def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o |
|
Preliminary Proxy Statement |
þ |
|
Definitive Proxy Statement |
o |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o |
|
Definitive Additional Materials |
o |
|
Soliciting Material Pursuant to §240.14a-12 |
DELTA PETROLEUM CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ |
|
No fee required. |
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
(1) |
|
Title of each class of securities to which transaction applies: |
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
|
|
|
|
|
|
|
|
|
|
|
(4) |
|
Proposed maximum aggregate value of transaction: |
|
|
|
|
|
|
|
|
|
|
|
(5) |
|
Total fee paid: |
|
|
|
|
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing. |
|
(1) |
|
Amount Previously Paid: |
|
|
|
|
|
|
|
|
|
|
|
(2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
|
|
|
|
|
(3) |
|
Filing Party: |
|
|
|
|
|
|
|
|
|
|
|
(4) |
|
Date Filed: |
|
|
|
|
|
|
|
|
|
TABLE OF CONTENTS
DELTA
PETROLEUM CORPORATION
370 SEVENTEENTH STREET,
SUITE 4300
DENVER, COLORADO 80202
(303) 293-9133
April 30,
2007
Dear Delta Stockholders:
On behalf of the Board of Directors, it is a pleasure to invite
you to attend the Annual Meeting of Stockholders to be held at
10:00 a.m. (MDT) on Wednesday, May 30, 2007, in
Denver, Colorado in the Georgetown Room of the Brown Palace
Hotel, 321 17th Street, Denver, Colorado 80202.
Business matters expected to be acted upon at the meeting are
described in detail in the accompanying Notice of the Annual
Meeting and Proxy Statement. Members of management will report
on our operations, followed by a period for questions and
discussion.
We hope you can attend the meeting. Regardless of the number of
shares you own, your vote is very important. Please ensure that
your shares will be represented at the meeting by signing and
returning your proxy now, even if you plan to attend the meeting.
Thank you for your continued support.
Sincerely,
Roger A. Parker
Chairman of the Board
and Chief Executive Officer
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 30, 2007
TO THE STOCKHOLDERS OF DELTA PETROLEUM CORPORATION:
As a stockholder of Delta Petroleum Corporation, a Delaware
corporation (Delta or the Company), you
are invited to be present in person or to be represented by
proxy at the Annual Meeting of Stockholders, to be held in the
Georgetown Room of the Brown Palace Hotel, 321 17th Street,
Denver, Colorado 80202, on Wednesday, May 30, 2007, at
10:00 a.m. (MDT) for the following purposes:
1. To elect eight directors;
2. To consider and vote upon the ratification of the
appointment of KPMG LLP as the independent registered public
accounting firm for Delta for the fiscal year ending
December 31, 2007; and
3. To transact such other business as may be properly
brought before the meeting and any adjournments thereof.
Stockholders of Delta of record at the close of business on
April 18, 2007 are entitled to vote at the meeting and all
adjournments thereof.
One-third of the outstanding shares of Common Stock of Delta
must be represented at the meeting to constitute a quorum.
Therefore, all stockholders are urged either to attend the
meeting or to be represented by proxy. If a quorum is not
present at the meeting, a vote for adjournment will be taken
among the stockholders present or represented by proxy. If a
majority of the stockholders present or represented by proxy
vote for adjournment, it is Deltas intention to adjourn
the meeting until a later date and to vote proxies received at
such adjourned meeting(s).
If you do not expect to attend the meeting in person, please
complete, sign, date and return the accompanying proxy card in
the enclosed business reply envelope. If you later find that you
can be present or for any other reason desire to revoke your
proxy, you may do so at any time before the voting.
By Order of the Board of Directors
Roger A. Parker
Chairman of the Board
and Chief Executive Officer
Denver, Colorado
April 30, 2007
DELTA
PETROLEUM CORPORATION
370 SEVENTEENTH STREET,
SUITE 4300
DENVER, COLORADO 80202
(303) 293-9133
PROXY
STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 30, 2007
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (our Board or
our Board of Directors) of Delta Petroleum
Corporation (us, our, we,
Delta or the Company) of proxies to be
voted at our Annual Meeting of Stockholders (the Annual
Meeting or the Meeting) to be held on
May 30, 2007, in the Georgetown Room of the Brown Palace
Hotel, 321 17th Street, Denver, Colorado 80202, at
10:00 a.m. (MDT), and at any adjournment thereof. Each
holder of record at the close of business on April 18, 2007
of shares of our common stock, par value $0.01 per share (the
Common Stock), will be entitled to one vote for each
share so held. As of April 18, 2007, there were
58,556,856 shares of Common Stock issued and outstanding.
Shares represented by properly executed proxy cards received by
us at or prior to the Annual Meeting will be voted according to
the instructions indicated on the proxy card. Unless contrary
instructions are given, the persons named on the proxy card
intend to vote the shares so represented for: (i) the
election of the nominees for directors, and (ii) the
ratification of the appointment of KPMG LLP as our independent
auditors for the fiscal year ending December 31, 2007.
The expense of soliciting proxies, including the cost of
preparing, assembling and mailing this proxy material to
stockholders, will be borne by Delta. It is anticipated that
solicitations of proxies for the meeting will be made only by
use of the mail; however, we may use the services of our
directors, officers and employees to solicit proxies personally
or by telephone, without additional salary or compensation to
them. Brokerage houses, custodians, nominees and fiduciaries
will be requested to forward the proxy soliciting materials to
the beneficial owners of our shares held of record by such
persons, and we will reimburse such persons for their reasonable
out-of-pocket
expenses incurred by them in the performance of that task.
As to any other business which may properly come before the
Meeting, the persons named on the proxy card will vote according
to their judgment. The enclosed proxy may be revoked prior to
the Meeting by written notice to our Secretary at 370
Seventeenth Street, Suite 4300, Denver, Colorado 80202, or
by written or oral notice to the Secretary at the Annual Meeting
prior to being voted. This Proxy Statement and the enclosed
proxy card are expected to be first sent to our stockholders on
or about April 30, 2007.
The presence at the Meeting, in person or by proxy, of the
holders of one-third of the shares of our Common Stock
outstanding as of the record date will constitute a quorum.
There must be a quorum for any action to be taken at the Meeting
(other than an adjournment or postponement of the Meeting). If
you submit a properly executed proxy card, even if you abstain
from voting, then your shares will be counted for purposes of
determining the presence of a quorum. If a broker indicates on a
proxy that it lacks discretionary authority as to certain shares
to vote on a particular matter, commonly referred to as
broker non-votes, those shares will still be counted
for purposes of determining the presence of a quorum at the
Meeting.
Votes cast in favor of and against proposed actions (whether in
person or by proxy) will be counted for us by our Secretary at
the Meeting, but this count may be at least partially based upon
information tabulated for us by our transfer agent or others. In
the election of directors, the eight candidates will be elected
by a plurality of affirmative votes. The affirmative vote of the
majority of the outstanding shares of Common Stock present in
person or by proxy will be required to approve the ratification
of the appointment of KPMG LLP as our independent auditors for
the fiscal year ending December 31, 2007.
A vote withheld for a nominee in the election of directors will
have the same effect as a vote against the nominee. For purposes
of determining whether any of the other proposals has received
the requisite vote, where a stockholder abstains from voting, it
will have the same effect as a vote against the proposal. If you
hold your shares beneficially in street name and do not provide
your broker or nominee with voting instructions, your shares
may
constitute broker non-votes. Generally, broker
non-votes occur on a matter when a broker is not permitted to
vote on that matter without instructions from the beneficial
owners and instructions are not given. In tabulating the voting
results for any of the proposals expected to be presented at the
Meeting, shares that constitute broker non-votes will not be
included in the vote totals, and therefore will have no effect
on the outcome of the vote of any of the proposals.
If a quorum is not present at the Meeting, a vote for
adjournment will be taken among the stockholders present or
represented by proxy. If a majority of the stockholders present
or represented by proxy vote for adjournment, it is our
intention to adjourn the Meeting until a later date and to vote
proxies received at such adjourned meeting(s).
PROPOSAL 1
ELECTION OF DIRECTORS
General
Our directors are elected annually by the stockholders to serve
until the next annual meeting of stockholders and until their
respective successors are duly elected and qualified, or until
the earlier of their death, resignation or retirement. Our
bylaws provide that the number of directors comprising the whole
Board shall from time to time be fixed and determined by
resolution adopted by our Board of Directors. Our Board has
established the size of the Board at nine directors. James P.
Van Blarcom resigned from our Board on March 23, 2007 due
to health problems and the resulting vacancy has not yet been
filled. This Board seat will remain vacant until the
Boards Nominating and Governance Committee has identified
a suitable candidate to fill the vacant Board seat. Our Board is
recommending that our eight current directors be reelected.
Each nominee consented to be named as a nominee in this proxy
statement, and we expect that each nominee will be able to serve
if elected. If any nominee becomes unavailable or unwilling to
accept his nomination for election for any reason, a substitute
nominee may be proposed by our Board and the shares represented
by proxy will be voted for any substitute nominee, unless the
Board otherwise reduces the number of directors. Proxies cannot
be voted for a greater number of persons than the number of
nominees named below.
Nominees
The following individuals are nominees to serve on our Board of
Directors:
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions
|
|
Period of Service as a Director
|
|
Roger A. Parker
|
|
|
45
|
|
|
Chairman of the Board and Chief
Executive Officer
|
|
May 1987 to Present
|
Kevin R. Collins
|
|
|
50
|
|
|
Director
|
|
March 2005 to Present
|
Jerrie F. Eckelberger
|
|
|
62
|
|
|
Director
|
|
September 1996 to Present
|
Aleron H. Larson, Jr.
|
|
|
61
|
|
|
Director
|
|
May 1987 to Present
|
Russell S. Lewis
|
|
|
52
|
|
|
Director
|
|
June 2002 to Present
|
Jordan R. Smith
|
|
|
72
|
|
|
Director
|
|
October 2004 to Present
|
Neal A. Stanley
|
|
|
59
|
|
|
Director
|
|
October 2004 to Present
|
James B. Wallace
|
|
|
78
|
|
|
Director
|
|
November 2001 to Present
|
The following is biographical information as to the business
experience of each of the nominees and our executive officers.
Roger A. Parker has been a director since May 1987 and
Chief Executive Officer since April 2002. He served as our
President from May 1987 until February 2006 when he resigned to
accommodate the appointment of John R. Wallace to that position.
He was named Chairman of the Board on July 1, 2005. Since
April 1, 2005, he has also served as Executive Vice
President and Director of DHS Drilling Company
(DHS). Mr. Parker also serves as President,
Chief Executive Officer and Director of Amber Resources Company
of Colorado (Amber Resources). He received a
Bachelor of Science in Mineral Land Management from the
University of Colorado in 1983. He is a
2
member of the Independent Petroleum Association of the Mountain
States (IPAMS). He also serves on other boards, including
Community Banks of Colorado.
Kevin R. Collins serves as interim Chief Executive
Officer and President of Evergreen Energy Inc. Prior to his
current position, Mr. Collins served as Executive Vice
President Chief Operating Officer until April 2007,
Executive Vice President Finance and Strategy from
September 2005 to September 2006, and acting Chief Financial
Officer from November 2005 until March 31, 2006.
