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:
___ Preliminary Proxy Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
X Definitive Proxy Statement
- ---
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ALFA RESOURCES, INC.
(Name of Registrant as Specified in Its Charter)
ALFA RESOURCES, INC.
(Name of Person(s) Filing Proxy Statement)
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ALFA RESOURCES, INC.
218 W. Carmen Lane, Suite 208
Santa Maria, California 92454
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NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS AND PROXY STATEMENT
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TO BE HELD NOVEMBER 5, 1999
Dear Stockholder:
The Annual Meeting of Stockholders of Alfa Resources, Inc. ("Alfa" or the
"Company") will be held at 2922 Chapman Avenue, Suite 202, Orange, California
93869 on November 8, 1999, at 10:30 a.m. PST for the following purposes:
I. to elect five directors of the Company;
II. to approve a 100 to 1 reverse stock split;
III. to approve changing the name of the Company;
VI. to approve the 1999 Incentive Equity Plan (the "Incentive Equity Plan");
and,
VII. to consider and act upon such other matters as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 15, 1999 as
the record date for determining Stockholders entitled to notice of, and to vote
at, the meeting or any adjournment or postponements thereof.
You are cordially invited to attend the meeting in person. Whether or not you
plan to attend the meeting, you are urges to complete, date, sign and return the
enclosed proxy in the accompanying envelope, which mailing will be postage free
if mailed in the United States of America. You may revoke the proxy by filing
properly executed proxy bearing a later date or by attending the Annual Meeting
and voting in person.
Regardless of how many shares you own, your vote is very important. Please sign,
date and return the enclosed proxy card today.
The Company's Annual Report for its fiscal year ending May 31, 1999 is being
mailed to Stockholders and accompanies these proxy materials. The Annual Report
contains financial and other information about the Company, but is not
incorporated in the Proxy Statement and is not deemed a part of the proxy
soliciting materials.
BY ORDER OF THE BOARD OF DIRECTORS
William J. Hickey
Secretary
Santa Maria, California
October 15, 1999
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ALFA RESOURCES, INC.
218 W. Carmen Lane, Suite 208
Santa Maria, California 93454
PROXY STATEMENT
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This Proxy statement is furnished to the holders ("Stockholders") of common
stock, par value ("Common Stock") of Alfa Resources, Inc., a Colorado
corporation (the "Company") in connection with the solicitation of proxies by
the Board of Directors for use at the Annual Meeting of Stockholders to be held
on November 8, 1999 at 10:30 a.m. PST at 2922 Chapman Avenue, Suite 202, Orange,
California 92869 (including any adjournments or postponements thereof (the "
Meeting"). A copy of the Notice of Meeting accompanies this Proxy Statement. It
is anticipated that the mailing of this Proxy Statement and the accompanying
Proxy Card will commence on October 25, 1999.
RECORD DATE; STOCKHOLDERS ENTITLED TO VOTE
Only Stockholders of record at the close of business on October 15, 1999,
the record date ("Record Date") for the meeting, will be entitled to notice of
and to vote at the Meeting. As of the Record Date, Alfa had outstanding
100,000,000 shares of Common Stock. Shares of Common Stock are the only
securities of Alfa entitled to vote at the 'annual Meeting and each share
outstanding as of the Record Date will be entitled to one vote.
VOTE REQUIRED FOR APPROVAL
The presence in person or by proxy of the holders representing one-third of
the outstanding shares of Common Stock will constitute a quorum for the
transaction of business at the meeting. If a quorum is present, a majority of
the shares of Common Stock represented in person or by proxy at the meeting and
voting on a proposal is required to approve the election of Directors and all
other proposals. Sultan Mahmud, Imran Jattala, Tariq Chaudhary, Javed Chaudhary
and Faisal Chaudhary who each own 9.9% of the shares of Common Stock of the
Company, and Edward J. Names and C. L. Nordstrom who own 6.5% and 1.9% of the
shares of Common Stock of the Company (collectively representing 57.9% of the
shares entitled to vote at the Meeting), have each advised the Company that they
intend to vote FOR each of the nominees named herein, FOR the approval of the 1
for 100 share reverse stock split, FOR the change of the Company's name, and FOR
the Incentive Plan.
REVOCABILITY OF PROXIES
A Stockholder who dates, signs and returns the enclosed for of proxy may
revoke the proxy at any time before it is voted by submitting a duly executed
written revocation or a proxy bearing a later date to the Secretary of the
Company. Attendance at the meeting shall not have the effect of revoking a proxy
unless the Stockholder so attending shall, in writing, so notify the secretary
of the meeting at any time prior to the voting of the proxy.
PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition to
soliciting proxies will be borne by the Company. In addition to soliciting
proxies by mail, directors, executive officers and employees of the Company,
without receiving extra compensation therefor, may solicit proxies by
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telephone, telegram or in person. Arrangements will also be made with brokerage
firms and other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owner of shares of the common Stock, and the Company
will reimburse such brokerage firms and other custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in connection
with forwarding such materials, which are anticipated to total approximately
$5,000.
VOTING OF PROXIES
Proxies will be voted in accordance with the instructions indicated
thereon. A validly executed proxy, that does not indicate instructions, will be
voted FOR the Director Nominees identified below and FOR the other proposals.
The proxy permits a Stockholder to withhold voting for any proposal if the
Stockholder so chooses. Abstentions are counted for purposes of determining the
number of shares represented and entitled to vote at the meeting. However,
abstentions are not counted in determining the number of shares voting for an
item of business, and, therefore, have the same effect as a vote AGAINST a
business item. Broker non-votes are counted for purposes of determining the
number of shares represented and entitled to vote at the meeting; however, the
shares represented thereby are not voted and do not represent a vote either FOR
or AGAINST an item of business. The Annual Meeting will be held for the
transaction of business described herein and for the transaction of such other
business as may properly come before the Annual Meeting (which, as defined
herein, includes any postponements or adjournments thereof). At the date of this
Proxy Statement, the only business that the Company's management intends to
present, or knows that others will present, is that described in this Proxy
Statement. If other matters come before the Annual Meeting, the persons holding
proxies solicited hereunder intend to vote such proxies in accordance with their
judgment on all such matters.
PROPOSAL NO. I - ELECTION OF DIRECTORS
The entire Board of Directors is elected annually to serve until their
terms expire and their successors have been elected and qualified. It is the
intention of the persons named in the Proxy to vote for the nominees listed
below except where authority has been withheld as to a particular nominee or as
to all nominees. If any candidate nominated in this Proxy /statement should for
any reason, become unavailable for election, proxies may be voted with
discretionary authority for any substitute designated by the Board of Directors.
Sultan Mahmud, Imran Jattala, Tariq Chaudhary, Javed Chaudhary and Faisal
Chaudhary who each own 9.9% of the shares of Common Stock of the Company, and
Edward J. Names and C. L. Nordstrom who own 6.5% and 1.9% of the shares of
Common Stock of the Company (collectively representing 57.9% of the shares
entitled to vote at the Meeting), have each advised the Company that they intend
to vote for each of the nominees listed below. Pursuant to the Company's
Articles of Incorporation, the Stockholders have authorized a minimum of three
Directors.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS FOR A ONE-YEAR TERM TO EXPIRE
AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
The Board of Directors recommends a vote for the following Director
Nominees, designated as Proposal No. I on the enclosed proxy card.
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NAME AND POSITION YEAR FIRST
CURRENTLY HELD BECAME A YEAR CURRENT
WITH THE COMPANY AGE DIRECTOR TERM EXPIRES
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Sultan Mahmud, President, Director 43 1999 1999
Nancy Heck, Secretary-Treasurer 53 1999 1999
C. L. Nordstrom, Director 80 1981 1999
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INFORMATION ABOUT DIRECTOR NOMINEES
Following is a brief account of the business experience during the past
five (5) years of each of the three Director Nominees of the Company indicating
their principal occupation and employment during that period, and the name and
principal business of any organization in which such occupations and employment
were carried out.
Sultan Mahmud has been president and a Director of the Company since 1999.
Mr. Mahmud has 16 years experience in various aspects of management in public
and private companies. He has MBA degrees in Finance and Marketing from American
International College of Massachusetts. Prior to 1995, Mr. Mahmud worked for
seven years in various positions for Innovation Luggage, a New Jersey based
company. During the year 1996, he was the Chief Operating Officer of Pyramid
Stores, Inc., a wholly owned subsidiary of Meteor Industries, Inc. (Nasdaq;
"METR"). From January 1997 to July 1998 he was a Vice President of Capco
Acquisub, Inc., a wholly owned subsidiary of Capco Resources Ltd. (Alberta;
"CPD-AL"). From August 1998 to January 1999 Mr. Mahmud was Vice President,
Investor Relations for Saba Petroleum Company (Amex; "SAB"). From January 1999
to July 1999, he was President of Capco Resources Ltd. and from August 1999 to
present he has been President of the Company.
