GOLDEN TRIANGLE INDUSTRIES, INC.
Notice of Annual Meeting of Stockholders
to be held May 17, 1997
Albuquerque, New Mexico
April 7, 1997
PLEASE TAKE NOTICE that the Annual Meeting of the Stockholders of
Golden Triangle Industries, Inc. will be held on May 17, 1997 at
Hyatt Regency, 330 Tijeras N.W., Albuquerque, New Mexico 87102.
The meeting will convene at 2:00 p.m. (Mountain Time), for the
purpose of considering and acting upon the following:
(1) the election of directors;
(2) the ratification of the selection of Robert Early &
Company, P.C. as independent accountants for fiscal
year 1997;
(3) the approval of a proposal to amend the Company's
Articles of Incorporation to abolish classification of
directors;
(4) the approval of a proposal for a 1-for-3.5 reverse
split of the Company's stock; and
(5) the transaction of such other business as may properly
come before the meeting.
The transfer books of the Company will not be closed, but only
stockholders of record at the close of business on April 1, 1997
will be entitled to vote at the meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON, PLEASE SIGN AND DATE THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED SELF ADDRESSED ENVELOPE TO ASSURE YOUR
REPRESENTATION AT THE MEETING. YOU MAY REVOKE YOUR PROXY AT ANY
TIME PRIOR TO ITS EXERCISE BY GIVING WRITTEN NOTICE TO THE
COMPANY OR BY ATTENDING THE MEETING AND VOTING IN PERSON. YOUR
VOTE IS IMPORTANT.
Shawna Owens
Secretary
=================================================================
<PAGE>
PROXY STATEMENT
GOLDEN TRIANGLE INDUSTRIES, INC.
P. O. Box 22010
Albuquerque, New Mexico 87154
(505) 856-5075
The following information is furnished to stockholders of Golden
Triangle Industries, Inc. (the "Company") in connection with the
solicitation by the Board of Directors of the Company (the
"Board") of proxies to be used at the Annual Meeting of
Stockholders to be held on May 17, 1997 (the "Meeting"), and at
any adjournment thereof. All properly executed proxies will be
voted in accordance with the instructions contained thereon, and
if no choice is specified, the proxies will be voted for the
election of all the directors named herein and in favor of each
proposal set forth in the Notice of Meeting.
Any GTII shareholder has the power to revoke his Proxy before its
exercise at the Annual Meeting or any adjournment thereof by: (1)
giving written notice of revocation to the Secretary of GTII,
Shawna Owens, P. O. Box 22010, Albuquerque, New Mexico 87154,
prior to the Annual Meeting; (2) giving written notice of
revocation to the Secretary at the Annual Meeting; or (3) signing
and delivering a Proxy bearing a later date. However, the mere
presence at the Annual Meeting of a shareholder who has executed
and delivered a valid Proxy will not revoke such Proxy.
There are no dissenters' rights of appraisal. Neither the By-
Laws nor corporate law of the Company's state of incorporation
call for any dissenters' rights of appraisal.
This proxy statement will be transmitted to stockholders on or
about April 7, 1997.
VOTING
The voting securities of the Company consist of shares of its
common stock, $.001 par value (the "Common Stock"). Holders of
record of the Common Stock at the close of business on April 1,
1997 will be entitled to vote at the Meeting. Each share of
Common Stock entitles its owner to one vote, and cumulative
voting is not allowed. The number of shares outstanding of the
Common Stock at the close of business on April 1, 1997 was
1,960,377. In addition to the Common Stock, there are 11,586
shares outstanding of Class A Preferred Stock and 188,585 shares
outstanding of Class B Preferred Stock ("Preferred Stock").
During 1996 Preferred Stock was issued to shareholders in
exchange for Common Stock at a rate of 1-for-10, with the
Preferred Stock retaining the same voting rights as if it were
Common Stock. Therefore, the holders of Preferred Stock at the
close of business on April 1, 1997, are also entitled to vote at
the Meeting with each preferred share being equivalent to 10
common shares (total preferred shares equivalent to 2,001,710
common shares outstanding). Hereafter in this report reference
to voting Common Stock will also include the Preferred Stock.
