<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[X] Preliminary Information Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[_] Definitive Information Statement
MEXCO ENERGY CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant As Specified In Charter)
NICHOLAS C. TAYLOR, PRESIDENT
- --------------------------------------------------------------------------------
(Name of Person(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
MEXCO ENERGY CORPORATION
Suite 1101
214 W. Texas Avenue
Midland, Texas 79701
(915) 682-1119
(915) 682-1123 (FAX)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held September 15, 1997
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of the Stockholders of MEXCO
ENERGY CORPORATION (the "Company") will be held at the Company's principal
executive office, Suite 1101, 214 W. Texas Avenue, Midland, Texas 79701, at
10:00 A.M. Central Standard Time on September 15, 1997, for the following
purposes:
1. To elect four directors of the Company.
2. To adopt the 1997 Employee Incentive Stock Plan of Mexco Energy
Corporation.
3. To consider and take action upon a proposed Amendment to and
Restatement of the Company's Articles of Incorporation to increase the
number of authorized shares of common stock from 5,000,000 to two
classes consisting of 40,000,000 common stock and 10,000,000 preferred
stock.
4. To ratify the selection of auditors for the Company.
5. To transact such other business as may properly come before the
meeting.
The stock transfer records for the Company will not be closed. The close of
business on August 25, 1997, has been fixed by the Board of Directors as the
record date for determining the shareholders of the Company entitled to notice
of and to vote at the meeting.
DATED this 26th day of August, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
DONNA GAIL YANKO, Secretary
<PAGE>
INFORMATION STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
MEXCO ENERGY CORPORATION
To be held September 15, 1997
This Information Statement is furnished by the management of MEXCO ENERGY
CORPORATION (the "Company"), in connection with the Annual Meeting of
Stockholders of the Company to be held at the Company's principal executive
office, Suite 1101, 214 W. Texas Avenue, Midland, Texas 79701, at 10:00 a.m.,
Central Standard Time.
The Annual Report to stockholders respecting the Company's fiscal year
ending March 31, 1997, and the Information Statement were mailed to stockholders
August 26, 1997.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
VOTING SECURITIES
The close of business of August 25, 1997 has been fixed as the time and
record date for the determination of stockholders entitled to notice of and vote
at the Annual Meeting. At the record date, there were issued and outstanding
and entitled to vote 1,623,229 shares of Common Stock, $.50 par value per share,
of the Company (the "Common Stock"). Holders of shares of Common Stock are
entitled to one (1) vote for each share owned at the record date on all business
to come before the meeting.
PRINCIPAL STOCKHOLDERS AND STOCKHOLDINGS OF MANAGEMENT
The following table sets forth information, as of August 18, 1997
concerning the Common Stock beneficially owned by each director and nominee of
the Company, by all officers, directors and nominees as a group, and by each
stockholder known by the Company to be the beneficial owner of more than five
percent (5%) of the outstanding Common Stock.
<TABLE>
<CAPTION>
Number of Shares Percent
of Common Stock of
Beneficially Owned Class
------------------ -------
<S> <C> <C>
Howard E. Cox, Jr. 194,000 11.95
Thomas Graham, Jr. 77,000 4.74
Nicholas C. Taylor 1,112,770 68.55
Donna Gail Yanko 7,240 .45
All Officers and
Directors as a Group 1,197,110 73.75
</TABLE>
All shares listed in the table are directly owned, and the named
individual has sole voting and investment power with respect to such shares.
Mr. Taylor owns 1,082,770 shares of the common stock of the Company as community
property, 21,000 shares of which is held in the name of his spouse, Catherine B.
Taylor, and the balance in the name of Mr. Taylor. Mr. Taylor, as custodian
under the Uniform Gift to Minors Act, also holds 30,000 shares of the common
stock of the Company for his minor daughter, Christie Hardin Van Vraanken
Taylor. Mr. Taylor disclaims any beneficial ownership of common stock of the
Company owned by his two adult children, Nicholas Van Campen Taylor and
Katherine Camilla Taylor, who each own 45,000 shares of the common stock of the
Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
- --------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, (collectively
"Reporting Persons"), to file with the Securities and Exchange Commission
("SEC") and the National Association of Securities Dealers, Inc., initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, Directors and greater than ten
percent (10%) shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
1
<PAGE>
Ownership of and transactions in Company stock by executive officers and
Directors of the Company are required to be reported to the SEC pursuant to
Section 16(a) of the Securities Exchange Act of 1934. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company and written representations of Reporting Persons that no other reports
were required with respect to fiscal 1997, all Section 16(a) filing requirements
applicable to the Reporting Persons were complied with.
