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Bill Barrett Corp – ‘DEF 14A’ for 5/10/12

On:  Wednesday, 4/4/12, at 9:01am ET   ·   Effective:  4/4/12   ·   For:  5/10/12   ·   Accession #:  1193125-12-149120   ·   File #:  1-32367

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/04/12  Bill Barrett Corp                 DEF 14A     5/10/12    1:1.0M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML    775K 

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  ¨

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

BILL BARRETT CORPORATION

(Name of the Registrant as Specified in its Charter)

Not Applicable

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

Not applicable

1099 18th Street, Suite 2300

Denver, Colorado 80202

(303) 293-9100

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

to be held May 10, 2012

The 2012 annual meeting of shareholders of Bill Barrett Corporation (the “Company”) will be held on May 10, 2012 at 9:30 a.m. (Denver time) at The Westin Denver Downtown, Tabor Auditorium, 1672 Lawrence Street, Denver, CO 80202, for the following purposes:

Only the shareholders of record as shown on our transfer books at the close of business on March 13, 2012 are entitled to notice of, and to vote at, the annual meeting of shareholders and any adjournment or postponement of the meeting.

Our proxy statement is attached. Financial and other information concerning us is contained in our Annual Report on Form 10-K for the year ended December 31, 2011. Pursuant to rules promulgated by the Securities and Exchange Commission (“SEC”), we have elected to provide access to our proxy materials both by sending you this full set of proxy materials, including a proxy card, and by notifying you of the availability of our proxy materials on the Internet. This proxy statement and our 2011 Annual Report on Form 10-K are available at our website at www.billbarrettcorp.com/annualreports.html. In addition, and in accordance with SEC rules, you may access our proxy statement at https://materials.proxyvote.com/06846N, which does not have “cookies” that identify visitors to the site.

Your vote is important. Regardless of whether you expect to attend the meeting in person, please vote your shares via the Internet at www.proxyvoting.com/bbg, in accordance with the instructions provided on the website, by calling our toll-free number, or by completing, dating, signing and returning promptly the enclosed proxy card in the accompanying envelope (which requires no postage if mailed in the United States) in accordance with the instructions on the proxy card. You may revoke your proxy at any time before it is exercised by delivering written notice of revocation to us, by substituting a new proxy executed at a later date, or by requesting, in person at the shareholders meeting, that the proxy be returned to you.

The Board of Directors recommends shareholders vote FOR each of the two Class II director nominees and the one Class III director nominee and FOR Proposals 2, 3, 4, 5 and 6.

ALL SHAREHOLDERS ARE EXTENDED A CORDIAL INVITATION TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS.

By the Board of Directors

Francis B. Barron

Secretary

Denver, Colorado

April 4, 2012

1099 18th Street, Suite 2300

Denver, Colorado 80202

(303) 293-9100

PROXY STATEMENT

For the Annual Meeting of Shareholders

to be held May 10, 2012

This proxy statement is provided in connection with the solicitation of proxies on behalf of the Board of Directors of Bill Barrett Corporation, a Delaware corporation, to be voted at our annual meeting of shareholders to be held at 9:30 a.m. (Denver time) on May 10, 2012 at The Westin Denver Downtown, Tabor Auditorium, 1672 Lawrence Street, Denver, CO 80202, or at any adjournment or postponement of the meeting. We anticipate that this proxy statement and the accompanying proxy card will be first mailed or given to shareholders on or about April 4, 2012.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 10, 2012. This proxy statement is available at https://materials.proxyvote.com/06846N.

ABOUT THE MEETING

What is the purpose of the meeting?

The purpose of the meeting is:

Am I entitled to vote at the meeting?

Only shareholders of record on March 13, 2012, the record date for the meeting, are entitled to receive notice of and to vote at the meeting. As of the close of business on March 13, 2012, there were 48,128,222 outstanding shares of common stock entitled to vote at the meeting, with each share of common stock entitling the holder of record on such date to one vote.

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What are my voting rights as a shareholder?

Shareholders are entitled to one vote for each share of our common stock that they own as of the record date. Shareholders may not cumulate their votes in the election of directors.

How do I vote?

Shareholders may vote at the meeting in person or by proxy. Proxies validly delivered by shareholders (by Internet, telephone or mail as described below) and timely received by us will be voted in accordance with the instructions contained therein. If a shareholder provides a proxy but gives no instructions, such shareholder’s shares will be voted in accordance with the recommendation of our Board.

You may vote by proxy in three ways:

IF YOU VOTE BY INTERNET OR TELEPHONE, PLEASE DO

NOT RETURN YOUR PROXY/VOTING INSTRUCTION CARD.

Can I change my vote?

Yes. A shareholder may revoke or change a proxy before the proxy is exercised by filing with our Secretary a notice of revocation, delivering to us a new proxy, or by attending the meeting and voting in person. Shareholders who vote by the Internet or by telephone may change their votes by re-voting by telephone or the Internet within the time periods listed above. A shareholder’s last timely vote, whether via the Internet, by telephone or by mail, is the one that will be counted.

What constitutes a quorum?

Shareholders representing a majority of all the shares entitled to vote at the meeting, present in person or by proxy, will constitute a quorum for the transaction of business at the meeting. Abstentions and broker non-votes will be counted towards a quorum. At the close of business on March 13, 2012, the record date for the meeting, there were 48,128,222 shares of our common stock outstanding.

What are your Board’s recommendations?

Our Board recommends a vote:

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If any other matters are brought before the meeting, the proxy holders will vote as recommended by our Board. If no recommendation is given, the proxy holders will vote in their discretion.

What vote is required to approve each proposal?

The affirmative vote of a plurality of the shares voted at the meeting is required to elect each director. As a result, the two nominees for election as Class II directors and the one nominee for election as a Class III director who receive the greatest number of votes will be elected directors. Withheld votes, abstentions and broker non-votes will have no effect on the outcome of the election of directors.

Approval of the advisory (non-binding) resolution regarding the compensation of our named executive officers requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively. Broker non-votes will have no effect on the outcome of the proposal.

Approval of the proposal to amend and restate our certificate of incorporation to provide for the annual election of all directors requires the affirmative vote of the holders of 80% of our outstanding common stock. Abstentions and broker non-votes will not count as votes in favor of the proposed amendment and restatement and accordingly will have the effect of votes against the proposal.

Approval of the proposal to amend and restate our certificate of incorporation to eliminate the supermajority voting requirements requires the affirmative vote of the holders of 80% of our outstanding common stock. Abstentions and broker non-votes will not count as votes in favor of the proposed amendment and restatement and accordingly will have the effect of votes against the proposal.

Approval of the proposal to approve our 2012 Equity Incentive Plan requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively. Broker non-votes will have no effect on the outcome of the proposal.

Ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2012 requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively. Broker non-votes will have no effect on the outcome of the ratification.

The shares represented by all proxies that are properly executed and submitted will be voted at the meeting in accordance with the instructions indicated on the proxies. Unless otherwise directed, the shares represented by proxies will be voted “FOR” the election of the nominees for director, “FOR” approval of the advisory (non-binding) resolution regarding the compensation of our named executive officers, “FOR” the proposal to amend our certificate of incorporation to provide for the annual election of all directors, “FOR” the proposal to amend our certificate of incorporation to eliminate the supermajority requirements, “FOR” the proposal to approve our 2012 Equity Incentive Plan, and “FOR” ratification of the appointment of Deloitte & Touche LLP. Votes at the annual meeting of shareholders are counted by the Inspector of Election appointed by the chairman of the meeting.

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Other Information

A copy of our annual report for the year ended December 31, 2011 accompanies this proxy statement. None of the information contained in our annual report is proxy solicitation material.

We will bear the expense of soliciting proxies. We have retained Georgeson Inc. to solicit proxies for a base fee plus reasonable expenses that we estimate will range between $12,500 and $25,000 in total. The solicitation of proxies is to be made principally by mail. Following the original solicitation, however, further solicitations may be made by telephone or oral communication with shareholders. Our officers, directors, and employees may solicit proxies, but without compensation for that solicitation other than their regular compensation as our employees. Arrangements also will be made with brokerage houses and other custodians, nominees, and fiduciaries to forward solicitation materials to beneficial owners of the shares held of record by those persons. We may reimburse those persons for reasonable out-of-pocket expenses incurred by them in forwarding such solicitation materials. All expenses involved in preparing, assembling, and mailing this proxy statement and the enclosed material will be paid by us.

