<PAGE>
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Proxy Statement RULE 14a-6(a)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
AMERAC ENERGY CORPORATION
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
AMERAC ENERGY CORPORATION
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
AMERAC ENERGY CORPORATION
700 LOUISIANA, SUITE 3330
HOUSTON, TEXAS 77002
TO BE HELD ON MAY 22, 1996
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Amerac Energy Corporation:
It is my pleasure to invite you to attend the 1996 Annual Meeting of
Stockholders (the "Meeting") of Amerac Energy Corporation (the "Company"),
which will be held in the NationsBank Auditorium, 4th Floor, NationsBank
Center, 700 Louisiana, Houston, Texas, on May 22, 1996, at 2:00 p.m., local
time. The Meeting is being held to consider and take action with respect to
the following matters:
COMMON STOCK MATTERS:
(1) To elect five (5) Directors;
(2) To approve an amendment to the Company's Certificate of Designations
which is a part of the Company's Certificate of Incorporation (the
"Preferred Amendment") that provides for the conversion of each
outstanding share of the Company's $4.00 Senior Preferred Stock, $1.00
par value (the "Preferred Stock"), into nine (9) shares of the Company's
Common Stock, $.05 par value (the "Common Stock");
(3) To approve an amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of the Common Stock from
50,000,000 to 100,000,000;
(4) To ratify and approve the selection of Price Waterhouse LLP as the
Company's independent auditors for the 1996 fiscal year; and
(5) To transact such other business as may properly come before the Meeting
or any adjournment thereof.
PREFERRED STOCK MATTERS:
(1) To approve the Preferred Amendment; and
(2) To transact such other business as may properly come before the Meeting
or any adjournment thereof.
If holders of the requisite amount of each of the Common Stock and the
Preferred Stock approve the Preferred Amendment, the Company's Certificate of
Designations which is a part of the Company's Certificate of Incorporation
will be amended so that on May 23, 1996 each outstanding share of the
Preferred Stock will be converted into nine (9) shares of Common Stock, and
the Preferred Stock will be eliminated. The holders of approximately 20% of
the Preferred Stock entered into an agreement with the Company, prior to their
acquisition of such Preferred Stock, to vote in favor of the Preferred
Amendment.
Only the holders of shares of the Common Stock of record on the books of the
Company at the close of business on April 8, 1996, will be allowed to vote at
the Meeting, or any adjournment thereof, on the Common Stock Matters, and only
holders of shares of the Preferred Stock of record on the books of the Company
at the close of business on April 8, 1996, will be entitled to vote at the
Meeting, or any adjournment thereof, on the Preferred Stock Matters.
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 accompanies this notice.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
COMPLETE, DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY AT YOUR EARLIEST
CONVENIENCE. A REPLY ENVELOPE IS PROVIDED FOR SUCH PURPOSE WHICH NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES.
By order of the Board of Directors,
JEFFREY L. STEVENS
Senior Vice President-Finance and
Secretary
April 9, 1996
<PAGE>
AMERAC ENERGY CORPORATION
700 LOUISIANA, SUITE 3330
HOUSTON, TEXAS 77002
TO BE HELD ON MAY 22, 1996
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is submitted in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Amerac Energy Corporation,
a Delaware corporation (the "Company"), for the Annual Meeting of Stockholders
to be held in the NationsBank Auditorium, 4th Floor, NationsBank Center, 700
Louisiana, Houston, Texas on May 22, 1996 at 2:00 p.m., local time, or any
adjournment thereof (the "Meeting"), pursuant to the enclosed Notice of the
Meeting. At the Meeting matters relating to both the Company's Common Stock,
$.05 per value (the "Common Stock"), and the Company's $4.00 Senior Preferred
Stock, $1.00 per value (the "Preferred Stock"), will be voted on by the
appropriate stockholders at the Meeting. The approximate date this Proxy
Statement and the enclosed form of Proxy are first being sent to both the
holders of the Common Stock and the holders of the Preferred Stock
(collectively, "Stockholders") is April 9, 1996.
INFORMATION CONCERNING PROXIES
The persons named as proxies are Jeffrey L. Stevens and Jeffrey B. Robinson,
both of whom are presently directors of the Company. Stock represented at the
Meeting by the enclosed Proxy will be voted in the manner specified by each
Stockholder. A Proxy may be revoked by a Stockholder at any time prior to the
exercise thereof by filing with the Secretary of the Company a written
revocation or a duly executed Proxy bearing a later date. A Proxy shall be
revoked if a Stockholder present at the Meeting elects to vote in person.