DIRECTORS AND EXECUTIVE OFFICERS
At the Annual Meeting to be held on September 15, 1997, four (4) persons
are to be elected to serve on the Board of Directors for a term of one (1) year
and until their successors are duly elected and qualified. All of the current
Directors will be available for election to the Board of Directors. The Company
nominees for the four (4) directorships are set forth in the following table,
together with certain information as to each person as of the date of this
Information Statement.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AS DIRECTORS
Director of the
Name Age Position with the Company Company Since
- --------------------- --- ---------------------------------- ---------------
<S> <C> <C>
William G. Duncan 55 Director 1994
Thomas Graham, Jr. 63 Director and Chairman of the Board 1997
of Directors
Director 1990 to 1994
Nicholas C. Taylor 59 President, Treasurer, and Director 1983
Donna Gail Yanko 53 Vice President, Secretary and 1990
Director
</TABLE>
WILLIAM G. DUNCAN, JR., 55, since 1995 has been the President of
Southeastern Financial Services, Louisville, Kentucky, prior to which he
had served as Senior Vice President and Chief Investment Officer since
1991. For the previous twenty-five (25) years he held several positions at
Liberty National Bank and Trust Company, Louisville, Kentucky, serving as
Senior Vice President and Manager of the bank's Personal Trust Investment
Section, member of Liberty's Trust Executive Committee, and several
positions in Liberty's Commercial Banking Division. Mr. Duncan has been a
Director of the Company since 1994, after the resignation of Thomas Graham,
Jr. to become a United States Ambassador.
THOMAS GRAHAM, JR., 63, was appointed Chairman of the Board of
Directors by the Directors of the Company, effective July, 1997, having
served as a director from 1990 through 1994. From 1994 through May, 1997,
Mr. Graham served as a United States Ambassador. For more than five years
prior thereto, Mr. Graham served as General Counsel, United States Arms
Control and Disarmament Agency, as well as Acting Director and as Acting
Deputy Director of such agency successively, in 1993 and 1994. He currently
serves as President of the Lawyers Alliance for World Security.
NICHOLAS C. TAYLOR, 59, was elected President, Treasurer and Director
of the Registrant on April 8, 1983 and continues to serve in such
capacities on a part-time basis, as required. From July 15, 1993 to the
present, Mr. Taylor has been involved in the independent practice of law
and business interests. For more than the prior nineteen (19) years, Mr.
Taylor was a Director and Shareholder of the law firm of Stubbeman, McRae,
Sealy, Laughlin & Browder, Inc., Midland, Texas, and a partner of the
predecessor firm. In 1995 he was appointed by the Governor of Texas and
serves as Chairman of the three member State Securities Board.
DONNA GAIL YANKO, 53, has worked as part-time Administrative Assistant
to the Chief Executive Officer and controlling shareholder and as Assistant
Secretary of the Company until June 1992 when she was appointed Corporate
Secretary. Mrs. Yanko was appointed to the position of Vice President and
elected to the Board of Directors in 1990.
During the year ended March 31, 1997, two (2) meetings of the Board of
Directors were held and attended by all three (3) Directors. One meeting was
held in the first quarter ending June 30, 1997. The Board of Directors does not
have a standing audit, nominating or compensation committee, nor any committees
performing similar functions, since the Board of Directors itself performs these
functions. There are no other executive officers than those listed above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's principal shareholder owns working interests varying from
ninety-three percent (93%) to one hundred percent (100%) in three wells which
the Company operates. Registrant operates these wells on a contract basis
charging the same administrative fees as the previous operator. The billings for
such lease operating expenses totaled approximately $112,657 for the year ended
March 31, 1997, with accounts receivable balance at that date of approximately
$6,042.
2
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning annual and long-term
compensation paid or accrued to executive officers for services in all
capacities to the Company for the fiscal year ended March 31, 1997.