Unless the context indicates otherwise, the terms “us,” “we,” “our,” or the “Company” will be used in the proxy statement to include Bill Barrett Corporation and all of its subsidiaries that existed during the period of reference.

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PROPOSAL NO. 1—ELECTION OF DIRECTORS

Our current Restated Certificate of Incorporation provides that our Board of Directors is divided into three classes, designated Class I, Class II, and Class III. Directors from each class are elected once every three years for a three-year term and thereafter until their successors are duly elected and qualified. Fredrick J. Barrett, Jim W. Mogg, and Michael E. Wiley currently serve as the Class I directors until the annual meeting to be held in 2014; James M. Fitzgibbons, William F. Owens, and Randy I. Stein currently serve as the Class II directors until the annual meeting to be held on May 10, 2012; and Kevin O. Meyers and Edmund P. Segner, III currently serve as the Class III directors until the annual meetings to be held in 2012 and 2013, respectively. Mr. Fitzgibbons will have reached retirement age under our director retirement policy as of the annual meeting to be held May 10, 2012 and therefore is retiring as a director effective as of the annual meeting and is not standing for re-election. The Board of Directors thanks Mr. Fitzgibbons for his long and distinguished service as a director of the Company.

On behalf of the Board of Directors, the Nominating and Corporate Governance Committee of the Board of Directors nominated William F. Owens and Randy I. Stein for election to the Board as Class II directors and Kevin O. Meyers for election to the Board as a Class III director. The Board of Directors recommends that each of William F. Owens and Randy I. Stein be re-elected to the Board of Directors to serve as Class II directors, to hold office until the 2015 annual meeting of shareholders, and that Kevin O. Meyers be re-elected to the Board of Directors to serve as a Class III director, to hold office until the 2013 annual meeting of shareholders, and thereafter until each of their successors is elected and qualified or his earlier resignation or removal. Biographical information concerning each nominee and our other directors and executive officers is set forth below under “Directors and Executive Officers.”

Assuming the presence of a quorum, the affirmative vote of a plurality of the shares voted at the meeting is required to elect each director. Cumulative voting is not permitted in the election of directors. Consequently, each shareholder is entitled to one vote for each share of common stock held in the shareholder’s name on each matter. In the absence of instructions to the contrary, the persons named in the accompanying proxy will vote the shares represented by that proxy for William F. Owens and Randy I. Stein as the Class II directors and Kevin O. Meyers as a Class III director. For purposes of the election of directors, withheld votes, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will count towards the presence of a quorum.

Each of the nominees named above has consented to be named in this proxy statement as a nominee for director and to serve on the Board of Directors if elected. It is not anticipated that any of the nominees will become unable or unwilling to accept nomination or election, but, if that should occur, the persons named in the proxy intend to vote for the election of such other person or persons as the Board of Directors or the Nominating and Corporate Governance Committee may recommend.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF WILLIAM F. OWENS AND RANDY I. STEIN AS THE CLASS II DIRECTORS AND KEVIN O. MEYERS AS A CLASS III DIRECTOR.

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Directors and Executive Officers

The following table sets forth, as of March 13, 2012, the names of our directors and our executive officers, their respective positions and ages, and the year in which each director was initially elected as a director. Each director has been elected to serve for a three-year term until the corresponding annual meeting of shareholders and thereafter until his successor is duly elected and qualified or until his earlier resignation or removal. As a result, approximately one-third of the director positions currently are elected at each annual meeting of shareholders. If the proposal to amend and restate our certificate of incorporation to provide for the annual election of all directors is approved, all directors will stand for election annually once their respective terms expire. Additional information concerning each of these individuals, including the experience, qualifications, attributes and/or skills that led the Nominating and Corporate Governance Committee and the Board to determine that each should serve as a director, follows the table.

Named Executive Officers

Fredrick J. Barrett. Mr. Barrett has served as Chief Executive Officer and Chairman of the Board since March 2006, as a director since the Company’s inception in 2002, and as President from January 2002 until July 2006 and from July 2010 to the present. Mr. Barrett served as Chief Operating Officer of the Company from June 2005 through February 2006. Mr. Barrett served as senior geologist of Barrett Resources Corporation, a publicly traded exploration and production company (“Barrett Resources”), and its successor, Williams Production RMT Company, a wholly-owned subsidiary of The Williams Companies, in the Rocky Mountain Region from 1997 through 2001, and as a geologist from 1989 to 1996. From 1987 to 1989, Mr. Barrett was a partner in Terred Oil Company, a private oil and gas partnership providing geologic services for the Rocky Mountain Region. From 1983 to 1987, Mr. Barrett worked as a project and field geologist for Barrett Resources. Mr. Barrett’s education, training and experience as a geologist enable him to bring valuable insights to the Board of Directors, including

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through his understanding of the geology of oil and gas producing areas in the Rocky Mountain region in which we operate and the ability to assist us in prioritizing exploration opportunities. In addition, his prior experience as our Chief Executive Officer and previously as our Chief Operating Officer provides the Board of Directors with insights and direct knowledge of the operation of our development areas.

R. Scot Woodall. Mr. Woodall has served as our Chief Operating Officer since July 2010. He served as our Executive Vice President—Operations from February 2010 until July 2010 and as our Senior Vice President—Operations from April 2007 until February 2010. Prior to joining Bill Barrett Corporation, Mr. Woodall worked for Amoco, Snyder Oil, and Forest Oil. He currently serves on the Executive Committee of the Colorado Oil & Gas Association and is a member of the Society of Petroleum Engineers. Mr. Woodall holds a degree in mechanical engineering from Louisiana State University.

Robert W. Howard. Mr. Howard has served as our Chief Financial Officer and Treasurer since March 30, 2007. He served as Chief Financial Officer for Quantum Resources, a private oil and gas company headquartered in Denver, from May 2006 until March 2007. Previously, Mr. Howard served from January 2002 through May 2006 in various executive positions for the Company, including Executive Vice President—Finance and Investor Relations and Treasurer from February 2003 until May 2006 and as Chief Financial Officer from our inception in January 2002 until February 2003. From August 2001 until December 2001, Mr. Howard served as Vice President—Finance and Administration and a director of AEC Oil & Gas (USA) Inc., an indirect subsidiary of Alberta Energy Company, Ltd., an oil and gas exploration and development company that subsequently was merged into PanCanadian Energy Corporation and then renamed EnCana Corporation. From 1984 through its sale in 2001, Mr. Howard served in various positions at Barrett Resources, including as Senior Vice President—Investor Relations and Corporate Development and Senior Vice President Accounting and Finance and Treasurer.

Francis B. Barron. Mr. Barron has served as our Executive Vice President—General Counsel and Secretary since February 2009 and as Secretary since March 2004. He served as our Senior Vice President—General Counsel from March 2004 until February 2009. He served as our Chief Financial Officer from November 2006 until March 2007. Mr. Barron was a partner at the Denver, Colorado office of the law firm Patton Boggs LLP from February 1999 until February 2004, practicing corporate, securities and general business law. Prior to February 1999, Mr. Barron was a partner at Bearman Talesnick & Clowdus Professional Corporation, a Denver law firm. Mr. Barron’s clients included publicly traded and private oil and gas companies, including the Company and Barrett Resources.

Kurt M. Reinecke. Mr. Reinecke has served as our Executive Vice President—Exploration since February 2009. He served as our Senior Vice President—Exploration, Southern Division from March 2006 until February 2009 and previously served as Vice President—Exploration, Southern Division from our inception in January 2002 through February 2006. From 1985 to 2001, Mr. Reinecke served as a senior exploration geologist or operations geologist in numerous Rocky Mountain and Mid-Continent basins for Barrett Resources.