Mr. Collins also serves as a director of Quest Midstream
Partners, L.P. From 1995 until 2004, Mr. Collins was an
executive officer of Evergreen Resources, Inc., serving as
Executive Vice President and Chief Financial Officer until
Evergreen Resources merged with Pioneer Natural Resources in
September 2004. Mr. Collins became a Certified Public
Accountant in 1983 and has over 13 years public
accounting experience. He has served as Vice President and a
board member of the Colorado Oil and Gas Association, President
of the Denver Chapter of the Institute of Management
Accountants, and board member and Chairman of the Finance
Committee of IPAMS. Mr. Collins received his B.S. degree in
Business Administration and Accounting from the University of
Arizona.
Jerrie F. Eckelberger is an investor, real estate
developer and attorney who has practiced law in the State of
Colorado since 1971. He graduated from Northwestern University
with a Bachelor of Arts degree in 1966 and received his Juris
Doctor degree in 1971 from the University of Colorado School of
Law. From 1972 to 1975, Mr. Eckelberger was a staff
attorney with the Eighteenth Judicial District Attorneys
Office in Colorado. From 1975 to the present,
Mr. Eckelberger has been engaged in the private practice of
law in the Denver area. Mr. Eckelberger previously served
as an officer, director and corporate counsel for Roxborough
Development Corporation. Since March 1996, Mr. Eckelberger
has engaged in the investment and development of Colorado real
estate through several private companies in which he is a
principal.
Aleron H. Larson, Jr. has operated as an independent
in the oil and gas industry individually and through public and
private ventures since 1978. Mr. Larson served as Chairman
of the Board, Secretary and director of Delta, as well as Amber
Resources, until his retirement on July 1, 2005, at which
time he resigned as Chairman of the Board and as an executive
officer of the Company. He ceased to be an officer or director
of Amber Resources on January 3, 2006. Mr. Larson
practiced law in Breckenridge, Colorado from 1971 until 1974.
During this time he was a member of a law firm,
Larson & Batchellor, engaged primarily in real estate
law, land use litigation, land planning and municipal law. In
1974, he formed Larson & Larson, P.C., and was
engaged primarily in areas of law relating to securities, real
estate, and oil and gas until 1978. Mr. Larson received a
Bachelor of Arts degree in Business Administration from the
University of Texas at El Paso in 1967 and a Juris Doctor
degree from the University of Colorado in 1970.
Russell S. Lewis is President and CEO of Lewis Capital,
LLC, located in Harrisburg, Pennsylvania, which makes private
investments in, and provides general business and M&A
consulting services to, growth-oriented firms. He has been a
member of our Board since June 2002. From February 2002 until
January 2005, Mr. Lewis served as Executive Vice President
and General Manager of VeriSign Name and Directory Services
(VRSN) Group, which managed a significant portion of the
internets critical .com and .net addressing
infrastructure. For the preceding 15 years, Mr. Lewis
managed a wireless transportation systems integration company.
Prior to that time, Mr. Lewis managed an oil and gas
exploration subsidiary of a publicly traded utility and was Vice
President of EF Hutton in its Municipal Finance group.
Mr. Lewis also served on the Board of Directors of Castle
Energy Corporation prior to its merger with Delta in April 2006,
and Advanced Aerations Systems, a privately held firm engaged in
subsurface soil treatment. Mr. Lewis has a BA degree in
Economics from Haverford College and an MBA from the Harvard
School of Business.
Jordan R. Smith is President of Ramshorn Investments,
Inc., a wholly owned subsidiary of Nabors Drilling USA LP that
is located in Houston, Texas, where he is responsible for
drilling and development projects in a number of producing
basins in the United States. He has served in such capacity for
more than the past five years. Mr. Smith has served on the
Board of the University of Wyoming Foundation and the Board of
the Domestic Petroleum Council, and is also Founder and Chairman
of the American Junior Golf Association. Mr. Smith received
Bachelors and Masters degrees in geology from the University of
Wyoming in 1956 and 1957, respectively.
Neal A. Stanley founded Teton Oil & Gas
Corporation in Denver, Colorado and has served as its President
and sole stockholder since 1991. From 1996 to June 2003, he was
Senior Vice President Western Region for Forest
3
Oil Corporation, Denver, Colorado. Since December 2005,
Mr. Stanley has served as a member of the Board of
Directors and Compensation Committee for Calgary-based Pure
Energy Services Ltd., which is listed on the Toronto Stock
Exchange under the symbol PSV. Mr. Stanley has thirty-two
years of experience in the oil and gas business. Since 1995, he
has been a member of the Executive Committee of the Independent
Petroleum Association of Mountain States, and served as its
President from 1999 to 2001. Mr. Stanley received a B.S.
degree in Mechanical Engineering from the University of Oklahoma
in 1975.
James B. Wallace has been involved in the oil and gas
business for over 40 years and has been a partner of
Brownlie, Wallace, Armstrong and Bander Exploration in Denver,
Colorado since 1992. From 1980 to 1992, he was Chairman of the
Board and Chief Executive Officer of BWAB Incorporated.
Mr. Wallace received a B.S. degree in Business
Administration from the University of Southern California in
1951. James B. Wallace is the father of John R. Wallace, the
President and Chief Operating Officer of Delta.
John R. Wallace, 47, President and Chief Operating
Officer, joined Delta in October 2003 as Executive Vice
President of Operations and was appointed President in February
2006. Since April 1, 2005, he has also served as Executive
Vice President and Director of DHS. Mr. Wallace was Vice
President of Exploration and Acquisitions for United States
Exploration, Inc. (UXP), a Denver-based
publicly-held oil and gas exploration company, from May 1998 to
October 2003. Prior to UXP, Mr. Wallace served as president
of various privately held oil and gas companies engaged in
producing property acquisitions and exploration ventures. He
received a Bachelor of Science in Geology from Montana State
University in 1981. He is a member of the American Association
of Petroleum Geologists and the Independent Producers
Association of the Mountain States. Mr. Wallace is the son
of James B. Wallace, a Director of the Company.
Kevin K. Nanke, 42, Treasurer and Chief Financial
Officer, joined Delta in April 1995 as our Controller and has
served as the Treasurer and Chief Financial Officer of Delta
since 1999. Since April 1, 2005 he has also served as Chief
Financial Officer, Treasurer and Director of DHS. Since 1989, he
has been involved in public and private accounting with the oil
and gas industry. Mr. Nanke received a Bachelor of Arts in
Accounting from the University of Northern Iowa in 1989. Prior
to working with us, he was employed by KPMG LLP. He is a member
of the Colorado Society of CPAs and the Council of
Petroleum Accountants Society.
Stanley F. (Ted) Freedman, 58, has served as
Executive Vice President, General Counsel and Secretary since
January 1, 2006 and has served in those same capacities for
DHS since that same date. He also serves as Executive Vice
President and Secretary of Amber Resources. He graduated from
the University of Wyoming with a Bachelor of Arts degree in 1970
and a Juris Doctor degree in 1975. From 1975 to 1978,
Mr. Freedman was a staff attorney with the United States
Securities and Exchange Commission. From 1978 to
December 31, 2005, he was engaged in the private practice
of law, and was a stockholder and director of the law firm of
Krys Boyle, P.C. in Denver, Colorado.
Required
Vote
The eight persons receiving the highest number of
FOR votes from stockholders in the
election of directors at the Annual Meeting will be elected.
Recommendation
of the Board of Directors
Our Board of Directors recommends that you vote FOR the
re-election of each of the nominees for director to serve on our
Board of Directors.
4
CORPORATE
GOVERNANCE
Board
Membership and Director Independence
Our Board of Directors has determined that each of Kevin R.
Collins, Jerrie F. Eckelberger, Russell S. Lewis, Jordan R.
Smith and Neal A. Stanley qualifies as an independent director
under rules promulgated by the SEC and The
NASDAQ®
Stock Market listing standards. During the fiscal year ended
December 31, 2006, our Board of Directors met on twelve
occasions either in person or by telephone conference call and
acted by written consent on two occasions. Each of our current
directors attended at least 75% of the aggregate total of
meetings of the Board of Directors and committees on which he
served.
Directors standing for election are expected to attend the
Annual Meeting of Stockholders. A majority of the directors
standing for election at the Annual Meeting of Stockholders held
on October 17, 2006 attended the meeting.
Committees
of the Board of Directors
Our Board of Directors has established an audit committee, a
compensation committee and a nominating and governance
committee. The full text of all of the charters of the Board
committees is available on the Companys website at
www.deltapetro.com. The Board has determined that each of
the directors who serve on these committees is
independent under The
NASDAQ®
Stock Market listing standards. The directors who serve on each
of these committees are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominating and
|
|
|
|
|
|
|
Compensation
|
|
|
Governance
|
|
Name of Director
|
|
Audit Committee
|
|
|
Committee
|
|
|
Committee
|
|
|
Kevin R. Collins
|
|
|
Chairman
|
|
|
|
Member
|
|
|
|
Member
|
|
Jerrie F. Eckelberger
|
|
|
Member
|
|
|
|
Chairman
|
|
|
|
Member
|
|
Russell S. Lewis
|
|
|
Member
|
|
|
|
Member
|
|
|
|
Member
|
|
Jordan R. Smith
|
|
|
Member
|
|
|
|
Member
|
|
|
|
Chairman
|
|
Neal A. Stanley
|
|
|
Member
|
|
|
|
Member
|
|
|
|
Member
|
|
Audit Committee. The audit committee oversees
and monitors our independent audit process, and assists the
Board of Directors in fulfilling its responsibilities with
respect to matters involving the accounting, financial reporting
and internal control functions of the Company and its
subsidiaries. It is also charged with the responsibility for
reviewing all related party transactions for potential conflicts
of interest. A discussion of the role of the audit committee is
provided under Audit Committee Report.
The Board also has determined that each of Messrs. Lewis
and Collins is an audit committee financial expert
as defined by rules adopted by the SEC.
The audit committee met four times in fiscal year 2006.
Compensation Committee. The compensation
committee reviews the performance of our executives, sets
compensation and compensation-related policies and makes
recommendations to the Board of Directors in the area of
executive compensation and policies on equity incentives. The
specific nature of the compensation committees roles and
responsibilities as they relate to executive officers is set
forth under Compensation Discussion and Analysis.
The compensation committee met twelve times in fiscal year 2006.
Nominating and Governance Committee. The
nominating and governance committee makes recommendations to the
Board of Directors of the persons who shall be nominated for
election as directors. The committee has not established any
minimum qualifications for persons to be considered for
nomination, but will be guided by the following criteria: that
the individual be of the highest character and integrity; be
free of any conflict of interest that would violate any
applicable law or regulation or interfere with proper
performance of the responsibilities of a director; possess
substantial and significant experience that would be of
particular importance to Delta in the
5
performance of the duties of a director; have sufficient time
available to devote to the affairs of Delta; and have a desire
to represent the balanced best interests of the stockholders as
a whole.
The nominating and governance committee did not meet in fiscal
year 2006, but has met one time in fiscal year 2007.