<TABLE>
<CAPTION>
Summary Compensation Table*
--------------------------
Name and
Principal
Position Year Salary
- -------------------- ---- --------
<S> <C> <C>
4 Officers 1997 $53,738
& Directors 1996 $37,800
as a group 1995 $32,959
</TABLE>
* All annual compensation is comprised of salary and insurance. There are
no long-term compensation awards, stock options, employment agreements,
retirement benefits or any other basis of compensation. Directors are paid $100
per meeting of which there were two (2) during the year ended March 31, 1997,
and one (1) in the quarter ended June 30, 1997. The sole compensation received
by the President of the Company for such period consisted of director's fees.
Board of Directors Report of Executive Compensation
- ---------------------------------------------------
The Board of Directors is solely responsible for setting executive
compensation which includes base pay and Board of Directors' fees. Such payment
is based on performance, including hours worked and effectiveness.
PERFORMANCE GRAPH
The following graph shows how an initial investment of $100 in the
Company's Common Stock would have compared to an equal investment in the S&P 500
Index or in an index of Peer Group Competitors over a five (5) year period
beginning December 31, 1990 and ending December 31, 1996. The selected Peer
Group consists of several larger independent oil and gas producers: Noble
Affiliates, Inc., Pogo Producing Company, Anadarko Petroleum Corporation, Apache
Corporation, Santa Fe Energy Resources, Inc., and Oryx Energy Company. This
group of companies is used by the Company for certain compensation and
performance comparisons.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------
MEXCO $ 100 $ 100 $ 120 $ 220 $ 320 $ 400
- -------------------------------------------------------
S&P 500 $ 100 $ 104 $ 113 $ 99 $ 120 $ 166
- -------------------------------------------------------
PEER GROUP $ 100 $ 86 $ 108 $ 110 $ 108 $ 163
=======================================================
</TABLE>
3
<PAGE>
ADOPTION OF THE 1997 EMPLOYEE INCENTIVE STOCK PLAN
INTRODUCTION
On April 22, 1997 the Board of Directors approved and recommended for
submission to the stockholders for their adoption the 1997 Employee Incentive
Stock Plan of Mexco Energy Corporation ("Plan"). The approval by an affirmative
vote of the holders of a majority of the shares of Common Stock present, in
person or by proxy and entitled to vote on this proposal, at the 1997 Annual
Meeting is required for adoption.
The Board of Directors believes that the adoption of the Plan is desirable
since it will promote and closely align the interests of employees of the
Company and its shareholders by providing stock based compensation. The Board
believes the Plan will strengthen the Company's ability to reward performance
which enhances long term shareholder value; increase employee stock ownership
through performance based compensation plans; and strengthen the Company's
ability to attract and retain an outstanding employee and executive team.
The following summary of the material features of the Plan does not purport
to be complete and is qualified in its entirety by reference to the text of the
Plan, a copy of which has been filed with the Securities and Exchange
Commission.
STOCK SUBJECT TO THE PLAN
The Plan provides for the grant of two types of stock options: (i)
Incentive Stock Options, and (ii) Non-Qualified Stock Options. The Plan
provides for the award of Restricted Stock grants at a price of not less than
$5.00 per share. The Restricted Stock Awards may be made subject to such
performance, longevity, or other standards as the Company may set. Under the
Plan the maximum number and kind of shares as to which options may be granted
(subject to adjustment in certain events as described below) is 350,000 shares
of Common Stock. Upon the expiration, termination or cancellation (in whole or
in part) of unexercised non-qualified or incentive stock options on which no
dividends have been paid, the shares of Common Stock subject thereto shall again
be available for option under the Plan. The market value of a share of Common
Stock based on the closing bid price of the Company's Common Stock on July 30,
1997 was $6.50.
ADMINISTRATION
The Plan shall be administered by the Committee which shall be composed of
at least three members of the Board of Directors, none of whom shall be eligible
to participate under the Plan. No Committee members have been appointed at this
time.
ELIGIBILITY
Plan participation is limited to employees of the Company and its
subsidiaries. As of March 31, 1997, there were one full time and two part time
employees of the Company and its subsidiary. Only Directors who are employees
are eligible to receive awards under the Plan.
