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Bill Barrett Corp – ‘DEF 14A’ for 5/12/11

On:  Friday, 3/25/11, at 9:02am ET   ·   Effective:  3/25/11   ·   For:  5/12/11   ·   Accession #:  1193125-11-77382   ·   File #:  1-32367

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

 3/25/11  Bill Barrett Corp                 DEF 14A     5/12/11    1:837K                                   Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML    605K 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

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 STOCKHOLDERS

to be held May 12, 2011

The 2011 annual meeting of stockholders of Bill Barrett Corporation will be held on May 12, 2011 at 9:30 a.m. (Denver time) at The Westin Denver Downtown, Tabor Auditorium, 1672 Lawrence Street, Denver, Colorado 80202, for the following purposes:

Only the stockholders of record as shown on our transfer books at the close of business on March 14, 2011 are entitled to notice of, and to vote at, the annual meeting of stockholders 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, 2010. 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 2010 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 stockholders meeting, that the proxy be returned to you.

The Board of Directors recommends stockholders vote FOR each of the three Class I director nominees, FOR Proposals 2, 4 and 5, FOR “EVERY ONE YEAR” with respect to Proposal 3, and AGAINST Proposal 6.

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

Denver, Colorado

March 25, 2011

1099 18th Street, Suite 2300

Denver, Colorado 80202

(303) 293-9100

PROXY STATEMENT

For the Annual Meeting of Stockholders

to be held May 12, 2011

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 stockholders to be held at 9:30 a.m. (Denver time) on May 12, 2011 at The Westin Denver Downtown, Tabor Auditorium, 1672 Lawrence Street, Denver, Colorado 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 stockholders on or about March 25, 2011.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 12, 2011. 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 stockholders of record on March 14, 2011, 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 14, 2011, there were 47,095,364 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 stockholder?

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

How do I vote?

Stockholders may vote at the meeting in person or by proxy. Proxies validly delivered by stockholders (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 stockholder provides a proxy but gives no instructions, such stockholder’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 stockholder 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. Stockholders 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 stockholder’s last timely vote, whether via the Internet, by telephone or by mail, is the one that will be counted.

What constitutes a quorum?

Stockholders 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 14, 2011, the record date for the meeting, there were 47,095,364 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 three nominees for election as Class I directors who receive the greatest number of votes will be elected directors. Withheld votes, broker non-votes and abstentions will have no effect on the outcome of the election.

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 advisory (non-binding) resolution regarding whether an advisory vote on compensation should be held once every one, two or three years requires the affirmative vote of the holders of a plurality 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 approve our Performance Cash Bonus 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 2011 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.

Approval of the stockholder proposal requesting that the Board of Directors take the steps necessary so that each stockholder voting requirement in our certificate of incorporation and bylaws that calls for a greater than simple majority vote be changed to a majority of the votes cast for and against the proposal in compliance with applicable law 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.

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 “EVERY ONE YEAR” on the advisory (non-binding) resolution regarding whether an advisory vote on compensation should be held once every one, two or three years, “FOR” the proposal to approve our Performance Cash Bonus Plan, “FOR” ratification of the appointment of Deloitte & Touche LLP, and “AGAINST” the stockholder proposal to change stockholder voting requirements described in this proxy statement. Votes at the annual meeting of stockholders 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, 2010 accompanies this proxy statement. None of the information contained in our annual report is proxy solicitation material.

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 stockholders. 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,” 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 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 on May 12, 2011; James M. Fitzgibbons, William F. Owens, and Randy I. Stein currently serve as the Class II directors until the annual meeting to be held in 2012; and Randy A. Foutch and Edmund P. Segner, III currently serve as the Class III directors until the annual meeting to be held in 2013.