The holders of record of 45% of the outstanding shares of the
Common Stock will constitute a quorum for the transaction of
business at the Meeting, but if a quorum should not be present,
the Meeting may adjourn from time to time until a quorum is
obtained.
A majority of the shares represented and entitled to vote at the
meeting are required for an affirmative vote. An abstain vote
will be counted in determining a quorum, but will not be counted
as a vote either for or against the issues.
ELECTION OF DIRECTORS
The Board of Directors of the Company (the "Board") presently
consists of eight members. The directors of the Company are
divided into three classes designated as Class I, Class II, and
Class III. The term of office of the initial Class I directors
expires at the next succeeding annual meeting of stockholders,
the term of office of the initial Class II directors expires at
the second succeeding annual meeting of stockholders, and the
term of office of the initial Class III directors expires at the
third succeeding annual meeting of stockholders. The initial
Class I, Class II, and Class III directors are those directors
elected at the June 14, 1991 annual meeting. At each annual
meeting after the June 14, 1991 annual meeting, directors to
replace those of a Class whose terms expire at such meeting shall
be elected to hold office until the third succeeding annual
meeting. If the number of directors is changed, the directorships
shall be so apportioned among the classes as to make all classes
as nearly equal in number as possible. Currently serving as
directors are: Ivan Webb, Karen Lee, and Betty Polston as Class
I directors; John Vuksich and Richard A. Levine as Class II
directors; and Howard Siegel, Kenneth Owens, and Glenn Gagnon as
Class III directors. David Polston resigned as a Class II
director effective March 13, 1997. Richard A. Levine and Glenn
Gagnon were appointed as directors during March 1997 to be placed
on the ballot for election. The following table sets forth
information concerning the persons currently serving as directors
of the Company.
Date First
Position With Elected
Name Age the Company as Director
Kenneth Owens 59 Chairman of the 1994
Board and President
Ivan Webb 46 Chief Financial 1993
Officer and Director
Karen Lee 37 Director 1989
Betty Polston 63 Director 1995
Howard B. Siegel 54 Director 1980
John M. Vuksich 45 Director 1995
Richard A. Levine 49 Proposed Director* --
Glenn Gagnon 32 Proposed Director* --
*Appointed by the Board of Directors to be elected by the
shareholders at the 1997 annual meeting.
Family relationships among the Company's officers and directors
include: Kenneth Owens and Shawna Owens are father and daughter,
and Betty Polston and David Polston are mother and son.
Kenneth Owens, Chairman of the Board and President, has expertise
in various areas of business. Beginning in 1961 he performed in
a supervisory capacity for several worldwide companies including
Becktel and Brown & Root. He has been involved in a variety of
projects including: (1) Alaskan oil and gas pipeline; (2) ICBM
projects; and (3) underground nuclear testing in Nevada. He has
also been active in real estate and agriculture, acquiring a
major interest in ranch grazing land and cattle operations in
Texas, Arizona, and New Mexico covering hundreds of thousands of
acres.
At the present time, he is active in both agricultural ventures
and oil and gas operations. He is also consultant for
surrounding businesses in south Texas concerning the Railroad
Commission of Texas and the Texas Natural Resource Conservation
Commission. He incorporated Transcon Energy Corp. in Texas in
1988, and since that time he has incorporated several other
companies and holds positions in these companies as President
and/or CEO or Director.
Ivan Webb, Chief Financial Officer and Director, is a petroleum
landman. He received his Bachelor of Business Administration
degree in Management from Tarleton State University (branch of
Texas A & M) in 1978. In July, 1992, the Company acquired
Houston Oil & Energy, Inc. (HOE). Mr. Webb was an officer and
director of HOE for 11 years. He was instrumental in the
preparation of four oil and gas public stock offerings in 1972,
1974, 1976 and 1981, being employed by each of these companies to
seek oil and gas production plus manage the office operations.
Mr. Webb has negotiated the acquisition of more than 200
producing oil and gas wells within the United States.
In addition to the domestic acquisitions, Mr. Webb has been
active in leasing foreign oil and gas concessions, mostly in
Australia. He has successfully leased over 12,000,000 acres in
Queensland, Australia, and has negotiated lease terms with
government officials for oil and gas exploration in Argentina,
Guyana, and New Zealand. Over the past four years Mr. Webb has
acted as an independent consultant and managed the drilling
operations of sixteen oil and gas wells in central Texas,
thirteen of which have been completed as producers.
