<PAGE>
PRELIMINARY
AMERAC ENERGY CORPORATION
1201 LOUISIANA, SUITE 3350
HOUSTON, TEXAS 77002
TO BE HELD OR NOVEMBER 20, 1996
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Amerac Energy Corporation:
It is my pleasure to invite you to attend the Special Meeting of
Stockholders (the "Meeting") of Amerac Energy Corporation (the "Company"), which
will be held at the offices of Jackson and Walker, L.L.P., 42nd floor
auditorium, 1100 Louisiana, Houston, Texas, on November 20, 1996, at 2:00 p.m.,
local time. The Meeting is being held to consider and take action with respect
to the following matters:
(1) To consider and approve a proposal to amend the Company's Certificate of
Incorporation to effect a one-for-fifteen reverse stock split (the
"Reverse Stock Split") and to reduce the number of authorized shares
from 100 million to 20 million shares.
(2) To transact such other business as may properly come before the Meeting or
any adjournment thereof.
Only the holders of shares of the Common Stock of record on the books of
the Company at the close of business on October 11, 1996, will be allowed to
vote at the Meeting, or any adjournment thereof.
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---Chief Financial Officer
and Secretary
October 11, 1996
<PAGE>
AMERAC ENERGY CORPORATION
1201 LOUISIANA, SUITE 3350
HOUSTON, TEXAS 77002
TO BE HELD OR NOVEMBER 20, 1996
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
This Proxy Statement is submitted in connection with the solicitation of
proxies by the Board of Directors of Amerac Energy Corporation, a Delaware
corporation (the "Company"), for a Special Meeting of Stockholders to be held at
the offices of Jackson and Walker, L.L.P., 42nd floor auditorium, 1100
Louisiana, Houston, Texas, on November 20, 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 the Company's Common Stock, $.05 per
value (the "Common Stock"), will be voted on by the stockholders at the Meeting.
The approximate date this Proxy Statement and the enclosed form of Proxy are
first being sent to the holders of the Common Stock ("Stockholders") is
October 12, 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 before it is
voted 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 the following
matters: (1) to consider and approve a proposal to amend the Company's
Certificate of Incorporation to effect a one-for-fifteen reverse stock split
(the "Reverse Stock Split") and to reduce the number of authorized shares of
Common Stock from 100 million to 20 million shares, and (2) to transact such
other business as may properly come before the Meeting.
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 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 October 11, 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 42,761,405 shares of the Common Stock. Each
outstanding share of the Common Stock is entitled to one vote with respect to
the matters to come before the Meeting. There are no cumulative voting rights.
The Common Stock will be voted at the Meeting by ballots (in person or by
Proxy) which are tabulated by a person appointed by the Board of Directors to
serve as the inspector of election at the Meeting and who has
<PAGE>
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. Approval of each of the items,
will be decided by the affirmative vote of a majority of the outstanding shares
of the Common 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 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.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as to the number of shares of (1)
Common Stock beneficially owned as of August 31, 1996 by each beneficial owner
of more than five percent of the outstanding shares of the Common Stock and (2)
the shares of Common Stock beneficially owned as of August 31, 1996 by: (I) the
Chief Executive Officer and the current executive officers of the Company who
earned over $100,000 in cash 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. In determining the "Percent
of Class" the Company used the number of shares issued and outstanding on August
31, 1996, consisting of 42,761,405 shares of Common Stock.
<TABLE>
<CAPTION>
Amount
Beneficial Owner Beneficially Owned Percent of Class
- ---------------- ------------------- -----------------
<S> <C> <C>
Michael L. Harvey 149,618 (1) .3%
c/o Amerac Energy Corporation
1201 Louisiana, Suite 3350
Houston, TX 77002
William P. Nicoletti 422,852 (1) 1.0%
c/o Nicoletti & Company, Inc.