Nancy Heck has been Chief Financial Officer, Treasurer, Secretary and a
Director of the Company since 1999. Ms. Heck is a Colorado licensed Certified
Public Accountant with twenty years experience in business and finance. Ms.
Heck's educational background includes a Bachelor's and Master of Science
degree in biology from the University of Michigan, supplementary education in
business and accounting from Ft. Lewis College in Colorado, and yearly
continuing professional educational required for CPA licensure. Prior to
joining the Company, Ms. Heck was a consultant to Community Health Centers,
Inc. and it's affiliated health care organizations in Colorado Springs.
Before consulting for Community Health Centers, Inc. she was employed as the
Center's Chief Financial Officer. She has also held the position of Chief
Financial Officer at Cedar Springs Hospital in Colorado Springs and at Mercy
Medical Center in Durango, Colorado. Ms. Heck has also worked as a Practice
Administrator to an ophthalmology medical practice. Her Public Accounting
experience includes four years as a Senior Accountant in tax and auditing.
C. L. Nordstrom has been a Director of the Company since 1981. From June
1979 to March 1994, Mr. Nordstrom was a Director of Winco Petroleum Corporation,
a publicly held Colorado corporation engaged in oil and gas exploration and
development. Since 1973, Mr. Nordstrom has been self-employed as an investor.
From 1970 until 1973, Mr. Nordstrom served as Manager of Operations
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for the Rocky Mountain District as well as Petroleum Engineer for the Rocky
Mountain Division of Champlin Petroleum Company, a subsidiary of the Union
Pacific Railroad Company. Mr. Nordstrom received a Bachelor of Science degree
in Geology and Engineering from the Montana School of Mines in 1947.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. I
BOARD COMMITTEES AND MEETINGS
The Board of Directors met twice during the fiscal year 1998. The Company
has no standing executive, audit or compensation committees.
PROPOSAL NO. II - APPROVAL OF 1 FOR 100 SHARE ROLLBACK OF
THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK
On October 14, 1999, the Board of Directors adopted a resolution
authorizing the 1 for 100 shares reverse stock split or "rollback" of the issued
and outstanding shares of the Common Stock (the "Rollback"), subject to approval
by the Stockholders of the Company at the Annual Meeting. Sultan Mahmud, Imran
Jattala, Tariq Chaudhary, Javed Chaudhary and Faisal Chaudhary who each own 9.9%
of the shares of Common Stock of the Company, and Edward J. Names and C. L.
Nordstrom who own 6.5% and 1.9% of the shares of Common Stock of the Company
(collectively representing 57.9% of the shares entitled to vote at the Meeting),
have each advised the Company that they intend to vote for the approval of the
Rollback.
On January 4, 1982, the shares of Common Stock of the Company (the Stock")
began trading on the NASD-OTC market. The Stock has never been traded actively
or sustained any level of significant interest by the investment community.
Since 1994, the Company has been unable to attract a market maker to participate
in its securities, and, as a consequence, the Stock has not traded in that
period of time.
As a part of the other business to be transacted by the Stockholders in the
Meeting, the Company proposes to refocus the Company's business strategy by
changing the name of the Company [Proposal No III] in anticipation of acquiring
other oil and gas entities in the near future. It is management's belief that
reducing the outstanding shares of the Common Stock by implementing the reverse
split of 1:100 will allow Alfa Stockholders to gain economic benefit by the
creation of an orderly market for the securities, where buyers and sellers of
Stock would be allowed to trade their securities at a price as dictated by the
market. The current lack of a market for the Stock does not allow investors the
opportunity to, either value their holdings appropriately, or realize proceeds
should they wish to liquidate. The liquidity offered to Stockholders by virtue
of this method would be invaluable in allowing Stockholders to make informed
decisions about their investment in the Company. The 1 for 100 share adjustment
will reduce the current issued and outstanding shares of the Common Stock from
99,000,000 as of August 15, 1999 to 990,000 upon approval of this Proposal. This
will have the effect of increasing the per share Stock value and attracting an
experienced and motivated market maker to create an active market in the
Company's Stock.
No fractional shares of the Company's post-split Common Stock will be
issued upon the surrender for exchange of pre-split stock certificates, and such
fractional share interests will not entitle the owner thereof to vote or have
any other rights of a shareholder of the Company. For each fractional share of
the Company's Common Stock that would otherwise be issued as a result of the
proposed reverse stock split, the Company, in its sole discretion, will remit an
amount in cash (without interest) equal to the product of (a) such fractional
part of a share of the company's Common Stock multiplied by (b) the book value
of the Company's Common Stock as of October 15, 1999, or issue one full share.
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PROPOSAL NO. III - APPROVAL TO CHANGE THE NAME OF THE COMPANY
On October 14, 1999, the Board of Directors unanimously adopted a
resolution approving the amendment of the Articles of Incorporation to change
the name of the Company to "Capco Energy, Inc.", subject to approval by the
Stockholders of the Company at the Annual Meeting. Sultan Mahmud, Imran Jattala,
Tariq Chaudhary, Javed Chaudhary and Faisal Chaudhary who each own 9.9% of the
shares of Common Stock of the Company, and Edward J. Names and C. L. Nordstrom
who own 6.5% and 1.9% of the shares of Common Stock of the Company (collectively
representing 57.9% of the shares entitled to vote at the Meeting), have each
advised the Company that they intend to vote for the approval of this Proposal
No. III.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. II
PROPOSAL NO. IV - APPROVAL OF THE 1999 INCENTIVE EQUITY PLAN
The Board of Directors adopted the 1999 Incentive Equity Plan of the
Company (the "Incentive Plan") on October 14, 1999, subject to approval by the
Stockholders of the Company at the Annual Meeting. Sultan Mahmud, Imran Jattala,
Tariq Chaudhary, Javed Chaudhary and Faisal Chaudhary who each own 9.9% of the
shares of Common Stock of the Company, and Edward J. Names and C. L. Nordstrom
who own 6.5% and 1.9% of the shares of Common Stock of the Company (collectively
representing 57.9% of the shares entitled to vote at the Meeting), have each
advised the Company that they intend to vote for the approval of the Incentive
Plan.
PRIOR HISTORY OF EMPLOYEE STOCK OPTION PLANS
On September 30, 1981, the Board of Directors approved the adoption of an
Incentive Stock Option Plan ("ISOP"). The ISOP reserved 5,000,000 shares of the
Company's $.001 par value common stock for grants to employees at exercise
prices no less than the market value of the common stock on the date of grant.
As of May 31, 1999, no options were outstanding. Options granted are exercisable
for a period of five years or three months after an employee terminates his
employment with the Company, whichever is sooner.
On May 18, 1982, the Board of Directors established a Bargain Stock Option
Plan ("BSOP"). The BSOP reserved 8,000,000 shares of the Company's $.001 par
value common stock for grants to officers, Directors and employees. Under this
plan, the exercise price is determined by the Board of Directors but in no event
can the can the exercise price be less than $.12 per share. As of May 31, 1999,
no options under the this plan were issued and outstanding or exercisable.
On October 14, 1999, the Board of Directors terminated both the ISOP and
the BSOP with instructions to management to review alternative plans that would
provide greater flexibility to the Company in terms of the types of awards that
might be granted.
PURPOSE OF THE INCENTIVE PLAN
The purpose of the Incentive Plan is to enable the Company to attract
officers and other key employees and consultants and to provide then with
appropriate incentives and rewards for superior performance. The Incentive Plan
affords the Company the ability to re4spond to changes in the competitive and
legal environments by providing the Company with greater flexibility in key
employee and executive compensation than was available
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through the previously approved plans. This plan is designed to be an omnibus
plan allowing the Company to grant a wide range of compensatory awards including
stock options, stock appreciation rights, restricted stock, deferred stock and
performance shares or units. The Incentive Plan is intended to encourage stock
ownership by recipients by providing for or increasing their proprietary
interests in the Company, thereby encouraging them to remain in the Company's
employment. The Incentive Plan has been prepared to comply with all applicable
tax and securities laws, including Section 16 (b) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and state and federal tax laws.
DESCRIPTION OF THE INCENTIVE PLAN
General
The following general description of certain features of the Incentive Plan
is qualified in its entirety by reference to the Incentive Plan, which is
attached as Appendix A. Subject to adjustment as provided in the Incentive Plan,
the number of shares of common stock that may be issued or transferred, plus the
amount of shares of common stock covered by outstanding awards granted under the
Incentive Plan, shall not in the aggregate exceed 10% of the issued and
outstanding shares. The number of Performance Units granted under the Incentive
Plan shall not in the aggregate exceed 5% of the issued and outstanding shares.
The number of shares of common stock granted under the Incentive Plan to any
individual in any calendar year shall not in the aggregate exceed 3% of the
issued and outstanding shares.