Other Executive Officers

David R. Macosko. Mr. Macosko has served as our Senior Vice President—Accounting since February 2010 and previously served as our Vice President—Accounting from May 2006 until February 2010. Mr. Macosko has served as our Controller since June 2005 and previously served as Manager—Operations Accounting from 2003 until May 2005. Prior to joining the Company, Mr. Macosko served in various accounting capacities at other oil and gas companies.

Stephen W. Rawlings. Mr. Rawlings has served as our Senior Vice President—Operations since December 2010. Mr. Rawlings previously served as Division Operations Manager at Samson Resources from December 2009 to December 2010, and from 2001 to October 2009 he served as Production Manager at Forest Oil Corporation. Mr. Rawlings has served in various manager and engineering roles and has 31 years of petroleum engineering experience.

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Non-Employee Directors

James M. Fitzgibbons. Mr. Fitzgibbons has served as a director since July 2004. Mr. Fitzgibbons also has served as a Director/Trustee of Dreyfus Laurel Funds, a series of mutual funds, since 1994. From January 1998 until 2001, Mr. Fitzgibbons served as Chairman of the Board of Davidson Cotton Company, a cotton goods manufacturing company. From July 1987 until October 1992 and from January 1994 until its sale in 2001, Mr. Fitzgibbons served as a director of Barrett Resources. From October 1990 through December 1997, Mr. Fitzgibbons was Chairman of the Board and Chief Executive Officer of Fieldcrest Cannon, Inc., a publicly traded diversified textile company. As a result of Mr. Fitzgibbons’ service as chief executive officer and a director on many public company boards of directors, he provides a strong operational and strategic background and has valuable business, leadership and management experience and insights into many aspects of the operations of businesses. Mr. Fitzgibbons also brings financial expertise to the Board, including through his service as a director/trustee and member of the audit committee of Dreyfus Laurel Funds and his prior service as a chief executive officer. Mr. Fitzgibbons will have reached retirement age under our director retirement policy as of the annual meeting to be held May 10, 2012 and therefore is retiring effective as of the annual meeting and not standing for re-election.

Kevin O. Meyers. Dr. Meyers has served as a director since December 1, 2011, when he was appointed by our Board of Directors upon the recommendation of the Nominating and Corporate Governance Committee after a search conducted with the assistance of a recruiting firm. Dr. Meyers served as Senior Vice President, Exploration and Production, Americas of ConocoPhillips from 2009 until 2010. He also served as President, ConocoPhillips Canada from 2006 to 2009, and served as President for several other ConocoPhillips predecessor companies from 2000 through 2006. From 1980 to 2000, Dr. Meyers was with ARCO and held various engineering and senior management positions including President and Chief Operating Officer of ARCO Alaska, Inc., from 1998 to 2000. Dr. Meyers has an impressive academic education, coupled with a strong oil and gas exploration and production background. Dr. Meyers retired from ConocoPhillips in 2010 and serves as a director for Denbury Resources Inc., Hornbeck Offshore Services, Inc., Precision Drilling Corporation, and the World Energy Council. He served as a director of LUKOIL, an international vertically-integrated oil and gas company, from January 2005 until June 2007. Dr. Meyers brings significant leadership and management experience as a result of his service as an executive and a director. In addition, his academic background and extensive experience in the oil and gas industry provide operational and technical expertise to the Board.

Jim W. Mogg. Mr. Mogg has served as a director since May 2007 and as our Lead Director since February 2010. Mr. Mogg also has served as a director for ONEOK, a publicly traded diversified energy and natural gas distribution company, since July 2007 and ONEOK Partners, a master limited partnership that operates gathering, processing, natural gas liquids pipelines and fractionation, since August 2009. Since July 2008, Mr. Mogg has served as a director and non-executive Chairman of First Wind Holdings Inc., a wind energy company. From 2005 until 2007, Mr. Mogg served as Chairman of DCP Midstream Partners, a publicly traded midstream master limited partnership. From 2004 through 2006, Mr. Mogg was Group Vice President and Chief Development Officer for Duke Energy Corporation. From 2000 through 2003, Mr. Mogg was Chairman, President, and Chief Executive Officer of Duke Energy Field Services and, as a member of the board of directors of and Vice Chairman/Chairman of TEPPCO Partners, L.P., a publicly traded master limited partnership that owns and operates pipelines. Previously, Mr. Mogg held various executive and senior management positions at Duke Energy and Pan Energy over a 27-year period. Mr. Mogg has also served on several nonprofit and industry boards, including as a past President of the Gas Processors Association. As a result of Mr. Mogg’s service as chief executive officer and in other executive positions and as a director of many natural gas distribution and pipeline companies, he provides a strong operational and strategic background and has valuable business, leadership and management experience and insights into many aspects of the operations of these types of businesses, which are important to our ability to market and transport our natural gas and natural gas liquids production. Mr. Mogg also brings financial expertise to the Board, including through his previous supervision of principal financial officers, his involvement in financing transactions, and his service on the audit committees of other companies. In addition, Mr. Mogg’s current and previous directorships at other companies provide him

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with extensive corporate governance experience. In light of the foregoing, Mr. Mogg is qualified to analyze all financial and operational aspects of the Company as well as to advise and, if necessary and appropriate, challenge management with respect to the Company’s operations and strategy.

William F. Owens. Mr. Owens has served as a director since May 2010. Mr. Owens served as Governor of Colorado from 1999 to 2007, as Colorado State Treasurer from 1994 to 1998, and, prior to that, as a member of the Colorado State Senate and the Colorado State House of Representatives. Before his public service, Mr. Owens was on the consulting staff at Touche Ross & Co. (now Deloitte & Touche, LLP) and served as Executive Director of the Colorado Petroleum Association, which represented more than 400 energy firms doing business in the Rocky Mountains region. Currently, he is a Managing Director of Front Range Resources, a Denver-based land and water investment firm. He currently serves as a director of Key Energy Services, Inc., a publicly traded oilfield services company, Cloud Peak Energy Inc., a publicly traded coal producer, Federal Signal, a publicly traded manufacturing and communications company, and FESCO, a publicly traded transportation company in the Russian Federation that is listed on the Russian Trading System. Mr. Owens served as a director of Highland Acquisition Corp., a publicly traded blank check company formed for the purpose of acquiring an operating business, from May 2007 until October 2009 and Keating Capital, which makes equity investments in private companies, from May 2009 until September 2011. Mr. Owens’ background as the Governor of Colorado and as the executive director of an energy trade group provide valuable leadership, management and regulatory experience and insights into the issues we face and that are important to our ability to operate as an oil and gas production company in the current regulatory environment. Mr. Owens also brings financial expertise to the Board, including through his service on the audit committees of other public companies and his previous service as the Treasurer of the State of Colorado.

Edmund P. Segner, III. Mr. Segner has served as a director since August 2009. Mr. Segner currently is a professor in the practice of engineering management in the Department of Civil and Environmental Engineering at Rice University in Houston, Texas, a position he has held since July 2006 and full time since July 2007. In 2008, Mr. Segner retired from EOG Resources, Inc. (EOG), a publicly traded independent oil and gas exploration and production company. Among the positions he held at EOG was President, Chief of Staff, and Director from 1999 to 2007. From March 2003 through June 2007, he also served as the principal financial officer of EOG. Mr. Segner is a certified public accountant. He currently serves as a member of the board or as a trustee for several non-profit organizations as well as being a director of Exterran Partners, L.P., a master limited partnership that provides natural gas contract operations services, since May 2009 and a director for Laredo Petroleum, Inc., a Mid-Continent focused exploration and production company, since August 2011. He served as a director of Seahawk Drilling, Inc., an offshore oil and natural gas drilling company, from August 2009 until October 2011. Mr. Segner’s service as president, principal financial officer and a director of a publicly traded oil and gas exploration and development company provides our Board of Directors with a strong operational, financial, accounting and strategic background and provides valuable business, leadership and management experience and insights into many aspects of the operations of exploration and production companies. Mr. Segner also brings financial and accounting expertise to the Board, including through his experience in financing transactions for oil and gas companies, his background as a certified public accountant, his service as a principal financial officer, his supervision of principal financial officers and principal accounting officers, and his service on the audit committees of other companies.