Karen Lee, Director, graduated with high honors from Cisco Junior
College. She administers the operation of the Company's offices
in Springtown, Texas, performs many tasks in connection with the
Company's public relations and broker relations programs, does
much of the research and writing for filing of Securities and
Exchange Commission documents, and is the transfer agent for the
Company. Ms. Lee has been employed by the Company for the past
17 years.
Betty Polston, Director, received two Masters degrees and worked
as a business/education consultant before moving to South Texas.
For the past seven years she has been employed by OCR and
Transcon, now subsidiaries of GTII, and has been instrumental in
the development of their facilities. She is the office manager,
plus is responsible for establishing and keeping current all
leases and permits for the entire South Texas operation, which
includes OCR, Transcon and Jim Wells. She manages the base field
radio and office phone on a 24 hour seven day a week basis, helps
coordinate field operations, and handles inquiries from clients,
Railroad Commission inspectors, lease holders, suppliers, SEC
auditors etc.
Howard B. Siegel, Director, received his Bachelor of Business
Administration Degree from the University of Oklahoma in 1966.
He received a Doctor of Jurisprudence Degree from St. Mary's
University School of Law in 1969. Mr. Siegel was formerly an
attorney for Superior Oil Company, a major oil and gas concern
located in Houston. He previously served as Vice President,
General Counsel, and a member of the Board of Directors of
Tenneco Inc. Federal Credit Union. From August 1989 until
January, 1991 he was employed with Hurt, Richardson, Garner, Todd
& Cadenhead in Atlanta, Georgia. Mr. Siegel is currently
employed as an attorney with Eikenburg & Stiles in Houston,
Texas. Mr. Siegel has served in an advisory capacity to the
Board of Directors of the Company since March 25, 1980.
John M. Vuksich, Director, received a B.S. degree from the U. S.
Military Academy at West Point, a M.S. degree from Stanford
University, and another M.S. degree from the Naval War College.
From 1987 to 1991 he was the System Element Manager/Operations
Research Analyst for the Strategic Defense Initiative
Organization in Washington, D. C. From August 1991 to July 1993
he was the Senior Cost Analyst for the Office of the Assistant
Secretary of Defense where he conducted independent assessments
for the Under Secretary of Defense for Acquisition of selected
defense programs, and assessed all elements of the Strategic
Defense Initiative. From September 1994 until February 1996 Mr.
Vuksich served as the Science Advisor to the Governor of New
Mexico.
Dr. Richard A. Levine, proposed Director, received three degrees
from State University of New York at Buffalo - B.A., D.D.S., with
honors, M.D., with honors. After residencies including the U. S.
Army Institute of Surgical Research and Resident in General
Surgery at Buffalo General Hospital, and appointments at several
hospitals such as Chief of Plastic Surgery at Charleston
Veteran's Administration Hospital, and Attending Plastic Surgeon
at Medical University of South Carolina, Dr. Levine settled in
San Antonio, Texas. He has been self-employed in San Antonio
for the past five years, and on the active staff of the Baptist
Memorial Hospital System. He is Chairman of the Division of
Plastic Surgery for the Baptist Memorial Hospital System, and is
the Clinical Associate Professor - Department of Plastic Surgery
at the University of Texas Health Science Center at San Antonio.
Dr. Levine has had articles published in the "Journal of Plastic
and Reconstructive Surgery" and has given numerous presentations
on various subjects in his field.
Glenn Gagnon, proposed Director, received a Bachelor of Science
degree from Texas A&M University in 1994. From 1990-1994 he was
employed by Gold Gyms Inc. and was responsible for marketing,
sales and automation of new facilities. He has been employed by
Golden Triangle Industries, Inc. since 1994 and is now in charge
of public relations for the Company. He established the Dividend
Reinvestment and Stock Purchase Plan for the Company and is
currently assisting with filing of Securities and Exchange
Commission documents.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD
The Board has recommended and placed on the ballot a proposal to
abolish the classification of directors (see "Proposal to Amend
the Articles of Incorporation to Abolish the Classification of
Directors"). Therefore, each of the eight directors will no
longer be in classes, but will be elected to serve a one year
term only. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
EIGHT DIRECTORS TO BE ELECTED as directors to hold office until
the next annual meeting and until his/her successor has been duly
elected and qualified.