1155 Avenue of the Americas, 29th floor
New York, New York 10036
Kenneth R. Peak 349,913 (1) .8%
c/o Amerac Energy Corporation
1201 Louisiana, Suite 3350
Houston, TX 77002
Jeffrey B. Robinson 1,719,032 (2) 4.02%
c/o Amerac Energy Corporation
1201 Louisiana, Suite 3350
Houston, TX 77002
Jeffrey L. Stevens 550,338 (3) 1.3%
306 W. 7th
Suite 1025
Fort Worth, TX 76102
All directors and executive officers,
as a group (7 persons) (4) 3,443,954 8.05%
</TABLE>
____________
(1) Includes vested options to purchase 40,000 shares of Common Stock and has
the right to acquire 50,000 shares pursuant to unvested options.
(2) Includes unvested options to purchase 533,334 shares of Common Stock and
vested options to purchase 206,666 shares of Common Stock.
(3) Includes 270,333 shares of Common Stock which Mr. Stevens has the right to
acquire pursuant to vested stock options and 166,667 of unvested options.
In addition, his ownership includes 113,338 shares of the Common Stock
owned by PFI of which Mr. Stevens is President and Chief Executive Officer
and a 74% stockholder.
(4) The group's (7 persons) ownership includes vested options to purchase to
purchase 697,000 shares of Common Stock and 950,000 of unvested options.
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are elected annually by the Board of
Directors 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 of Directors may be
removed by the Board of Directors 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-Chief Financial
Officer and Secretary 1974
Richard Savoie..................... 49 Vice President-Engineering 1994
</TABLE>
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO EFFECT THE ONE-FOR-FIFTEEN REVERSE STOCK SPLIT
As a means of improving marketability of the Common Stock, reducing costs,
and other considerations, on September 9, 1996, the Board of Directors of the
Company approved, subject to the stockholders' approval solicited hereby, a
proposal to amend the Company's Certificate of Incorporation to effect a
one-for-fifteen reverse stock split (the "Reverse Stock Split"). The proposed
amendment to the Company's Certificate of Incorporation in the form attached
hereto as Exhibit A will also reduce the number of shares of Common Stock which
the Company is authorized to issue from 100 million shares to 20 million.
Effective upon the filing in the Office of the Secretary of State of Delaware of
the Certificate reflecting this amendment to Article Four of this Company's
Certificate of Incorporation (the "Effective Date"), each fifteen issued shares
of the Company's Common Stock outstanding immediately prior to the Effective
Date ("Old Common") shall be combined into and reclassified as one validly
issued, fully paid and non-assessable share of Common Stock, par value $.05 per
share ("New Common"), of the Company. Each certificate that theretofore
represented shares of Old Common represented by such certificate shall be
combined. The Company shall not issue fractional shares as a result of the
combination of shares but shall arrange for the disposition of fractional shares
on behalf of those record holders of Old Common at the close of business on the
Effective Date who would otherwise be entitled to a fraction of a share as a
result of the Reverse Stock Split.
Although the Company's Board of Directors believes as of the date of this
Proxy Statement that a one-for-fifteen Reverse Stock Split is advisable, the
Reverse Stock Split may be abandoned by the Board of Directors at any time
before, during of after the Special Meeting. In addition, depending upon
prevailing market conditions, the Board of Directors may deem it advisable to
implement the Reverse Stock Split and concurrently declare a Common Stock
dividend in an amount to be determined, which Common Stock dividend would not
require stockholder approval. Any such Common Stock dividend would partially
offset the decrease in the number of issued shares of New Common resulting from
the one-for-fifteen Reverse Stock split. No such Common Stock dividend is
presently contemplated.
The principal effect of the Reverse Stock Split would be to decrease the
number of issued and outstanding shares of Common Stock as of August 31, 1996,
from 42,761,405 to approximately 2,850,760 depending on the number of whole New
Common shares issued and the number of fractional New Common shares paid for
with cash. The Reverse Split would not have an immediate effect on any
Stockholder's proportionate interest in the Company, including the proportionate
interest of management.