Options may be granted by the Committee to eligible employees in such
number and at such times during the term of the Plan as the Committee shall
determine. In granting options the Committee shall take into account such
factors as the Committee may deem relevant in respect of accomplishing the
Plan's purposes, including one or more of the following: the extent to which
performance goals have been met, the duties of the respective employees and
their present and potential contributions to the Company's success.
TERMS AND CONDITIONS OF NON-QUALIFIED OPTIONS
All non-qualified options granted under the Plan will be options which do
not meet the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended, ("Code") and will be subject to the following terms and conditions:
(i) the option price per share will be determined by the Committee but will not
in any event be less than 100% of the fair market value of the Common Stock on
the date the option is granted, (ii) in no event will any option be exercisable
more than 10 years after the date the option is granted, (iii) except in cases
of death or disability of the employee, the shares covered by an option may not
be purchased for 12 months after the date on which the option is granted (unless
the Committee determines otherwise), or such longer period or periods and
subject to such conditions as the Committee may determine, but thereafter may be
purchased at one time or in such installments over the balance of the option
period as may be provided in the option, and (iv) an option may not be
transferred except that it may be exercised by an optionee's legal
representatives or heirs. All options will expire immediately if the optionee
is discharged from employment for cause. If the optionee's employment is
terminated due to death, the option may be exercised for a period equal to the
longer of (i) twelve months from the date of death, or (ii) six months from the
appointment of the legal representative of the estate or until the expirations
of the stated term of the option, whichever period is shorter. If the
optionee's employment is terminated due
4
<PAGE>
to disability or retirement, the option may be exercised for a period of one
year from the date of such termination of employment or until the expiration of
the stated term of the option, whichever period is shorter; provided that if an
optionee dies within such period, the option may be exercised within the periods
in which it could be exercised if such optionee had been an employee on the date
of death. If employment is terminated by the Company without cause, the option
may be exercised for the lessor of three (3) months or the balance of the stock
option term. If employment termination occurs for any other reason, the option
shall expire at the time of such employment termination. In no event shall any
option be exercisable subsequent to the 10th anniversary of the date on which it
is granted. The Committee will determine with respect to each option grant the
nature and extent of the restrictions, if any, to be imposed on the shares which
may be purchased thereunder.
At the discretion of the Committee, all or a portion of the exercise price
of the option may be paid by the surrender of previously acquired Common Stock
owned by the optionee or by authorizing the Company to withhold shares of Common
Stock otherwise issuable upon exercise of the option. In addition, the
Committee may permit the optionee to pay amounts due under applicable
withholding tax laws upon exercise of options by authorizing the Company to
withhold or accept shares of Common Stock.
TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
The Committee may also grant incentive stock options as defined under
Section 422 of the Code. All incentive stock options issued under the Plan
shall be subject to the same terms and conditions as the non-qualified options
granted under the Plan.
ADJUSTMENT IN EVENT OF CAPITAL CHANGES
In the event of a "Change in Control" or a "Potential Change in Control"
(as defined in the Plan) of the Company, the Plan provides that the optionee
shall be paid the difference in the exercise price of the option and the "Change
in Control Price" of the option stock (as defined in the Plan).
DURATION AND AMENDMENT OF THE PLAN
No option may be granted pursuant to the Plan after the 10th anniversary of
the effective date of the Plan. The Board of Directors may at any time
terminate the Plan with respect to any shares of the Common Stock not at the
time subject to an option grant and may alter or amend the Plan (including any
amendment deemed necessary to ensure the Company may obtain any required
regulatory approval or to ensure that the grant or exercise of options or any
other provision of the Plan complies with Section 16(b) of the Securities
Exchange Act of 1934), provided, however, that without the approval of
stockholders no amendment may be made which would (i) increase the maximum
number of shares for which options may be granted under the Plan (except in the
case of adjustments in the event of capital changes as referred to above), (ii)
extend the term of the Plan, or (iii) change the class of eligible persons who
may receive options under the Plan. No change may be made in any option
previously granted that would impair the rights of an optionee or participant
without his or her consent.
TAX STATUS OF NON-QUALIFIED OPTIONS, INCENTIVE STOCK OPTIONS, AND
RESTRICTED STOCK AWARDS
Under present Federal tax laws and regulations, the Federal income tax
consequences to optionees and the Company as a result of the grant and exercise
of non-qualified stock options and incentive stock options pursuant to the Plan
should be as described below or to employees and the Company in case of
Restricted Stock Awards.