Randy I. Stein. Mr. Stein has served as a director and the chair of our Audit Committee since July 2004. Mr. Stein is a self-employed tax, accounting, and general business consultant. Since January 2005, Mr. Stein has served as a director and chairman of the audit committee of Denbury Resources Inc., a publicly traded exploration and production company. From 2001 through 2005, Mr. Stein served as a director of Koala Corporation, a publicly traded company engaged in the design, production, and marketing of family convenience products, where he served on the audit and compensation committees. From July 2000 until its sale in June 2004, Mr. Stein was a director and chair of the audit committee of Westport Resources Corporation, a publicly traded exploration and production company. He was also a principal at PricewaterhouseCoopers LLP, formerly Coopers & Lybrand LLP, from November 1986 to June 2000. Mr. Stein’s background in public accounting and

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tax services, focused on oil and gas companies, provides our Board of Directors with strong financial and accounting leadership and insights into many aspects of the financial reporting and tax issues facing exploration and production companies. Mr. Stein brings additional financial, accounting and tax expertise to the Board through his background as a vice president of taxation of a publicly traded oil and gas company, and his service on the audit committees, including as chair, of other publicly traded oil and gas exploration and development companies.

Michael E. Wiley. Mr. Wiley has served as a director since January 2005. Since 2005, Mr. Wiley has served as a director of Tesoro Corporation, a publicly traded independent oil refiner and marketer, and, since 2004, as a director of Post Oak Bank, NA, a privately held bank. Since 2007, Mr. Wiley has served as a Trustee of Fidelity Funds, equity and high-income mutual funds. Mr. Wiley served as Chairman of the Board and Chief Executive Officer of Baker Hughes Incorporated, a publicly traded oilfield services company, from August 2000 until October 2004. He also served as President of Baker Hughes Incorporated from August 2000 to February 2004. From 2001 until its sale in 2005, Mr. Wiley served as a director of Spinnaker Exploration Company, a publicly traded exploration and production company. Mr. Wiley was President and Chief Operating Officer of Atlantic Richfield Company, a publicly traded integrated energy company, from 1998 through May 2000. Prior to 1998, he served as Chairman, President, and Chief Executive Officer of Vastar Resources, Inc., a publicly traded exploration and production company. As a result of Mr. Wiley’s service as chief executive officer, chief operating officer and in other executive positions and as a director of an oilfield services company, an exploration and production company, and an integrated energy company, he provides a strong operational and strategic background and has valuable business, leadership and management experience and insights into many aspects of the operations of these types of businesses which are important to our business. Mr. Wiley also brings financial expertise to the Board, including through his service as a trustee of Fidelity Funds, his involvement in financing transactions in his executive officer roles, and his supervision of principal financial officers.

Beneficial Owners of Securities

The following table and footnotes show information as of March 13, 2012, except as otherwise noted, regarding the beneficial ownership of our common stock by:

Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the shareholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Unless otherwise indicated, the address for each person set forth in the table is c/o Bill Barrett Corporation, 1099 18th Street, Suite 2300, Denver, Colorado 80202.

In calculating the number of shares beneficially owned by each person and the percentage owned by each person, we have assumed that all shares issuable upon exercise of options or the vesting of restricted shares on or prior to May 12, 2012 are beneficially owned by that person. The total number of shares outstanding used in calculating the percentage owned assumes no exercise of options held by other persons.

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Equity Compensation Plan Information

The following table provides aggregate information presented as of December 31, 2011 with respect to all compensation plans under which equity securities are authorized for issuance.

CORPORATE GOVERNANCE

Set forth below in question and answer format is a discussion about our corporate governance policies and practices and other matters relating to our Board of Directors and its committees.

General

Have you adopted corporate governance guidelines?

Yes, our Board has formally adopted corporate governance guidelines that address such matters as director qualification standards, director responsibilities, board committees, director access to management and independent advisors, director compensation, director orientation and continuing education, evaluation of our chief executive officer, management succession, and performance evaluations of our Board.

Have you adopted a code of business conduct and ethics?

Yes, our Board has formally adopted a corporate code of business conduct and ethics applicable to our directors, officers, and employees. Our corporate code includes a financial code of ethics applicable to our chief executive officer, chief financial officer, and controller or chief accounting officer.

How can I view or obtain copies of your corporate governance materials?

Current copies of the guidelines and codes mentioned above, as well as the charters for each standing committee of our Board and our bylaws (the “Bylaws”), are available on our website for viewing and printing.

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Go to http://www.billbarrettcorp.com, then to the “Investor Relations” tab and then to the “Corporate Governance” tab. We also will provide shareholders with a free copy of these materials upon request. Requests may be made by mail, telephone, or via the Internet as follows:

Bill Barrett Corporation

Attention: Corporate Secretary

1099 18^th Street, Suite 2300

Denver, Colorado 80202

(303) 293-9100

http://www.billbarrettcorp.com

Board of Directors

How many independent directors do you have? How do you determine whether a director is independent?

Our Board affirmatively determined that seven of the eight directors who served at the end of fiscal year 2011 are “independent” as that term is defined by New York Stock Exchange (“NYSE”) rules. The seven current directors who served during 2011 determined to be independent are Messrs. Fitzgibbons, Meyers, Mogg, Owens, Segner, Stein, and Wiley. In making the determination of whether directors were independent, the Board of Directors considered the directors’ relationships with us, including commercial relationships with entities affiliated with the directors, and the specific provisions of the NYSE corporate governance standards that would make a director not independent. The purpose of this review was to determine whether any of these relationships or transactions were material and, therefore, inconsistent with a determination that the director is independent. As a result of this review, our Board affirmatively determined, based on its understanding of these transactions and relationships, that all of the directors nominated for election at the annual meeting are independent under the standards set forth by the NYSE.

How many times did your Board meet last year?

Our Board met in person or by telephone conference 10 times during 2011.

Did any of your directors attend fewer than 75% of the meetings of your Board and such director’s assigned committees during 2011?

No. All directors attended at least 75% of the meetings of our Board and assigned committees during 2011.

How many of your directors attended the 2011 annual meeting of shareholders?

All of our current directors who were directors at the time attended and were introduced during our 2011 annual meeting of shareholders. We strongly encourage our directors to attend annual meetings, but we do not have a formal policy regarding attendance.

What is your Board leadership structure?

Our Board is headed by our Chairman of the Board. Currently, our Chairman is our Chief Executive Officer, Fredrick J. Barrett. As Chairman, Mr. Barrett presides over meetings of the full Board of Directors and prepares the agendas for these meetings in consultation with the Lead Director. We also have a Lead Director, who is elected by the Board from among our non-management directors. Jim W. Mogg currently serves as our Lead Director. The duties of the Lead Director are as follows:

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We believe our Board leadership structure is appropriate because the Chairman of the Board and Chief Executive Officer is able to prepare agendas that reflect the current needs of the Company due to his day-to-day management of the Company and also the strategic needs of the Company through his interaction with the Lead Director. The Lead Director is able to assist the full Board of Directors with oversight of management, strategic planning, and risk oversight and assessment through his interaction with the Chief Executive Officer, his collaboration with the Chief Executive Officer on Board meeting agendas, and his setting of agendas and presiding over executive sessions of the non-management directors.

Do your non-management directors and independent directors meet in executive session?

Yes, our non-management directors and independent directors meet separately at least quarterly, usually at each regularly scheduled meeting of our Board. Our corporate governance guidelines provide that the presiding director position for executive sessions shall be the Lead Director (a non-management director elected by the Board) and, if there is no Lead Director or the Lead Director is absent, the presiding director position will rotate among the Chairs of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.

What is the Board’s role in risk oversight?