Stockholder
Nominations of Directors
Stockholders who wish to recommend a director candidate to serve
on the Board of Directors to the nominating and governance
committee should submit a letter addressed to the chairperson of
the nominating and governance committee no later than
120 days prior to the date of the next Annual Meeting of
Stockholders. The notice shall contain the following information:
|
|
|
|
|
The name of the nominating stockholder(s) and the address, phone
number and
e-mail
address at which the nominating stockholder(s) can be contacted.
|
|
|
|
Evidence of the number of shares of Deltas Common Stock
held by the nominating stockholder(s), a statement of how long
the nominating stockholder(s) has held those shares, and a
statement that the nominating stockholder(s) will continue to
hold those shares at least through our next annual meeting of
stockholders.
|
|
|
|
The candidates full name, together with the address, phone
number and
e-mail
address at which the candidate can be contacted.
|
|
|
|
A statement of the candidates qualifications and
experiences and any other qualities that the nominating
stockholder(s) believes that the candidate would bring to the
Board.
|
|
|
|
A description of any relationship and all arrangements or
understandings, if any, between the nominating stockholder(s)
and the candidate and any other person or persons with respect
to the candidates proposed service on the Board.
|
|
|
|
Information that would bear on the independence of the
recommended candidate (such as affiliated transactions or
relationships).
|
|
|
|
Any proceedings adverse to Delta, including legal proceedings,
to which the recommended candidate or an associate is a party.
|
|
|
|
Information regarding whether the nominating stockholder(s) or
recommended candidate has plans to submit proposals for Delta or
seeks to address any personal interest involving Delta.
|
|
|
|
The candidates resume, which must include at a minimum a
detailed description of the candidates business,
professional or other appropriate experience for at least the
last ten (10) years, a list of other boards of directors on
which the candidate currently serves or on which he or she
served in the last ten (10) years, and undergraduate and
post-graduate educational information.
|
|
|
|
A written statement, signed by the candidate, agreeing that if
he or she is selected by the Committee and the Board, he or she
will (i) be a nominee for election to the Board,
(ii) provide all information necessary for us to include in
our proxy statement under applicable SEC or Nasdaq rules, and
(iii) serve as a director if he or she is elected by
stockholders.
|
|
|
|
Any additional information that the nominating stockholder(s)
believes is relevant to the Committees consideration of
the candidate.
|
A nominee for director should be a person of integrity and be
committed to devoting the time and attention necessary to
fulfill his or her duties to Delta. The nominating and
governance committee will evaluate the independence of directors
and potential directors, as well as their business experience,
understanding of and experience in the energy industry, personal
skills, or specialized skills or experience, relative to those
of the then-current directors. Diversity of background and
experience, including diversity of race, ethnicity,
international background, gender and age, are also important
factors in evaluating candidates for Board membership. The
Committee will also consider issues involving possible conflicts
of interest of directors or potential directors, the
6
results of interviews of selected candidates by members of the
Committee and the Board, and the totality of the circumstances.
Code of
Ethics
Our Board of Directors adopted a Code of Business Conduct and
Ethics in November 2003 (amended in October 2004 and
January 1, 2007), which applies to all of our executive
officers, directors and employees. A copy of the Code of
Business Conduct and Ethics is available on our website at
www.deltapetro.com or by writing to our Secretary at 370
Seventeenth Street, Suite 4300, Denver, Colorado 80202.
Certain
Relationships and Related Transactions
Transactions
with Related Persons
On September 29, 2005 we acquired an undivided 50% working
interest in approximately 145,000 net undeveloped acres in
the Columbia River Basin in Washington and purchased an interest
in undeveloped acreage in the Piceance Basin in Colorado from
Savant Resources, LLC (Savant) for an aggregate
purchase price of $85.0 million in cash. James Wallace, one
of our directors, owns approximately a 1.7% interest in Savant,
and also serves as a director of Savant. The majority of the
acquired acreage in the Columbia River Basin consolidates our
current leasehold position.
During fiscal 2001 and 2000, Mr. Larson and Mr. Parker
guaranteed certain borrowings which have subsequently been paid
in full. As consideration for the guarantee of the
Companys indebtedness, each of Mr. Larson and Mr. Parker
was assigned a 1% overriding royalty interest (ORRI)
in the properties acquired with the proceeds of the borrowings.
Each of Mr. Larson and Mr. Parker earned approximately
$142,000, $58,000, $100,000, and $66,000 for their respective 1%
ORRI during the year ended December 31, 2006, six months
ended December 31, 2005 and fiscal years 2005 and 2004,
respectively.
At December 31, 2006, the Company had $30,000 of
receivables from certain of our officers. These amounts include
drilling costs and lease operating expense on wells owned by the
related parties and operated by the Company.
Review,
Approval or Ratification of Transactions with Related
Persons
The Board of Directors has recognized that transactions between
the Company and certain related persons present a heightened
risk of conflicts of interest. In order to ensure that the
Company acts in the best interest of its stockholders, the Board
has delegated the review and approval of related party
transactions to the audit committee. After its review, the audit
committee will only approve or ratify transactions that are fair
to the Company and not inconsistent with the best interests of
the Company and its stockholders.
7
Stockholder
Communications with the Board of Directors
Stockholders wishing to contact the Board of Directors or
specified members or committees of the Board should send
correspondence to the Secretary, Delta Petroleum Corporation,
370 Seventeenth Street, Suite 4300, Denver, Colorado 80202.
All communications so received from stockholders of the Company
will be forwarded to the members of the Board of Directors, or
to a specific director or committee if so designated by the
stockholder. A stockholder who wishes to communicate with a
specific director or committee should send instructions asking
that the material be forwarded to the director or to the
appropriate committee chairman. All stockholders are also
encouraged to communicate directly with both officers and
directors regarding issues affecting the Company at the Annual
Meeting of Stockholders.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
STOCKHOLDERS AND MANAGEMENT
Security
Ownership of Certain Beneficial Owners
The following table presents information concerning persons
known by us to own beneficially 5% or more of our issued and
outstanding Common Stock as of April 18, 2007.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
|
|
Nature of
|
|
|
|
|
Name and Address
|
|
Beneficial
|
|
|
Percent of
|
|
of Beneficial Owner
|
|
Ownership
|
|
|
Class(1)
|
|
|
Sprott Asset Management, Inc.(2)
|
|
|
8,102,976
|
|
|
|
13.8
|
%
|
Suite 2700 South Tower
Royal Bank Plaza
Toronto, Ontario M5J 2J1
Canada
|
|
|
|
|
|
|
|
|
Capital Group International,
Inc.(3)
|
|
|
6,791,520
|
|
|
|
11.6
|
%
|
111100 Santa Monica Blvd.
Los Angeles, CA 90025
|
|
|
|
|
|
|
|
|
Capital Research and Management
Company and SMALLCAP World Fund, Inc.(4)
|
|
|
5,149,000
|
|
|
|
8.8
|
%
|
333 South Hope Street
Los Angeles, CA 90071
|
|
|
|
|
|
|
|
|
Touradji Capital Management, LP(5)
|
|
|
4,363,930
|
|
|
|
7.5
|
%
|
101 Park Avenue,
48th Floor
New York, NY 10178
|
|
|
|
|
|
|
|
|
Steinberg Asset Management, LLC(6)
|
|
|
3,980,065
|
|
|
|
6.8
|
%
|
12 East
49th Street,
Suite 1202
New York, NY 10017
|
|
|
|
|
|
|
|
|
GLG North American Opportunity
Fund(7)
|
|
|
3,200,000
|
|
|
|
5.5
|
%
|
1 Curzon Street
London W1J 5HB
England
|
|
|
|
|
|
|
|
|
Vega Petroleum Limited(8)
|
|
|
3,007,671
|
|
|
|
5.1
|
%
|
12 York Gate
London, NW1 4QS
United Kingdom
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
We have authorized 300,000,000 shares of $.01 par
value Common Stock, of which 58,556,856 shares were issued
and outstanding as of April 18, 2007. We also have
authorized 3,000,000 shares of $.01 par value
preferred stock, of which no shares are outstanding. |
8
|
|
|
(2) |
|
This disclosure is based on a Schedule 13G filed with the
SEC on January 10, 2006. At the time of filing, the
reporting person reported having sole voting and dispositive
power over 8,102,976 shares and shared voting and
dispositive power over 451,300 shares. The
Schedule 13G discloses that reporting person is the
beneficial owner of 535,600 shares. |
|
(3) |
|
This disclosure is based on an amendment to Schedule 13G
filed with the SEC on February 12, 2007. The
Schedule 13G/A was filed on behalf of Capital Group
International, Inc. and Capital Guardian Trust Company. The
Schedule 13G/A discloses that Capital Group International,
Inc. has sole voting power over 5,112,420 shares and sole
dispositive power over 6,791,520 shares; however, it
disclaims beneficial ownership of such shares. At the time of
filing, Capital Guardian Trust Company reported being a
registered investment advisor that has sole voting power over
4,824,420 shares and sole dispositive power over
6,503,520 shares; however, it also disclaims beneficial
ownership of such shares. |
|
(4) |
|
This disclosure is based on an amendment to Schedule 13G
filed with the SEC on February 12, 2007. The
Schedule 13G/A was filed on behalf of Capital Research and
Management Company and SMALLCAP World Fund, Inc. At the time of
filing, Capital Research and Management Company reported being a
registered investment advisor that has sole voting and
dispositive power over 5,149,000 shares; however, it
disclaims beneficial ownership of such shares. SMALLCAP World
Fund, Inc. reported that it beneficially owned
2,829,000 shares. |
|
(5) |
|
This disclosure is based on an amendment to Schedule 13G
filed with the SEC on February 14, 2007. The
Schedule 13G/A was filed on behalf of Touradji Capital
Management, LP, Touradji Global Resources Master Fund, Ltd. and
Paul Touradji. At the time of filing, Touradji Capital
Management, LP reported being a registered investment advisor
that has shared voting and dispositive power over
4,363,930 shares. Paul Touradji also reported having shared
voting and dispositive power over 4,363,930 shares and
Touradji Global Resources Master Fund, Ltd. reported having
shared voting and dispositive power over 3,499,145 shares. |
|
(6) |
|
This disclosure is based on an amendment to Schedule 13G
filed with the SEC on February 8, 2007. The
Schedule 13G/A was filed on behalf of Steinberg Asset
Management LLC, Michael A. Steinberg & Company, Inc.
and Michael A. Steinberg. At the time of filing, Steinberg Asset
Management LLC reported being a registered investment advisor
that has sole voting power over 3,567,865 shares and sole
dispositive power over 3,850,915 shares. Michael A.
Steinberg & Company, Inc. reported having sole
dispositive power over 56,000 shares and Michael A.