The affirmative vote of the holders of a majority of the issued
and outstanding shares of Common Stock is necessary for the
election of directors.
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1996, the Board held 12
meetings either by actual meeting or telephone conference. All
directors participated in at least 75% of the meetings.
The Board maintains a standing Audit Committee, Compensation
Committee and Nominating Committee. Kenneth Owens and David
Polston are the sole members of the Nominating Committee. Karen
Lee and Betty Polston are the sole members of the Compensation
Committee. Ivan Webb, John Vuksich, and Shawna Owens are the
sole members of the Audit Committee.
The functions of the Audit Committee are to approve the selection
of the Company's accountants and to monitor the process by which
the Company's financial records are maintained. The primary
function of the Compensation Committee is to recommend to the
Board the compensation to be paid to the Company's officers,
directors, and employees. The primary function of the Nominating
Committee is to select nominees for director. Presently the
Board of Directors is filled, but in the event a new director is
needed, the Nominating Committee would consider nominees
recommended by security holders (see "Stockholder Proposals").
These committees met twice during the year with all members of
the committees attending each meeting.
MANAGEMENT
All of the Company's officers are executive officers who serve,
unless otherwise specified by the Board, for a term of one year
or until their successors are elected or appointed and qualified.
The table below sets forth certain information with respect to
the executive officers of the Company.
Date First
Position With Elected
Name Age the Company as Director
Kenneth Owens* 59 Chairman of the 1994
Board and President
Ivan Webb* 46 Chief Financial 1993
Officer and Director
Shawna Owens 24 Secretary/Treasurer 1995
*See "Election of Directors" for biographical information.
Shawna Owens, Secretary/Treasurer, attended Texas A&M University
and has experience in management, accounting and public relations
with different law firms. Ms. Owens worked in Washington, D. C.
for Senator Pete Dominici of New Mexico and also worked with the
Sergeant of Arms for the U. S. Senate Chambers. She is in charge
of bookkeeping and was instrumental in automating GTII's
accounting. Ms. Owens also performs public relations duties for
the Company. She has been employed by the Company since August,
1995.
COMPENSATION
Officer Compensation
The following table sets forth certain information as to each of
the Company's executive officers for the past three fiscal years.
Salary Cash Bonus Cash
Name and Compensation Compensation
Principal Position Year ($) ($)
Kenneth Owens 1994 -0-
Chairman and President 1995 -0-
1996 -0-
Ivan Webb 1994 33,365
Chief Financial 1995 38,926
Officer 1996 17,037
Shawna Owens 1994 -0-
Secretary/Treasurer 1995 5,500
1996 13,410 5,500
Director Compensation
In 1994 each director, with the exception of Robert Kamon who
volunteered to forego his fee, received $2,000 cash for services
rendered in their capacities as directors; no stock was issued
for directors' fees. In 1995, the Board approved a $1,500 fee
for each director to be paid as cash or 500 shares of stock; the
fee was paid in cash to six directors, and in stock to four
directors. In 1996, the Board approved a $1,500 fee for each
director to be paid as cash or 500 shares of stock. To date, the
fee has not yet been paid.
Compensation Committee Report
The Board of Directors delegates responsibility for executive
compensation to the Compensation Committee which is comprised of
two of the directors on the Board. This committee reviews the
salaries of each of the officers of the Company, as well as
recommends the directors' fees for the year. The committee
recommended to the Board that all salaries remain at the same
level for all officers during 1996, that a bonus progam in place
for two officers/employees be terminated, and that directors'
fees be set at $1,500 cash or 500 shares of stock for 1996.
Performance Graph - Set forth below is a line graph comparing the
yearly percentage change in the cumulative total shareholder
return on the Corporation's Common Stock against the cumulative
total return of the NASDAQ Stock Market and the NASDAQ Non-
Financial Stocks. The graph assumes that the value of the
investment in the Corporation's Common Stock and each index was
$100 at December 31, 1992. GTII's numbers reflect a 1-for-20
reverse stock split in 1993 and a 1-for-2.5 reverse stock split
in 1995.