Our Board administers its risk oversight function directly and through its committees. The Board has regular discussions with management of our major risk exposures, their potential financial impact on the Company, and the steps we take to manage them. These discussions occur at least quarterly, usually during our regular meetings of the Board of Directors. The Board’s committees oversee risks associated with their respective areas of responsibility. For example, the Audit Committee administers risk oversight through its oversight of our internal audit function and interaction with internal audit staff, other management, and our outside auditors. The Compensation Committee administers risk oversight through its oversight of compensation practices and the Compensation Committee’s assessment of the potential impact of those practices on risk-taking. The Nominating and Corporate Governance Committee administers risk oversight through its oversight of our internal corporate governance process and our management succession plan. The Reserves Committee administers risk oversight through its oversight of our independent engineering consultants and our reserves evaluation process and reporting system.

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How can interested parties communicate directly with your non-management directors?

Shareholders and other interested parties who are interested in communicating directly with the non-management directors may write to the non-management directors at the address for our corporate headquarters. Similarly, shareholders and other interested parties who would like to communicate directly with the entire Board of Directors may direct their questions or comments to the Board of Directors in care of the Corporate Secretary at our headquarters. Our Corporate Secretary will forward all correspondence to the Board of Directors. Executive officers of the Company may have access to these communications addressed to the Board of Directors except in instances in which the charters of a committee of the Board of Directors or the Company’s Code of Business Conduct and Ethics require anonymity.

How are your directors compensated?

See “Executive Compensation—Director Compensation” for information about our director compensation.

Committees

Does your Board have any standing committees?

Yes, our Board presently has the following standing committees:

Each of these committees is composed entirely of independent directors. From time to time, the Board may appoint other committees or subcommittees for specific purposes.

Has your Board adopted charters for each of these committees? If so, how can I view or obtain copies of them?

Yes, our Board has adopted a charter for each of these committees. Current copies of the charters are available on our website for viewing and printing. Go to http://www.billbarrettcorp.com, then to the “Investor Relations” tab and then to the “Corporate Governance” tab. We also will provide shareholders with a free copy of the charters upon request. See “Corporate Governance—General—How can I view or obtain copies of your corporate governance materials?” for more information about requesting copies from us.

Audit Committee

What does the Audit Committee do?

The primary purposes of the Audit Committee are to assist the Board in monitoring:

The Audit Committee also prepares a report each year in conformity with the rules of the SEC for inclusion in our annual proxy statement. See “Audit Committee Report” below.

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Who are the members of the Audit Committee?

The Audit Committee currently consists of James M. Fitzgibbons, Kevin O. Meyers, Edmund P. Segner, III, and Randy I. Stein, with Mr. Stein serving as Chair.

Does the committee have an audit committee financial expert?

Yes, our Board has determined that each of Mr. Stein and Mr. Segner meets the qualifications of an “audit committee financial expert” as defined by SEC rules. Our Board has determined that all members of the Audit Committee are independent under the standards set forth by the NYSE and SEC rules.

How many times did the Audit Committee meet last year?

The Audit Committee held 10 meetings in person or by telephone conference during 2011.

Compensation Committee

What does the Compensation Committee do?

The primary purposes of the Compensation Committee are to:

The Compensation Committee has the sole authority to oversee the administration of compensation programs applicable to all of our employees, including executive officers. The Compensation Committee may delegate some or all of its authority to subcommittees when it deems appropriate.

Who are the members of the Compensation Committee?

The Compensation Committee currently consists of James M. Fitzgibbons, Jim W. Mogg, William F. Owens, Edmund P. Segner, III, and Michael E. Wiley, with Mr. Wiley serving as Chair.

How many times did the Compensation Committee meet last year?

The Compensation Committee held nine meetings in person or by telephone conference during 2011.

What are the Compensation Committee’s processes and procedures for consideration and determination of executive compensation?

The Compensation Committee reviews executive compensation at least annually. With limited exceptions, the Compensation Committee makes all decisions regarding the compensation of our executive officers in the first quarter of each year. These decisions include adjustments to base salary, grants of cash bonuses, and grants of equity awards. See “Executive Compensation—Compensation Discussion and Analysis” for more information regarding the Compensation Committee’s processes and procedures for consideration and determination of executive compensation.

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Nominating and Corporate Governance Committee

What does the Nominating and Corporate Governance Committee do?

The primary purposes of the Nominating and Corporate Governance Committee are to:

Who are the members of the Nominating and Corporate Governance Committee?

The Nominating and Corporate Governance Committee currently consists of Kevin O. Meyers, Jim W. Mogg, William F. Owens, Randy I. Stein, and Michael E. Wiley, with Mr. Mogg serving as Chair.

How many times did the committee meet last year?

The Nominating and Corporate Governance Committee held seven meetings during 2011.

What guidelines does the Nominating and Corporate Governance Committee follow when considering a director nominee for a position on the Board?

The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become directors and for evaluating potential or suggested director nominees. Although the Nominating and Corporate Governance Committee has not established written criteria or a set of specific minimum qualifications, our corporate governance guidelines provide that any assessment of a potential director nominee will include the individual’s qualification as independent, as well as consideration of his or her background, ability, judgment, skills, and experience in the context of the needs of our Board. The Nominating and Corporate Governance Committee also considers whether a prospective nominee has relevant business or financial experience or a specialized expertise and the diversity of the nominee and the Board as a whole.

Does the Nominating and Corporate Governance Committee consider candidates for the Board who are recommended by shareholders and, if so, what are the procedures for submitting such recommendations?

Yes, the Nominating and Corporate Governance Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. Nominations from shareholders will be considered on the same basis as nominees from other sources. Any such suggestions, together with appropriate biographical information, should be submitted to the Chair of the Nominating and Corporate Governance Committee, c/o Francis B. Barron, Secretary, Bill Barrett Corporation, 1099 18^th Street, Suite 2300, Denver, Colorado 80202. See “What is the process a shareholder must follow to nominate a director?” below for the complete requirements for nominations.

What is the process a shareholder must follow to nominate a director?

Our Bylaws provide that nominations for the election of directors may be made by or at the direction of the Board of Directors, which has directed the Nominating and Corporate Governance Committee to make nominations, or by any shareholder entitled to vote for the election of directors who has complied with the notice procedures of the Bylaws. To be considered, nominations by shareholders generally must be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to our Corporate Secretary not less than 60 days nor more than 90 days prior to the first anniversary of the date on which we first mailed our proxy

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materials for the previous year’s annual meeting of shareholders. If the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, or if no such meeting was held in the preceding year, notice by the shareholder to be timely must be so delivered not later than the close of business on the later of (a) the 90th day prior to such annual meeting or (b) the 10th day following the day on which public announcement of the date of such meeting is first made. Each notice of nomination of directors by a shareholder must set forth the following information, which will be considered by the Nominating and Corporate Governance Committee in determining whether to nominate the candidate for consideration for election as a director:

The chairman of any meeting of shareholders may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with this procedure and that the defective nomination will be disregarded.

Reserves Committee

What does the Reserves Committee do?

The primary purposes of the Reserves Committee are to:

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Who are the members of the Reserves Committee?

The Reserves Committee currently consists of Kevin O. Meyers, Jim W. Mogg, Edmund P. Segner, III, and Michael E. Wiley, with Mr. Segner serving as Chair.

How many times did the Reserves Committee meet last year?

The Reserves Committee was formed as of December 8, 2011 and held no meetings in person or by telephone conference during 2011.

EXECUTIVE COMPENSATION

Compensation Committee Report

The Compensation Committee has discussed and reviewed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis provides a description of the material elements of our executive compensation program, as well as perspective and context for decisions made during 2011 regarding the compensation for our named executive officers, or NEOs, who are identified below:

Executive Summary

As described in more detail throughout this Compensation Discussion and Analysis, our executive compensation programs seek to encourage and reward contributions and align the interests of our NEOs with those of our shareholders by rewarding performance that meets or exceeds established goals. Our Compensation Committee believes that our long-term objective of increasing shareholder value is closely tied to our ability to compete for talented executives who are motivated to achieve short-term and long-term business objectives. The Compensation Committee believes that its approach to choosing performance metrics and threshold, target, and stretch performance levels, and its evaluation of performance results, assists in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives.