Steinberg reported having sole voting and dispositive power over
73,150 shares. The Schedule 13G/A reported that the
reporting persons beneficially owned 3,980,065 shares. |
|
(7) |
|
This disclosure is based on a Schedule 13G filed with the
SEC on August 8, 2006. The Schedule 13G discloses that
the reporting person has shared voting and dispositive power
over 1,500,000 shares and options to purchase
1,700,000 shares. |
|
(8) |
|
This disclosure is based on a Schedule 13G filed with the
SEC on March 27, 2007. At the time of filing, the reporting
person reported having sole voting and dispositive power over
3,007,671 shares; however it disclaims beneficial ownership
of such shares, except to the extent of any pecuniary interest
therefrom and 200,000 shares, which it holds for itself. |
9
Security
Ownership of Management
The following table contains information about the beneficial
ownership (unless otherwise indicated) of our Common Stock as of
April 18, 2007 by:
|
|
|
|
|
each of our directors, including the Boards nominees for
re-election;
|
|
|
|
each executive officer named in the Summary Compensation
Table; and
|
|
|
|
all directors and current executive officers as a group.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Amount and Nature
|
|
|
Percent of
|
|
of Beneficial Owner
|
|
of Beneficial Ownership(1)
|
|
|
Class(2)
|
|
|
Roger A. Parker
|
|
|
1,879,552
|
(3)
|
|
|
3.21
|
%
|
Kevin K. Nanke
|
|
|
731,181
|
(4)
|
|
|
1.24
|
%
|
John R. Wallace
|
|
|
611,263
|
(5)
|
|
|
1.04
|
%
|
Aleron H. Larson, Jr.
|
|
|
585,500
|
(6)
|
|
|
*
|
|
Stanley F. Freedman
|
|
|
286,255
|
(7)
|
|
|
*
|
|
Russell S. Lewis
|
|
|
140,159
|
(8)
|
|
|
*
|
|
James B. Wallace
|
|
|
100,500
|
(9)
|
|
|
*
|
|
Jerrie F. Eckelberger
|
|
|
49,000
|
(10)
|
|
|
*
|
|
Neal A. Stanley
|
|
|
31,000
|
(11)
|
|
|
*
|
|
Jordan R. Smith
|
|
|
28,000
|
(12)
|
|
|
*
|
|
Kevin R. Collins
|
|
|
12,000
|
(13)
|
|
|
*
|
|
All executive officers and
directors as a Group (11 persons)
|
|
|
4,454,410
|
(14)
|
|
|
7.44
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than one percent (1.0%)
of the outstanding shares of our Common Stock. |
|
(1) |
|
If a stockholder holds options or other securities that are
exercisable or otherwise convertible into our Common Stock
within 60 days of April 18, 2007, we treat the Common
Stock underlying those securities as owned by that stockholder,
and as outstanding shares when we calculate the
stockholders percentage ownership of our Common Stock.
However, we do not consider that Common Stock to be outstanding
when we calculate the percentage ownership of any other
stockholder. |
|
(2) |
|
We have authorized 300,000,000 shares of $.01 par
value Common Stock, of which 58,556,856 shares were issued
and outstanding as of April 18, 2007. We also have
authorized 3,000,000 shares of $.01 par value
preferred stock, of which no shares are outstanding. |
|
(3) |
|
Includes 1,225,252 shares of Common Stock owned directly,
54,300 unvested restricted shares and 600,000 unearned
performance shares owned by Mr. Parker. Also includes
options to purchase 175,000 shares of Common Stock that are
currently exercisable or exercisable within 60 days of
April 18, 2007. |
|
(4) |
|
Consists of 51,525 shares of Common Stock owned directly,
27,156 unvested restricted shares and 240,000 unearned
performance shares owned by Mr. Nanke. Also includes
options to purchase 412,500 shares of Common Stock that are
currently exercisable or exercisable within 60 days of
April 18, 2007. |
|
(5) |
|
Includes 6,549 shares of Common Stock owned directly,
27,514 unvested restricted shares and 420,000 unearned
performance shares owned by Mr. John Wallace. Also includes
options to purchase 150,000 shares of Common Stock that are
currently exercisable or exercisable within 60 days of
April 18, 2007. In addition, Mr. Wallace owns an
economic interest in 7,200 shares of Common Stock relating
to his ownership interest in a family trust. |
|
(6) |
|
Consists of 11,000 shares of Common Stock owned by
Mr. Larson directly. Also includes options to purchase
570,000 shares of Common Stock that are currently
exercisable or exercisable within 60 days of April 18,
2007. Also includes 4,500 shares held by his daughter. |
|
(7) |
|
Includes 3,100 shares of Common Stock owned directly,
43,155 unvested restricted shares and 240,000 unearned
performance shares owned by Mr. Freedman. |
10
|
|
|
(8) |
|
Includes 86,159 shares of Common Stock owned directly by
Mr. Russell S. Lewis and options to purchase
54,000 shares of Common Stock that are currently
exercisable or exercisable within 60 days of April 18,
2007. |
|
(9) |
|
Includes 44,000 shares of Common Stock owned directly by
Mr. James B. Wallace and options to purchase
56,500 shares of Common Stock that are currently
exercisable or exercisable within 60 days of April 18,
2007. |
|
(10) |
|
Includes 14,000 shares of Common Stock owned directly by
Mr. Jerrie F. Eckelberger and options to purchase
34,000 shares of Common Stock that are currently
exercisable or exercisable within 60 days of April 18,
2007. Also includes 1,000 shares held by his children. |
|
(11) |
|
Includes 17,000 shares of Common Stock owned directly by
Mr. Stanley and options to purchase 14,000 shares of
Common Stock that are currently exercisable or exercisable
within 60 days of April 18, 2007. |
|
(12) |
|
Includes 14,000 shares of Common Stock owned directly by
Mr. Smith and options to purchase 14,000 shares of
Common Stock that are currently exercisable or exercisable
within 60 days of April 18, 2007. |
|
(13) |
|
Includes 12,000 shares of Common Stock owned directly by
Mr. Collins. |
|
(14) |
|
Includes all warrants, options and shares referenced in
footnotes (3), (4), (5), (6), (7), (8), (9), (10) (11)
(12) and (13) above as if all warrants and options had
been exercised and as if all resulting shares were voted as a
group. |
11
COMPLIANCE
WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers, directors and persons
who beneficially own more than ten percent (10%) of a registered
class of our equity securities, to file initial reports of
securities ownership of Delta and reports of changes in
ownership of equity securities of Delta with the Securities and
Exchange Commission (SEC). Such persons also are
required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file.
To our knowledge, during the fiscal year ended December 31,
2006, our officers and directors complied with all applicable
Section 16(a) filing requirements. These statements are
based solely on a review of the copies of such reports furnished
to us by our officers and directors and their written
representations that such reports accurately reflect all
reportable transactions.
PLAN
INFORMATION
We maintain the following equity-based compensation plans: 1993
Incentive Plan, as amended, 2001 Incentive Plan, 2002 Incentive
Plan, 2004 Incentive Plan, as amended, 2006 New-Hire Equity
Incentive Plan and 2007 Performance and Equity Incentive Plan.
Our stockholders have approved each of these plans.
The following table sets forth for our equity compensation plans
in the aggregate, the number of shares of our Common Stock
subject to outstanding options and rights under these plans, the
weighted-average exercise price of outstanding options, and the
number of shares remaining available for future award grants
under these plans as of December 31, 2006 (in thousands,
except exercise price data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available
|
|
|
|
Number of Securities
|
|
|
Weighted-Average
|
|
|
for Issuance Under
|
|
|
|
to be Issued Upon
|
|
|
Exercise Price of
|
|
|
Equity Compensation
|
|
|
|
Exercise of Outstanding
|
|
|
Outstanding
|
|
|
Plans (Excluding
|
|
|
|
Options, Warrants and
|
|
|
Options, Warrants
|
|
|
Securities Reflected
|
|
|
|
Rights
|
|
|
and Rights
|
|
|
in Column (a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved
by security holders
|
|
|
2,359,776
|
(1)
|
|
$
|
8.69
|
|
|
|
219,250(2
|
)
|
Equity compensation plans not
approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,359,776
|
|
|
|
|
|
|
|
219,250
|
|
|
|
|
(1) |
|
This amount consists of the number of options then outstanding
under each of the plans, except for our 2007 Performance and
Equity Incentive Plan, as it had not been approved as of
December 31, 2006. |
|
(2) |
|
Of the aggregate number of shares that remained available for
future issuance, 73,399 shares were available for issuance
under the 2004 Incentive Plan and 141,851 shares were
available for issuance under the 2006 New Hire Equity Incentive
Plan. This amount does not include the number of securities
remaining available for issuance under our 2007 Performance and
Equity Incentive Plan, as it had not been approved as of
December 31, 2006. |
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview
The following Compensation Discussion and Analysis describes the
material elements of compensation for the named executive
officers identified in the Summary Compensation Table below. As
more fully described below, the compensation committee of the
Board of Directors reviews and recommends to the full Board of
Directors the total direct compensation programs for our
executive officers, including the named executive officers. Our
chief executive officer, Roger A. Parker, reviews the base
salary, annual bonus and long-term compensation levels for the
other named executive officers. The entire Board of Directors
remains responsible for significant changes to or adoption of
new employee benefit plans.
12
Compensation
Philosophy
Deltas compensation philosophy is to encourage growth in
our oil and natural gas reserves and production, growth in cash
flow and profitability, and to enhance stockholder value through
the creation and maintenance of compensation opportunities that
attract and retain highly qualified executive officers. To
achieve these goals, the compensation committee believes that
the compensation of executive officers should reflect our high
growth and entrepreneurial environment, while ensuring fairness
among the executive management team by recognizing the
contributions each individual executive makes to our success.
The compensation committee believes compensation should include
the following components:
|
|
|
|
|
a base salary at a level equal to the approximate
75th percentile
of a peer group of other oil and natural gas exploration and
production enterprises similar to Delta;
|
|
|
|
annual incentive compensation to reward achievement of Company
objectives, individual responsibility and productivity, high
quality work and impact on our results, including reserve
growth, performance and profitability; and
|
|
|
|
long-term incentive compensation in the form of stock-based
awards.
|
The compensation committee periodically reviews data about the
compensation of executives in the oil and gas industry. Based on
this review, we believe that the elements of our executive
compensation program are comparable to those offered by our
industry competitors.
Outside
Advisor
The compensation committee has retained Effective Compensation
Incorporated, or ECI, as an outside advisor to review our
executive compensation program and broad-based equity
compensation practices and assist in ongoing development of our
executive compensation philosophy. The compensation committee
developed a competitive peer group of oil and gas exploration
and production companies of generally similar revenue and market
capitalization to which to compare compensation programs, and
ECI performed analyses of competitive performance and
compensation levels for the peer group companies. Our current
peer group companies are as follows:
|
|
|
Berry Petroleum Company
Bill Barrett Corporation
Brigham Exploration Company
Cabot Oil and Gas Corp.
Cimarex Energy Co.
|
|
Denbury Resources Inc.
Edge Petroleum Corp.
Range Resources Corporation
St. Mary Land & Exploration Company
Whiting Petroleum
|
Elements
of Deltas Compensation Program
The compensation program for Deltas executive officers is
composed of three principal components: base salary, annual
incentive compensation and long-term incentive compensation in
the form of stock-based awards.
Base Salary. Base salaries (paid in cash) for
our executives are established based on the scope of their
responsibilities, taking into account competitive market
compensation paid by the peer companies for similar positions.
We review executive base salaries in comparison to salaries for
executives in similar positions and with similar
responsibilities at comparable companies. Base salaries are
reviewed annually, and adjusted from time to time to realign
salaries with market levels after taking into account individual
responsibilities, performance, experience and other criteria.
The compensation committee reviews the recommendations of the
chief executive officer for base salaries for executive
officers, including all of the named executive officers except
for the chief executive officer, in the first quarter of each
year. The chief executive officer proposes new base salary
amounts based on his evaluation of individual performance and
expected future contributions and a review of survey data
provided by ECI to ensure competitive compensation against the
external market, defined as the peer companies. The Company
targets base salaries for executive officers including the chief
executive officer at the 75th percentile for peer oil and
gas companies.