Unless contrary instructions are indicated on a Proxy, all shares
represented by valid proxies received pursuant to this solicitation (and which
have not been revoked or suspended before they are voted) will be voted FOR;
(A) the following matters relating to the Common Stock (the "Common Stock
Matters"): (1) the election of five (5) Directors; (2) the approval of an
amendment to the Company's Certificate of Designations which is a part of the
Company's Certificate of Incorporation (the "Preferred Amendment") which
provides for the conversion of each outstanding share of Preferred Stock into
nine (9) shares of Common Stock; (3) the approval of an amendment to Article
IV of the Company's Certificate of Incorporation (the "Article IV Amendment")
increasing the number of authorized shares of the Common Stock from 50,000,000
to 100,000,000; (4) the ratification and approval of the selection of Price
Waterhouse LLP as the Company's independent auditors for the 1996 fiscal year;
and (5) to transact such other business as may properly come before the
Meeting; and (B) the following matters relating to the Preferred Stock (the
"Preferred Stock Matters"); (1) the approval of the Preferred Amendment; and
(2) to transact such other business as may properly come before the Meeting.
If holders of the requisite amount of each of the Common Stock and the
Preferred Stock approve the Preferred Amendment, the Company's Certificate of
Designations which is a part of the Company's Certificate of Incorporation
will be amended so that on May 23, 1996 each outstanding share of the
Preferred Stock will be converted into nine (9) shares of Common Stock, and
the Preferred Stock will be eliminated. The holders of approximately 20% of
the Preferred Stock entered into an agreement with the Company, prior to their
acquisition of such Preferred Stock, to vote in favor of the Preferred
Amendment.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of mail, employees of the Company may solicit proxies by
telephone or telegraph, and the Company may employ proxy soliciting
<PAGE>
agents who will receive customary compensation for such services. Upon
request, the Company will reimburse brokers, dealers, bankers, and trustees,
or their nominees, for reasonable expenses incurred by them in forwarding
proxy material to beneficial owners.
VOTING RIGHTS
Only Stockholders of record at the close of business on April 8, 1996 (the
"Record Date") are entitled to notice of and to vote at the Meeting. On the
Record Date, the issued and outstanding securities of the Company entitled to
vote at the Meeting consisted of 23,932,101 shares of the Common Stock and
1,825,646 shares of the Preferred Stock. Each outstanding share of the Common
Stock is entitled to one vote with respect to the Common Stock Matters to come
before the Meeting and each share of the Preferred Stock is entitled to one
vote with respect to the Preferred Stock Matters to come before the Meeting.
There are no cumulative voting rights.
The Common Stock and the Preferred Stock will be voted at the Meeting by
ballots (in person or by Proxy) which are tabulated by a person appointed by
the Board to serve as the inspector of election at the Meeting and who has
executed and verified an oath of office. A majority in interest of the voting
power of the outstanding shares of the Common Stock, represented in person or
by proxy, will be required to constitute a quorum with respect to the Common
Stock Matters and a majority in interest of the voting power of the
outstanding shares of the Preferred Stock, represented in person or by proxy,
will be required to constitute a quorum with respect to the Preferred Stock
Matters. Approval of each of the Common Stock Matters, other than the Article
IV Amendment and the Preferred Amendment, will be decided by the affirmative
vote of a majority of the Common Stock voting power present at the Meeting.
Approval of the Article IV Amendment will require the affirmative vote of a
majority of the outstanding Common Stock entitled to vote thereon and approval
of the Preferred Amendment will require the affirmative vote of a majority of
the outstanding shares of the Common Stock entitled to vote thereon and the
affirmative vote of a majority of the outstanding shares of the Preferred
Stock entitled to vote thereon. Abstentions and broker non-votes are included
in the determination of the number of shares present at the Meeting for quorum
purposes. Abstentions will have no effect on the outcome of the election of
directors, but will have the same effect as negative votes with respect to all
other matters to come before the Meeting. Broker non-votes will have the same
effect as negative votes with respect to all matters to come before the
Meeting.
The holders of approximately 20% of the Preferred Stock entered into an
agreement with the Company, prior to their acquisition of such Preferred
Stock, to vote in favor of the Preferred Amendment.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board shall consist of five to
fifteen members as fixed by the Board from time to time. The Board has fixed
at five the number of directors which will constitute the Board for the
ensuing year.
Five directors of the Company are to be elected to serve until the next
annual meeting of stockholders or until the election and qualification of
their respective successors. All the nominees named below currently serve as
directors of the Company. Mr. Thomas J. Edelman is currently a director and
Chairman of the Board of Directors. Mr. Edelman will not stand for reelection
due to attention required by his other business activities. The persons named
in the accompanying Proxy intend to vote (unless authority to vote for
directors is withheld in such Proxy) all duly executed Proxies unrevoked at
the time of the exercise thereof for the election to the Board of all of the
nominees named below, each of whom consented to be named herein and to serve
as a director if elected at the Meeting. In the event that any nominee should
become unavailable prior to the Meeting, the Proxy will be voted for a
substitute nominee designated by the Board if a substitute nominee is
designated. Listed below is certain information with respect to each current
nominee for election as a director. For information concerning the number of
shares of Common Stock and Preferred Stock beneficially owned by each nominee,
see "Principal Stockholders."
2
<PAGE>
The Board recommends that the holders of the Common Stock vote FOR the
nominees listed below.