On behalf of the Board of Directors, the Nominating and Corporate Governance Committee of the Board of Directors nominated Fredrick J. Barrett, Jim W. Mogg, and Michael E. Wiley for election to the Board as Class I directors. The Board of Directors recommends that each of Fredrick J. Barrett, Jim W. Mogg, and Michael E. Wiley be re-elected to the Board of Directors to serve as the Class I directors, to hold office until the 2014 annual meeting of stockholders, and thereafter until each of their successors is elected and qualified or his earlier resignation or removal. Biographical information concerning these nominees 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 stockholder is entitled to one vote for each share of common stock held in the stockholder’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 Fredrick J. Barrett, Jim W. Mogg, and Michael E. Wiley as the Class I directors. For purposes of the election of directors, withheld votes and abstentions 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 Nominating and Corporate Governance Committee may recommend.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF FREDRICK J. BARRETT, JIM W. MOGG, AND MICHAEL E. WILEY AS THE CLASS I DIRECTORS.

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Directors and Executive Officers

The following table sets forth, as of March 14, 2011, 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 stockholders 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 will be elected at each annual meeting of stockholders. 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, 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 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.

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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.

R. Scot Woodall. Mr. Woodall has served as our Chief Operating Officer since July 2010. He previously 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. Mr. Woodall previously served as Senior Vice President—Western US for Forest Oil Corporation from 2004 to April 2007 and as Drilling and Production Manager for Forest Oil Corporation from 2000 until 2004.

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 the Company’s Chief Financial Officer from November 2006 until March 2007. Mr. Barron was a partner at the Denver, Colorado office of 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.

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

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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.

Randy A. Foutch. Mr. Foutch has served as a director since July 2006. Since March 2007, Mr. Foutch has been serving as a director of Helmerich & Payne, a publicly traded contract drilling company. In 2007, Mr. Foutch founded Laredo Petroleum, Inc., a Mid-Continent focused exploration and production company, where he serves as Chairman and Chief Executive Officer. He also founded Latigo Petroleum, Inc. in 2002 and served as its President and Chief Executive Officer until its sale to Pogo Producing Company in May 2006. In 1996, Mr. Foutch founded Lariat Petroleum, Inc. and served as its President until January 2001, when it was sold to Newfield Exploration, Inc. Prior to founding Colt Resources in 1991, Mr. Foutch was Rocky Mountain Regional Manager for Anschutz Company and Vice President of Exploration for Dyco Petroleum. Mr. Foutch also serves on several nonprofit and private industry boards. As a result of Mr. Foutch’s service as chief executive officer and in other executive positions and as a director of many oil and gas exploration and development 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 exploration and productions companies. Mr. Foutch also brings financial expertise to the Board, including through his experience in obtaining financing for startup oil and gas companies.

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 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 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

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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, Keating Capital, which makes equity investments in private companies, 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. 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 Seahawk Drilling, Inc., an offshore oil and natural gas drilling company, since August 2009. 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 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

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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 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 14, 2011, 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 stockholders 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 13, 2011 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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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.

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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, 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 stockholders 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 2010 are “independent” as that term is defined by New York Stock Exchange (“NYSE”) rules. The seven current directors who served during 2010 determined to be independent are Messrs. Fitzgibbons, Foutch, 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 six times during 2010.

Did any of your directors attend fewer than 75% of the meetings of your Board and such director’s assigned committees during 2010?

No. All directors attended at least 75% of the meetings of our Board and assigned committees during 2010.

How many of your directors attended the 2010 annual meeting of stockholders?

All of our current directors attended and were introduced during our 2010 annual meeting of stockholders. 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. 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 and petroleum engineers. 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.

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

Stockholders 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, stockholders 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 stockholders 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.

Who are the members of the Audit Committee?

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

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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 seven meetings in person or by telephone conference during 2010.

Compensation Committee

What does the Compensation Committee do?

The primary purposes of the Compensation Committee are:

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 ten meetings in person or by telephone conference during 2010.

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

Executive compensation is reviewed at least annually by the Compensation Committee. With limited exceptions, the Compensation Committee makes all decisions regarding the compensation of our executive officers in February 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.