13
ECI provided a comprehensive review of our compensation
structure in place for 2006. Our executive officer compensation
for 2006 was compared to data from the annual proxies and
subsequent disclosures of the peer companies as well as
compensation surveys prepared by ECI. Base salaries for our
executive officers, including the named executive officers, were
generally compared to comparable positions or comparable pay
rank. As with prior years, for 2006, our executives
salaries were determined to be approximately at the
75th percentile in the aggregate. Accordingly, base salary
increases for our executive officers have been relatively minor
for the past several years.
Annual Incentive Compensation. The
compensation committee recommends to the Board and the Board
approves the bonus for each named executive officer. In 2005,
the compensation committee adopted the Capital Management System
(CMS), a performance-based annual incentive plan.
All Delta employees, including the named executive officers, are
eligible to participate in the CMS. Under the CMS, the
compensation committee establishes one or more goals and minimum
performance thresholds at the beginning of the year for the
annual incentive plan. If the specific goals in the CMS are
achieved, there is not only a substantial benefit to the
stockholders, but also to all employees including the named
executive officers. If the goals are not met or only minimally
achieved, there may be no or minimal awards under the CMS.
The goals of the CMS are to (1) maximize the net present
value (NPV 10%) of the proved reserve base of Deltas oil
and gas properties (Goal 1), and (2) to add new
proved producing reserves and value through the drilling of
non-proved properties and the acquisition of proved reserves
(Goal 2). In addition to Goals 1 and 2, the CMS
provides for additional bonuses to be paid to participants at
the discretion of the compensation committee. Factors considered
by the compensation committee include our EBITDAX, cost
controls, levels of production, guidance, cash flows and the
discharge of an individual participants responsibilities.
For Goals 1 and 2, the compensation committee annually sets
a target award and the related performance criteria, which may
be expressed as a percentage of a participants base
salary. For 2006, named executive officers were eligible to
receive up to 70% of their annual base salary for each of these
two performance goals, thus resulting in a maximum potential
bonus of 140% of each executive officers annual base
salary.
For 2006, Delta met Goal 1 but did not meet Goal 2. Per the
terms of the CMS, the Board has the discretion to pay bonuses in
cash or in a combination of cash and stock. In 2006,
participants had the option to receive 75% in the form of cash
and 25% in the form of restricted stock, with an additional
12.5% also paid in restricted stock. The restricted stock
granted in 2006 vests in full on January 1, 2008. The
annual bonus award approved for each named executive officer was
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 Annual
|
|
|
%Bonus for
|
|
|
Bonus for
|
|
|
%Bonus for
|
|
|
Discretionary
|
|
|
Total 2006
|
|
Named Executive Officer
|
|
Base Salary
|
|
|
Goal 1
|
|
|
Goal 1
|
|
|
Goal 2
|
|
|
Bonus
|
|
|
Bonus(1)
|
|
|
Roger A. Parker
|
|
$
|
493,000
|
|
|
|
70
|
%
|
|
$
|
186,354
|
|
|
|
|
|
|
$
|
123,246
|
|
|
$
|
309,600
|
|
John R. Wallace
|
|
|
275,000
|
|
|
|
70
|
%
|
|
|
103,950
|
|
|
|
|
|
|
|
68,750
|
|
|
|
172,700
|
|
Kevin K. Nanke
|
|
|
247,000
|
|
|
|
70
|
%
|
|
|
93,366
|
|
|
|
|
|
|
|
61,734
|
|
|
|
155,100
|
|
Stanley F. Freedman
|
|
|
247,000
|
|
|
|
70
|
%
|
|
|
93,366
|
|
|
|
|
|
|
|
61,734
|
|
|
|
155,100
|
|
|
|
|
(1) |
|
Each of the named executive officers received the following
amounts in cash with the remaining paid in restricted stock:
$232,200, $129,525, $116,325 and $116,325, respectively. |
14
Long Term Incentive Compensation. We believe
the use of stock-based awards creates an ownership culture that
encourages the long-term performance of our executive officers.
In January 2007, our stockholders approved the 2007 Performance
and Equity Incentive Plan. In February 2007, the executive
officers received performance share grants that provide that the
shares of Common Stock awarded vest if the market price of Delta
stock reaches and maintains certain price levels. The price
thresholds chosen were $40, $50, $60, $75 and $90, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares of Common Stock
|
|
|
|
and
|
|
|
|
Associated Stock Price Vesting Thresholds
|
|
Named Executive Officer
|
|
$40
|
|
|
$50
|
|
|
$60
|
|
|
$75
|
|
|
$90
|
|
|
Roger A. Parker, CEO
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
150,000
|
|
|
|
150,000
|
|
John R. Wallace,
President & COO
|
|
|
70,000
|
|
|
|
70,000
|
|
|
|
70,000
|
|
|
|
105,000
|
|
|
|
105,000
|
|
Kevin K. Nanke,
Treasurer & CFO
|
|
|
40,000
|
|
|
|
40,000
|
|
|
|
40,000
|
|
|
|
60,000
|
|
|
|
60,000
|
|
Stanley F. Freedman, Executive
Vice
President, General Counsel and
Secretary
|
|
|
40,000
|
|
|
|
40,000
|
|
|
|
40,000
|
|
|
|
60,000
|
|
|
|
60,000
|
|
If the market price for Deltas Common Stock reaches and
remains at these price thresholds for a certain period, then the
associated Common Stock award vests. With such stock price
increase, both the stockholders and the executive officers
benefit. As with the CMS awards, in an effort to retain the
executive officers, the five tranches of Common Stock vest, if
at all, on the following terms:
|
|
|
|
|
The first tranche of Common Stock shall become vested in full as
of the date that the average daily closing price of our Common
Stock on the principal United States securities exchange or
trading market on which our Common Stock is traded (the
Applicable Market) equals or exceeds $40.00 for
trading days within any period of 90 calendar days during the
term of the performance share award (Term), provided
that the average closing price over the last 20 trading days of
such period shall have equaled or exceeded $40.00.
|
|
|
|
The second tranche of Common Stock shall become vested in full
as of the date that the average daily closing price of our
Common Stock on the Applicable Market equals or exceeds $50.00
for trading days within any period of 90 calendar days during
the Term, provided that the average closing price over the last
20 trading days of such period shall have equaled or exceeded
$50.00, and provided further that the second tranche shall not
vest earlier than one year following the date the first tranche
vests.
|
|
|
|
The third tranche of Common Stock shall become vested in full as
of the date that the average daily closing price of our Common
Stock on the Applicable Market equals or exceeds $60.00 for
trading days within any period of 90 calendar days during the
Term, provided that the average closing price over the last 20
trading days of such period shall have equaled or exceeded
$60.00, and provided further that the third tranche shall not
vest earlier than one year following the date the second tranche
vests.
|
|
|
|
The fourth tranche of Common Stock shall become vested in full
as of the date that the average daily closing price of our
Common Stock on the Applicable Market equals or exceeds $75.00
for trading days within any period of 90 calendar days during
the Term, provided that the average closing price over the last
20 trading days of such period shall have equaled or exceeded
$75.00, and provided further that the fourth tranche shall not
vest earlier than one year following the date the third tranche
vests.
|
|
|
|
The fifth tranche of Common Stock shall become vested in full as
of the date that the average daily closing price of our Common
Stock on the Applicable Market equals or exceeds $90.00 for
trading days within any period of 90 calendar days during the
Term, provided that the average closing price over the last 20
trading days of such period shall have equaled or exceeded
$90.00, and provided further that the fifth tranche shall not
vest earlier than one year following the date the fourth tranche
vests.
|
|
|
|
If the first tranche of Common Stock has not vested by
March 31, 2008, the fourth and fifth tranches of Common
Stock will automatically terminate on March 31, 2008. If
the first tranche of Common Stock has not vested by
March 31, 2009, the second and third tranches will
automatically terminate on March 31, 2009.
|
|
|
|
Upon a Change in Control (as defined in the 2007 Plan), the
Common Stock subject of the performance share awards shall vest
to the extent that the Fair Market Value (as defined in the 2007
Plan) of a share of Common
|
15
|
|
|
|
|
Stock equals or exceeds the relevant stock price vesting
threshold contemplated above and, to the extent that such Fair
Market Value of a share of Common Stock is greater than one
stock price vesting threshold but less than the next stock price
vesting threshold, the number of shares of Common Stock in the
next vesting segment will vest according to the following
formula: (i) total shares of Common Stock in such segment,
multiplied by (ii) the acquisition price per share of
Common Stock less the prior stock price vesting threshold,
divided by (iii) the difference between the two applicable
stock price vesting thresholds.
|
Common Stock issued pursuant to the performance share awards
will vest only if the executive officer is employed by us at the
time the applicable vesting criteria are satisfied, and all
unvested Common Stock subject to performance share awards will
lapse and be forfeited to the extent not vested prior to a
termination of the executive officers employment with us.
The performance share award must vest, if at all, within ten
(10) years following the grant date. The compensation
committee recommended the termination provisions incorporated in
the awards after discussions with its outside consultants in
order to decrease the amount of expense that would have to be
recorded in Deltas financial statements.
Change in Control and Severance. We have
employment agreements with each of our executive officers
pursuant to which the officer will receive benefits if his
employment is terminated (other than for misconduct) due to
death, disability, and certain employment terminations following
a change in control. The details and amount of this benefit are
described in Executive Officer Compensation in
2006 Potential Payments Upon Termination or Change
in Control.
Other Benefits. All employees may participate
in our 401(k) Retirement Savings Plan, or 401(k) Plan,
established in 2006. Each employee may make before tax
contributions in accordance with the Internal Revenue Service
limits. We provide this 401(k) Plan to help our employees save a
portion of their cash compensation for retirement in a tax
efficient manner. Deltas matching contribution is an
amount equal to 100% of the employees elective deferral
contribution which cannot exceed 3% of the employees
compensation, and 50% of the employees elective deferral
which exceeds 3% of the employees compensation but does
not exceed 5% of the employees compensation.
All fulltime employees, including our named executive officers,
may participate in our health and welfare benefit programs;
including medical, dental and vision care coverage, disability
insurance and life insurance.
Accounting
and Tax Considerations
Our restricted stock award policies have been impacted by the
implementation of Statement of Financial Accounting
Standards No. 123(R), which we adopted in the first
quarter of 2006.
We have structured our compensation program to comply with
Internal Revenue Code Sections 162(m) and 409A. Under
Section 162(m) of the Internal Revenue Code, a limitation
is placed on tax deductions of any publicly-held corporation for
individual compensation to certain executives of such
corporation exceeding $1,000,000 in any taxable year, unless the
compensation is performance-based. If an executive officer is
entitled to nonqualified deferred compensation benefits that are
subject to Section 409A, and such benefits do not comply
with Section 409A, then the benefits are taxable in the
first year they are not subject to a substantial risk of
forfeiture. In such case, the executive officer is subject to
regular federal income tax, interest and an additional federal
income tax of 20% of the benefit included in income. Delta has
no individuals with non-performance based compensation paid in
excess of the Internal Revenue Code Section 162(m) tax
deduction limit.
REPORT OF
THE COMPENSATION COMMITTEE
The following Compensation Committee Report does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates
this Report.
The Compensation Committee of the Board of Directors has
reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of SEC
Regulation S-K
with management. The Compensation
16
Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in the
registrants Proxy Statement on Schedule 14A.