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Therefore, in line with our pay for performance philosophy, our Compensation Committee has designed and continually reviews and refines our executive compensation programs with an intention to accomplish the following goals:

Our executive compensation program is designed to promote the attainment of short-term and long-term business objectives to increase shareholder value. Total compensation for our NEOs consists of base salary, a performance cash bonus, and equity-based compensation. Actual payouts vary based on individual and corporate performance measured against annual and long-term performance goals, consistent with our “pay for performance” philosophy. We received a 98% vote in favor of our say on pay proposal regarding 2010 compensation of our NEOs at the May 2011 annual meeting of shareholders.

Key Features of Our Executive Compensation Program

2011 Business Results

For 2011, we delivered strong operating and financial performance, as summarized below:

Compensation Philosophy

Our compensation philosophy is that performance should have a significant impact on compensation and, consequently, we link executive officers’ total compensation with the achievement of annual performance goals and the long-term performance of our company. As such, our compensation program is designed to encourage

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the achievement of goals established relative to key drivers of value for our shareholders, including growth in oil and natural gas reserves, production, cash flow, and profitability and controlling costs. The compensation programs also are designed to provide compensation opportunities that support the attraction and retention of key management and technical talent. We pursue these objectives while stressing the safety of our employees, contractors and the public, and seeking to apply appropriate and environmentally conscious technological solutions in all our operations.

Total compensation for our NEOs is not targeted at median or other specific levels relative to market benchmark data. Rather, the Compensation Committee generally positions total compensation for our executive officers at levels commensurate with our size relative to our peer group (discussed in “Compensation Benchmarking” below). The Compensation Committee retains discretion to set pay levels for individual executive officers at alternative levels based on individual performance or other factors in order to achieve our overall pay objectives. Actual compensation may be above or below targeted levels based on Company and individual performance.

Elements of Compensation

The primary elements of our executive compensation programs are summarized below. A significant portion of the compensation of our NEOs is performance-based. Additional information regarding each element is provided below in the section titled “Discussion of Compensation Elements and Performance Criteria.”

There is no pre-established formula for the allocation between cash and non-cash compensation and short-term and long-term compensation. Instead, each year the Compensation Committee determines, in its discretion and business judgment, the appropriate level and mix of cash and non-cash and short-term and long-term incentive compensation for named executives to reflect Company and individual performance, and consideration of market pay levels and practices as described below in the section titled “Annual Review of Executive Compensation.”

Annual Review of Executive Compensation

The Role of Our Compensation Committee

The Compensation Committee is responsible for overseeing our executive compensation programs, including reviewing and approving, and recommending to our Board of Directors, the compensation arrangements for our NEOs and other senior management. In the first quarter of each year, the Compensation Committee reviews prior year compensation of the named executive officers, determines bonus payouts for prior year performance, and makes decisions regarding current year salaries and equity awards for each named executive officer. During these reviews, the Compensation Committee also approves the calculations of vesting of performance shares based on our prior year performance. After careful consideration of the information

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described in this compensation discussion and analysis, including competitive benchmarking data, performance evaluations, recommendations of our Chief Executive Officer, and current economic conditions, the Compensation Committee determines the levels and allocation of compensation among cash (salary and bonus) and equity (stock options, restricted stock and performance shares) for our Chief Executive Officer and the other named executive officers.

The Role of Compensation Consultants

Under the terms of its charter, the Compensation Committee is authorized to retain the services of a compensation consultant. In 2011, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”), as its independent advisor. Meridian is an independent compensation consulting firm and does not provide any other services outside of matters pertaining to executive and director compensation and related corporate governance matters. Meridian reports directly to the Compensation Committee, which is the sole party responsible for determining the scope of services performed by Meridian, the directions given to Meridian regarding the performance of those services, and the approval of the payment of invoices for those services.

Services performed by Meridian for the Compensation Committee during 2011 included preparation of competitive benchmarking reviews regarding the executive and director compensation, evaluation of proposed compensation programs or changes to existing programs, provision of information on current trends in executive compensation, and updates regarding applicable legislative and governance activity.

The Role of Management

Our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Executive Vice President—General Counsel, and Vice President—Human Resources were involved in gathering data about our compensation practices, discussing peer companies, providing suggested performance metrics, and responding to questions from the Compensation Committee and Meridian. In addition, our Chief Executive Officer provides recommendations to the Compensation Committee regarding the compensation for the NEOs other than himself. The Compensation Committee considered these recommendations in making decisions regarding 2011 compensation.

Compensation Benchmarking

To assist in its determination of the compensation of our officers and pay decisions for 2011, the Compensation Committee considered a competitive benchmarking review prepared by Meridian. The benchmarking review provided peer group data for each element of compensation (base salary, annual bonus, and long-term incentives), as well as information regarding the design of the peers’ compensation programs. Competitive compensation data in the benchmarking review are based on Meridian’s proprietary oil and gas exploration and production industry survey database and supplemented by information in peer company public disclosures. The Compensation Committee uses this review as a reference point for assessing the overall competitiveness of our executive compensation programs.

The companies that comprise the peer group reflect direct competitors in the exploration and production industry, against whom we compete for business opportunities, investor capital and in the market for executive talent. Selection criteria include: scope of operations (U.S. onshore producers; natural gas focused); financial and operational metrics (assets, revenues, market capitalization, enterprise value, production, reserves, and standardized measure); and the availability of market compensation data. The Compensation Committee reviews the composition of the peer group annually and considers changes to the peer group, as warranted. These changes may occur as the result of changes in our strategy, business combinations, asset sales or other types of transactions that cause peer companies to no longer exist or to no longer be comparable. The peer group used for comparing the compensation of our named executive officers for the 2010-2011 compensation cycle was

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comprised of the companies listed below. With regard to the financial and operational metrics described above, we are generally positioned at or below the 25th percentile relative to the peer group:

Performance Evaluations

In setting compensation for the NEOs, the Compensation Committee also considered individual performance evaluations of the NEOs, other than the Chief Executive Officer, that are prepared by the Chief Executive Officer and the performance evaluation of the Chief Executive Officer that was performed by the independent directors in a process facilitated by our Lead Director.

Consideration of 2011 Say on Pay Vote

At our annual meeting of shareholders held on May 12, 2011, over 98% of votes cast were in favor of the proposal to approve an advisory resolution regarding the 2010 compensation program for our named executive officers (“say-on-pay” vote). The Compensation Committee believes this result is an indication that a vast majority of our shareholders are satisfied with our executive compensation policies and decisions, and that our executive compensation program effectively aligns the interests of our named executive officers with the interests of our shareholders. The Compensation Committee considered the results of the 2011 say-on-pay vote, but such results did not impact the Committee’s decisions regarding the determination of executive compensation for 2012. We will continue to consider the outcome of our “say-on-pay” vote results when determining future compensation policies and pay levels for our named executive officers.

An advisory vote also was held on the frequency of the “say-on-pay” proposal. As recommended by the Board, stockholders expressed their preference for an annual advisory vote on executive compensation, and we have implemented that recommendation.

Discussion of Compensation Elements and Performance Criteria

Base Salary

We provide our named executive officers with base salaries to compensate them for services rendered during the fiscal year. We believe that the base salaries are market competitive relative to compensation offered by other oil and gas exploration and production companies with which we compete for talent. The Compensation Committee does not identify specific target ranges for the base salary of each executive officer. Rather, decisions

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regarding base salary are based on the position and responsibility of each NEO, information provided in the competitive benchmarking review, and other data that the Compensation Committee deems relevant.

The Compensation Committee reviews the base salaries of our NEOs on an annual basis and makes adjustments based on subjective evaluations of each individual officer’s performance, our company’s performance, and a comparison to salary ranges for executives holding comparable positions at other independent oil and gas exploration and production companies. In February 2011, based on these considerations, the Compensation Committee made the following adjustments to the annual salaries for each named executive officer:

Performance Cash Bonus Plan

The Compensation Committee believes that annual cash bonuses provide a market-competitive element of compensation and are an appropriate way to incentivize strong corporate and individual performance. In February 2011, the Compensation Committee approved, and in May 2011 our shareholders approved, our Performance Cash Bonus Plan (the “Performance Cash Plan”). The Performance Cash Plan was developed to emphasize pay-for-performance by providing annual cash awards to employees for the achievement of pre-determined levels of Company performance.