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:

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

The Nominating and Corporate Governance Committee currently consists of Randy A. Foutch, 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 five meetings during 2010.

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 stockholders and, if so, what are the procedures for submitting such recommendations?

Yes, the Nominating and Corporate Governance Committee considers suggestions from many sources, including stockholders, regarding possible candidates for director. Nominations from stockholders 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 below, “What is the process a stockholder must follow to nominate a director?” for the complete requirements for nominations.

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

Our bylaws (the “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 stockholder entitled to vote for the election of directors who has complied with the notice procedures of the Bylaws. To be considered, nominations by stockholders 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 materials for the previous year’s annual meeting of stockholders. 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 stockholder 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 stockholder 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:

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The chairman of any meeting of stockholders 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.

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.

Members of the Compensation Committee

James M. Fitzgibbons

Jim W. Mogg

William F. Owens

Edmund P. Segner, III

Michael E. Wiley, Chair

COMPENSATION DISCUSSION AND ANALYSIS

This compensation discussion and analysis provides a description of the material elements of our executive compensation programs, as well as perspective and context for decisions made during 2010 regarding the compensation for our named executive officers (“NEOs”), who are identified below:

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Executive Summary

2010 Business Results

Our financial and operational highlights for the year ended December 31, 2010 are summarized below:

Key Features of Our Compensation Programs

Compensation Philosophy and Objectives of Compensation Programs

Compensation Philosophy

Our compensation program is strategically designed to encourage growth in our oil and natural gas reserves, production, cash flow, and profitability while focusing on controlling costs and achieving attractive returns on capital in order to enhance long term stockholder value. To achieve these objectives, we believe it is critical to create and maintain compensation opportunities that attract and retain committed, highly qualified personnel by providing appropriate rewards and incentives that align the interests of our employees with those of our stockholders, and structuring a significant portion of the NEOs total compensation as performance-based. We pursue these objectives while stressing the safety of our employees, contractors and the public, and applying appropriate and environmentally conscious technological solutions to minimize disturbance to the areas in which we operate.

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Elements of Compensation

To achieve our goals, we believe that the compensation of all employees, including executive officers, should include the following components:

The Compensation Committee retains the discretion to periodically adjust the compensation program in order to enhance the Company’s ability to attract and retain executives and optimize alignment with stockholder value.

Pay-for-Performance

We believe in maintaining a strong link between the compensation of our named executive officers and performance. Our compensation program is structured to align with overall Company performance, based on an established set of metrics, and individual performance. As a result of these efforts, a significant portion of the 2010 compensation of our named executive officers was performance-based. The following pie charts illustrate the portions of the total compensation of our Chief Executive Officer and other named executive officers (as provided in the Summary Compensation Table) that were performance-based:

Benchmarking Compensation

In its consideration of the appropriate methods, levels, and allocations of compensation for our executive officers, the Compensation Committee reviews data from compensation research firms and compensation consultants about compensation practices and levels of compensation used by other companies within the oil and gas industry. We generally target the 50^th percentile of the comparative market data. During its February meeting each year, the Compensation Committee reviews prior year compensation of the named executive officers,

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determines bonus payouts for prior year performance, and makes decisions regarding current year salaries and equity awards for each named executive officer. At this meeting, the Committee also approves the calculations of vesting of performance shares based on our prior year performance. To assist in its review of the compensation of our officers and pay decisions for 2010, the Compensation Committee reviewed industry data compiled by Effective Compensation, Inc. (“ECI”), a compensation research firm. The same ECI industry survey was used for named executive officers and other employees at the 2009 and 2010 meetings. Beginning in 2011, based on an assessment of available sources of market compensation data, the Compensation Committee has decided to utilize a private survey of companies in the exploration and production industry conducted by Hewitt Associates LLC (“Hewitt”) in connection with its review of officer compensation and pay decisions. The Committee believes this survey contains more robust data relevant to executives and that the survey participants more accurately reflect the executive talent we compete for within the industry.