<TABLE>
<CAPTION>
NAME AGE POSITION A DIRECTOR SINCE
---- --- -------- ----------------
<S> <C> <C> <C>
Michael L. Harvey(1).... 48 Director 1995
William P.
Nicoletti(1)........... 50 Director 1995
Kenneth R. Peak(1)...... 50 Director 1995
Jeffrey B. Robinson..... 51 President, Chief Executive Officer and Director 1994
Jeffrey L. Stevens...... 47 Senior Vice President-Finance and Secretary 1992
</TABLE>
- --------
(1) Member of the Audit and Compensation Committees.
Mr. Harvey has been a director of the Company since 1995. Since 1987, Mr.
Harvey has been chairman and Chief Executive Officer of the Gulfstar
Companies. Mr. Harvey is a founder and principal stockholder of such
companies. The Gulfstar Companies explore and develop oil and gas exclusively
in the Gulf of Mexico. Mr. Harvey serves as a director of Gulfstar Energy,
Inc., Gulfstar Petroleum Corporation, and Gulfstar Operating Company. Mr.
Harvey also serves as a director of Black Diamond Exploration Corporation, a
privately owned offshore exploration company focused upon exploration and
development in South Texas. Mr. Harvey also serves on the advisory board of
the Texas A&M University College of Business.
Mr. Nicoletti has been a director of the Company since 1995. He is Managing
Director of Nicoletti & Company Inc., a New York based private investment
banking firm founded in 1991. Previously, Mr. Nicoletti was a Managing
Director and head of the Energy and Natural Resources Group of PaineWebber
Incorporated. He is a director of Star Gas Corporation, a Stamford,
Connecticut based propane gas distributor and StatesRail L.L.C., a Dallas,
Texas based short line railroad holding company.
Mr. Peak has been a director of the Company since 1995. Since 1990, Mr. Peak
has been the President of Peak Economics, Incorporated, a company engaged in
consulting activities in the oil and gas industry. From 1989 to 1990, Mr. Peak
was the Managing Director and Co-Manager Corporate Finance of Howard Weil
Incorporated, an investment banking firm. Mr. Peak is a director of N.L.
Industries, Inc., a manufacturer of titanium dioxide, and a director of
Fibrebond Corporation, a manufacturer of cellular communication shelters.
Mr. Robinson has been the President, Chief Executive Officer and a director
of the Company since 1994. Mr. Robinson was appointed on July 15, 1994, as
President and Chief Executive Officer of the Company. Prior to joining the
Company, Mr. Robinson was Vice President of Engineering and Operations with
Amax Oil and Gas Inc. from 1982 to 1994. From 1974 to 1981, Mr. Robinson
served as Vice President--General Manager of Ranger Oil Company.
Mr. Stevens has been Senior Vice President--Finance, Secretary and a
director of the Company since 1992. Mr. Stevens joined the Company in 1974.
Since May 1991, Mr. Stevens has been President and Chief Executive Officer of
Petroleum Financial, Inc. ("PFI"). See "Certain Transactions."
3
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information as to the number of shares of (1)
Common Stock and Preferred Stock beneficially owned as of March 1, 1996 by
each beneficial owner of more than five percent of the outstanding shares of
the Common Stock and the Preferred Stock, respectively and (2) the shares of
Common Stock and Preferred Stock beneficially owned as of March 1, 1996 by:
(I) the Chief Executive Officer and the current executive officers of the
Company who earned over $100,000 during the Company's last fiscal year (the
"Named Executive Officers"); (ii) each director; and (iii) all current
executive officers and directors of the Company as a group. All shares are
owned both of record and beneficially unless otherwise indicated.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIAL OWNER TITLE OF CLASS BENEFICIALLY OWNED PERCENT OF CLASS
- ---------------- --------------- ------------------ ----------------
<S> <C> <C> <C>
William T. Smith........... Common Stock 1,310,679 5.5%
Suite P-IIG
777 Taylor Street
Fort Worth, TX 76102
Powell Resources Inc....... Common Stock 2,017,152 8.4%
3030 N.W. Expressway
Suite 1602
Oklahoma City, OK 73112
Thomas J. Edelman.......... Common Stock 1,024,031(1) 4.3%
777 Main Street, Suite Preferred Stock 359,623(1) 19.7%
2500
Fort Worth, Texas 76102
Michael L. Harvey.......... Common Stock 78,039(2) *
c/o Amerac Energy Corpora-
tion
700 Louisiana, Suite 3330
Houston, Texas 77002
William P. Nicoletti....... Common Stock 278,039(2) 1.2%
c/o Amerac Energy Corpora-
tion
700 Louisiana, Suite 3330
Houston, Texas 77002
Kenneth R. Peak............ Common Stock 278,039(2) 1.2%
c/o Amerac Energy Corpora-
tion
700 Louisiana, Suite 3330
Houston, Texas 77002
Jeffrey B. Robinson........ Common Stock 1,390,000(3) 5.8%
c/o Amerac Energy Corpora-
tion
700 Louisiana, Suite 3330
Houston, Texas 77002
Jeffrey L. Stevens......... Common Stock 400,338(4) 1.7%
c/o Amerac Energy Corpora-
tion
700 Louisiana, Suite 3330
Houston, Texas 77002
All directors and executive officers, as a 3,598,486 14.8%
group (7 persons)(5).......................