<PAGE>
The following table illustrates the principal effect of the proposed stock
split based on the Company's capitalization as of August 31, 1996:
<TABLE>
<CAPTION>
COMMON SHARES PRIOR TO REVERSE SPLIT AFTER REVERSE SPLIT
------------- ---------------------- -------------------
<S> <C> <C>
Authorized 100,000,000 20,000,000
Outstanding 42,761,405 2,850,760
Available for
future Issuance 57,238,595 17,149,240
</TABLE>
*Assumes that no post-split New Common are issued in lieu of
fractional New Common shares
REASONS FOR THE REVERSE STOCK SPLIT PROPOSAL
The Board of Directors believes that the Reverse Stock Split is beneficial to
the Company and the Stockholders for a number of reasons, as summarized below:
* Capability to meet the listing requirements for the Nasdaq National
Market
* Reduced cost of stockholder mailings
* Lower relative brokerage costs and marginability
* Greater interest in the brokerage and investment community
* Greater liquidity for the stockholders
* Enhance the Company's ability to raise new capital
In order to be eligible for listing on the Nasdaq National Market System, the
following minimum conditions are required to be satisfied. First, the shares of
New Common must maintain a minimum bid price of $5.00 for a period of time prior
to listing. Second, a public float (share not held directly of indirectly by an
officer, director or be any person who is the beneficial officer, director or by
any person who is the beneficial owner of more that 10% of the total shares
outstanding) of at least 500,000 shares of New Common must exist at the time of
listing and the public float of the New Common at the time must have a market
value of at least $3,000,000. Third, the New Common must be held by at least 800
beneficial owners. Last, at the time of listing, the Company must have minimum
net tangible assets (total assets (excluding goodwill) minus total liabilities)
of $4,000,000 as of the end of the most recent quarter immediately preceding the
time of listing, and the Company's net income and pre-tax income in 1995 must
have exceeded $400,00 and $750,000, respectively. After the stock split it is
anticipated that the stock will trade above the required price and the Company
can apply for listing on the Nasdaq National Market System. While there is no
assurance that such listing will be granted the Company believes that the
listing will be granted.
The Board of Directors of the Company believes that the relatively low market
price of the Common Stock may impair the acceptability of the Common Stock to
certain institutional investors and other members of the investing public.
Theoretically, the number of shares outstanding should not, by itself, affect
the marketability of a stock, the type of investor who acquires it, or the
issuers's reputation on the financial community. In practice this is not
necessarily the case, as certain investors view low-priced stocks as
unattractive or, as a matter of policy, will not extend margin credit on stocks
trading at low prices, although certain other investors may be attracted to low-
priced stocks because of the greater trading volatility sometimes associated
with such securities. Many brokerage houses are reluctant to recommend lower-
priced stocks to their clients or to hold them in their own portfolios. Further,
a variety of brokerage house policies and practices discourage individual
brokers within those firms dealing in low-priced stocks because of the time-
consuming procedures that make the handling those low-priced stocks economically
unattractive.
<PAGE>
In addition, since the broker's commissions on low-priced stocks generally
represent a higher percentage of the stock price than commissions on higher
priced stocks, the current share price of the Common Stock can result in
individual stockholders paying transaction costs (commissions, markups or
markdowns) which are a higher percentage of their total share value than would
be the case if the share price was substantially higher. This factor is also
believed to limit the willingness of institutions to purchase the Common Stock
at its current relatively low market price. If approved, the Reverse Stock Split
will result in some stockholders owning "odd-lots" of less than 100 shares of
Common Stock. Brokerage commissions and other costs of transactions in odd-lots
may be higher, particularly on per-share basis, than the cost of transactions in
lots of 100 shares or more.
The Board of Directors believes that the decrease in the number of shares of
Common Stock outstanding as a consequence of the proposed Reverse Stock Split
and the resulting anticipated Nasdaq National Market listing, will encourage
greater interest in the Common Stock by the financial community and the
investing public and possibly promote greater liquidity for the Stockholders,
although it is possible that such liquidity could be affected adversely by the
reduced number of shares outstanding after the Reverse Stock Split. Also,
although any increase in the market price of the New Common from the Reverse
Stock Split may be proportionately less than the decrease in the number of
shares outstanding, the proposed Reverse Stock Split could result in a market
price for the shares that would be high enough to overcome the reluctance,
policies and practices of brokerage houses and investors referred to above and
to diminish the adverse impact of correspondingly higher trading commissions on
the market for the shares.