Eligibility
Officers, including officers who are members of the Board of Directors, and
other key employees and consultants to the Company may be selected by the
Committee (as defined below) to receive benefits under the Incentive Plan.
Terms of Options and Other Possible Awards
The Incentive Plan authorizes the granting of options to purchase shares of
Common Stock ("Option Rights"), stock appreciation rights ("Appreciation
Rights"), restricted shares ("Restricted Shares"), deferred shares ("Deferred
Shares"), performance shares ("Performance Shares") and performance units
("Performance Units"). The terms applicable to these various types of awards,
including those terms that may be established by the Committee when making or
administering particular awards, are set forth in detail in the 1999 Incentive
Plan.
Option Rights.
The Committee may grant Option Rights that entitle the optionee to purchase
shares of common stock at a price less than, equal to or greater than market
value on the date of grant. The option price is payable at the time of exercise
(i) in cash or cash equivalent, (ii) by transfer to the Company of shares of
Common Stock that are already owned by the optionee and have a value at the time
of exercise equal to the option price, (iii) with any other legal consideration
the Committee may deem appropriate or (iv) by any combination of the foregoing
methods of payment. Any grant may provide for deferred payment of the option
price from the proceeds of sale through a broker on the date of exercise of some
or all of the shares of Common stock to which the exercise relates. The
Committee has the authority to specify at
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any time that Restricted shares or other shares of Common Stock which are
subject to risk of forfeiture or restrictions on transfer will be accepted for
part or all of the option price. In such event, the Committee may provide that
the shares of Common Stock received upon exercise of the stock option will not
be subject to the same risks of forfeiture or restrictions on transfer which
applied to the shares used for payment of the option price. The Committee may
also provide that additional Option Rights will automatically be granted to an
optionee upon exercise of Option Rights.
Option Rights granted under the Incentive Plan may be Option Rights that
are intended to qualify as incentive stock options ("ISO's") within the meaning
of Section 422 of the Internal Revenue Code of 1986 ("Code") or Option Rights
that are not intended to so qualify. The Incentive Plan permits the granting of
incentive stock options or non-qualified stock options at the discretion of the
Committee. The exercise price for non-qualified stock options granted may not be
less than 85% of the fair m market value per share of Common Stock on the date
of grant. The exercise price for ISO's may not be less than the fair market
value per share on the date of grant, ISO's granted to persons owning more than
10% of the Company's voting stock must have an exercise price of not less than
110% of the fair market value per share of Common Stock on the date of grant.
All options granted must be exercised within ten years of grant, except that
ISO's granted to Stockholders owning 10% or more of the voting stock of the
Company must be exercised within five years of the date of grant. The aggregate
market value (as determined as of the date of grant) of the common stock for
which any optionee may be awarded ISO's which are first exercisable by such
optionee during any calendar year may not exceed $100,000. At or after the date
of grant of any non-qualified Option rights, the Committee may provide for the
payment of dividend equivalents to the optionee on current, deferred or
contingent basis or may provide that dividend equivalents be credited against
the option price.
Each grant must specify the conditions, including as and to the extent
determined by the Committee, the period or periods of continuous employment or
continuous engagement of consulting services of the optionee by the Company or
any subsidiary, or the achievement of Management Objectives (as defined in the
Incentive Plan), that are necessary before the Option Rights will become
exercisable, and may provide for the earlier exercise of the Option rights,
including, without limitation, in the event of a change in control of the
Company or other similar transaction or event. Successive grants may be made to
the same optionee regardless of whether Option Rights previously granted to him
or her remains unexercised.
Appreciation Rights.
Appreciation Rights granted under the Incentive Plan may either be
freestanding or granted in tandem with Option Rights. An Appreciation Right
represents the right to receive from the Company the difference ("Spread"), or a
percentage thereof not in excess of 100 percent, between the base price per
share of Common Stock in the case of a freestanding Appreciation Right, or the
option price of the related Option Right in the case of a tandem Appreciation
Right, and the market value of the Common Stock on the date of exercise of the
Appreciation Right. Tandem Appreciation Rights may only be exercised at the time
when the related Option Right is exercisable and the Spread is positive, and the
exercise of a tandem Appreciation Right requires the surrender of the related
Option Right for cancellation.
A Freestanding Appreciation Right must have a base price which is at least
equal to the fair market value of a share of Common Stock on the date
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of the grant, must specify the conditions, including as and to the extent
determined by the Committee, the period of continuous employment or continuous
engagement of consulting services, or the achievement of Management objectives
that are necessary before the Appreciation Right becomes exercisable (except
that it may provide for its earlier exercise, including , without limitation, in
the event of a change of control of the Company or other similar transaction or
event) and may not be exercised more than 10 years from the date of grant. Any
grant of Appreciation Rights may specify that the amount payable by the Company
upon exercise may be paid in cash, shares of Common Stock or a combination
thereof, and the Committee may either reserve or grant to the recipient the
right to elect among those alternatives. The committee may provide with respect
to any grant of appreciation/rights for the payment of dividend equivalents
thereon in cash or Common Stock on a current, deferred or contingent basis.
Restricted Shares.
An award of Restricted Shares involves the immediate transfer by the
Company to a participant of ownership of a specific number of shares of Common
Stock in consideration of the performance of services or, as and to the extent
determined by the Committee, the achievement of Management Objectives. The
participant is entitled immediately to voting, dividend and other ownership
rights in the shares. The transfer may be made without additional consideration
from the participant or in consideration of a payment by the participant that is
less than the market value of the shares on the date of grant, as the Committee
may determine.
Restricted Shares must be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined by
the Committee. An example would be a provision that the Restricted Shares would
be forfeited if the participant ceased to serve the Company as an officer or
other key employee during a specified period of years. In order to enforce these
forfeiture provisions, the transferability of Restricted Shares will be
prohibited or restricted in a manner and to the extent prescribed by the
Committee for the period during which the forfeiture provisions are to continue.
The Committee may provide for a shorter period during which the forfeiture
provisions are to apply, including, without limitation, in the event of a change
in control of the Company or other similar transaction or event.
Deferred Shares.
An award of Deferred Shares constitutes an agreement by the Company to
deliver shares of Common Stock to the participant in the future in consideration
of the performance of services, subject to the fulfillment of such conditions
during the Deferral Period (as defined in the Incentive Plan) as the Committee
may specify. During the Deferral Period, the participant has no right to
transfer any rights under the award and no right top vote the shares covered by
the award. On or after the date of any grant of Deferred Shares, the Committee
may authorize the payment of dividend equivalents thereon on a current, deferred
or contingent basis in either cash or additional shares of Common Stock. Grants
of Deferred Shares may be made without additional consideration from the
participant or for consideration in an amount that is less than the market value
of the shares on the date of grant. Deferred Shares must be subject to a
Deferral Period, as determined bay the Committee on the date of grant, except
that the Committee may provide for a shorter Deferral Period, including, without
limitation, in the event of a change of control of the Company or similar
transaction event.
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Performance Shares and Performance Units.
A Performance Share is the equivalent of one share of Common Stock, and a
Performance Unit is the equivalent of $1.00. A participant may be granted any
number of Performance Shares or Performance Units. The participant will be given
one or more Management Objectives to meet within a specified period
("Performance Period") which may be subject to earlier termination, including,
without limitation, in the event of a change in control of the Company or other
similar transaction or event. A minimum level of acceptable achievement will
also be established by the Committee. If by the end of the Performance Period
the participant has achieved the specified Management Objectives, he or she will
be deemed to have fully earned the Performance Shares or Performance Units. If
the participant has not achieved the Management Objectives but has attained or
exceeded the predetermined minimum level of acceptable achievement, he or she
will be deemed to have partly earned the Performance Shares or Performance Units
in accordance with a predetermined formula. To the extent earned, the
Performance Shares or Performance Units will be paid to the participant at the
time and in the manner determined by the Committee in cash, shares of Common
Stock or any combination thereof, and the Committee may either grant to the
recipient or retain the right to elect among these alternatives. At or after the
date of grant of any Performance Shares, the committee may provide for the
payment of dividend equivalents to the optionee on a current, deferred or
contingent basis.
Management Objectives
Management Objectives mean the achievement of performance objectives
established pursuant to the Incentive Plan. The Committee may adjust Management
Objectives and related minimum acceptable levels of achievement if events or
transactions have occurred after the date an award was granted that are
unrelated to the performance of the participant and result in distortion of the
Management Objectives or the related mime levels. Management Objectives my be
described in terms of either Company-wide objectives or objectives that are
related to the performance of the individual participant or the division,
subsidiary, department or function within the Company or a subsidiary in the
participant is employed or with respect to which the participant provides
consulting services.
Transferability
No Option Right, or other "derivative security" within the meaning of Rule
16b-3 under the Exchange Act, is transferable by a participant except by will or
the laws of descent and distribution. Option Rights and Appreciation Rights may
not be exercised during a participant's lifetime except bay the participant or,
in the event of his or her incapacity, by his or her guardian or legal
representative acting in a fiduciary capacity on behalf of the participant under
state law and supervision.