Role of Compensation Consultants

The Compensation Committee engaged Hewitt in 2010 to review the Company’s compensation practices compared to the practices of other independent oil and gas exploration and production companies and to provide suggestions for improving the Company’s compensation practices. During 2010, the lead Hewitt consultant joined Meridian Compensation Partners, LLC (“Meridian”), which was formed through a planned separation of a significant portion of the executive compensation consulting practice from Hewitt. Meridian provided services to the Compensation Committee throughout 2010 and into 2011. In February 2011, following a review of different compensation consultants, the Compensation Committee entered into an agreement with Meridian to provide the Committee with ongoing consulting services. Meridian is retained by and 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 such services, and the review and approval of Meridian’s invoices.

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 with the Compensation Committee, providing suggested performance metrics for approval by the Compensation Committee, and responding to questions from the Compensation Committee, Hewitt and Meridian. After considering the information described in this compensation discussion and analysis, including information provided by ECI and Meridian and the recommendations of our executive officers as well as current economic conditions, the Compensation Committee determined the levels and allocation of compensation among cash (salary and bonus) and equity (stock options and restricted stock awards) for our Chief Executive Officer and other named executive officers.

Performance Evaluations

In determining salary, bonus, and equity amounts, the Compensation Committee also considered the evaluations of the named executive officers, other than the Chief Executive Officer, prepared by the Chief Executive Officer. The Chief Executive Officer was evaluated by the Compensation Committee and the Nominating and Corporate Governance Committee in a process facilitated by our Lead Director. These evaluations were comprehensive and focused on the significant accomplishments, individual performance levels, work quality, management skills, and opportunities for improvement for each of the named executive officers.

Discussion of Compensation Elements and Performance Criteria

Base Salary

Executive officer salaries are reviewed by the Compensation Committee on an annual basis and are set for individual executive officers 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

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independent oil and gas exploration and production companies. Through these criteria, the Compensation Committee and management believe that base salaries are set in a manner that is both competitive and reasonable within our industry and that allow us to attract and retain qualified executives in the face of competition from other independent oil and gas exploration and production companies.

Based on these considerations, the Compensation Committee set the following annual salaries for each current named executive officer:

Both Mr. Barrett’s and Mr. Reinecke’s salary increases in 2010 were to better position them to the 50^th percentile of the benchmark market data for their respective positions. Mr. Woodall’s salary was increased in July 2010 from $302,264 to $350,000 in connection with his promotion to Chief Operating Officer. Salary increases for the other NEOs are consistent with annual increases for all our employees. The 2011 salaries for the named executive officers were all below the 50^th percentile of the 2010 Hewitt survey information for corresponding positions, ranging from 69% of the 50^th percentile for Mr. Barrett to 97% of the 50^th percentile for Mr. Reinecke.

Annual Cash Bonus Compensation

The Compensation Committee believes that annual cash bonuses are an appropriate way to reward strong corporate and individual performance. The Compensation Committee considers on an annual basis whether to pay cash bonuses to some or all of our employees, including our executive officers. The Compensation Committee approves the total amount of bonuses to all employees and the individual bonuses to each executive officer. In February 2011, the Compensation Committee approved the payment of bonuses to our executive officers based on 2010 performance, including the achievements discussed above under “—Executive Summary—2010 Business Results”, and individual performance and benchmarking analysis. While the Compensation Committee considers these factors, the bonuses are awarded at the discretion of the Compensation Committee.

2010 Performance Metrics

A number of factors went into our determination of 2010 performance goals in February 2010, including the commodity price outlook and business and market conditions at that time. 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), which are reviewed over both one-year and multi-year periods.

Threshold, target, and stretch levels of performance were established for these metrics. Threshold levels of performance are expected to be met in normal operating circumstances and are generally at the low end of the public guidance ranges that we published in the beginning of the year. Target levels of performance are believed to be achievable with additional effort and are generally at the mid-range of our public guidance. Stretch levels of performance are believed to be capable of being met with extraordinary efforts and are above our published guidance range.