There can be no assurance, however, that the foregoing hoped for effects will
occur following the Reverse Stock Split or that the market price of the New
Common immediately after implementation of the proposed Reverse Stock Split will
be maintained for any period of time, that such market price will approximately
fifteen times the market price before the proposed Reverse Stock Split, or that
such market price will exceed or remain in excess of the current market price.
If the Reverse Stock Split is approved by the Stockholders, the total number
of shares of Old Common held by each Stockholder would be converted
automatically into a right to receive an amount of whole shares of New Common
equal to the number of shares owned immediately prior to the Reverse Stock Split
divided by fifteen. No fractional shares will be issued and, in lieu of any
fractional shares, fractional shares otherwise issuable to the Stockholders will
be aggregated and purchased by the Company at the closing asked price on
November 20, 1996, for the first $15,000 of fractional shares and the remainder,
if any, will be sold, by an agent, selected by the Company, for such
Stockholders' benefit and the cash proceeds from such sales will be distributed
(on a weighted average basis) to such Stockholders together with their stock
certificates for the New Common following their surrender of their stock
certificates representing their Common Stock prior to the Reverse Stock Split.
Approval of the Reverse Stock Split will not affect any Stockholders'
percentage ownership interest in the Company or proportional voting power,
except for minor differences resulting from the sale of fractional shares. The
Reverse Stock Split will reduce the number of Stockholders of the Company. The
shares of New Common which will be issued upon approval of the Reverse Stock
Split will be fully paid and non-assessable. The voting rights and other
privileges of the holders of Common Stock will not be affected substantially by
adoption of the Reverse Stock Split or subsequent implementation thereof. If for
any reason the Board of Directors deem it advisable to do so, the Reverse Stock
Split may be abandoned by the Board of Directors at any time before, during or
after the Meeting and prior to filing and effectiveness of the amendment to the
Company's Certificate of Incorporation with the Secretary of State of Delaware,
pursuant to the Delaware General Corporation Law, without further action by the
Stockholders of the Company. In addition, the effect of the Reverse Stock Split
may be partially offset if the Board of Directors elects to declare a Common
Stock dividend as described above.
<PAGE>
EFFECTIVE DATE
If the Reverse Stock Split is approved by the Stockholders at the Meeting,
and upon a determination by the Board of Directors that a Reverse Stock Split is
in the best interest of the Company and its Stockholders, an amendment to
Article Four of the Company's Certificate of Incorporation will be filed with
the Secretary of State of the State of Delaware on or about November 21, 1996 or
any other date (the "Effective Date") selected by the Board of Directors on or
prior to the Company's next Annual Meeting of Stockholders, and the Reverse
Stock Split will become effective on the date of such filing. Without any
further action on the part of the Company or the Stockholders, the shares of
Common Stock held by each Stockholder of record as of the Effective Date will be
converted on the Effective Date into the right to receive an amount of whole
shares of New Common equal to the number of such Stockholder's shares divided by
fifteen, with any fractional share to be sold on such Stockholder's behalf as
described above.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the Effective Date, the Company will send a
letter of transmittal to each Stockholder of record on the Effective Date for
use in transmitting certificates representing shares of Common Stock ("old
certificates") to the Company's transfer agent, Continental Stock Transfer and
Trust (the "Exchange Agent"). The letter of transmittal will contain instruction
for the surrender of old certificates to the Exchange Agent in exchange for
certificates representing the number of whole shares of new Common Stock. No new
certificates will be issued to a Stockholder until such Stockholder has
surrendered all old certificates together with a properly completed and executed
letter of transmittal to the Exchange Agent.
Upon proper completion and execution of the letter of transmittal and return
thereof to the Exchange Agent, together with all old certificates, Stockholders
will receive a new certificate or certificates representing the number of whole
shares of New Common into which their shares of Common Stock represented by the
old certificates have been converted as a result of the Reverse Stock Split.
Stockholders who would otherwise also receive a fractional share will instead
receive a check representing the proceeds from the sale of such fractional share
as described above. Until surrendered, outstanding old certificates held by
Stockholders will be deemed for all purposes to represent the number of whole
share of Common Stock to which such Stockholders are entitled as a result of the
Reverse Stock Split. Stockholders should not send their old certificates to the
Exchange Agent until they have received the letter of transmittal. Shares not
presented for surrender as soon as is practicable after the letter of
transmittal is sent will be exchanged at the first time they are presented for
transfer.