NON-QUALIFIED STOCK OPTIONS. Optionees will not have taxable income upon
the grant of a non-qualified stock option. Upon the exercise of a non-qualified
stock option, the Federal income tax consequences to the optionee depend upon
whether or not the stock issued upon exercise is both non-transferable and
subject to a substantial risk of forfeiture. If one or both of the foregoing
conditions are not present, the optionee will have taxable income at the time of
such exercise equal to the excess of the fair market value of the option stock
on the date of exercise over the option price. If both conditions are present,
recognition of income upon the exercise of a non-qualified stock option to the
extent such right is paid in stock will be postponed until the stock becomes
transferable or is no longer subject to a substantial risk of forfeiture (unless
the optionee elects to be taxed upon exercise). At that time, the optionee will
have taxable income from exercising the option equal to the excess of the then
fair market value of the option stock over the option price and from exercising
the right equal to the then fair market value of any stock received.
The Company or a subsidiary will be entitled to a deduction, for Federal
income tax purposes, in the same amount as the income that the optionee
recognizes and in the taxable year in which the optionee recognizes the income.
An optionee exercising a non-qualified stock option is subject to withholding
for Federal, and generally for state and local, income taxes.
5
<PAGE>
INCENTIVE STOCK OPTIONS. Optionees will not have taxable income upon the
grant of an incentive stock option. Upon the exercise of an incentive stock
option, the optionee will not have taxable income, provided the optionee at all
times from the date of the granting of the incentive stock option to a date
three months before the date of exercise has been an employee of the Company or
a subsidiary. In the case of an optionee who is disabled within the meaning of
Section 22(e)(3) of the Code, the three-month period is extended to one year.
The excess of (i) the fair market value (on the exercise date) of the stock
transferred to an optionee pursuant to his or her exercise of an incentive stock
option over (ii) the option exercise price, increases the optionee's income for
purposes of the alternative minimum tax and may as a consequence give rise to a
liability under that tax.
If the optionee makes a "disqualifying disposition" of stock acquired
pursuant to the exercise of an incentive stock option, the optionee will
recognize taxable income equal to the amount by which the fair market value of
the option stock at the time of exercise (or, if less, the amount realized on
such disposition) exceeds the option price. A disqualifying disposition
generally includes a sale, exchange, gift, or transfer of legal title within one
year of exercise of the incentive stock option or within two years of grant,
whichever is later.
The Company and its subsidiaries will not be entitled to any Federal income
tax deductions with respect to incentive stock options unless the optionee makes
a disqualifying disposition of the option stock. If an optionee makes such a
disposition, the Company or a subsidiary will then be entitled to a tax
deduction equal to the amount by which the fair market value of the option stock
at the time of exercise (or, if less, the amount realized on such disposition)
exceeds the option price.
RESTRICTED STOCK AWARDS
Employees who receive Restricted Stock Awards will have taxable income on
the difference between the employee's basis for tax purposes in the stock and
the fair market value at the time of the award. The company will be entitled to
a deduction for federal income tax purposes, in the same amount and in the
taxable year as the income that the employee recognizes the income. Such
employees are subject to withholding for Federal and, generally for state and
local, income taxes.
ACCOUNTING TREATMENT
NON-QUALIFIED AND INCENTIVE STOCK OPTIONS, AND RESTRICTED STOCK AWARDS.
There is no impact on net income resulting from the grant of stock options under
the Plan, during the time that such stock options are outstanding or on exercise
of such stock options. The exercise of a stock option is treated as a capital
transaction and the option price received by the Company is added to
stockholders' equity. Restricted Stock Awards are treated as compensation and
are charged against earnings.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
PROPOSED AMENDMENT TO AND RESTATEMENT OF THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM
5,000,000 TO 40,000,000 SHARES AND TO AUTHORIZE 10,000,000 SHARES OF PREFERRED
STOCK
The Board of Directors proposes an Amendment to and Restatement of the
Company's Articles of Incorporation which will increase the number of authorized
shares of common stock ($.50 par value) from 5,000,000 to 40,000,000. Likewise
the Board of Directors of the Company also, through the proposed Amendment and
Restatement of the Company's Articles of Incorporation, proposes to authorize
for issuance 10,000,000 share of preferred stock ($1.00 par value) which could
be issued by the Company in various series or classes, and with various rights
and preferences established from time to time by the Board of Directors of the
Company. While the Board of Directors of the Company has no present plans to
issue any of the preferred stock to be authorized by the proposed Amendment and
Restatement of the Articles of Incorporation, if and when such preferred stock
is issued, such shares may have rights and preferences greater than those of the
current common stockholders. Currently the Company has outstanding 1,623,229 of
its Common Stock, and an additional 350,000 shares are reserved for issuance
pursuant to the Company's 1997 Employee Incentive Stock Plan subject to approval
of the Plan at the Annual Meeting.