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The criteria included in the goals approved by the Compensation Committee for 2010, which were not weighted or prioritized, are summarized below. For those criteria for which we give public guidance, we have included the guidance range published in January 2010 and our actual 2010 results.

During its meeting in February 2011, the Compensation Committee approved the following cash bonus awards for our current named executive officers: Mr. Barrett, $435,000; Mr. Howard, $310,882; Mr. Woodall, $315,000; Mr. Barron, $249,271; and Mr. Reinecke, $206,250. The awards are based on the Committee’s overall assessment of the performance of the Company relative to the 2010 performance metrics (as summarized in the table above) in a challenging operating environment and other achievements described in the “Executive Summary” to this Compensation Discussion and Analysis, as well as performance evaluations of the individual executive officers.

2011 Performance Cash Bonus Plan

In February 2011, the Compensation Committee approved, and recommended to the Company’s stockholders the approval of, the Company’s Performance Cash Bonus Plan (the “Cash Plan”). The purpose of the Cash Plan is to further support a culture of pay-for-performance by providing annual cash awards to employees for the achievement of pre-determined levels of Company performance. We are seeking stockholder approval of this plan at the May 12, 2011 annual meeting of stockholders. See below, “Proposal No. 5—Approval of Performance Cash Bonus Plan”.

The criteria included in the performance goals for the Cash Plan approved by the Compensation Committee for 2011 are summarized below.

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Equity Based Compensation

The Compensation Committee grants stock options and restricted stock to officers and other employees as a means of providing long term incentives to our employees and as a retention tool. The Compensation Committee believes that stock option and restricted stock grants create incentives for increased performance by our employees, including our executive officers, by providing the opportunity for executive officers and other employees to receive added compensation as a result of increases in the value of our common stock. Any increases in the value of our common stock would also benefit all stockholders, thereby aligning our employees’ interests with those of our stockholders. The exercise price for our stock options is the fair market value of our common stock on the date those options are granted. See “Timing of Equity Awards” below.

In making decisions concerning the amounts of stock option and restricted stock awards made to our named executive officers, the Compensation Committee considers several factors, including competitive market data and the performance of the Company and each officer. Our equity awards also have vesting requirements to enhance employee retention and to provide incentive to increase stockholder value over a multi-year period. In February 2010, the Compensation Committee approved the issuance of stock options to our named executive officers and senior managers and restricted stock to certain of our other employees. The awards vest 25% on each of the first four anniversaries of the date of grant. The Compensation Committee also approved a performance share program for named executive officers and senior managers in 2010 (the “2010 Program”).

Performance Share Grants and Vesting for 2010 Performance Share Program

The 2010 Program is designed so that if target goals are consistently met, the performance shares will vest on a ratable basis over a four year period. Minimum performance must be achieved each year (i.e., achieving the target goals) for the restrictions to be lifted. Vesting may be accelerated to be less than four years if exceptional performance is achieved (i.e., achieving the stretch goals). If exceptional performance is achieved so that vesting is accelerated, the restrictions will be lifted and the associated shares transferred to the recipient without any further consideration of the original four year cycle of the initial grant. This potential to accelerate vesting promotes an incentive to achieve performance in excess of the target goals. Up to 50% of the initial performance shares granted to the named executive officers under the 2010 Program may vest each year for four years (beginning with calendar year 2010) based on the achievement of the performance goals as follows:

In order to more closely align named executive officers’ compensation with stockholder return, 20% of the performances shares included in the 2010 Program are subject to vesting based on relative stockholder return. This is a metric added for the 2010 Program and is consistent with the Compensation Committee’s objective to reinforce the concept of rewarding named executive officers when stockholders are rewarded. TSR is computed, and the determination of whether the metric has been met is determined, as follows:

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2010 Performance Share Metrics. In February 2010, the Compensation Committee approved the performance metrics for vesting of performance shares based on 2010 performance in the areas of production growth, combined LOE and G&A expenses, F&D costs, and TSR. In setting the performance metrics, the Compensation Committee considered the commodity price outlook, business and market conditions as of February 2010, and continued its focus on the future success of the Company, and, through the TSR, more closely aligning senior management’s compensation with stockholder return.