No service charges will be payable by Stockholders in connection with the
exchange of certificates, all expenses of which will be borne by the Company.
The Company will obtain a new CUSIP number for the Common Stock.
EFFECT OF THE REVERSE STOCK SPLIT
If the Reverse Stock Split is approved at the Meeting and the Company's Board
of Directors determines that it is advisable to proceed with the Reverse Stock
Split, the result (without giving effect to a Common Stock dividend, if any,
referred to above) would be that each Stockholder who owns fifteen or more
shares of Common Stock will receive one share of New Common for each fifteen
shares of Old Common held at the time of the Reverse Split, and a check
representing the cash proceeds from the sale of such Stockholder's fractional
share, if any.
Dissenting Stockholders have no appraisal rights under Delaware law or under
the Company's Certificate of Incorporation or Bylaws in connection with the
Reverse Stock Split.
The Board of Directors has determined to set the authorized number of New
Common shares at 20,000,000 after the Reverse Stock Split, as provided in the
form of amendment to the Company's Certificate of Incorporation attached hereto
as Exhibit A. Normally the authorized number of shares would be reduced to
6,666,667 to reflect the one-for-fifteen Reverse Stock Split. Electing to set
the authorized number of shares at 20,000,000 could result in a
<PAGE>
significant increase in possible dilution to present Stockholders' percentage of
ownership of the New Common shares. Assuming the issuance of all authorized
shares of Common Stock, the Stockholders, in the aggregate, would own
approximately 42.4% under the Company's present capital structure prior to the
Reverse Stock Split, but only 14.1% of the outstanding New Common shares under
the capital structure assuming adoption of Reverse Stock Split.
The Board of Directors has determined that having 20,000,000 authorized
shares may be more attractive for future possible merger of acquisition
candidates should the opportunity become available and be in the Company's best
interest.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material anticipated federal income tax
consequences of the Reverse Stock Split to Stockholders of the Company. This
summary is based on the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury Department Regulations (the "Regulations")
issued pursuant thereto, and published rulings and court decisions in effect as
of the date hereof, all of which are subject to change. This summary does not
take into account possible changes in such laws or interpretations, including
amendments to the Code, applicable statutes, Regulations and proposed
Regulations or changes in judicial or administrative rulings, some of which may
have retroactive effect. No assurance can be given that any such changes will
not adversely affect the discussion in this summary.
This summary is provided for general information only and does not purport to
address all aspects of the possible federal income tax consequences of the
Reverse Stock Split and IS NOT INTENDED AS TAX ADVICE TO ANY PERSON. In
particular, and without limiting the foregoing, this summary does not consider
the federal income tax consequences to Stockholders of the Company in light of
their individual investment circumstances or to holders subject to special
treatment under the federal income tax laws (for example, life insurance
companies, regulated investment companies and foreign taxpayers). In addition,
this summary does not address any consequence of the Reverse Stock Split under
any state, local or foreign tax laws. As a result, it is the responsibility of
each Stockholder to obtain and rely on advice from his or her personal tax
advisor as to: (i) the effect on his or her personal tax situation of the
Reverse Stock Split, including the application and effect of state, local and
foreign income and other tax laws; (ii) the effect of possible future
legislation and Regulations; and (iii) the reporting of information required in
connection with the Reverse Stock Split on his or her own tax returns. It will
be the responsibility of each Stockholder to prepare and file all appropriate
federal, state and local tax returns.
No ruling from the Internal Revenue Service ("Service") or opinion of counsel
will be obtained regarding the federal income tax consequences to the
stockholders of the Company as a result of the Reverse Stock Split. ACCORDINGLY,
EACH STOCKHOLDER IS ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES OF THE PROPOSED TRANSACTION TO SUCH STOCKHOLDER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND
OTHER TAX LAWS.