Comparison of Five-Year Cumulative Total Return
12-31 1992 1993 1994 1995 1996
GTII Stock 100.00 67.50 51.47 72.88 57.75
NASDAQ Stocks 100.00 114.80 112.21 158.68 195.19
Non-Financial 100.00 115.45 111.02 154.71 187.97
Stocks
CERTAIN TRANSACTIONS
During 1996, GTII borrowed money to purchase the use of the
Amando Disposal Facility, $313,000 of which was borrowed from
directors of GTII, directors' family members, and security
holders known to own more than 5% of the Company. Following is a
table showing the related party who loaned the money to GTII,
date of loan, amount of loan, interest rate, and the date GTII
repaid the loan.
Amount of Date of Interest Date
Name Loan Loan Rate Paid Off
Kenneth Owens $120,000 04/23/96 24% 12/30/96
Betty Polston $100,000 04/23/96 24% 10/22/96
John Vuksich $ 15,000 04/23/96 24% 05/18/96
Ken Kamon $ 38,000 04/23/96 24% 05/18/96
Derald Polston $ 40,000 05/05/96 24% 10/22/96
GTII repaid all loans plus interest before the 1996 year end.
Several of the officers and directors of the Company have
invested in the oil and gas business, either directly or through
entities in which they have an interest. Certain of these
interests could directly compete with the interests of the
Company. Although the Company is not aware of any present
conflicts of interest, such present or future activities on the
part of the officers and directors could directly compete with
the interests of the Company. If the Company should enter into
future transactions with its officers, directors or other related
parties, the terms of any such transaction will be as favorable
to the Company as those which could be obtained from an unrelated
party in an arm's-length transaction.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the
Company's common stock as of April 1, 1997 with respect to (1)
each person known by the Company to own beneficially more than 5%
of the Company's common stock, (ii) each of the Company's
directors, and (iii) all directors and officers of the Company as
a group. The title of class is common stock, $.001 par value.
NOTE: Some of the following shareholders have exchanged all or a
portion of their common shares for preferred shares. In
accordance with the Preferred Stock Plans, the preferred shares
have the same voting rights as if they were common shares.
Therefore, the shares are listed below as common shares with a
footnote following to explain the breakdown of the number of
common and the number of preferred each person holds.
# of Shares
Name and Beneficially Percent of
Address of Stockholder Owned Class
Kenneth Owens 1,314,543 (1) 33.18%
P. O. Box 125
Magdalena, NM 87825
Howard B. Siegel 500 00.01%
14760 Memorial Dr.
Ste. 300-228
Houston, TX 77079
Karen Lee 4,656 00.12%
104 Fossil Court
Springtown, TX 76082
Ivan Webb 5,300 00.13%
P. O. Box 31
Cisco, TX 76437
Betty Polston 282,458 (2) 07.13%
P. O. Box 470
Zapata, TX 78076
John Vuksich 10,500 (3) 00.27%
4322 Shadow Oak Lane
Austin, TX 78746
Shawna Owens 2,000 (4) 00.05%
P. O. Box 22010
Albuquerque, NM 87154
Dr. Richard A. Levine 3,637 00.09%
8500 Village Drive
Ste. 102
San Antonio, TX 78217
Glenn Gagnon 1,998 (5) 00.05%
8504 Sonoma Valley N.E.
Albuquerque, NM 87122
All directors and officers
as a group (8 persons) 1,625,592 (6) 41.03%
David Polston 278,808 (7) 07.04%
P. O. Box 470
Zapata, TX 78076
Ken Kamon 252,595 (8) 06.38%
P. O. Box 10589
Midland, TX 79072
Note: The stockholders identified in the table above have sole
voting and investment power with respect to the shares
beneficially owned by them.
(1) Common - 13,493; Preferred B - 130,105
(2) Common - 14,558; Preferred B - 26,790
(3) Common - 500; Preferred B - 1,000
(4) Preferred B - 200
(5) Common - 198; Preferred B - 180
(6) Common - 42,842; Preferred B - 158,275
(7) Common - 28,808; Preferred B - 25,000
(8) Common - 172,595; Preferred A - 6,500; Preferred B - 1,500
Changes in Control
No changes in control occurred during 1996, and management is not
aware of any present arrangements that would cause a change in
control in the future.