Adjustments
The maximum number of shares of Common Stock that may be issued or transferred
under the Incentive Plan, the number of shares covered by outstanding awards and
the option prices or base prices per share applicable thereto, are subject to
adjustment in the event of stock dividends, stock splits, combination of shares,
re-capitalizations, mergers, consolidations, spin-offs, reorganizations,
liquidations, issuances of rights or warrants and similar transactions or
events. In the event of any such transaction or event, the
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Committee may it its sole discretion provide in substitution for any or all
outstanding awards under the Incentive Plan such alternative consideration as it
may in good faith determine to be equitable in the circumstances and may require
the surrender of all awards so replaced.
Administration and Amendments
The Incentive Plan is to be administered by a committee ("Committee") of
the Board of Directors which shall consist of not less than two Directors, each
of whom is a "disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act. In connection with its administration of the Incentive Plan, the
Committee is authorized to interpret the Incentive Plan and related agreements
and other documents. The Committee may make grants to participants under any or
a combination of all of the various categories of awards that are authorized
under the Incentive Plan. The Committee may with the concurrence of the affected
participant cancel any agreement evidencing an award granted under the Incentive
Plan. In the event of any such cancellation, the Committee may authorize the
granting of a new award under the Incentive Plan in such manner, at such price
and subject to such other terms, conditions and discretion as would have been
applicable under the Incentive Plan had the canceled award not been granted. The
Committee may also grant any award or combination of awards authorized under the
Incentive Plan, including without limitation an award that was granted prior to
the adoption of the Incentive Plan, and any such award or combination of awards
so granted under the Incentive Plan may or may not cover the same number of
shares of Common Stock as had been covered by the canceled award and will be
subject to such other terms, conditions and discretion as would have been
permitted under the Incentive Plan had the canceled award not been granted.
The Incentive Plan may be amended from time to time by the Committee, but
without further approval by the Stockholders of the Company no such amendment
(unless expressly allowed pursuant to the adjustment provisions described above)
may (i) increase the aggregate number of shares that may be issued or
transferred plus the amount of shares covered by outstanding awards, or increase
the aggregate number of Performance Units that may be granted thereunder or (ii)
otherwise cause Rule 16b-3 under the Exchange Act to cease to be applicable to
the Incentive Plan.
Federal Income Tax Consequences to Participants in Plan
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Incentive Plan based on federal
income tax laws in effect on January 1, 1999. This summary is not intended to be
exhaustive and does not describe state or local tax consequences.
Non-qualified Option Rights.
In general; (i) no income will be recognized by an optionee at the time a
non-qualified Option Right is granted; (ii) at the time of exercise of a
non-qualified Option Right, ordinary income will be recognized by the optionee
in an amount equal to the difference between the option price paid for the
shares and the fair market value of the shares if they are nonrestricted on the
date of exercise; and (iii) at the time of sale of shares acquired pursuant to
the exercise of a non-qualified Option right, any appreciation (or depreciation)
in the value of the shares after the date of exercise will be treated as either
short-term capital gain (or loss) depending on how long the shares have been
held.
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Incentive Stock Options.
No income generally will be recognized by an optionee upon the grant or
exercise of an incentive stock option. If shares of Common Stock are issued to
an optionee pursuant to the exercise of an incentive stock option and no
disqualifying disposition of the shares is made by the optionee within two years
after the date of grant or within one year after the transfer of the shares to
the optionee, then upon the sale of the shares any amount realized in excess of
the option price will be taxed to the optionee as long-term capital gain and any
loss sustained will be long-term capital loss.
If shares of Common Stock acquired upon the exercise of an incentive stock
option are disposed of prior to the expiration of either holding period
described above, the optionee generally will recognize ordinary income in the
year of disposition in an amount equal to any excess of the fair market value of
the shares at the time of exercise (or, if less, the amount realized on the
disposition of the shares in a sale or exchange) over the option price paid for
the shares. Any further gain (or loss) realized by the optionee generally will
be taxed as short-term or long-term capital gain (or loss) depending on the
holding period.
Appreciation Rights.
No income will be recognized by a participant in connection with the grant
of an Appreciation Right. When the Appreciation Right is exercised, the
participant normally will be required to include as taxable ordinary income in
the year of exercise an amount of cash, and the fair market value of any
nonrestricted shares of Common Stock, received pursuant to the exercise. In
limited circumstances, however, the Internal Revenue Service ("IRS) may contend
that the holder of a free-standing appreciation right is in constructive receipt
of ordinary income before the Appreciation Right is exercised if (i) a maximum
limitation on the amount payable upon exercise of the Appreciation Right at the
time when Appreciation Right is imposed and (ii) the maximum limitation is
reached prior to the exercise of the appreciation Right at a time when the
Appreciation Right is exercisable.
Restricted Shares.
A recipient of Restricted Shares generally will be subject to tax at
ordinary income rates on the fair market value of the Restricted Shares reduced
by any amount paid by the recipient at such time as the shares are no longer
subject to a risk of forfeiture or restrictions on transfer for purposes of
Section 83 of the Code. However, a recipient who so elects under Section 83 (b)
of the Code within 30 days of the date of transfer of the shares will have
taxable ordinary income on the date of transfer of the shares equal to the
excess of the fair market value of the share (determined without regard to the
risk of forfeiture or restrictions on transfer) over any purchase price paid for
the shares. If a Section 83 (b) election has not been made, any non-restricted
dividends received with respect to Restricted Shares that are subject at the
time to a risk of forfeiture or restrictions on transfer generally will be
treated as compensation that is taxable as ordinary income to the recipient.
Deferred Shares.
No income generally will be recognized upon the grant of Deferred Shares.
The recipient of a grant of Deferred Shares generally will be subject to tax at
ordinary income rates on the fair market value of non-restricted shares of
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Common Stock on the date that the Deferred Shares are transferred to the
recipient, reduced by any amount paid by the recipient, and the capital gain or
loss holding periods for the Deferred Shares will also commence on that date.
Performance Shares and Performance Units.
No income generally will be recognized upon the grant of Performance Shares or
Performance Units. Upon payment in respect of the earn-out of Performance Shares
or Performance Units, the recipient generally will be required to include as
taxable ordinary income in the year of receipt an amount equal to the amount of
cash received and the fair market value of any nonrestricted shares of Common
Stock received.
Special Rules Applicable to Officers and Directors
In limited circumstances where the sale of stock that is received as the
result of a grant of an award could subject an officer or Director to suit under
Section 16 (b) of the Exchange Act, the tax consequences to the officer or
Director may differ from the tax consequences described above. In these
circumstances, unless a special election has been made, the principal difference
usually will be to postpone valuation and taxation of the stock received so long
as the sale of stock received could subject the Officer or Director to suit
under Section 16 (b) of the Exchange Act, but no longer than six months.
Tax Consequences to the Company
To the extent that a participant recognizes ordinary income in the
circumstance described above, the Company will be entitled to a corresponding
deduction provided that, among other things, (i) the income meets the test of
reasonableness, is an ordinary and necessary business expense, is not subject to
the annual compensation limitation set forth in Section 162 (m) of the Code and
is not an "excess parachute payment" within the meaning of Section 280G of the
Code and (ii) any applicable withholding obligations are satisfied.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. IV
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of August 15, 1999
with respect to the beneficial ownership of the Company's Common Stock by: (i)
each person who is known by the Company to beneficially own five percent or more
of any class of the Company's Common Stock, (ii) each Directors and nominee for
Director of the Company, and (iii) all Directors, nominees for Director and
officers of the Company as a group.
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Amount & Nature
Name & Address of Beneficial Percent
Title of Class Beneficial Owner(2) Ownership of Class
- -----------------------------------------------------------------------
$.001 Par Paul Roebling A Trust 10,330,000 (1) 10.4%
Value Common c/o Bank of New York,
Stock 530 Fifth Avenue
New York, NY 10021
$.001 Par Edward J. Names 4,658,000 6.5%
Value Common 216 16th Street #730
Stock Denver, CO 80202
$.001 Par Sultan Mahmud 9,800,000 9.9%
Value Common 3838 Mira Loma Drive
Stock Santa Maria, CA 93455
$.001 Par Imran Jattala 9,800,000 9.9%
Value Common 13763 Harvard Avenue
Stock Chino, CA 91710
$.001 Par Tariq Chaudhary 9,800,000 9.9%
Value Common 3834 Mira Loma Drive
Stock Santa Maria, CA 93455
$.001 Par Javed Chaudhary 9,800,000 9.9%
Value Common 330 E. Enos Drive #170
Stock Santa Maria, CA 93454
$.001 Par Faisal Chaudhary 9,800,000 9.9%
Value Common 5753-G Santiago Road #1500
Stock Anaheim Hills, CA 92807
$.001 Par C. L. Nordstrom 1,891,500 1.9%
Value Common 1735 Clark Street
Stock Aurora, CO 80011
$.001 Par Nancy Heck -0- 0%
Value Common 822 Speed Street
Stock Santa Maria, CA 93454
All Officers and
Directors as a Group 21.7%
- -----------------------
(1)Includes 2,000,000 shares held in the name of the Estate of Paul Roebling
individually and 8,330,000 shares in the name of Paul Roebling A Trust.