The Board of Directors believes that the proposed increase in the number of
authorized shares of common stock and the authorization for issuance of shares
of preferred stock will benefit the Company by improving its flexibility in
responding to future business needs and opportunities. The additional
authorized shares of both common or preferred stock will be available for
issuance from time to time in connection with financings, acquisitions, employee
plans, and stock splits in the form of stock dividends, and for other corporate
purposes which the Board of Directors may deem advisable from time to time. The
Company has no present intention to issue any additional shares of common stock,
except pursuant to its executive incentive compensation plans and employee
benefit plans.
6
<PAGE>
The Board of Directors has no present plan to seek further approval by the
stockholders for the authorization of additional shares, unless required to do
so by applicable laws or regulations.
If the proposed amendment and restatement is approved by the stockholders,
the increased number of authorized shares of common stock, as well as the
presently authorized but unissued shares of common stock, might be utilized in a
transaction which could have the effect of delaying or preventing a change in
control of the Company which some or a majority of the stockholders may consider
desirable. For example, such stock could be issued to third parties in order to
discourage a takeover attempt or to dilute the ownership interest of a
substantial stockholder who opposes policies of the Board of Directors.
The Company's Articles of Incorporation contain other provisions which
might be deemed to have the effect of delaying or preventing a change in control
of the Company. These include the provision authorizing the Board of Directors
to issue preferred stock with rights (including voting rights or conversion
rights) and preferences which could impede the completion of such a transaction;
and the requirement that stockholder action can only be taken at a meeting or by
unanimous written consent.
The Board of Directors does not currently intend to propose any other
amendments to the Company's Articles of Incorporation which might be deemed to
have the effect of discouraging takeover attempts, nor is the Board aware of any
existing or threatened effort to obtain control of the Company.
VOTE REQUIRED
The favorable vote of two-thirds of the outstanding shares of stock is
required for adoption of the proposed amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company, by resolution, has approved the
selection of Grant Thornton LLP as the accountants for the Company for the
fiscal year beginning April 1, 1997. A representative of said accountants will
not be present at the Annual Meeting, but will be available by telephone to make
a statement, if they so desire and to respond to appropriate questions. The
Board of Directors does not have an audit or similar committee.
NEXT ANNUAL MEETING
The next Annual Meeting of the Company's stockholders is scheduled to be
held on September 14, 1998. Appropriate proposals of stockholders intended to
be presented at the 1998 Annual Meeting must be received by Ms. Gail Yanko,
Secretary, no later than June 25, 1998, in order to be included in the Company's
Information Statement relating to such meeting.
OTHER MATTERS
Management knows of no other business which will be presented at the Annual
Meeting other than as explained herein.
A majority in interest of the issued and outstanding Common Stock entitled
to vote shall constitute a quorum at the Annual Meeting and shall be necessary
to elect the Board of Directors and transact any business except as to Amendment
of the Articles of Incorporation of the Company a favorable vote of two-thirds
of the outstanding common stock entitled to vote will be required.
The cost of preparing and mailing this Information Statement will be paid
by the Company. The Company will, upon request, reimburse brokers for the cost
incurred by them in mailing copies of this Statement and the Annual Report of
the Company to such of their customers as are beneficial owners of the Common
Stock of the Company registered in the names of such brokers.
STOCKHOLDERS MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO,
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED
MARCH 31, 1997, BY WRITING THE SECRETARY, MEXCO ENERGY CORPORATION, SUITE 1101,
214 WEST TEXAS AVENUE, MIDLAND, TEXAS 79701.
7