</TABLE>
- --------
* Less than 1%.
(1) Mr. Edelman is currently a director and is not standing for reelection.
Includes vested options to purchase 40,000 shares of Common Stock. Also,
includes 984,031 shares of Common Stock and 359,623 held by Snyder Oil
Company ("SOCO") of which Mr. Edelman is a director and President. On
March 15, 1996, SOCO sold its 359,623 shares of Preferred Stock.
(2) Includes vested options to purchase 40,000 shares of Common Stock.
(3) Includes vested options to purchase 206,666 shares of Common Stock and
333,334 of unvested options.
(4) Mr. Stevens' ownership includes 303,667 shares of Common Stock which Mr.
Stevens has the right to acquire pursuant to vested stock options and
33,333 of unvested options. In addition, his ownership includes 63,338
shares of the Common Stock owned by PFI of which Mr. Stevens is President
and Chief Executive Officer and a 74% stockholder.
(5) The group's (7 persons) ownership includes vested options to purchase
260,000 shares of Common Stock and 400,000 of unvested options.
4
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are elected annually by the Board at
its first meeting held following the annual meeting of stockholders, or as
soon thereafter as necessary and convenient in order to fill vacancies or
newly created offices. Each executive officer holds office until his
resignation or removal or until his successor is duly elected and qualified.
Any executive officer elected or appointed by the Board may be removed by the
Board whenever in its judgment the best interests of the Company will be
served thereby.
The names of the Executive Officers of the Company, their ages, positions,
and the dates of their employment are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD WITH THE COMPANY EMPLOYED SINCE
---- --- ------------------------------ --------------
<S> <C> <C> <C>
Jeffrey B. Robinson..... 51 Director, President and Chief Executive Officer 1994
Jeffrey L. Stevens...... 47 Director, Senior Vice President-Finance and-Secretary 1974
Richard Savoie.......... 49 Vice President-Engineering 1994
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board held five (5) meetings during the year ended December 31, 1995.
All directors attended all such Board meetings, with the exception of Mr.
Edelman and Mr. Harvey who each attended all but one meeting in 1995.
The Audit Committee of the Board is responsible for, among other things,
recommending the appointment of the independent public accountants and
reviewing their compensation; assuring that proper guidelines are established
for the dissemination of financial information; meeting periodically with the
independent accountants, the Board and certain officers of the Company and its
subsidiaries to assure the adequacy of internal controls and reporting;
reviewing consolidated financial statements and performing any other duties or
functions deemed appropriate by the Board. During 1995, this committee met
twice. Messrs. Peak, Nicoletti and Harvey are members of the Audit Committee.
The Compensation Committee of the Board is responsible for recommending
compensation policies with respect to the directors, management and employees
of the Company. During 1995, this committee met twice. Messrs. Peak, Nicoletti
and Harvey are members of the Compensation Committee. The Technical Committee
comprised of Messrs. Harvey and Peak met four times in 1995.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation (including salary,
bonus and all other forms of annual and long-term compensation) paid to or
accrued by the Company during the fiscal years 1995 and 1994, for the Named
Executive Officers.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
--------------------- -------------------------------------
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS($) SARSS(#) COMPENSATION(4)
- --------------------------- ---- -------- ------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jeffrey B. Robinson* ... 1995 $125,000 $28,000 $-0- $-0- $-0- $-0-
Chief Executive Officer 1994 $ 60,657 $ -0- $-0- $-0- $-0- $-0-
</TABLE>
- --------
* Mr. Robinson was elected Chief Executive Officer on July 15, 1994
5
<PAGE>
YEAR END OPTION VALUE TABLE
The following table sets forth information at December 31, 1995, respecting
exercisable and non exercisable options held by the Named Executive Officers.
The table also includes the value of "in-the-money" options which represents
the spread between the exercise price of the existing stock options and the
year end price of the Common Stock which was $0.22 per share.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
SHARES ACQUIRED VALUE OPTIONS/SARS AT DECEMBER 31, DECEMBER 31, 1995 ($)
NAME AND PRINCIPAL POSITION ON EXERCISE (#) REALIZED 1995 (#) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------- --------------- -------- ---------------------------------- -------------------------
<S> <C> <C> <C> <C>
Jeffrey R. Robinson(*)
Chief Executive Offi-
cer................... -0- -0- 540,000/0 93,200/0
</TABLE>
- --------
* Mr. Robinson was elected Chief Executive Officer on July 15, 1994
COMPENSATION OF DIRECTORS
During 1995, non-employee directors received a base retainer of $15,000,
payable quarterly, one-half in cash and one-half in Common Stock, and each of
the non-employee directors also received $500 per meeting attended and $200
per telephonic meeting. In 1994, each director of the Company was granted a
stock option under the Company's stock option plan to acquire 40,000 shares of
Common Stock. Effective July 1, 1995, the Board approved an additional payment
to the Chairman of the Board of $30,000 per annum, payable quarterly in Common
Stock. The Board also approved, effective October 1, 1995, that each non-
employee director serving on a committee receive an additional $1,000 per
annum and the chairman of each committee receive an additional $1,000 per
annum, payable quarterly in Common Stock.