(2)Each of the individuals named own all the shares listed of Alfa's Common
Stock directly and of record unless otherwise indicated.
Changes in Control. There are no arrangements, known to the Company,
including any pledge by any person of securities of Alfa, the operation of which
may at a subsequent date result in a change of control of Alfa.
CERTAIN INFORMATION WITH RESPECT TO EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following table sets forth the name, age and position of the executive
officers and key employees of the Company.
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Name Age Position
- ----------------------------------------
Sultan Mahmud 43 President
Nancy Heck 53 Chief Financial Officer & Treasurer
William J. Hickey 58 Secretary
Sultan Mahmud has been president and a Director of the Company since 1999.
Mr. Mahmud has 16 years experience in various aspects of management in public
and private companies. He has MBA degrees in Finance and Marketing from American
International College of Massachusetts.
Nancy Heck has been Chief Financial Officer, Treasurer, Secretary and a
Director of the Company since 1999. Ms. Heck is a Colorado licensed Certified
Public Accountant with twenty years experience in business and finance. Ms.
Heck's educational background includes a Bachelor's and Master of Science degree
in biology from the University of Michigan, supplementary education in business
and accounting from Ft. Lewis College in Colorado, and yearly continuing
professional educational required for CPA licensure.
Prior to joining CRC, Ms. Heck was a consultant to Community Health
Centers, Inc. and it's affiliated health care organizations in Colorado
Springs. Before consulting for Community Health Centers, Inc. she was
employed as the Center's Chief Financial Officer. She has also held the
position of Chief Financial Officer at Cedar Springs Hospital in Colorado
Springs and at Mercy Medical Center in Durango, Colorado.
Ms. Heck has also worked as a Practice Administrator to an ophthalmology
medical practice. Her Public Accounting experience includes four years as a
Senior Accountant in tax and auditing.
William J. Hickey was elected Secretary of the Company on October 14,
1999. Mr. Hickey was a Director and Secretary of Saba Petroleum Company
(Amex; "SAP") from 1992 to 1995. From 1995 to 1996, he was Vice President and
a Director of American Telephone + Data, Inc. (OTC-BB; "AMDP"). From 1997 to
present, he has been a Director and Consultant to Capco Resources Ltd. (ASE;
"CPD-AL"). Mr. Hickey is a lawyer by training and a graduate of Cornell
University Law School.
EXECUTIVE COMPENSATION
No executive officer of the Company received salary, bonuses, option grants
or any other form of compensation during the fiscal year 1998. Any and all
options granted prior to the fiscal year 1998 have expired.
Compensation of Directors.
The Directors of Alfa who do not receive annual salaries from the Company,
receive fees of $350 per Board Meeting attended in person, and reimbursement for
travel expenses. These fees may be increased or decreased from time to time by a
majority vote of the Board of Directors. In addition, any Director who presents
a prospect to Alfa acceptable to a majority of disinterested Board members, or
if a Director substantially assists in the sale of a Company property, the Board
may grant such Director an overriding royalty interest, and/or pay such Director
a commission or finder's fee in
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varying amounts, on a case-by-case basis. Commissions, if paid, are a minimum of
two percent of the purchase or sale price of the property. No consulting fees,
finder's fees or commissions were paid to Directors of Alfa during the fiscal
year ended May 31, 1999.
Termination of Employment and Change of Control Arrangement.
Alfa has no compensation plan or arrangement with any of its current or
former officers or Directors, which will result from the resignation,
retirement, or any other termination by such individual of employment with Alfa.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No Director or officer of Alfa, nominee for election as a Director,
security holder who is known to the Company to own of record or beneficially
more than 5% of any class of the Company's voting securities, or any relative or
spouse of any of the foregoing persons, or any relative of such spouse, who has
the same home as such person or who is a Director or officer of any parent or
subsidiary of Alfa, has had any transaction or series of transactions exceeding
$60,000 during Alfa's last two fiscal years, or has any presently proposed
truncation to which Alfa was or is a party, in which any of such persons had or
is to have any direct or indirect material interest.
As a matter of policy, Directors who are not employees of the Company may
receive finder's fees or commissions if they present a property or prospect to
the Company, which is considered acceptable to a majority of disinterested Board
members. Such commission or finder's fees will be determined on a case-by-case
basis if a transaction is consummated with regard to such prospect or property.
In 1994, a former Company Director (former president) and the former chief
financial officer organized a corporation ("Industries'). In 1998, Industries
charged Alfa $18,392 for accounting and administrative services. In 1998, $2,500
was paid to a Director (chief financial officer) for accounting services related
to SEC filings. A payment of $2,900 was also made to Industries as a prepayment
for preparation of the 1998 Form 10-KSB.
FILING DISCLOSURE
Section 16 (a) of the Exchange Act, as amended, and the rules thereunder
require the Company's officers and Directors and persons who own more than 10%
of the Company's Common Stock to file reports of ownership and changes in the
ownership with the Securities and Exchange Commission and to furnish the Company
with copies.
Based upon its review of the copies of such forms received by it, or
written representation from certain reporting persons, the Company believes
that, during the last fiscal year, all filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were met.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Glenn, Burdette, Phillips & Bryson, a professional corporation, were independent
accountants for the Company for the fiscal year ended May 31, 1999. A
representative of Glenn, Burdette, Phillips & Bryson is expected to be present
at the Meeting and to be available to respond to appropriate questions. No
auditors have been appointed for the fiscal year 1999. The Stockholders are not
being asked to ratify the appointment of auditors for 1999.
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SUBMISSION OF PROPOSALS BY STOCKHOLDERS
In order to be eligible for inclusion in the company's Proxy Statement for
the next Annual Meeting of Stockholders, anticipated to be held in October 2000,
any proposal by a Stockholder must be received by the company in writing at its
principal office in Santa Maria, California by May 27, 2000.
OTHER BUSINESS
The Board of Directors does not know of any business to be presented for
consideration at the Annual Meeting of Stockholders other than that stated in
the Notice of Annual Meeting of Stockholders. It is intended, however, that
persons authorized under the proxies solicited from the Stockholders bay the
Board of Directors may, in the absence of instructions to the contrary, vote or
act in accordance with their judgment with respect top any other proposal
properly presented for action at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
ALFA RESOURCES, INC.
William J. Hickey
Secretary
Santa Maria, California
October 15, 1999
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Appendix A
CAPCO ENERGY, INC.
1999 INCENTIVE EQUITY PLAN
1. Purpose. The purpose this Plan is to attract and retain officers and other
key employees of and consultants to Capco Energy, Inc. (the "Corporation") and
its Subsidiaries and to provide such persons with incentives and rewards for
superior performance.
2. Definitions. As used in this Plan, "Appreciation Right" means a right granted
Pursuant to Section 5 of this Plan, including a Free-standing Appreciation Right
and a Tandem Appreciation Right.
"Base Price" means the price to be used as the basis for determining the Spread
upon the exercise of a Freestanding Appreciation Right.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Committee" means the committee described in Section 14(a) of this Plan.
"Common Shares" means (i) shares of the Common Stock, no par value, of the
Corporation and (ii) any security into which Common Shares may be converted by
reason of any transaction or event of the type referred to in Section 10 of this
Plan.
"Date of Grant" means the date specified by the Committee on which a grant of
Option Rights, Appreciation Rights, Performance Shares or Performance Units or a
grant or sale of Restricted Shares or Deferred Shares shall become effective,
which shall not be earlier than the date on which the Committee
takes action with respect thereto.
"Deferral Period" means the period of time during which Deferred Shares are
subject to deferral limitations under Section 7 of this Plan.
"Deferred Shares" means an award pursuant to Section 7 of this Plan of the right
to receive Common Shares at the end of a specified Deferral Period.
"Effective Date" shall have the meaning set forth in Section 17.
"Free-standing Appreciation Right" means an Appreciation Right granted pursuant
to Section 5 of this Plan that is not granted in tandem with an Option Right or
similar right.
"Incentive Stock Option" means an Option Right that is intended to qualify as an
"incentive stock option" under Section 422 of the Code or any successor
provision thereto.
"Management Objectives" means the achievement of performance objectives
established pursuant to this Plan, which may be described in terms of
Corporation-wide objectives or objectives that are related to the performance of
the individual Participant, or the Subsidiary, division, department or function
within the corporation or Subsidiary in which the Participant is employed or
with respect to which the Participant provides consulting
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services. The Committee may adjust Management Objectives and the related minimum
acceptable level of achievement if, in the sole judgment of the Committee,
events or transactions have occurred after the Date of Grant that are unrelated
to the performance of the Participant and result in distortion of the Management
Objectives or the related minimum acceptable level of achievement.