Respectfully submitted by the Compensation Committee of the
Board of Directors:
Jerrie F. Eckelberger, Chairman
Russell S. Lewis
Kevin R. Collins
Jordan R. Smith
Neal A. Stanley
2006
EXECUTIVE OFFICER COMPENSATION
Summary
Compensation Table
The following table sets forth summary information concerning
compensation awarded to, earned by, or accrued for services
rendered to the Company in all capacities by our principal
executive officer, principal financial officer, and each of our
two other most highly compensated executive officers who were
serving as executive officers at the end of fiscal year 2006
(collectively, the named executive officers), for
fiscal year 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
Name and
|
|
|
|
|
Salary
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
Roger A. Parker,
|
|
|
2006
|
|
|
$
|
493,000
|
|
|
$
|
394,734
|
|
|
$
|
546,962
|
|
|
$
|
232,200
|
|
|
$
|
50,993
|
|
|
$
|
1,717,889
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Wallace,
|
|
|
2006
|
|
|
|
275,000
|
|
|
|
197,370
|
|
|
|
457,481
|
|
|
|
129,525
|
|
|
|
63,327
|
|
|
|
1,122,703
|
|
President and Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin K. Nanke,
|
|
|
2006
|
|
|
|
247,000
|
|
|
|
197,370
|
|
|
|
273,481
|
|
|
|
116,325
|
|
|
|
68,796
|
|
|
|
902,972
|
|
Treasurer and Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley F. Freedman,
|
|
|
2006
|
|
|
|
247,000
|
|
|
|
210,392
|
|
|
|
|
|
|
|
116,325
|
|
|
|
27,060
|
|
|
|
600,777
|
|
Executive Vice
President, General
Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
These amounts shown include dollar amounts recognized for
financial statement reporting purposes in fiscal year 2006 for
stock awards and option awards granted to named executive
officers in prior years and in 2006 in accordance with Statement
of Financial Accounting Standards No. 123(R). |
|
(2) |
|
The amounts reflect the cash bonus awards to the named executive
officers under the CMS, which is discussed in further detail
under the heading Elements of Deltas Compensation
Program under the caption Annual Incentive
Compensation. Bonus awards under the CMS were accrued and
earned in 2006 and paid in the first quarter of 2007. |
|
(3) |
|
Amounts in the All Other Compensation column consist
of the following payments we paid to or on behalf of the named
executive officers: |
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
Auto Maintenance
|
|
|
|
|
|
|
|
|
|
to Retirement Plans
|
|
|
Auto Allowance
|
|
|
and Insurance
|
|
|
Health Club
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Roger A. Parker,
|
|
$
|
29,000
|
|
|
$
|
18,000
|
|
|
$
|
3,993
|
|
|
$
|
|
|
|
$
|
50,993
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Wallace,
|
|
|
44,000
|
|
|
|
18,000
|
|
|
|
1,327
|
|
|
|
|
|
|
|
63,327
|
|
President and Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin K. Nanke,
|
|
|
44,000
|
|
|
|
18,000
|
|
|
|
4,396
|
|
|
|
2,400
|
|
|
|
68,796
|
|
Treasurer and Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley F. Freedman,
|
|
|
8,922
|
|
|
|
18,000
|
|
|
|
138
|
|
|
|
|
|
|
|
27,060
|
|
Executive Vice President,
General Counsel and
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grants of
Plan-Based Awards
The following table provides additional information about
restricted stock awards and equity and non-equity incentive plan
awards granted to our named executive officers during fiscal
2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Stock
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-
|
|
|
Awards: Number of
|
|
|
Grant Date Fair
|
|
|
|
Grant Date or
|
|
|
Equity Incentive Plan Awards(1)
|
|
|
Shares of Stock or
|
|
|
Value of Stock and
|
|
|
|
Performance
|
|
|
Threshold
|
|
|
Target
|
|
|
Max
|
|
|
Units
|
|
|
Option Awards
|
|
Name
|
|
Period
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)(2)
|
|
|
($)
|
|
|
Roger A. Parker,
|
|
|
01/01/06-
|
|
|
$
|
369,750
|
|
|
$
|
369,750
|
|
|
$
|
739,500
|
|
|
|
|
|
|
$
|
|
|
Chief Executive
|
|
|
12/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
03/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,003
|
|
|
|
147,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Wallace,
|
|
|
01/01/06-
|
|
|
|
206,250
|
|
|
|
206,250
|
|
|
|
412,500
|
|
|
|
|
|
|
|
|
|
President and Chief
|
|
|
12/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Officer
|
|
|
03/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,502
|
|
|
|
73,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin K. Nanke,
|
|
|
01/01/06-
|
|
|
|
185,250
|
|
|
|
185,250
|
|
|
|
370,500
|
|
|
|
|
|
|
|
|
|
Treasurer and Chief
|
|
|
12/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Officer
|
|
|
03/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,502
|
|
|
|
73,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley F. Freedman,
|
|
|
01/01/06-
|
|
|
|
185,250
|
|
|
|
185,250
|
|
|
|
370,500
|
|
|
|
|
|
|
|
|
|
Executive Vice
|
|
|
12/31/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, General
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Non-Equity Incentive Plan Awards are determined if goals set
forth in the CMS plan are met. Subsequent to year end, the 2006
CMS awards were paid 75% in cash and 25% in restricted stock,
with an additional 50% of such restricted stock also paid (for a
total of 75% cash and 37.5% stock). Such restricted stock vests
in full on January 1, 2008 if the named executive officer
is still employed on such date. |
|
(2) |
|
Amounts represent awards granted in 2006 under the CMS plan for
services performed in 2005. |
18
Outstanding
Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Market
|
|
|
Number of
|
|
|
Value of
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value of
|
|
|
Unearned
|
|
|
Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
of Stock
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
That
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
Roger A. Parker,
|
|
|
|
|
|
|
175,000
|
|
|
$
|
15.34
|
|
|
|
12/21/14
|
|
|
|
43,334
|
|
|
$
|
1,003,620
|
|
|
|
4,669
|
|
|
$
|
108,130
|
|
Chief Executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John R. Wallace,
|
|
|
150,000
|
|
|
|
50,000
|
|
|
|
5.44
|
|
|
|
12/03/13
|
|
|
|
21,666
|
|
|
|
501,780
|
|
|
|
2,335
|
|
|
|
54,080
|
|
President and Chief
|
|
|
|
|
|
|
87,500
|
|
|
|
15.34
|
|
|
|
12/21/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Officer(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin K. Nanke,
|
|
|
55,000
|
|
|
|
|
|
|
|
1.75
|
|
|
|
05/12/09
|
|
|
|
21,666
|
|
|
|
501,780
|
|
|
|
2,335
|
|
|
|
54,080
|
|
Treasurer and Chief
|
|
|
41,250
|
|
|
|
|
|
|
|
1.75
|
|
|
|
11/05/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Officer(3)
|
|
|
68,750
|
|
|
|
|
|
|
|
3.75
|
|
|
|
07/14/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
|
|
|
|
|
|
|
3.29
|
|
|
|
01/09/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
|
|
|
|
|
|
|
2.38
|
|
|
|
10/05/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,500
|
|
|
|
|
|
|
|
5.29
|
|
|
|
08/26/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,500
|
|
|
|
15.34
|
|
|
|
12/21/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanley F. Freedman,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
926,400
|
|
|
|
|
|
|
|
|
|
Executive Vice
President, General
Counsel and
Secretary(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The vesting date for Mr. Parkers unvested unexercised
options is
12/21/07.
The vesting dates for Mr. Parkers unvested restricted
stock awards are as follows: 8,334 shares vest on
12/21/07 and
35,000 vest on
9/15/08.
Mr. Parkers equity incentive plan awards vest as
follows: 2,334 shares vest on
3/31/08 and
2,335 vest on
3/31/09. |
|
(2) |
|
The vesting dates for Mr. Wallaces unvested
unexercised options are as follows: 50,000 shares vest on
12/8/07 and
87,500 shares vest on
12/21/07.
The vesting dates for Mr. Wallaces unvested
restricted stock awards are as follows: 4,166 shares vest
on 12/21/07
and 17,500 vest on
9/15/08.
Mr. Wallaces equity incentive plan awards vest as
follows: 1,166 shares vest on
3/31/08 and
1,167 vest on
3/31/09. |
|
(3) |
|
The vesting date for Mr. Nankes unvested unexercised
options is
12/21/07.
The vesting dates for Mr. Nankes unvested restricted
stock awards are as follows: 4,166 shares vest on
12/21/07 and
17,500 vest on
9/15/08.
Mr. Nankes equity incentive plan awards vest as
follows: 1,166 shares vest on
3/31/08 and
1,167 vest on
3/31/09. |
|
(4) |
|
The vesting date for Mr. Freedmans unvested
restricted stock awards is
1/1/09. |
19
2006
Option Exercises and Stock Vested
The following table provides information about the value
realized by the named executive officers for option award
exercises and stock award vesting during fiscal 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Acquired
|
|
|
Realized
|
|
|
|
Exercise
|
|
|
on Exercise
|
|
|
on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Roger A. Parker
|
|
|
666,667
|
|
|
$
|
9,417,672
|
|
|
|
8,333
|
|
|
$
|
199,667
|
|
John R. Wallace
|
|
|
|
|
|
|
|
|
|
|
4,167
|
|
|
|
99,833
|
|
Kevin K. Nanke
|
|
|
32,476
|
|
|
|
742,719
|
|
|
|
4,167
|
|
|
|
99,833
|
|
Stanley F. Freedman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment
and Change in Control Agreements
Employment
Agreements
On May 5, 2005, we entered into Employment Agreements with
the following executive officers: Roger A. Parker, Kevin K.
Nanke and John R. Wallace. The initial term of employment under
each of the Employment Agreements was through December 31,
2006, and the term of each Employment Agreement will be
automatically extended for additional one year terms thereafter
unless notice of termination is given by either party at least
60 days prior to the end of a term. The base annual salary
for Mr. Parker was $450,000, and the base annual salary for
Messrs. Nanke and Wallace was $225,000. Each of these
executive officers will also be entitled to bonuses based on a
percentage of their base salary as determined by the
Compensation Committee of the Board of Directors upon
satisfaction of performance criteria established by the
Compensation Committee.
In the event the employment of any of these executive officers
is terminated other than for cause (as defined in the Employment
Agreement) or if any of them resigns for good reason
(as defined in the Employment Agreement), then that executive
officer will be entitled to receive a payment equal to two times
his annual base salary, annual automobile allowance and his
average annual bonus for the three fiscal years preceding the
fiscal year in which the termination occurs, but not less than
the greater of that executive officers (i) highest
annual target bonus during any of these three preceding fiscal
years or (ii) target bonus for the fiscal year in which the
termination occurs. In the event that any of these Employment
Agreements is not renewed and the executive officer is
terminated within 24 months following the last day of
employment under the expired Employment Agreement, at the time
that his employment is terminated the executive officer will
receive the same payment as stated above, reduced
proportionately by the number of months he continues to be
employed by us during such 24 month period. The Employment
Agreements also include non-solicitation and non-competition
obligations on the part of the executive officer that survive
for one year following the date of termination.