REPORTS UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, and the
rules thereunder, require the Company's executive officers and directors, and
persons who own more than ten percent (10%) of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the securities and Exchange Commission and to furnish the
Company with copies.
Based solely on its review of the copies of such forms received by it, or
written representations from such persons, the Company is not aware of any
person who failed to file any reports required by Section 16(a) to be filed
for fiscal 1995.
CERTAIN TRANSACTIONS
Effective May 1, 1991, as a cost reduction measure, the Company entered into
a service contract with PFI (of which the Company owns 26%), which was amended
and restated in October 1994, pursuant to which PFI performs all of the
Company's accounting, marketing, tax, administrative, financial, and treasury
services. The contract also encompasses all computer operations for the
Company as well as maintaining stockholder relations, SEC reporting, and
banking relations. Mr. Jeffrey Stevens, Senior Vice President--Finance and
Secretary and director of the Company owns 74% of PFI. PFI currently employs
four other former employees of the Company. The overall compensation
arrangement with PFI, in the opinion of the Company, is at least as fair as
could have been obtained for comparable services from an unaffiliated third
party. The aggregate service fees for 1995, 1994 and 1993 were $300,000,
$350,000, and $500,000, respectively. Such service fees for 1996 are
anticipated to be approximately $240,000. For 1996, PFI agreed to perform its
services for the Company at a monthly fee of $20,000, with incentives if it is
able to achieve certain goals.
6
<PAGE>
THE PREFERRED AMENDMENT
The Company has been successful in substantially increasing its reserves
since changing its focus from exploration to growth through acquisitions and
exploration. The Company's reserve base has grown from 1,532,000 barrels of
oil equivalent ("BOE") at December 31, 1994 to 4,370,000 BOE at December 31,
1995, pro forma for the acquisition of Fremont Energy in January 1996. The
Board has determined that to continue the Company's policy of growth through
acquisitions, it is in the Company's best interest for the Preferred Stock to
be eliminated and Common Stock issued in its place for the following reasons:
(I) commencing in 1997 the Company will have to begin paying dividends in cash
which will be a diminishment of its acquisition resources; (ii) if the Company
misses a dividend payment the holders of the Preferred Stock will have the
right to elect 80% of the Board, (iii) the terms of the Preferred Stock
prohibit the Company from raising funds through the issuance of new preferred
stock that is either pari-passu or senior to the Preferred Stock (iv) this
increases the common stock float in the market and (v) the Company can
eliminate the liquidating value of the Preferred Stock.
The Board believes that it is in the best interests of the Company to amend
the terms of the Preferred Stock by providing for the elimination of this
class and the substitution therefore of nine (9) shares of the Common Stock
for each outstanding share of the Preferred Stock. To achieve this goal the
Board passed a resolution, subject to Stockholder approval, approving the
resolution to amend the terms of the Preferred Stock's Certificate of
Designations which is a part of the Company's Certificate of Incorporation. If
approved, effective May 24, 1996, each outstanding share of the Preferred
Stock would be automatically converted into nine (9) shares of the Common
Stock and the Preferred Stock would thereafter cease to exist.
The conversion rate of nine (9) shares of Common Stock for each outstanding
share of Preferred Stock was negotiated by management, on behalf of the
holders of Common Stock, with unaffiliated third parties who wished to
purchase approximately 20% of the Preferred Stock from SOCO with a view to the
exchange of the Preferred Stock into Common Stock. The interest of such
individuals in achieving the most favorable exchange ratio possible was
aligned with the interests of all holders of the Preferred Stock. Management
was interested in converting the outstanding Preferred Stock into Common Stock
and eliminating the Preferred Stock, for the reasons mentioned above. Upon
completion of these negotiations, which were completed prior to such person's
purchase of such Preferred Stock, the Board concluded that the proposed ratio
was fair from a financial point of view to both the holders of the Common
Stock and the Preferred Stock, and the individuals entered into an agreement
with the Company which provides that if such individuals purchased such shares
from SOCO, such individuals would vote to convert such shares of Preferred
Stock into Common Stock at a ratio of no less than nine (9) shares of Common
Stock for each share of Preferred Stock if the Company chose to proceed with
such a transaction. After the execution of such agreements, the Company
decided to proceed with such a transaction if these individuals actually
purchased the shares of Preferred Stock from SOCO. The Company was informed
that such individuals, after disclosing to SOCO their agreement with the
Company, purchased such Preferred Stock on March 15, 1996. The Board concluded
that it was not necessary to obtain a fairness opinion because of the cost of
obtaining such an opinion and because this ratio was obtained in an arms
length negotiation with sophisticated unaffiliated third party investors.