For 2010, the Compensation Committee believed it was important to demonstrate the Company’s ability to continue production growth while aligning capital expenditures with cash flow, maintaining a strong balance sheet, and managing costs to the lowest possible level. The Compensation Committee believed the performance measures chosen are aligned with our stockholders’ interests and would provide incentive for the named executive officers to achieve these objectives. Therefore, in 2010, the Compensation Committee assigned a 30% weighting to the F&D costs criteria due to the importance of maintaining discipline in our capital spending during 2010. The remaining weighting was split between organic production growth with a 30% weighting, cost control measures (combined LOE and G&A expenses) at a 20% weighting, and TSR at a 20% weighting. The following table summarizes the operating performance share target and stretch goals for 2010 as determined by the Compensation Committee as well as the actual 2010 results for these measures:

For 2010, the target goals for this program were computed in a two-step process. First, a preliminary target was determined based on normal expectations of our performance for the year. A stretch goal was selected based on what would be perceived to be extraordinary performance by the Company and, where a metric was the same as published guidance, the stretch goal exceeded our published guidance. For purposes of determining the performance share target goals for 2010, the preliminary target amounts were increased by 25% of the difference between the preliminary target and the stretch goals. The Compensation Committee may set the target amounts in a different manner in future years of the program.

Performance Share Vesting Based on 2010 Results. We achieved between the target and stretch goals for the 2010 F&D and total LOE and G&A performance share measures and below the target goal for the organic production growth measure as summarized in the above table. In addition, 7.5% of the total performance shares granted vested based on the TSR measure (which was equivalent to 37.5% of the portion of the performance shares attributable to the TSR performance metric, as discussed in the Outstanding Equity Awards table below) as a result of our TSR being fifth out of the 14 companies in the group. As a result, a total of 28.2% of the original total performance shares granted (which was equivalent to 37.5% of the TSR metric plus 25.9% of the operating metrics) under the 2010 Program vested on February 16, 2011 for those participants who remained employees on that date.

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Rationale for Performance Metrics. The purpose of a performance share program is to encourage management to achieve goals that create stockholder value and to tie a meaningful portion of management’s compensation to Company performance. It is not intended to reward or penalize management for commodity price changes or other factors that are outside of management’s control. In the independent exploration and production (“E&P”) sector, investors typically value companies based on a combination of the following or similar measures:

With the current economic challenges, analysts and investors also are evaluating companies on the basis of financial strength and lower cost structure. Several of the performance results listed above are strongly influenced by commodity prices and general industry conditions. We do not intend to adopt performance measures that encourage speculation with respect to oil and gas prices or discourage implementation of a hedging program because it could limit exposure to increased commodity prices. The Compensation Committee also desires to limit the performance metrics to three or four objectively measured results that are strongly linked to stock performance and thus stockholder value.

The program applies performance vesting equally to all recipients of performance share grants so that the officers, managers, and senior technical professionals will participate on the same basis in all performance measures, and individuals will not participate at different levels in different performance measures, thus promoting corporate alignment to the stockholders’ interests.

The actual performance to be compared to the performance metrics will be modified with consideration to significant changes in the business such as acquisitions, divestitures, or significant changes in the annual budget that require Board approval. If the performance metrics include the results of a property that is sold during the year, the metrics will be adjusted to eliminate those results. If a significant property is acquired during the year, the results from that property will not be included in the actual results for the year. The Compensation Committee will approve any adjustments to the actual results for business changes.

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2010 Performance Share Grants

The following table summarizes the grants of performance shares made to the current named executive officers as part of the 2010 Program:

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 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 deferred compensation plan is a “401(k) overlay” program that matches in cash 6% of compensation above Internal Revenue Code Section 415 limit ($245,000 in 2010) with the flexibility to provide additional compensation deferral options. The named executive officers as well as 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 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 of the Company, 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.