Under the Performance Cash Plan, our NEOs have the opportunity to earn a bonus based on a market based targeted percentage of their annual base salary. The bonus targets are reviewed annually as described above. For 2011, the target bonus percentages for our named executives were as follows:

The Performance Cash Plan design provides each NEO with the opportunity to earn 50% of target bonus value based on the Company’s achievement of threshold performance (minimum level required); 100% of target bonus value based on the Company’s achievement of target performance; and 200% of target bonus value based on the Company’s achievement of stretch performance (maximum value level).

Threshold, target, and stretch levels of performance were established for these metrics. Target levels of performance are believed to be achievable with additional effort beyond threshold levels and stretch levels of performance are believed to be capable of being met with extraordinary efforts. Award payouts for results between the threshold, target, and stretch levels of performance are determined using linear progression between these levels.

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The performance metrics and goals approved by the Compensation Committee for 2011, along with their respective weightings are summarized below. A number of factors went into the selection of the 2011 performance metrics and goals for the Performance Cash Plan, including the commodity price outlook and business and market conditions. Some of the criteria are those for which we have given public guidance (such as net production, general and administrative expense, and lease operating expenses). In general, these performance metrics and weightings were selected because they are key value drivers in the exploration and production (“E&P”) sector, and for our company.

Based on Company performance relative to the 2011 performance metrics as shown in the above table, the annual Performance Cash Plan funded at 108.2% of target. In February 2012, the Compensation Committee approved the payment of bonuses to our executive officers. The individual payouts were determined based on target payout as a percentage of base salary and individual performance. See the “Summary Compensation Table” below for the amount paid to each NEO.

Equity Based Compensation

We use long-term equity awards to create incentives for increased performance by our employees, including the named executive officers, by providing them the opportunity to receive added compensation as a result of

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increases in the value of our common stock. Any increases in the value of our common stock also benefits all shareholders, thereby aligning our employees’ interests with those of our shareholders. The vesting requirements of these awards also provide employee retention.

In making decisions concerning the amounts of stock option, restricted stock, and performance share awards made to our NEOs, the Compensation Committee considers several factors, including competitive benchmarking data, the performance of the Company, and individual officer performance. Equity awards also have vesting requirements to enhance employee retention and to provide incentive to increase long-term shareholder value. In February 2011, the Compensation Committee approved the issuance of stock options and restricted stock to our NEOs and senior managers, and restricted stock to certain of our other employees; no performance shares were granted at that time. The Compensation Committee also approved the vesting of a portion of the performance shares granted in 2010 (the “2010 Program”), based on the achievement of pre-established performance goals for 2011.

Stock Options

For 2011, the number of stock options granted represented approximately half of the total equity award value for each NEO. The exercise price for our stock options is the fair market value of our common stock on the date those options are granted. The awards vest 25% on each of the first four anniversaries of the date of grant.

Restricted Stock

For 2011, the number of shares of restricted stock granted represented approximately half of the total equity award value for each NEO. Restricted stock awards vest 25% on each of the first four anniversaries of the date of grant.

Performance Shares

Grants of performance shares are made periodically to align the compensation of our NEOs and other key employees with the achievement of pre-established goals related to performance metrics that are key indicators of shareholder value. Award recipients have the opportunity to earn 25% of the granted shares per year over a four year period if target performance goals are achieved. On an annual basis, the Compensation Committee establishes target and stretch performance goals for a portion of the shares granted as part of the 2010 Program that may be earned in that year. If the target performance goals are not achieved for a given year, shares will not be earned. However, such shares may be earned in a subsequent year, subject to achievement relative to applicable performance targets. Any shares that have not vested over the four year period because performance goals are not achieved will be forfeited. If stretch performance goals are achieved, vesting may be accelerated such that up to 50% of the granted shares may be earned in a given year, but in no event will more than 100% of the initial performance shares be earned and vested. This potential to accelerate vesting provides an incentive to achieve performance in excess of the target goals.

The most recent grant of performance shares was made in February 2010 (the 2010 Program, as defined above). Based on the Company’s actual performance in 2010 relative to goals for that year, 28.2% of the performance shares originally granted to the NEOs as part of the 2010 Program were earned and vested. At the beginning of 2011, 71.8% of the performance shares originally granted to the NEOs as part of the 2010 Program remained unearned and unvested. Any performance shares granted pursuant to the 2010 Program that have not vested by February 16, 2014 will be forfeited.

2011 Performance Share Vesting. In March 2011, the Compensation Committee approved the 2011 performance metrics and weightings for vesting of the remaining performance shares granted as part of the 2010 Program. In setting the performance metrics, the Compensation Committee considered the commodity price outlook, business and market conditions, an assessment of the key value drivers of value for our shareholders.

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The Compensation Committee believes the performance measures chosen are aligned with our shareholders’ interests. The 2011 performance metrics, actual performance, and resulting vesting are summarized below:

The TSR metric relates to a measurement of our performance relative to a group of 14 companies (“Performance Peer Group”) with similar market capitalizations that the Compensation Committee believes are competitors for investor capital investment decisions. These companies (and our Company) are included in the Credit Suisse Onshore U.S. Producers Mid-Sized group and are listed below:

TSR is calculated based on the difference between the closing stock price on the last trading day of the year as reported by the NYSE, or other recognized national securities market (adjusted for any stock splits) divided by the closing stock price on the last day of the previous year. TSR will also include dividends paid, if any, by assuming dividends are reinvested in the same security at the closing price of the previous day.

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If our TSR is negative for the year, vesting of TSR related performance shares will be reduced by 50% of the amount otherwise computed. In addition, if our TSR was at least 15% for the year but the TSR is below the median, vesting of TSR related performance shares was to be at 12.5% (50% of target vesting of 25%).

Timing of Equity Awards

Our Compensation Committee considers any annual grants of equity awards to officers and employees in the first quarter of each year so that the compensation information can be included in our Annual Report on Form 10-K or proxy statement. These annual grants typically are made in February after we issue a press release in January containing the production for the prior year, year-end reserves for the prior year and guidance on capital expenditures, production, LOE, gathering and transportation expense, and G&A expenses (excluding non-cash stock-based compensation expense) for the coming year. Before making equity grants, the Compensation Committee seeks to confirm with management that there is no material nonpublic information that it needs to consider in making grant decisions. Awards for new executive officers are required to be made at a meeting of the Compensation Committee, called for that purpose, or at other regularly scheduled meetings of the Compensation Committee. Awards are not made by written consent.

The exercise price of options granted under our 2004 Stock Incentive Plan (“2004 Plan”) is equal to the closing price of our common stock on the NYSE on the trading day immediately preceding the date of grant. Our other equity plans provide that the exercise price cannot be less than the closing price on the date of grant, which also complies with the requirements of the Internal Revenue Code (the “Code”).

2012 Compensation Actions

For 2012, the Compensation Committee made base salary adjustments for named executive officers to recognize individual performance and to better align with competitive market levels. In order to provide additional incentive to management to drive long-term growth and value, the Compensation Committee allocated a significant portion of long-term equity compensation to a new performance share program, which may vest in three years based on achievement of predetermined metrics. The Compensation Committee believes these changes support the objectives of our executive compensation program, including market competitiveness and a strong performance orientation. The charts below illustrate the target pay mix for 2012 for our CEO and the other named executive officers:

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401(k) Retirement Savings Plan

We do not have a defined benefit pension plan. We maintain an employee retirement savings plan, the 401(k) Plan, to provide an additional means of attracting and retaining qualified employees by providing tax-advantaged opportunities for employees to save for retirement or future events. Under the 401(k) Plan, we currently contribute on behalf of each employee 100% of the contribution made by that employee, up to a maximum Company contribution of 6% of the employee’s gross salary and cash bonus for a particular pay period. The Compensation Committee has the discretion to discontinue or modify the match if business conditions warrant. One-half of our matching contribution is paid in cash and one-half is paid in our common stock. All contributions to the 401(k) Plan are immediately vested and employees can immediately sell the portion of the match made with our common stock. Participation in the 401(k) Plan is at the discretion of each individual employee, and the Compensation Committee is not involved in the administration of the 401(k) Plan. The named executive officers participate in the 401(k) Plan on the same basis as all other employees.