If the Preferred Amendment is adopted the Company will be required to issue
approximately 16,438,851 additional shares of Common Stock, increasing the
Company's outstanding shares of Common Stock from 23,932,101 to 40,370,952.
Therefore, if the Preferred Amendment is adopted the current holders of the
Preferred Stock would own a significant percentage of the Common Stock and
would, as a group, have substantial influence on the affairs of the Company.
The Board believes that adoption of the Preferred Amendment would be in the
best interests of the holders of both the Common Stock and the Preferred
Stock, however, management owns Common Stock and this fact should be
considered when you are making your decision.
7
<PAGE>
The affirmative vote of a majority of the outstanding shares of the Common
Stock entitled to vote thereon and the affirmative vote of a majority of the
outstanding shares of the Preferred Stock entitled to vote thereon is required
for approval of the Preferred Amendment. If the Preferred Amendment is
adopted, it will become effective upon filing of the Preferred Amendment with
the Secretary of State of the State of Delaware.
The text of the Preferred Amendment is annexed hereto as Exhibit A.
The Board recommends a vote FOR this proposal.
THE ARTICLE IV AMENDMENT
The Company's Certificate of Incorporation currently authorizes 50,000,000
shares of common stock, $.05 par value per share, and 10,000,000 shares of
preferred stock, $1 par value per share, of which 2,200,000 have been
designated as $4.00 Senior Preferred Stock. On March 20, 1996 the Board
approved the Article IV Amendment which, if approved by the holders of the
Common Stock, would increase the number of shares of the Common Stock
authorized for issuance under the Certificate of Incorporation by 50,000,0000,
from 50,000,000 to 100,000,000.
If the Preferred Amendment is approved, the Company's outstanding Common
Stock will increase from 23,932,101 to 40,132,101. Since the Company only has
50,000,000 shares of the Common Stock currently authorized, the Board believes
that it is prudent to increase the number of authorized shares of Common Stock
to the proposed level in order to provide a reserve of shares available for
issuance in connection with possible future actions. Such actions may include,
but are not limited to, stock splits or stock dividends, financings through
the issuance of equity securities, acquisitions of property or companies with
the Company's stock, establishing strategic relationships with corporate
partners, employee benefit plans and for other general corporate purposes.
Currently there are no plans in place requiring the use of these additional
shares for these purposes. If the additional authorized Common Stock is
available for issuance, the Board would avoid delays and expense occasioned by
the necessity of obtaining stockholder approval at the time the action is to
occur, which will better enable the Company to engage in these transactions.
The additional Common Stock to be authorized by adoption of the Article IV
Amendment would have rights identical to the currently outstanding Common
Stock of the Company. Adoption of the Article IV Amendment and issuance of the
Common Stock would not affect the rights of the holders of currently
outstanding Common Stock of the Company.
If the Article IV Amendment is approved, the Board may cause the issuance of
additional shares of the Common Stock without further vote of stockholders of
the Company, except as provided under the Delaware corporate law or under the
rules of any securities exchange on which shares of the Common Stock are then
listed. Current holders of the Common Stock have no preemptive or like rights,
which means that current stockholders do not have a prior right to purchase
any new issue of capital stock of the Company in order to maintain their
proportionate ownership thereof. The effects of the authorization of
additional shares of the Common Stock may also include dilution of the voting
power of currently outstanding shares and a reduction of the portion of
dividends and of liquidation proceeds payable to the holders of currently
outstanding Common Stock.
In addition, the Board could use authorized but unissued shares of the
Common Stock to create impediments to a takeover or a transfer of control of
the Company. Accordingly, the increase in the number of authorized shares of
the Common Stock may deter a future takeover attempt which holders of the
Common Stock may deem to be in their best interest or in which holders of the
Common Stock may be offered a premium for their shares over the market price.
The Board is not currently aware of any attempt to take over or acquire the
Company. While it may be deemed to have potential anti-takeover effects, the
Article IV Amendment to increase the authorized Common Stock is not prompted
by any specific effort or takeover threat currently perceived by management.
8
<PAGE>
The affirmative vote of a majority of the outstanding shares of the Common
Stock entitled to vote at the Meeting is required for the approval of this
proposal. If the Article IV Amendment is adopted, it will become effective
upon filing of the Article IV Amendment with the Secretary of State of the
State of Delaware.
The text of the Article IV Amendment is annexed hereto as Exhibit B:
The Board recommends a vote FOR this proposal.
SELECTION OF AUDITORS
The Board has appointed the firm of Price Waterhouse LLP as independent
public accountants for the Company for fiscal 1996, subject to ratification at
the Meeting.