"Market Value per Share" means the fair market value of the Common Shares as
determined by the Committee from time to time.
"Nonqualified Option" means an Option Right that is not intended to qualify as
an Incentive Stock Option.
"Optionee" means the person so designated in an agreement evidencing an
outstanding Option Right or the Successor of an Optionee, as the context so
requires.
"Option Price" means the purchase price payable upon the exercise of an Option
Right.
"Option Right" means the right to purchase Common Shares from the Corporation
upon the exercise of a Nonqualified Option or an Incentive Stock Option granted
pursuant to Section 4 of this Plan.
"Participant" means a person who is selected by the Committee to receive
benefits under this Plan and (i) is at that time an officer, including without
limitation an officer who may also be a member of the Board, or other key
employee of or a consultant to the Corporation or any Subsidiary or (ii) has
agreed to commence serving in any such capacity, or the Successor of a
Participant, as the context requires.
"Performance Period" means, in respect of a Performance Share or Performance
Unit, a period of time established pursuant to Section 8 of this Plan within
which the Management Objectives relating thereto are to be achieved.
"Performance Share" means a bookkeeping entry that records the equivalent of one
Common Share awarded pursuant to Section 8 of this Plan.
"Performance Unit" means a bookkeeping entry that records a unit equivalent to
$1.00 awarded pursuant to Section 8 of this Plan.
"Reload Option Rights" means additional Option Rights automatically granted to
an Optionee upon the exercise of Option Rights pursuant to Section 4(f) of this
Plan.
"Restricted Shares" means Common Shares granted or sold pursuant to Section 6 of
this Plan as to which neither the substantial risk of forfeiture nor the
restrictions on transfer referred to in Section 6 hereof has expired.
"Rule 16b-3" means Rule 16b-3, as promulgated and amended from time to time by
the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, or any successor rule to the same effect.
"Spread" means, in the case of a Free-standing Appreciation Right, the amount by
which the Market Value per Share on the date when the Appreciation Right is
exercised exceeds the Base Price specified therein or, in the case of a Tandem
Appreciation Right, the amount by which the Market Value per Share on the date
when the Appreciation Right is exercised exceeds the Option Price specified in
the related Option Right.
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"Subsidiary" means any corporation in which the Corporation owns or controls
directly or indirectly more than 50 percent of the total combined voting power
represented by all classes of stock issued by such corporation at the time of
the grant.
"Successor" of a Participant means the legal representative of the estate of a
deceased Participant or the person or persons who shall acquire the right to
exercise an award hereunder by bequest or inheritance or by reason of death of
the Participant.
"Tandem Appreciation Right" means an Appreciation Right granted pursuant to
Section 5 of this Plan that is granted in tandem with an Option Right or any
similar right granted under any other plan of the Corporation.
3. Shares and Performance Units Available under the Plan.
(a) Subject to adjustment as provided in Section 10 of this Plan, the number
of Common Shares issued or transferred, plus the number of Common Shares covered
by outstanding awards granted under this Plan, shall not in the aggregate exceed
500,000 Common Shares, which may be Common Shares of original issuance or Common
Shares held in treasury or a combination thereof.
For the purposes of this Section 3 (a):
(i) Upon payment in cash of the benefit provided by any award granted
under this Plan, any Common Shares that were covered by that award shall again
be available for issuance or transfer hereunder.
(ii) Common Shares covered by any award granted under this Plan shall be
deemed to have been issued or transferred, and shall cease to be available for
future issuance or transfer in respect of any other award granted hereunder, at
the earlier of the time when they are actually issued or transferred or the time
when dividends or dividend equivalents are paid thereon; provided, however, that
Restricted Shares shall be deemed to have been issued or transferred at the
earlier of the time when they cease to be subject to a substantial risk of
forfeiture or the time when dividends are paid thereon.
(b) The number of Performance Units that may be granted under this Plan shall
not in the aggregate exceed 100,000. Performance Units that are granted under
this Plan, but are paid in Common Shares or are not earned by the Participant at
the end of the Performance Period, shall be available for future grants of
Performance Units hereunder.
4. Option Rights. The Committee may from time to time authorize grants to
Participants of options to purchase Common Shares upon such terms and conditions
as the Committee may determine in accordance with the following provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains; provided, however, that no participant shall be granted Option Rights
for more than 100,000 Common Shares in any one fiscal year of the Corporation,
subject to adjustment as provided in Section 10 of this Plan.
(b) Each grant shall specify an Option Price per Common Share, which may be
less than, equal to or greater than the Market Value per Share on the Date of
Grant; provided, however, (i) the Option Price shall equal at least 85% of the
Market Value per Share on the Date of Grant, or (ii) the Option Price with
respect to each Incentive Stock Option shall not be less than 100% (or
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110%, in the case of an individual described in Section 422(b)(6) of the Code
(relating to certain 10% owners)) of the Market Value per Share on the Date of
Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check or
other cash equivalents acceptable to the Committee, (ii) subject to Section
4(d), non-forfeitable, unrestricted Common Shares, which are already owned by
the Optionee and have a value at the time of exercise that is equal to the
Option Price, (iii) any other legal consideration that the Committee may deem
appropriate, including without limitation any form of consideration author-ized
under Section 4(d) below, on such basis as the Committee may determine in
accordance with this Plan and (iv) any combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified Option, the Committee
may determine that payment of the Option Price may also be made in whole or in
part in the form of Restricted Shares or other Common Shares that are subject to
risk of forfeiture or restrictions on transfer. Unless otherwise determined by
the Committee on or after the Date of Grant, whenever any Option Price is paid
in whole or in part by means of any of the forms of consideration specified in
this Section 4(d), the Common Shares received by the Optionee upon the exercise
of the Nonqualified Option shall be subject to the same risks of forfeiture or
restrictions on transfer as those that applied to the consideration surrendered
by the Optionee; provided, however, that such risks of forfeiture and
restrictions on transfer shall apply only to the same number of Common Shares
received by the Optionee as applied to the forfeitable or restricted Common
Shares surrendered by the Optionee.
(e) Any grant may provide for deferred payment of the Option Price from the
proceeds of sale through a broker on the date of exercise of some or all of the
Common Shares to which the exercise relates.
(f) On or after the Date of Grant of any Option Rights, the Committee may
provide for the automatic grant to the Optionee of Reload Option Rights upon the
exercise of Option Rights, including Reload Option Rights for Common Shares or
any other noncash consideration authorized under Sections 4(c) and (d) above.
(g) Successive grants may be made to the same Participant regardless of
whether any Option Rights previously granted to the Participant remain
unexercised.
(h) Each grant shall specify the conditions, including as and to the extent
determined by the Committee, the period or periods of continuous employment, or
continuous engagement of the consulting services, of the Optionee by the
Corporation or any Subsidiary, or the achievement of Management Objectives, that
are necessary before the Option Rights or installments thereof shall become
exercisable, and any grant may provide for the earlier exercise of the Option
Rights, including, without limitation, in the event of a change in control of
the Corporation or other similar transaction or event.
(i) Option Rights granted pursuant to this Section 4 might be Nonqualified
Options or Incentive Stock Options or combinations thereof, as set forth in the
award agreement.
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(j) On or after the Date of Grant of any Nonqualified Option, the Committee
may provide for the payment to the Optionee of dividend equivalents thereon in
cash or Common Shares on a current, deferred or contingent basis, or the
Committee may provide that any dividend equivalents shall be credited against
the Option Price.
(k) No Option Right granted pursuant to this Section 4 may be exercised more
than 10 years from the Date of Grant (except that, in the case of an individual
described in Section 422(b)(6) of the Code (relating to certain 10% owners) who
is granted an Incentive Stock Option, the term of such Option Right shall be no
more than five years from the Date of Grant).
(l) Each grant shall be evidenced by an agreement, which shall be executed on
behalf of the Corporation by any officer thereof and delivered to and accepted
by the Optionee and shall contain such terms and provisions as the Committee may
determine consistent with this Plan.
(m) The aggregate Market Value per Share, determined as of the Date of Grant,
of the Common Shares for which any Optionee may be awarded Incentive Stock
Options which are first exercisable by the Optionee during any calendar year
under this Plan (or any other stock option plan required to be taken into
account under Section 422(d) of the Code) shall not exceed $100,000.
(n) If and to the extent otherwise advisable herein or under the applicable
option agreement, upon and after the death of an Optionee, such Optionee's
Option Rights, to the extent exercisable after death may be exercised by the
Successors of the Optionee. An Option Right may be exercised, and payment in
full of the aggregate Option Price made, by the Successors of an Optionee only
by written notice (in the form prescribed by the Committee) to the Corporation
specifying the number of Common Shares to be purchased. Such notice shall state
that the aggregate Option Price will be paid in full, or that the Option Right
will be exercised as otherwise provided hereunder, in the discretion of the
Corporation or the Committee, if and as applicable.