On January 11, 2006, we entered into an Employment
Agreement with Stanley F. Freedman, who became Executive Vice
President, General Counsel and Secretary of Delta on
January 3, 2006. The initial term of employment under the
Employment Agreement commenced effective January 1, 2006
and continued through December 31, 2006. The term of the
Employment Agreement will be automatically extended for
additional one year terms thereafter unless notice of
termination is given by either party at least 60 days prior
to the end of a term. The base annual salary for
Mr. Freedman was $240,000. He will also be entitled to
receive 40,000 shares of restricted Common Stock that will
vest three years after the date of grant, and will be entitled
to receive bonuses based on a percentage of his base salary as
determined by the Compensation Committee of the Board of
Directors upon satisfaction of performance criteria established
by the Compensation Committee.
In the event the employment of Mr. Freedman is terminated
other than for cause (as defined in the Employment Agreement) or
if he resigns for good reason (as defined in the
Employment Agreement), then he will be entitled to receive a
payment equal to two times his annual base salary, annual
automobile allowance and his average annual bonus for the three
years preceding the fiscal year in which the change in control
occurs, but not less than the greater of his (i) highest
annual target bonus during any of these three preceding fiscal
years or (ii) target bonus for the fiscal
20
year in which the termination occurs. In the event that his
Employment Agreement is not renewed and he is terminated within
24 months following the last day of employment under the
expired Employment Agreement, at the time that his employment is
terminated he will receive the same payment as stated above,
reduced proportionately by the number of months he continues to
be employed by us during such 24 month period. The
Employment Agreement also includes non-solicitation and
non-competition obligations on the part of Mr. Freedman
that survive for one year following the date of termination.
Change
in Control Agreements
On April 30, 2007, we entered into new Change in Control
Executive Severance Agreements (CIC Agreements) with
Messrs. Parker, Nanke, Wallace and Freedman which provide
that, following a change in control of the Company as defined in
the CIC Agreements and the termination of employment of the
executive officer during the period beginning 6 months
prior to and ending 24 months after the change in control,
the executive officer would not receive a payment under the
Employment Agreement. Instead he would receive a payment equal
to three times his annual base salary, annual automobile
allowance and his average annual bonus for the three years
preceding the fiscal year in which the change in control occurs,
but not less than the greater of that executive officers
(i) highest annual target bonus during any of these three
preceding fiscal years or (ii) target bonus for the fiscal
year in which the change in control occurs, in addition to the
continuation of certain benefits including medical insurance and
other benefits provided to the executive officer for a period of
three years. The CIC Agreements also include non-solicitation
and non-competition obligations on the part of the executive
officer that survive for one year following the date of
termination. The CIC Agreements also provide that if a payment
under the CIC Agreements would be subject to the excise tax
payments, the executive officer will receive a gross up payment
equal to such excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, and all taxes,
including any interest, penalties or income tax imposed on the
gross up payment. The CIC Agreements have an initial term
through December 31, 2006, and will be automatically
extended for additional two year terms thereafter unless notice
of termination is given by either party at least 60 days
prior to the end of a term.
The CIC Agreements define a change in control as the occurrence
of any of the following: (1) any Person becomes a
beneficial owner of 35% or more of Deltas voting
securities, except as the result of any acquisition of voting
securities by Delta or any acquisition of voting securities of
Delta directly from Delta (as authorized by the Board);
(2) the persons who constitute the incumbent Board cease
for any reason to constitute at least a majority of the Board
unless such change was approved by at least two-thirds (2/3) of
the incumbent Board; (3) the consummation of a
reorganization, merger, share exchange, consolidation, or sale
or disposition of all or substantially all of the assets of
Delta unless the persons who beneficially own the voting
securities of Delta immediately before that transaction
beneficially own, immediately after the transaction, at least
70% of the voting securities of Delta or any other corporation
or other entity resulting from or surviving the transaction; or
(4) Deltas stockholders approve a complete
liquidation or dissolution of Delta or a sale of substantially
all of its assets.
21
Payments
Upon Termination or Change in Control
The following table reflects the potential payments and benefits
upon termination for cause, and termination other than for cause
or death, disability or retirement, within and not within the
period beginning six months prior to and ending 24 months
following a
change-in-control
(Measurement Period) of Delta under the respective
CIC Agreements of each named executive officer. The amounts
payable assume termination of employment on December 31,
2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within The Measurement Period
|
|
|
Not Within The Measurement Period
|
|
|
|
|
|
|
Acceleration
|
|
|
|
|
|
Excise
|
|
|
|
|
|
|
|
|
Acceleration of
|
|
|
|
|
|
Excise
|
|
|
|
|
|
|
|
|
|
of Options &
|
|
|
|
|
|
Tax &
|
|
|
|
|
|
|
|
|
Options &
|
|
|
|
|
|
Tax &
|
|
|
|
|
|
|
Severance
|
|
|
Stock
|
|
|
|
|
|
Gross-
|
|
|
|
|
|
Severance
|
|
|
Stock
|
|
|
|
|
|
Gross-
|
|
|
|
|
|
|
& Bonus
|
|
|
Awards
|
|
|
Benefits
|
|
|
Ups
|
|
|
Total
|
|
|
& Bonus
|
|
|
Awards
|
|
|
Benefits
|
|
|
Ups
|
|
|
Total
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Roger A. Parker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For Cause
|
|
$
|
2,514,300
|
|
|
$
|
2,480,250
|
|
|
$
|
102,600
|
|
|
$
|
|
|
|
$
|
5,097,150
|
|
|
$
|
1,676,200
|
|
|
$
|
2,480,250
|
|
|
$
|
68,400
|
|
|
$
|
|
|
|
$
|
4,224,850
|
|
John R. Wallace
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For Cause
|
|
|
1,402,500
|
|
|
|
2,126,110
|
|
|
|
102,600
|
|
|
|
789,021
|
|
|
|
4,420,231
|
|
|
|
935,000
|
|
|
|
2,126,110
|
|
|
|
68,400
|
|
|
|
|
|
|
|
3,129,510
|
|
Kevin K. Nanke
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For Cause
|
|
|
1,259,700
|
|
|
|
1,240,110
|
|
|
|
102,600
|
|
|
|
648,597
|
|
|
|
3,251,007
|
|
|
|
839,800
|
|
|
|
1,240,110
|
|
|
|
68,400
|
|
|
|
|
|
|
|
2,148,310
|
|
Stanley F. Freedman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not For Cause
|
|
|
1,259,700
|
|
|
|
926,400
|
|
|
|
102,600
|
|
|
|
686,333
|
|
|
|
2,975,033
|
|
|
|
839,800
|
|
|
|
926,400
|
|
|
|
68,400
|
|
|
|
|
|
|
|
1,834,600
|
|
|
|
|
* |
|
Cause is defined in the CIC Agreement, and Not
For Cause means resignation by the executive for Good
Reason (as defined in the CIC Agreement) or termination of the
executive by the Company without Cause. |
Director
Compensation
The following table sets forth a summary of the compensation we
paid to our non-employee directors in 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
Stock
|
|
|
|
|
|
|
Cash
|
|
|
Awards
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
Kevin R. Collins
|
|
$
|
60,000
|
|
|
$
|
133,260
|
|
|
$
|
193,260
|
|
Jerrie F. Eckelberger
|
|
|
55,000
|
|
|
|
133,260
|
|
|
|
188,260
|
|
Jordan R. Smith
|
|
|
55,000
|
|
|
|
133,260
|
|
|
|
188,260
|
|
Russell S. Lewis
|
|
|
52,500
|
|
|
|
133,260
|
|
|
|
185,760
|
|
Neal A. Stanley
|
|
|
52,500
|
|
|
|
133,260
|
|
|
|
185,760
|
|
Aleron H. Larson Jr.
|
|
|
50,000
|
|
|
|
133,260
|
|
|
|
183,260
|
|
James B. Wallace
|
|
|
50,000
|
|
|
|
133,260
|
|
|
|
183,260
|
|
James P. VanBlarcom
|
|
|
50,000
|
|
|
|
133,260
|
|
|
|
183,260
|
|
|
|
|
(1) |
|
Each non-employee director was awarded 6,000 shares of
Common Stock in January 2006. The fair value of such Common
Stock was computed in accordance with FAS 123(R) at
$22.21 per share. |
Annual
Retainers
Each director who is not an employee of the Company receives an
annual retainer of $50,000, payable in monthly installments.
Each Board committee chair also receive an additional retainer
each year in the following amounts: chair of the audit
committee, $10,000; chair of the compensation committee, $5,000;
and chair of the nominating and governance committee, $5,000. In
addition, each non-employee director who is not a chairman but
serves on a committee of the Board receives an annual retainer
of $2,500. The additional retainer amounts are also paid to the
directors in equal monthly installments. The Company reimburses
the directors for costs incurred by them in traveling to and
attending Board and committee meetings.
22
Restricted
Stock
In addition, at the discretion of the Board of Directors, each
non-employee director is eligible to receive 6,000 shares
of Common Stock per year. All such Common Stock is granted
pursuant to the Companys equity incentive plans and is
generally awarded on the first business day of each year. Each
grant of Common Stock is fully vested upon grant.
Indemnification
of Directors
Pursuant to the Companys certificate of incorporation, the
Company provides indemnification of its directors and officers
to the fullest extent permitted under the Delaware General
Corporation Law, and provides certain indemnification to its
executive officers under their employment agreements. The
Company believes that this indemnification is necessary in
attracting and retaining qualified directors and officers.
PROPOSAL 2
APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Subject to ratification by our stockholders, the audit committee
has selected the firm of KPMG LLP, Suite 2300, 707
17th Street, Denver, Colorado 80202, as our independent
registered public accounting firm to examine and audit our
financial statements for the fiscal year ending
December 31, 2007. This firm has audited our financial
statements for more than seven years and is considered to be
well qualified. The selection of such firm as our independent
registered public accounting firm is being submitted for
ratification at the Annual Meeting.
Action by stockholders is not required for the appointment of
the independent registered public accounting firm, but the
ratification of its appointment is being submitted by the audit
committee in order to give our stockholders an opportunity to
vote on the designation of auditors. In the event this proposal
is defeated, the stockholder vote will not be binding on the
Company but may be considered by our audit committee when it
considers selecting other auditors for the next fiscal year.
However, because of the difficulty and expense of making any
substitution of auditors after the beginning of the fiscal year,
KPMGs appointment for the 2007 fiscal year will be
permitted to stand unless the audit committee finds other
reasons for making a change.
A representative of KPMG LLP will be present at the Annual
Meeting with the opportunity to make a statement if he desires
to do so and will also be available to respond to appropriate
questions.
Principal
Accountant Fees and Services
The following table summarizes the aggregate fees billed by KPMG
LLP for the 2006 and 2005 fiscal years:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended
|
|
|
6 Months Ended
|
|
|
Fiscal Year
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
Ended June 30,
|
|
|
|
2006
|
|
|
2005
|
|
|
2005
|
|
|
Audit fees
|
|
$
|
589,749
|
|
|
$
|
546,770
|
|
|
$
|
461,000
|
|
Audit-related fees
|
|
$
|
179,475
|
|
|
$
|
25,000
|
|
|
$
|
167,000
|
|
Tax fees
|
|
|
|
|
|
|
|
|
|
|
|
|
All other fees
|
|
|
|
|
|
|
|
|
|
$
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
769,224$
|
|
|
$
|
571,770
|
|
|
$
|
708,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees. Fees for audit services consisted
of the audit of our annual financial statements and reports on
internal controls required by the Sarbanes-Oxley Act of 2002 and
reviews of our quarterly financial statements.