PROPOSAL TO RATIFY THE ELECTION OF INDEPENDENT ACCOUNTANTS
Background and Description
Pursuant to the recommendations of the Audit Committee, the Board
has selected Robert Early & Company, P.C. to audit the accounts
of the Company and its subsidiaries for 1997. Such firm has
served as the Company's independent accountants for the past
fourteen (14) years. A representative of Robert Early & Company,
P.C. is expected to be present at the Meeting. He will have the
opportunity to make a statement, if he desires to do so, and to
respond to appropriate questions.
In addition to its audit services in 1996, Robert Early &
Company, P.C. prepared the Company's 1996 federal income tax
returns; its fees for this non-audit function amounted to less
than 5% of its fees for audit services. Management believes that
the performance of these non-audit functions does not affect the
independence of Robert Early & Company, P.C.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD
The affirmative votes of the holders of a majority of the issued
and outstanding shares of Common Stock is necessary for the
ratification of the selection of accountants. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO ABOLISH THE CLASSIFICATION OF DIRECTORS
During 1991, in an effort to protect the Company from potential
takeovers, directors recommended and shareholders approved the
establishment of three separate classes for the Board of
Directors. It is the current administration's philosophy that
the chance for any potential takeover is very low because of the
large stock position of insiders. Therefore the Board recommends
that the Articles of Incorporation be amended to abolish the
classification of directors, and to elect all directors to serve
a one year term.
Following is the proposed amendment to the Articles of
Incorporation.
The following paragraph will be deleted at the end of Article V:
"Classification of directors. When the Board of Directors
consists of six or more members, in lieu of electing the whole
number of directors annually, the directors shall be divided into
two or three classes. Each class is to be as nearly equal in
number as possible with the term of office of directors of the
first class to expire at the first annual meeting of shareholders
after their election, that of the second class to expire at the
second annual meeting after their election, and that the third
class, if any, will expire at the third annual meeting after
their election. At each annual meeting thereafter directors will
be elected to fill the class whose term then expires for them to
continue for two or three years depending upon the number of
classes. Should the directors vote to have less than six
directors, then the system of classification would cease as the
director's term expires bringing the number below this figure."
Article V, Paragraph 1, will be amended to hereafter read as
follows: "The number of directors of the corporation shall be not
less than three. The number of directors may be increased or
decreased to not less than three at any time by resolution passed
by a majority of the entire Board at any regular or special
meeting of said Board. Each director shall hold office until the
next annual meeting of shareholders and until his/her successor
has been elected and qualified. Directors need not be residents
of the state of incorporation or shareholders of the
corporation."
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD
The affirmative vote of the holders of a majority of the issued
and outstanding shares of Common Stock is necessary for the
adoption of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL TO AMEND
THE COMPANY'S ARTICLES OF INCORPORATION TO ABOLISH THE
CLASSIFICATION OF DIRECTORS.
PROPOSAL FOR A 1-FOR-3.5 REVERSE SPLIT OF THE COMPANY'S STOCK
The Board of Directors recommends a 1-for-3.5 reverse split of
the stock from 1,960,377 Common Shares presently outstanding to
approximately 560,108 outstanding after the reverse split, 11,586
Class A Preferred Shares presently outstanding to approximately
3,311 after the reverse split, and 188,585 Class B Preferred
Shares presently outstanding to 53,882 after the reverse split.
The proposed reverse split will not require a change in the
authorized shares, nor a change in the par value of the shares.
As a result, the Common Stock account of the Company's balance
sheet will be reduced by 29% of its present amount with the Paid-
In Capital account being credited with the amount by which the
Common Stock account is reduced.
If the proposed reverse split is approved by shareholders, each
holder of record of Common or Preferred Stock on the effective
date of the proposed reverse split will thereafter be deemed to
hold one (1) share of Common or Preferred Stock for every three
and a half (3.5) shares held as of the effective date.
No fractional shares will be issued. Fractional shareholdings
resulting from the proposed reverse stock split will be rounded
up to the next whole number of shares. This method will cause a
slight increase in the total number of shares outstanding after
the reverse split from the number stated. The actual number of
shares outstanding will not be determined until the record date
for the reverse split.
Purpose and Effect of the Proposed Reverse Stock Split
The principal effect of the proposed reverse stock split will be
to decrease the number of shares outstanding and increase the
price per share of the stock.