5. Appreciation Rights. The Committee may also authorize grants to Participants
of Appreciation Rights. An Appreciation Right shall be a right of the
Participant to receive from the Corporation an amount, which shall be determined
by the Committee and shall be expressed as a percentage (not exceeding 100
percent) of the Spread at the time of the exercise of an Appreciation Right. Any
grant of Appreciation Rights under this Plan shall be upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Any grant may specify that the amount payable upon the exercise of an
Appreciation Right may be paid by the Corporation in cash, Common Shares or any
combination thereof and may (i) either grant to the Participant or reserve to
the Committee the right to elect among those alternatives or (ii) preclude the
right of the Participant to receive and the Corporation to issue Common Shares
or other equity securities in lieu of cash; provided, however, that no form of
consideration or manner of payment that would cause Rule 16b- 3 to cease to
apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon the exercise of an
Appreciation Right shall not exceed a maximum specified by the Committee on the
Date of Grant.
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(c) Any grant may specify (i) a waiting period or periods before Appreciation
Rights shall become exercisable and (ii) permissible dates or periods on or
during which Appreciation Rights shall be exercisable.
(d) Any grant may specify that an Appreciation Right may be exercised only in
the event of a change in control of the Corporation or other similar transaction
or event.
(e) On or after the Date of Grant of any Appreciation Rights, the Committee
may provide for the payment to the Participant of dividend equivalents thereon
in cash or Common Shares on a current, deferred or contingent basis.
(f) Each grant shall be evidenced by an agreement, which shall be executed on
behalf of the Corporation by any officer thereof and delivered to and accepted
by the Optionee and shall contain such other terms and provisions as the
Committee may determine consistent with this Plan.
(g) Regarding Tandem Appreciation Rights only: Each grant shall provide that
a Tandem Appreciation Right may be exercised only (i) at a time when the related
Option Right (or any similar right granted under any other plan of the
Corporation) is also exercisable and the Spread is positive and (ii) by
surrender of the related Option Right (or such other right) for cancellation.
(h) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each Free-standing Appreciation
Right a Base Price per Common Share, which shall be equal to or greater than the
Market Value per Share on the Date of Grant;
(ii) Successive grants may be made to the same Participant regardless of
whether any Free-standing Appreciation Rights previously granted to the
Participant remain unexercised; provided, however, that no participant shall be
granted more than 100,000 Freestanding Appreciation Rights in any one fiscal
year of the Corporation, subject to adjustment as provided in Section 10 of this
Plan;
(iii) Each grant shall specify the conditions, including as and to the
extent determined by the Committee, the period or periods of continuous
employment, or continuous engagement of the consulting services, of the
Participant by the Corporation or any Subsidiary, or the achievement of
Management Objectives, that are necessary before the Free-standing Appreciation
Rights or installments thereof shall become exercisable, and any grant may
provide for the earlier exercise of the Free-standing Appreciation Rights,
including, without limitation, in the event of a change in control of the
Corporation or other similar transaction or event; and
(iv) No Freestanding Appreciation Right granted under this Plan may be
exercised more than 10 years from the Date of Grant.
6. Restricted Shares. The Committee may also authorize grants or sales to
Participants of Restricted Shares upon such terms and conditions as the
Committee may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate transfer of the
ownership of Common Shares to the Participant in consideration of the
performance of services, or as and to the extent determined by the Committee,
the achievement of Management Objectives, entitling such Participant to
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dividend, voting and other ownership rights, subject to the substantial risk of
forfeiture and restrictions on transfer hereinafter referred to.
(b) Each grant or sale may be made without additional consideration from the
Participant or in consideration of a payment by the Participant that is less
than the Market Value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the Restricted Shares covered
thereby shall be subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code for a period to be determined by the Committee
on the Date of Grant, and any grant or sale may provide for the earlier
termination of such period, including without limitation, in the event of a
change in control of the Corporation or other similar transaction or event.
(d) Each grant or sale shall provide that, during the period for which such
substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Committee on the Date of Grant. Such restrictions may
include, without limitation, rights of repurchase or first refusal in the
Corporation or provisions subjecting the Restricted Shares to a continuing
substantial risk of forfeiture in the hands of any transferee.
(e) Any grant or sale may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered and reinvested on an immediate or
deferred basis in additional Common Shares, which may be subject to the same
restrictions as the underlying award or such other restrictions as the Committee
may determine.
(f) Each grant or sale shall be evidenced by an agreement, which shall be
executed an behalf of the Corporation by any officer thereof and delivered to
and accepted by the Participant and shall contain such terms and provisions as
the Committee may determine consistent with this Plan. Unless otherwise directed
by the Committee, all certificates representing Restricted Shares, together with
a stock power that shall be endorsed in blank by the Participant with respect to
the Restricted Shares, shall be held in custody by the Corporation until all
restrictions thereon lapse.
7. Deferred Shares. The Committee may also authorize grants or sales of Deferred
Shares to Participants upon such terms and conditions as the Committee may
determine in accordance with the following provisions:
(a) Each grant or sale shall constitute the agreement by the Corporation to
issue or transfer Common Shares to the Participant in the future in
consideration of the performance of services rendered, subject to the
fulfillment during the Deferral Period of such conditions as the Committee may
specify.
(b) Each grant or sale may be made without additional consideration from the
Participant or in consideration of a payment by the Participant that is less
than the Market value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the Deferred Shares covered thereby
shall be subject to a Deferral Period, which shall be fixed by the Committee on
the Date of Grant, and any grant or sale may provide for the earlier termination
of the Deferral Period, including without limitation, in the event of a change
in control of the Corporation or other similar transaction or event.
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(d) During the Deferral Period, the Participant shall not have any right to
transfer any rights under the subject award, shall not have any rights of
ownership in the Deferred Shares and shall not have any right to vote the
Deferred Shares, but the Committee may on or after the Date of Grant authorize
the payment of dividend equivalents on the Deferred Shares in cash or additional
Common Shares on a current, deferred or contingent basis.
(e) Each grant or sale shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered to
and accepted by the Participant and shall contain such terms and provisions as
the Committee may determine consistent with this Plan.
8. Performance Shares and Performance Units. The Committee may also authorize
grants of Performance Shares and Performance Units, which shall become payable
to the Participant upon the achievement of specified Management Objectives, upon
such terms and conditions as the Committee may determine in accordance with the
following provisions:
(a) Each grant shall specify the number of Performance Shares or Performance
Units to which it pertains, which may be subject to adjustment to reflect
changes in compensation or other factors.
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be determined by the Committee on the Date of Grant and
may be subject to earlier termination, including, without limitation, in the
event of a change in control of the Corporation or other similar transaction or
event.
(c) Each grant shall specify the Management Objectives that are to be
achieved by the Participant.
(d) Each grant shall specify in respect of the specified Management
Objectives a minimum acceptable level of achievement below which no payment will
be made and shall set forth a formula for determining the amount of any payment
to be made if performance is at or above the minimum acceptable level but falls
short of full achievement of the specified Management Objectives.
(e) Each grant shall specify the time and manner of payment of Performance
Shares or Performance Units that shall have been earned, and any grant may
specify that any such amount may be paid by the Corporation in cash, Common
Shares or any combination thereof and may either grant to the Participant or
reserve to the Committee the right to elect among those alternatives; provided,
however, that no form of consideration or manner of payment that would cause
Rule 16b-3 to cease to apply to this Plan shall be permitted.
(f) Any grant of Performance Shares may specify that the amount payable with
respect thereto may not exceed a maximum specified by the Committee on the Date
of Grant. Any grant of Performance Units may specify that the amount payable, or
the number of Common Shares issued, with respect thereto may not exceed maximums
specified by the Committee on the Date of Grant.
(g) On or after the Date of Grant of Performance Shares, the Committee may
provide for the payment to the Participant of dividend equivalents thereon in
cash or additional Common Shares on a current, deferred or contingent basis.
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(h) Each grant shall be evidenced by an agreement, which shall be executed on
behalf of the Corporation by any officer thereof and delivered to and accepted
by the Participant and shall contain such terms and provisions as the Committee
may determine consistent with this Plan.
9. Transferability.
(a) No Option Right or other derivative security (as that term is used in
Rule 16b-3) granted under this Plan may be transferred by a Participant except
by will or the laws of descent and distribution. Option Rights and Appreciation
Rights granted under this Plan may not be exercised during a Participant's
lifetime except by the Participant or, in the event of the Participant's legal
incapacity, by his guardian or legal representative acting in a fiduciary
capacity on behalf of the Participant under state law and court supervision.