Audit Related Fees. Fees billed for audit
related services related to professional services rendered by
KPMG LLP for assurance and related services that are reasonably
related to the performance of the audit or review of
Deltas financial statements but are not included in audit
fees above.
All Other Fees. All other fees billed for
fiscal year 2005 related to consulting services related to
compliance with the Sarbanes Oxley Act of 2002.
23
Audit
Committee Pre-Approval Policy
The Companys independent registered public accounting firm
may not be engaged to provide non-audit services that are
prohibited by law or regulation to be provided by it, nor may
the Companys independent registered public accounting firm
be engaged to provide any other non-audit service unless it is
determined that the engagement of the principal accountant
provides a business benefit resulting from its inherent
knowledge of the Company while not impairing its independence.
Our audit committee must pre-approve permissible non-audit
services. During fiscal 2006, our audit committee approved 100%
of the non-audit services provided to Delta by its independent
registered public accounting firm.
Required
Vote
Ratification of the appointment of KPMG LLP as our independent
auditors for fiscal year 2007 requires the affirmative vote of a
majority of the votes cast in person or by proxy at the Annual
Meeting.
Recommendation
of the Board of Directors
Our Board of Directors recommends that you vote FOR
ratification of the appointment of KPMG LLP as our independent
auditors for the fiscal year ending December 31, 2007.
REPORT OF
THE AUDIT COMMITTEE
The following Report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates
this Report.
The audit committee is comprised of Kevin R. Collins (Chairman),
Jerrie F. Eckelberger, Russell S. Lewis, Jordan R. Smith and
Neal A. Stanley. The audit committee is responsible for
overseeing and evaluating the Companys financial reporting
process on behalf of the Board of Directors, selecting and
retaining the independent auditors, and overseeing and reviewing
the internal audit function of the Company.
Management has the primary responsibility for the Companys
financial reporting process, accounting principles, and internal
controls as well as preparation of the Companys financial
statements in accordance with generally accepted accounting
principles in the United States (GAAP). The
independent auditors are responsible for performing audits of
the Companys consolidated financial statements, the
effectiveness of the Companys internal control over
financial reporting and managements assessments of the
effectiveness of internal control over financial reporting in
accordance with the standards of the Public Company Accounting
Oversight Board (United States) and issuing reports thereon. The
audit committee is responsible for overseeing the conduct of
these activities. It is not the audit committees duty or
responsibility to conduct auditing or accounting reviews or
procedures or to independently verify the representations made
by management and the independent auditors. The audit
committees considerations and discussions with management
and the independent auditors do not assure that the
Companys financial statements are presented in accordance
with GAAP or that the audits of the annual financial statements,
the effectiveness of the Companys internal control over
financial reporting and managements assessment of the
effectiveness of the Companys internal control over
financial reporting have been carried out in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), or that the independent auditors are, in fact,
independent.
The audit committee has met and held discussions with management
and the independent auditors on a regular basis. The audit
committee plans and schedules its meetings with a view to
ensuring that it devotes appropriate attention to all of its
responsibilities. The audit committees meetings include,
whenever appropriate, executive sessions with the independent
auditors without the presence of the Companys management.
The audit committee has reviewed and discussed with both
management and the independent auditors the Companys
consolidated financial statements as of and for the year ended
December 31, 2006, including a discussion of the quality,
not just the acceptability, of the accounting principles, the
reasonableness of significant judgments and the clarity of the
disclosures in the financial statements. Management advised the
audit committee that the financial statements were prepared in
accordance with GAAP. The audit committee has relied on this
representation, without independent
24
verification, and on the representations of the independent
auditors included in their report on the consolidated financial
statements.
The audit committee discussed with the independent auditors the
matters required to be discussed pursuant to Statement of
Auditing Standards No. 61, Communication with Audit
Committees, as amended by Statement on Auditing Standards
No. 89, Audit Adjustments and Statement of
Auditing Standards No. 90, Audit Committee
Communications. The independent auditors have provided to
the audit committee the written disclosures and the letter
required by Independence Standards Board No. 1,
Independence Discussions with Audit Committees, and
the audit committee has discussed with the independent auditors
their independence. The audit committee has also considered
whether the independent auditors provision of other
non-audit services to the Company is compatible with maintaining
auditor independence. The audit committee has concluded that the
provision of non-audit services by the independent auditors was
compatible with the maintenance of independence in the conduct
of their auditing functions.
Based upon our review and discussions with management and the
independent auditors and the reports of the independent
auditors, and in reliance upon such information,
representations, reports and opinions, the audit committee
recommended that the Board of Directors approve the audited
financial statements for inclusion in the Companys annual
report on
Form 10-K
for the year ended December 31, 2006, and the Board of
Directors accepted the audit committees recommendations.
MEMBERS OF THE AUDIT COMMITTEE:
Kevin R. Collins (Chairman)
Jerrie F. Eckelberger
Russell S. Lewis
Jordan R. Smith
Neal A. Stanley
STOCKHOLDER
PROPOSALS
Any stockholder proposals to be included in the Board of
Directors solicitation of proxies for the Annual Meeting
of Stockholders to be held in May 2008 must be received by
Stanley F. Freedman, Executive Vice President and Secretary, at
370 Seventeenth Street, Suite 4300, Denver, Colorado 80202,
no later than December 28, 2007 in order to be included in
the proxy statement and proxy relating to that meeting. Such
proposals must comply with all of the requirements of SEC
Rule 14a-8.
In accordance with the Companys Bylaws, in order for a
stockholder to present any matter before the Annual Meeting to
be held in May 2008 that is not to be included in the proxy
statement and proxy, a stockholders notice of such matter
must be delivered to the Secretary at the Companys
principal offices (see preceding paragraph) not less than ninety
days nor more than one hundred twenty days prior to the date of
the meeting; provided, however, that in the event that public
disclosure of the date of the meeting is first made less than
one hundred days prior to the date of the meeting, notice by the
stockholder in order to be timely must be so received not later
than the close of business on the tenth day following the day on
which such public disclosure of the date of the meeting was made.
GENERAL
AND OTHER MATTERS
The Board of Directors knows of no matter, other than those
referred to in this Proxy Statement, which will be represented
at the Annual Meeting. However, if any other matters are
properly brought before the Meeting or any of its adjournments,
the person or persons voting the proxies will vote them in
accordance with their judgment on such matters.
The cost of preparing, assembling, and mailing this Proxy
Statement, the enclosed proxy card and the Notice of the Annual
Meeting will be paid by us. Additional solicitation by mail,
telephone, telegraph or personal solicitation may be done by our
directors, officers and regular employees. Such persons will
receive no additional compensation
25
for such services. Brokerage houses, banks and other nominees,
fiduciaries and custodians nominally holding shares of Common
Stock of record will be requested to forward proxy soliciting
material to the beneficial owners of such shares, and will be
reimbursed by us for their reasonable expenses.
Householding of Proxy
Materials. The SEC has adopted rules that permit
companies and intermediaries such as brokers to satisfy delivery
requirements for proxy statements with respect to two or more
stockholders sharing the same address by delivering a single
proxy statement addressed to those stockholders. This process,
which is commonly referred to as householding,
potentially provides extra convenience for stockholders and cost
savings for us. Under this procedure, multiple stockholders who
share the same last name and address will receive only one copy
of the annual proxy materials, unless they notify us that they
wish to continue receiving multiple copies. We have undertaken
householding to reduce our printing costs and postage fees.
If you wish to opt-out of householding and continue to receive
multiple copies of the proxy materials at the same address, you
may do so at any time prior to thirty days before the mailing of
proxy materials, which will typically be mailed in April or May
of each year, by notifying us in writing at: 370 Seventeenth
Street, Suite 4300, Denver, Colorado 80202 or by telephone
(303) 293-9133.
You also may request additional copies of the proxy materials by
notifying us in writing at the same address or contacting us at
(303) 293-9133,
and we will undertake to deliver such additional copies
promptly. If you share an address with another stockholder and
currently are receiving multiple copies of the proxy materials,
you may request householding by notifying us at the above
referenced address or telephone number.
AVAILABLE
INFORMATION
Upon request of any stockholder, our Annual Report on
Form 10-K
for the year ended December 31, 2006, as filed with the
SEC, will be sent to the stockholder without charge upon
request. All requests should be addressed to our Secretary at
370 Seventeenth Street, Suite 4300, Denver, Colorado 80202
or by telephone
(303) 293-9133.
You are urged to complete, sign, date and return your proxy
promptly. You may revoke your proxy at any time before it is
voted. If you attend the Annual Meeting, as we hope you will,
you may vote your shares in person.
By Order of the Board of Directors
Roger A. Parker, Chairman of the Board
and Chief Executive Officer
April 30, 2007
26
DELTA
PETROLEUM CORPORATION
PROXY
THIS
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Roger A. Parker
and Aleron H. Larson, Jr., or each of them, lawful
attorneys and proxies of the undersigned, with full power of
substitution, for and in the name, place and stead of the
undersigned, to attend the Annual Meeting of Stockholders of
Delta Petroleum Corporation, to be held in the Georgetown Room
of the Brown Palace Hotel, 321 17th Street, Denver,
Colorado 80202 on Wednesday, May 30, 2007, at
10:00 a.m. (MDT), and any adjournment(s) thereof, with all
powers the undersigned would possess if personally present and
to vote thereat, as provided below, the number of shares the
undersigned would be entitled to vote if personally present.
|
|
|
|
|
|
|
(Check One)
|
|
|
For
|
|
Withhold Vote
|
|
Proposal 1: To approve the
eight nominees to the Board of Directors:
|
|
|
|
|
Roger A. Parker
|
|
o
|
|
o
|
Aleron H. Larson, Jr.
|
|
o
|
|
o
|
Jerrie F. Eckelberger
|
|
o
|
|
o
|
James B. Wallace
|
|
o
|
|
o
|
Russell S. Lewis
|
|
o
|
|
o
|
Kevin R. Collins
|
|
o
|
|
o
|
Jordan R. Smith
|
|
o
|
|
o
|
Neal A. Stanley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Check One)
|
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
Proposal 2: To ratify the
appointment of
|
|
o
|
|
o
|
|
o
|
KPMG LLP as independent registered
public accounting firm
|
|
|
|
|
|
|
In accordance with their discretion, said attorneys and proxies
are authorized to vote upon such other business as may properly
come before the meeting or any adjournment(s) thereof. Every
properly signed proxy will be voted in accordance with the
specifications made thereon. IF NOT OTHERWISE SPECIFIED, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 and 2. All prior
proxies are revoked. This proxy will also be voted in accordance
with the discretion of the proxy or proxies on any other
business. Receipt is hereby acknowledged of the Notice of Annual
Meeting and Proxy Statement.
|
|
|
|
|
|
Signature
|
|
Signature (if jointly held)
|
|
|
|
|
|
|
Print Name
|
|
Print Name
|
|
|
|
|
|
|
Dated
|
|
Dated
|
(Please sign exactly as name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, etc., give
full title as such. For joint accounts, each joint owner should
sign.)
PLEASE MARK, DATE, SIGN AND RETURN THE PROXY FORM PROMPTLY
USING THE ENCLOSED ENVELOPE.