The Board of Directors is of the opinion that the proposed
reverse stock split is advisable and in the best interest of the
Company and its shareholders. The Company is currently listed on
the NASDAQ SmallCap Market tier of the NASDAQ Stock Market, with
a goal to obtain listing on the NASDAQ National Market ("NASDAQ
National") or the American Stock Exchange ("AMEX"). The main
requirements to be listed on NASDAQ National are to have net
income of not less than $750,000 before income taxes and a share
price of $5.00 per share. To be listed on AMEX also requires
$750,000 in net income before taxes and a stock price of $3.00
per share. The Company reported net income before income taxes
of $1,139,029 for the year ended December 31, 1995 and $1,026,733
for the year ended December 31, 1996, which meets the net income
requirement of both of these exchanges.
The Board believes that having GTII listed on a national market
will result in the increased tradeability of the shares with a
much broader market for the stock. A listing on NASDAQ National
or AMEX offers more visibility of the Company's stock as major
newspapers carry these markets. Exposure through either of these
markets also builds analyst confidence, as well as attracts more
sophisticated investors. Also of importance are the benefits
gained from the special services provided by both of these
exchanges.
Because of the dramatic improvement in the Company's financial
condition in the last two years, the Company has now met all
requirements to move up to a national market, with the exception
of the stock price requirement. To achieve the stock price
requirement led the Directors to propose the 1-for-3.5 reverse
stock split for the purpose of getting the price up to a level
for consideration by NASDAQ National or AMEX. The increased
price level may also encourage interest and trading in the
Company's Common Stock. However, there is no assurance that the
proposed reverse stock split will result in increased stock
prices, or if the price per share level of the Common Stock
immediately after the reverse stock split will be maintained for
a period of time to satisfy the national listing requirements for
either NASDAQ National or AMEX.
The Common and Preferred Stock issued pursuant to the proposed
reverse stock split will be fully paid and nonassessable. The
voting rights and other rights that accompany the Common and
Preferred Stock will not be altered by the change. It is not
anticipated that the number of shareholders of record will be
reduced in any material respect by this transaction.
The receipt of Common or Preferred Stock in the proposed reverse
split should not result in any taxable gain or loss to
shareholders for federal income tax purposes. For tax purposes,
the holding period of the shares immediately prior to the
effective date of the proposed reverse stock split will be
included in the holding period of the Common or Preferred Stock
received in the proposed reverse stock split.
Effectiveness
If the proposal is approved by the shareholders, the Board of
Directors will set the date of record for determining holders who
will participate in the proposed reverse stock split.
Upon the effectiveness of the proposed reverse stock split, the
Company will mail to each shareholder a letter of transmittal
with instructions for the surrender of each shareholders' shares
of Common or Preferred Stock. Please do not transmit shares of
Common or Preferred Stock for exchange prior to notification and
receipt of the letter of transmittal.
VOTE REQUIRED AND RECOMMENDATION OF THE BOARD
The affirmative vote of the holders of a majority of the issued
and outstanding shares of Common and Preferred Stock is necessary
for the adoption of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF
THE PROPOSAL TO EFFECT A 1-FOR-3.5 REVERSE SPLIT OF THE COMPANY'S
COMMON AND PREFERRED STOCK.
OTHER MATTERS
The Board knows of no other matters to be brought before the
Meeting. However, if other matters calling for stockholder
action should properly come before the Meeting, it is the
intention of each person named in the proxy to vote thereon in
accordance with his or her best judgement.
PROXY SOLICITATION
THE ENCLOSED PROXY FORM IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY.
The entire cost of preparing, assembling, printing, and mailing
the proxy form and proxy materials used in the solicitation of
proxies will be paid by the Company. The Company will request
banks, brokers and other fiduciaries to send the Company's proxy
materials to their principals, and the Company will reimburse
said fiduciaries for their mailing and related expenses. In
addition to the use of the mails, solicitation may be made by
officers, directors and regular employees of the Company by
telephone, facsimile and personal interview. The Company does
not expect to pay any compensation to such persons, other than
their regular compensation, for their services in soliciting
proxies.
