consideration at the
Meeting. NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, administrator, trustee, or guardian, please
give full title as such.