Representatives of Price Waterhouse LLP will be present at the Meeting, with
the opportunity to make a statement if they desire to do so, and such
representatives are expected to be available to respond to appropriate
questions made at the Meeting. Price Waterhouse LLP served as the Company's
independent accountants for the Company during the 1995 and 1994 fiscal years.
The affirmative vote of a majority of the Common Stock voting power present
at the Meeting is required for the approval of this proposal.
The Board recommends a vote FOR this proposal.
INFORMATION CONCERNING STOCKHOLDERS PROPOSALS
A stockholder intending to submit a proposal to be presented at the 1997
Annual Meeting of Stockholders must deliver such proposal in writing to the
Company's principal executive offices no later than December 10, 1996.
OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Company knows of no matters other than those above stated which are to
be brought before the Meeting. It is intended that the persons named in the
Proxy will vote their Common Stock according to their best judgment if any
other matters do properly come before the Meeting.
The Company's Annual Report on Form 10-K, which includes the Company's
audited financial statements, for the fiscal year ended December 31, 1995, is
being mailed concurrently herewith to all of the Company's stockholders of
record on the Record Date.
Whether or not you intend to be present at the Meeting, you are urged to
return the enclosed Proxy promptly. If you are present at the Meeting and wish
to vote your stock in person, the Proxy shall, at your request, be revoked,
and you may vote at the Meeting with respect to those individual matters on
which you are entitled to vote.
By Order of the Board of Directors
JEFFREY L. STEVENS
Senior Vice President--Finance and
Secretary
Dated April 9, 1996
9
<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF AMERAC ENERGY CORPORATION
AMERAC ENERGY CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), pursuant to the provisions
of the General Corporation Law of the State of Delaware (the "GCL"), DOES
HEREBY CERTIFY as follows:
FIRST: The Certificate of Incorporation is hereby amended by adding to the
Certificate of Designations of the Corporation's $4.00 Senior Preferred Stock,
$1.00 par value, which was filed with the Secretary of State of the State of
Delaware on March 20, 1995, which is a part of the Corporation's Certificate
of Incorporation, a new Section 9 in the following form:
"Section 9. Conversion. Notwithstanding anything to the contrary contained
herein, at 9:00 A.M., Texas Time, on May 23, 1996 (the "Effective Time"),
by virtue of this Section 9 and without any action on the part of any
holder of the Senior Preferred Stock, each issued and outstanding share of
the Senior Preferred Stock shall be converted into nine (9) shares of
Common Stock. At the Effective Time each share of outstanding Senior
Preferred Stock shall automatically be cancelled on the books of the
Company and each such share of Senior Preferred Stock shall at such time be
replaced on the books of the Company with nine (9) shares of Common Stock
and each holder of Senior Preferred Stock immediately prior to the
Effective Time shall, at the Effective Time, cease being a holder of the
Senior Preferred Stock and will commence being a holder of the Common
Stock. As soon as practicable subsequent to the Effective Time, the
Company's transfer agent shall deliver to each former Senior Preferred
Stock holder certificates evidencing nine (9) shares of Common Stock for
each share of Senior Preferred Stock held, immediately prior to the
Effective Time, by such holder.
SECOND: The amendment to the Certificate of Incorporation of the Corporation
set forth in this Certificate of Amendment has been duly adopted in accordance
with the provisions of Section 242 of the GCL.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment
to be signed by Jeffrey B. Robinson, its President, this day of May
1996.
AMERAC ENERGY CORPORATION
By:
----------------------------------
Jeffrey B. Robinson, President
<PAGE>
EXHIBIT B
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION
OF AMERAC ENERGY CORPORATION
AMERAC ENERGY CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), pursuant to the provisions
of the General Corporation Law of the State of Delaware (the "GCL"), DOES
HEREBY CERTIFY as follows:
FIRST: The Certificate of Incorporation is hereby amended by deleting the
first paragraph of Article Fourth of the Certificate of Incorporation in its
present form and substituting, therefore, a new first paragraph of Article
Fourth in the following form:
"ARTICLE FOURTH" The total number of shares of all classes of capital stock
which the Corporation shall have authority to issue is One Hundred and Ten
Million (110,000,000) shares, consisting of One Hundred Million
(100,000,000) shares of Common Stock, par value $0.05 per share (the Common
Stock), and Ten Million (10,000,000) shares of Preferred Stock, par value
$1.00 per share (the "Preferred Stock").
SECOND: The amendment to the Certificate of Incorporation of the Corporation
set forth in this Certificate of Amendment has been duly adopted in accordance
with the provisions of Section 242 of the GCL.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment
to be signed by Jeffrey B. Robinson, its President, this day of May
1996.