ANNUAL REPORT AND FORM 10-K
The 1996 Annual Report to the Stockholders of the Company is
enclosed together with this proxy statement.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON BEING
SOLICITED BY THIS PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH
PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 13a-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE COMPANY'S FISCAL YEAR ENDED DECEMBER 31, 1996. SUCH
REQUESTS SHOULD BE DIRECTED TO GOLDEN TRIANGLE INDUSTRIES, INC.,
P. O. BOX 22010, ALBUQUERQUE, NEW MEXICO 87154.
STOCKHOLDER PROPOSALS
Any interested stockholder may submit a proposal concerning the
Company to be considered by the Board for inclusion in the proxy
statement and form of proxy relating to next year's Annual
Meeting of Stockholders. In order for any proposal to be so
considered, the proposal must be in writing and received by the
Company on or before January 15, 1998. Stockholder proposals
should be submitted to Golden Triangle Industries, Inc., P. O.
Box 22010, Albuquerque, New Mexico 87154.
BY ORDER OF THE BOARD OF DIRECTORS
Shawna Owens
Secretary
Albuquerque, New Mexico
=================================================================
<PAGE>
PROXY
GOLDEN TRIANGLE INDUSTRIES, INC.
(A Colorado Corporation)
P. O. Box 22010
Albuquerque, New Mexico 87154
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF GOLDEN
TRIANGLE INDUSTRIES, INC.
The undersigned hereby appoints Kenneth Owens, Howard Siegel,
Karen Lee, Ivan Webb, Betty Polston, and John Vuksich, or any of
them (with full power to act alone and to designate substitutes),
proxies of the undersigned, with authority to vote and act with
respect to all shares of the common stock of Golden Triangle
Industries, Inc. that the undersigned would be entitled to vote
if personally present at the Annual Meeting of Stockholders to be
held on May 17, 1997 at 2:00 p.m. (Mountain Time) and at any
adjournment thereof, upon the matters noted below and upon any
other matters that may properly come before the Meeting or any
adjournment thereof. Said proxies are directed to vote as
checked below upon the following matters, and otherwise in their
discretion. An abstain vote will be counted in determining a
quorum, but will not be counted as a vote either for or against
the issues.
(1) To elect as directors the following nominees: Kenneth Owens,
Howard Siegel, Karen Lee, Ivan Webb, Betty Polston, John
Vuksich, Richard A. Levine, and Glenn Gagnon
[ ] FOR all of the foregoing nominees
[ ] WITHHOLD AUTHORITY to vote for all of the foregoing
nominees
[ ] ABSTAIN
NOTE: TO WITHHOLD AUTHORITY FOR AN INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME. UNLESS AUTHORITY TO VOTE FOR
ALL OF THE FOREGOING NOMINEES IS WITHHELD, THIS PROXY WILL BE
DEEMED TO CONFER AUTHORITY TO VOTE FOR EACH NOMINEE WHOSE NAME IS
NOT STRUCK.
(2) To ratify the selection of Robert Early & Company, P.C. as
the independent auditor for 1997.
VOTE FOR VOTE AGAINST ABSTAIN
[ ] [ ] [ ]
(3) To approve the proposal to amend the Company's Articles of
Incorporation to abolish the classification of directors.
VOTE FOR VOTE AGAINST ABSTAIN
[ ] [ ] [ ]
(4) To approve the proposal of a 1-for-3.5 reverse split of the
Company's stock.
VOTE FOR VOTE AGAINST ABSTAIN
[ ] [ ] [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IN THE
ABSENCE OF SPECIFIC DIRECTIONS, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE DIRECTORS NAMED, FOR THE RATIFICATION OF THE
SELECTION OF INDEPENDENT ACCOUNTANTS, FOR THE AMENDMENT TO THE
ARTICLES TO ABOLISH THE CLASSIFICATION OF DIRECTORS, AND FOR THE
1-FOR-3.5 REVERSE SPLIT OF THE STOCK. If any other business is
transacted at the Meeting, this Proxy will be voted in accordance
with the best judgment of the proxies. The Board of Directors
recommends a vote FOR each of the listed propositions. This
Proxy may be revoked prior to its exercise.
Note: Please sign exactly as name(s) appear on the stock
certificate. An attorney, executor, administrator, trustee or
guardian or other fiduciary should sign as such. ALL JOINT
OWNERS MUST SIGN.
Dated:
Signature of Stockholder(s)
Signature of Stockholder(s)