Deferred Compensation

In February 2010, the Compensation Committee approved a non-qualified deferred compensation plan for our executive officers and certain other employees (the “2010 Deferred Compensation Plan”). The plan, which became effective on April 3, 2010, is intended to assist in the retention and recruitment of senior level employees by providing a competitive retirement benefit. The 2010 Deferred Compensation Plan is a “401(k) overlay” program that matches in cash 6% of compensation above the Code Section 415 limit ($245,000 in 2011) with the flexibility to provide additional compensation deferral options. The named executive officers and all other officers are eligible to participate in the plan. Pursuant to the plan, participants may defer up to 90% of their combined base salaries and bonuses after reaching the Section 415 limit. In total, we will match the deferred amount up to 6% of the participant’s cash salary and bonus. The Compensation Committee has the discretion to discontinue or modify the match if business conditions warrant. All amounts deferred and matched under the plan vest immediately. The deferred amounts are payable to the participants at a time pre-selected by the participants, which can include separation from employment, death or disability, a change in control, or a set in-service date. The amount of the payouts will be tied to actual investment returns for mutual funds chosen by the participants from a group of mutual funds selected by the plan committee. The matching contributions made by the Company are included under “All Other Compensation” in the “Summary Compensation Table” below. Additional information is included in the narrative disclosure and table under “Non-qualified Deferred Compensation for 2011” below.

Change-in-Control Agreements

Our named executive officers and senior managers are covered by change-in-control agreements. We believe these agreements allow us to be competitive with other independent oil and gas exploration and production companies in attracting and retaining our executive officers and other officers and senior managers. Estimates of the payments that would be made using various assumptions and a summary of the material terms of these agreements, including the double trigger requirement, are included below under “Payments Upon Termination and Change in Control”.

Other Compensation

Our named executive officers receive health and life insurance benefits, transportation expense reimbursement of up to $125 per month, commuter bus and train passes, and reimbursement of $40 per month for health club dues on the same terms as offered to other employees.

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Other Information

Named Executive Officer and Director Stock Ownership Guidelines

Because the Board believes in linking the interests of management and shareholders, the Board has adopted stock ownership guidelines for the named executive officers. Our Executive Stock Ownership Guidelines specify a number of shares that our named executive officers must accumulate and hold within five years of the later of the adoption of the guidelines or the appointment of the individual as a named executive officer. The Chief Executive Officer is required to own shares having a value of five times base salary, and the other named executive officers are required to own shares having a value of two times base salary. The Board has adopted a similar policy for directors to require ownership of shares having a value equal to five times the directors’ annual retainer, currently $50,000 per year. These ownership guidelines were adopted on February 23, 2011 and officers and directors have until five years after the later to occur of the adoption of the guidelines or the appointment of that individual to comply with the guidelines. The number of shares of our common stock beneficially owned by our named executive officers is shown above in “Beneficial Owners of Securities”. All NEOs other than Mr. Reinecke and Mr. Woodall currently are in compliance with the stock ownership guidelines. Mr. Reinecke and Mr. Woodall are expected to achieve the required ownership within the time period allowed through the vesting of currently held restricted shares.

Tax and Accounting Treatment of the Elements of Executive Compensation

We account for stock-based compensation in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 (ASC 718).

Section 162(m) of the Code generally disallows a tax deduction to public companies for individual compensation paid to the Chief Executive Officer and the other four highest compensated executive officers to the extent the compensation exceeds $1 million in any year. Performance-based compensation paid pursuant to a shareholder-approved incentive plan is not subject to the Section 162(m) limitations if certain requirements are met. The Performance Cash Plan and the 2008 Stock Incentive Plan (the “2008 Plan”) both have been approved by our shareholders. These plans are intended to enable the Company to preserve, to the extent practicable, the tax deductibility of incentive awards under Section 162(m).

As part of its role, the Compensation Committee reviews and considers the financial reporting and income tax deductibility of the compensation of our executive officers. Our policy is to utilize available tax deductions whenever appropriate and consistent with our compensation philosophy and objectives. However, the Compensation Committee retains the discretion to provide compensation to our executive officers that may not be fully deductible.

Compensation Risk Assessment

The Compensation Committee believes that its approach to choosing performance metrics and threshold, target and stretch performance levels, and evaluation of performance results assist in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our programs reflect sound risk management practices. We believe our overall compensation program provides a reasonable balance between short-term and long-term objectives, which help mitigate the risk of excessive risk-taking in the short term. Further, with respect to our incentive compensation programs, the metrics that determine vesting for our performance shares are company-wide metrics only. In addition, the performance criteria reviewed by our Compensation Committee in determining cash bonuses are company-wide, and our Compensation Committee has used subjective judgment in setting bonus levels for our officers in the past and has authority to exercise negative discretion over bonus payments under the Performance Cash Plan. The Compensation Committee believes that applying company-wide metrics encourages decision making that is in our best long-term interests and those of our shareholders as a whole and that the multi-year vesting of our equity awards and our use of a combination of performance shares, restricted stock, and options for executive compensation discourages excessive risk-taking and properly accounts for the time horizon of risk.

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Clawback/Forfeiture Provisions

We do not have any formal agreements with officers, directors or employees concerning the return of bonuses or other compensation in the event they are found to have engaged in fraudulent or other inappropriate behavior or if performance measures are restated or adjusted in a manner that would reduce payments. We intend to follow the requirements of Section 304 of the Sarbanes-Oxley Act to recover bonus or other incentive-based or equity-based compensation received by our chief executive officer and chief financial officer and any profits they realized from the sale of securities during the relevant periods in the event we are required to prepare an accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under securities laws and would pursue other available remedies against them or other employees engaged in illegal activities. In addition, we intend to adopt a clawback policy in accordance with the requirements of the Dodd-Frank Act when regulations concerning clawback policies are adopted by the SEC and NYSE. Awards under the proposed 2012 Equity Incentive Plan will be subject to any clawback policy that we adopt.

Anti-Hedging Policy

Our insider trading policies applicable to named executive officers and other officers and directors prohibit transactions in puts, calls and other derivative securities with respect to our securities on an exchange or in any other organized market as well as short sales of our securities. These transactions can hedge against decreases in our stock price and encourage risky behavior. We believe these activities are often perceived as involving insider trading and may focus the holder’s attention on our short-term performance rather than our long-term objectives. In addition, the named executive officers and others subject to this policy may not hold Company securities in a margin account, and may not, without prior approval, pledge Company securities as collateral for any other loan. An exception to this prohibition may be granted in the case of a non-margin loan where the person is able to clearly demonstrate the financial ability to repay the loan without resorting to the pledged securities. We believe these prohibitions are appropriate because a broker is permitted to sell securities in a margin account if the customer fails to meet a margin call, and therefore the securities can be sold at a time when the customer is aware of material nonpublic information about us. Also, a foreclosure sale under any other loan could also occur at a time when the borrower has nonpublic information about us.

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SUMMARY COMPENSATION TABLE

The following table sets forth the compensation of our Chief Executive Officer, our Chief Financial Officer, and each of our next three most highly compensated executive officers serving as of December 31, 2011 (we refer to these five individuals, collectively, as the named executive officers) for the fiscal years ended December 31, 2011, 2010, and 2009. We did not have any pension plans for the past three fiscal years. In addition, our 2010 Deferred Compensation Plan does not provide for above-market or preferential earnings. Therefore, we have not included columns for changes in pension value, or changes in above-market non-qualified deferred compensation earnings in the table below. For additional information concerning the compensation paid to our named executive officers, including the 2010 Deferred Compensation Plan, see the “Compensation Discussion and Analysis” section above.

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GRANTS OF PLAN-BASED AWARDS GRANTED DURING 2011

During 2011, we granted equity awards to the named executive officers, which are summarized below. For additional information regarding the compensation paid to our named executive officers, including grants of equity awards, see “Compensation Discussion and Analysis” above.