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Additional information is included in the narrative disclosure and table under “Non-qualified Deferred Compensation for 2010” below.

Change in Control Severance Protection Agreements

Our named executive officers and senior managers are covered by change in control severance protection agreements. We believe these agreements allow us to be more 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 for senior vice presidents and above, including the named executive officers (collectively, the “Senior Officers”), 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 $75 per month for commuter bus and train passes, and reimbursement of $20 per month for health club dues on the same terms as offered to other employees.

Other Information

Named Executive Officer and Director Stock Ownership Guidelines

Because the Board believes in linking the interests of management and stockholders, 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 applicable to directors requiring 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. The number of shares of our common stock beneficially owned by our named executive officers is shown above in “Beneficial Owners of Securities”.

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 Internal Revenue 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 stockholder-approved incentive plan is not subject to the Section 162(m) limitations if certain requirements are met. We are seeking stockholder approval of the Performance Cash Bonus Plan at the May 12, 2011 annual meeting of stockholders (see below, “Proposal No. 5—Approval of Performance Cash Bonus Plan”). This plan is 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.

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Timing of Equity Awards

Our Compensation Committee has adopted a policy of granting equity awards at regular quarterly meetings of the Compensation Committee and to consider 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. In January and February 2011, prior to the meeting of the Compensation Committee in February 2011 where equity awards were granted, we issued a press release, filed Current Reports on Form 8-K, and conducted a live webcast of an investor presentation in which we provided estimated 2010 revenues, our 2011 plans and guidance, and other information and responded to investors’ questions. 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 employees, other than executive officers, may be granted at the regular quarterly meetings of the Compensation Committee or on a monthly basis by a subcommittee of the Compensation Committee that constitutes the Option Committee under our equity plans consisting of any two or more members of the Compensation Committee. 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 is equal to the closing price of our common stock on the New York Stock Exchange on the trading day immediately preceding the date of grant. This provision of the 2004 Stock Incentive Plan complies with the manner of determining fair market value in connection with the granting of incentive stock options under the Internal Revenue Code and applicable regulations, which allows the board of directors of a company to determine fair market value using any reasonable valuation method. We believe using the closing price on the day before the date of grant is appropriate so the Compensation Committee knows what the exercise price will be for the awards it is approving. Our 2002 Stock Option Plan, 2003 Stock Option Plan, and 2008 Stock Plan 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.

Compensation Risk Assessment

The Compensation Committee believes that its approach to choosing performance metrics and 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 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 Bonus Plan. The Compensation Committee believes that applying company-wide metrics encourages decision making that is in the best long term interests of the Company and our stockholders 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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Summary Compensation Table

The following table sets forth the compensation of our Chief Executive Officer, our Chief Financial Officer, each of our next three most highly compensated executive officers serving as of December 31, 2010, and Mr. Jaggers, our former Chief Operating Officer and former President, who resigned in July 2010 (we refer to these six individuals, collectively, as the named executive officers) for the fiscal years ended December 31, 2010, 2009, and 2008. We do not have any non-equity incentive plans or pension plans for the past three fiscal years. In addition, our non-qualified deferred compensation plan, which became effective on April 3, 2010, does not provide for above-market or preferential earnings. Therefore, we have not included columns for non-equity incentive plans, 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 non-qualified deferred compensation plan, see “Compensation Discussion and Analysis” above.

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Amount also includes the following matching contributions made to the Non-qualified Deferred Compensation Plan that began in 2010:

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Grants of Plan-Based Awards Granted During 2010

During 2010, we granted equity awards to the named executive officers, which are summarized below. We do not have any non-equity incentive plans. Therefore, we have not included the columns for those types of plans in the table below. For additional information regarding the compensation paid to our named executive officers, including grants of equity awards, see “Compensation Discussion and Analysis” above.