(b) Any grant made under this Plan may provide that all or any part of the
Common Shares that are to be issued or transferred by the Corporation upon the
exercise of Option Rights or Appreciation Rights or upon the termination of the
Deferral Period applicable to Deferred Shares or in payment of Performance
Shares or Performance Units, or are no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 6 of this Plan,
shall be subject to further restrictions upon transfer.
10. Adjustments. The Committee may make or provide for such adjustments in the
number of Common Shares covered by outstanding awards granted hereunder, the
Option Prices per Common Share or Base Prices per Common Share applicable to any
such awards, and the kind of shares (including shares of another issuer) covered
thereby, as the Committee may in good faith determine to be equitably required
in order to prevent dilution or expansion of the rights of Participants that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, re-capitalization or other change in the capital structure of the
Corporation or (b) any merger, consolidation, spin-off, spin-out, split-off,
split-up, reorganization, partial or complete liquidation or other distribution
of assets, issuance of warrants or other rights to purchase securities or any
other corporate transaction or event having an effect similar to any of the
foregoing. In the event of any such transaction or event, the Committee may
provide in substitution for any or all outstanding awards under this Plan such
alternative consideration as it may in good faith determine to be equitable
under the circumstances and may require in connection therewith the surrender of
all awards so replaced. Moreover, the Committee may on or after the Date of
Grant provide in the agreement evidencing any award under this Plan that the
holder of the award may elect to receive an equivalent award in respect of
securities of the surviving entity of any merger, consolidation or other
transaction or event having a similar effect, or the Committee may provide that
the holder will automatically be entitled to receive such an equivalent award.
The Committee may also make or provide for such adjustments in the maximum
number of Common Shares specified in Section 3(a) of this Plan, the maximum
number of Performance Units specified in Section 3(b), and the maximum number of
Common Shares and Free-standing Appreciation Rights specified in Sections 4(a)
and 5(h)(ii) of this Plan as the Committee may in good faith determine to be
appropriate in order to reflect any transaction or event described in this
Section 10.
11. Fractional Shares. The Corporation shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Committee may provide for
the elimination of fractions or for the settlement thereof in cash.
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12. Withholding Taxes. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Corporation for the withholding are insufficient,
it shall be a condition to the receipt of any such payment or the realization of
any such benefit that the Participant or such other person make arrangements
satisfactory to the Corporation for payment of the balance of any taxes required
to be withheld. At the discretion of the Committee and subject to the provisions
of Rule 16b-3, any such arrangements may include relinquishment of a portion of
any such payment or benefit. The Corporation and any Participant or such other
person may also make similar arrangements with respect to the payment of any
taxes with respect to which withholding is not required.
13. Certain Terminations of Employment or Consulting Services, Hardship and
Approved Leaves of Absence. Notwithstanding any other provision of this Plan to
the contrary, in the event of termination of employment or consulting services
by reason of death, disability, normal retirement, early retirement, with the
consent of the Corporation, termination of employment or consulting services to
enter public service with the consent of the Corporation or leave of absence
approved by the Corporation, or in the event of hardship or other special
circumstances, of a Participant who holds an Option Right or Appreciation Right
that is not immediately and fully exercisable, any Restricted Shares as to which
the substantial risk of forfeiture or the prohibition or restriction on transfer
has not lapsed, any Deferred Shares as to which the Deferral Period is not
complete, any Performance Shares or Performance Units that have not been fully
earned, or any Common Shares that are subject to any transfer restriction
pursuant to Section 9(b) of this Plan, the Committee may take any action that it
deems to be equitable under the circumstances or in the best interests of the
Corporation, including without limitation, waiving or modifying any limitation
or requirement with respect to any award under this Plan.
14. Administration of the Plan.
(a) This Plan shall be administered by a Committee of the Board, which shall
be composed of not less than two members of the Board, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3.
(b) The interpretation and construction by the Committee of any provision of
this Plan or any agreement, notification or document evidencing the grant of
Option Rights, Appreciation Rights, Restricted Shares, Deferred Shares,
Performance Shares or Performance Units, and any determination by the Committee
pursuant to any provision of this Plan or any such agreement, notification or
document, shall be final and conclusive. No member of the Committee shall be
liable for any such action taken or determination made in good faith.
15. Amendments and Other Matters.
(a) This Plan may be amended from time to time by the Committee; provided,
however, that except as expressly authorized by this Plan, no such amendment
shall increase the number of Common Shares specified in Section 3(a) hereof,
increase the number of Performance Units specified in Section 3(b) hereof, or
otherwise cause this Plan to cease to satisfy any applicable condition of Rule
16b-3, without further approval of the Stockholders of the Corporation.
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<PAGE>
(b) With the concurrence of the affected Participant, the Committee may
cancel any agreement evidencing Option Rights or any other award granted under
this Plan. In the event of any such cancellation, the Committee may authorize
the granting of new Option Rights or other awards hereunder, which may or may
not cover the same number of Common Shares or Performance Units as had been
covered by the canceled Option Rights or other award, at such Option Price, in
such manner and subject to such other terms, conditions and discretion as would
have been permitted under this Plan had the canceled Option Rights or other
award not been granted.
(c) The Committee may grant under this Plan any award or combination of
awards authorized under this Plan in exchange for the cancellation of an award
that was not granted under this Plan, including without limitation any award
that was granted prior to the adoption of this Plan by the Board, and any such
award or combination of awards so granted under this Plan may or may not cover
the same number of Common Shares as had been covered by the canceled award and
shall be subject to such other terms, conditions and discretion as would have
been permitted under this Plan had the canceled award not been granted.
(d) This Plan shall not confer upon any Participant any right with respect to
continuance of employment or other service with the Corporation or any
Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e) (i) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock Option from so
qualifying, any such provision shall be null and void with respect to any such
Option Right: provided, however, that any such provision shall remain in effect
with respect to other Option Rights, and there shall be no further effect on any
provision of this Plan.
(ii) Any award that may be made pursuant to an amendment to this Plan
that shall have been adopted without the approval of the Stockholders of the
Corporation shall be null and void if it is subsequently determined that such
approval was required in order for this Plan to continue to satisfy the
applicable conditions of Rule 16b-3.
16. Termination of the Plan. No further awards shall be granted under this Plan
after the passage of 10 years from the date on which this Plan is first approved
by the Stockholders of the Corporation.
17. Effective Date. The effective date of this Plan (the Effective Date") shall
be October 15, 1999, provided, however, that this Plan and each award granted
hereunder shall be void and of no force or effect until and unless this Plan
shall have been approved by a vote of the holders of the majority of the Common
Shares of the Corporation present, or represented, and entitled to vote at a
meeting duly held in accordance with Colorado law.
18. Non-transferability. Each award granted under this Plan shall by its terms
be nontransferable by the Participant except by will or the laws of decent and
distribution of the state wherein the Participant is domiciled at the time of
his death; provided, however, that the Committee may (but need not) permit other
transfers, to the extent consistent with Rule 16b-3; where the Committee
concludes that such transferability does not result in accelerated taxation and
is otherwise appropriate and desirable.
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ALFA RESOURCES, INC.
218 West Carmen Lane, Suite 208
Santa Maria, California 93454
ANNUAL MEETING OF STOCKHOLDERS - 1999
This proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints Nancy Heck and William J. Hickey, or either
of them, as attorneys-in-fact and proxies, each with the power to appoint
his/her substitute and hereby authorizes them to represent and to vote, as
designated below, all the shares of Alfa Resources, Inc. held of record by the
undersigned as of October 15, 1999, at the Annual Meeting of Stockholders to be
held at 2922 Chapman Avenue, Suite 202, Orange, California 92869 on November 8,
1999 at 10:30 a.m. or at any adjournments or postponements thereof.
I. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) [ ] below [ ]
Sultan Mahmud, Nancy Heck and C. L. Nordstrom
II. Approval of 1 for 100 reverse stock split
[ ] FOR [ ] AGAINST
III. Approval of the change of name of the Company to "Capco Energy, Inc."
[ ] FOR [ ] AGAINST
IV. Approval of the 1999 Incentive Equity Plan
[ ] FOR [ ] AGAINST
In their discretion, the proxies are authorized to vote upon such other
business as may come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTOR NOMINEES AND FOR
PROPOSALS II, III, IV AND V.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned Stockholder. If no direction is made, this proxy will
be voted for the proposals listed above and for any other proposals.
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The undersigned hereby ratifies and confirms that said attorneys-in-fact
and proxies shall lawfully do or cause to be done by virtue hereof, and hereby
revokes any and all proxies heretofore given by the undersigned to vote at the
Annual Meeting or at any adjournments or postponements thereof. The undersigned
acknowledges receipt of notice of said meeting and the proxy statement
accompanying such notice.
Dated: __________________________
--------------------------
Signature
--------------------------
Signature If Held Jointly
Please sign exactly as your name appears below. When shares are held as
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in the full corporate name by the president or other
authorized officer or if a partnership, by an authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY.
29