AMERAC ENERGY CORPORATION
By:
----------------------------------
Jeffrey B. Robinson, President
<PAGE>
AMERAC ENERGY CORPORATION
700 LOUISIANA, SUITE 3330, HOUSTON, TX 77002
ANNUAL MEETING OF STOCKHOLDERS--MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey L. Stevens and Jeffrey B. Robinson, or
either of them, proxies of the undersigned with full power of substitution, to
vote all the shares of $4.00 Senior Preferred Stock, $1.00 par value (the
"Preferred Stock"), of Amerac Energy Corporation (the "Company") held of record
by the undersigned on April 8, 1996, at the Annual Meeting of Stockholders to
be held May 22, 1996 and at any adjournment thereof.
(1) To approve an amendment to the [_] FOR [_] AGAINST [_] ABSTAIN
Company's Certificate of
Designations which is a part
of the Company's Certificate of
Incorporation that provides for
the conversion of each outstanding
share of the Preferred Stock into
nine (9) shares of the Company's
Common Stock, $.05 par value.
(2) In their discretion, the proxies [_] FOR [_] AGAINST [_] ABSTAIN
are authorized to vote upon
such matters as may properly
come before the meeting or any
other adjournment thereof.
(Continued and to be signed on the reverse side)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BY THE
UNDERSIGNED STOCKHOLDER, IF NO CHOICE IS SPECIFIED BY THE STOCKHOLDER, THIS
PROXY WILL BE VOTED "FOR" ITEM (1), AND IN THE PROXIES' DISCRETION ON ANY OTHER
MATTERS COMING BEFORE THE MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such stock and hereby ratifies and confirms all the
said attorneys, agents, proxies, their substitutes or any of them may lawfully
do by virtue hereof.
------------------------------------
------------------------------------
Dated: _____________________ , 1996
Please date this Proxy and sign
your name exactly as it appears
hereon. When there is more than one
owner, each should sign, when
signing as an attorney,
administrator, executor, guardian,
or trustee, please add your title
as such. If executed by a
corporation, this Proxy should by
signed by a duly authorized
officer. If a partnership, please
sign in partnership name by
authorized persons.
PLEASE DATE, SIGN AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE. NO
POSTAGE REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
- --------------------------------------------------------------------------------
AMERAC ENERGY CORPORATION
700 LOUISIANA, SUITE 3330, HOUSTON, TX 77002
ANNUAL MEETING OF STOCKHOLDERS--MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeffrey L. Stevens and Jeffrey B. Robinson, or
either of them, proxies of the undersigned with full power of substitution, to
vote all the shares of Common Stock, $.05 par value (the "Common Stock"), of
Amerac Energy Corporation (the "Company") held of record by the undersigned on
April 8, 1996, at the Annual Meeting of Stockholders to be held May 22, 1996
and at any adjournment thereof.
(1) Election of [_]FOR all nominees listed [_]WITHHOLD AUTHORITY to vote
Directors below (except as indicated for all nominees listed
otherwise below) below
INSTRUCTION: To withhold authority to vote for an individual nominee, write
such nominees name in the space below.
NOMINEES: Michael L. Harvey, William P. Nicoletti, Kenneth R. Peak, Jeffrey
B. Robinson, Jeffrey L. Stevens
------------------------------------------------------------------------------
(2) To approve an amendment to the [_] FOR [_] AGAINST [_] ABSTAIN
Company's Certificate of
Designations which is a part of
the Company's Certificate of
Incorporation that provides for
the conversion of each outstanding
share of the Company's $4.00
Senior Preferred Stock, $1.00 par
value (the "Preferred Stock"),
into nine (9) shares of Common Stock.
(3) To approve an amendment to the [_] FOR [_] AGAINST [_] ABSTAIN
Company's Certificate of
Incorporation increasing the number
of authorized shares of the
Common Stock from 50,000,000 to
100,000,000.
(4) To ratify the selection of Price [_] FOR [_] AGAINST [_] ABSTAIN
Waterhouse LLP as the Company's
independent public accountants
for fiscal year 1996.
(5) In their discretion, the proxies [_] FOR [_] AGAINST [_] ABSTAIN
are authorized to vote upon such
matters as may properly come
before the meeting or any other
adjournment thereof.
(To be signed on the reverse side.)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BY THE
UNDERSIGNED STOCKHOLDER, IF NO CHOICE IS SPECIFIED BY THE STOCKHOLDER, THIS
PROXY WILL BE VOTED "FOR" ITEMS (1), (2), (3) and (4), AND IN THE PROXIES'
DISCRETION ON ANY OTHER MATTERS COMING BEFORE THE MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
upon or act with respect to such stock and hereby ratifies and confirms all the
said attorneys, agents, proxies, their substitutes or any of them may lawfully
do by virtue hereof.
----------------------------
----------------------------
Dated: ______________ , 1996
Please date this Proxy and
sign your name exactly as
it appears hereon. When
there is more than one
owner, each should sign.
When signing as an
attorney, administrator,
executor, guardian, or
trustee, please add your
title as such. If executed
by a corporation, this
Proxy should be signed by a
duly authorized officer. If
a partnership, please sign
in partnership name by
authorized persons.
Please date, sign and
return this Proxy Card in
the enclosed envelope. No
postage required if mailed
in the United States.