The Company believes that the Reverse Stock Split will qualify as a
"recapitalization" under Section 368(a)(1)(E) the Code. As a result, no gain or
loss will be recognized by to the Company or its stockholders in connection with
the Reverse Stock Split, except with respect to any cash received in lieu of
fractional shares. A Stockholder of the Company who exchanges his or her Common
Stock solely for New Common will recognize no gain or loss for federal income
tax purposes. A Stockholder's aggregate tax basis in his or her shares of New
Common received from the Company will be the same as his or her aggregate tax
basis in the Common Stock exchanged therefor. The holding period of the New
Common shares received by such Stockholder will include the period during which
the Old Common surrendered in exchange therefor was held, provided all such
Common Stock was held as a capital asset on the date of the exchange. Each
Stockholder who will receive cash in lieu of fractional shares of New Common
will recognize capital gain or loss equal to the difference between the amount
of cash received and the Stockholder's tax basis allocable to such fractional
shares.
<PAGE>
STOCK OPTIONS
On August 31, 1996 the Company also had outstanding options issued under its
various stock option plans for employees to acquire up to an aggregate of
1,772,000 shares of the Company's Common Stock at various exercise prices. If
the Reverse Stock Split is approved at the Meeting, the number of shares subject
to these options will be reduced by one-fifteenth to 118,133 shares (subject to
minor adjustments for the rounding of fractional shares).
VOTE REQUIRED
In order to effect the Reverse Stock Split, the Company's Certificate of
Incorporation must be amended, which requires, under Delaware law, the
affirmative vote of holders of a majority of the outstanding shares of Common
Stock. THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE PROPOSAL TO AMEND THE
RESTATED CERTIFICATE OF INCORPORATION TO EFFECT THE ONE-FOR-FIFTEEN REVERSE
SPLIT OF THE COMMON STOCK AND THE CHANGE IN THE NUMBER OF AUTHORIZED SHARES FROM
100 MILLION TO 20 MILLION.
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.
INCORPORATION OF INFORMATION BY REFERENCE
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 (the
"10-K"), and the Company's Quarterly Reports on Form 10-Q SB, which includes the
Company's unaudited quarterly financial statements, for the fiscal quarters
ended March 31, 1996 and June 30, 1996 ("Form 10-Q SB") which include under the
captions "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the Company's financial statements and notes thereto
continued therein are incorporated herein by reference.
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---Chief Financial Officer
and Secretary
October 11, 1996
<PAGE>
AMERAC ENERGY CORPORATION
1201 Louisiana, Suite 3350, Houston, TX 77002
Special Meeting of Stockholders - November 20, 1996
This Proxy is Solicited of 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
October 11, 1996, at the Special Meeting of Stockholders to be held November 20,
1996, and at any adjournment thereof.
(1) To approve a proposal to amend the Company's [ ] For [ ] Against [ ] Abstain
Certificate of Incorporation to effect a
one-for-fifteen reverse stock split and to
reduce the number of authorized shares from
100 million to 20 million.
(2) In their discretion, the proxies are [ ] For [ ] Against [ ] Abstain
authorized to vote upon such matters as may
properly come before the meeting or any
adjournment thereof.
<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 OF 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.
<PAGE>
EXHIBIT A
FORM OF AMENDMENT
TO CERTIFICATE OF INCORPORATION
Upon approval of the proposed one-for-fifteen reverse stock split of the
Company's Common Stock, par value $0.05 per share, Article FOURTH of the
Certificate of Incorporation, as amended to date. Shall be amended as follows:
The first paragraph of Article FOURTH shall be amended to read in its
entirety as follows:
FOURTH. The aggregate number of shares of stock which the corporation
shall have the authority to issue is 30,000,000 shares, of which
10,000,000 shares shall be Preferred Stock, par value $1.00 per share,
and 20,000,000 shares shall be Common Stock, par value $0.05 per share.
At the effective time of this amendment each share of Common Stock, par
value $0.05 per share, authorized immediately prior to this amendment shall be
reclassified into one-fifteenth of one fully paid and non-assessable share of
Common Stock, par value $0.05 per share, so that every fifteen shares of Common
Stock, par value $0.05 per share, authorized immediately prior to this amendment
shall be combined together to form one full share of Common Stock, par value
$0.05 per share. No scrip or certificates for fractional shares of Common Stock
will be issued by reason of this amendment.
