SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. ___)
Check the appropriate box:
[ ] Preliminary Information Statement [ ] Confidential, for use of the
Commission Only (as permitted
[X] Definitive Information Statement by Rule 14a-6(e)(2))
MEXCO ENERGY CORPORATION
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(Name of Registrant as Specified in Charter)
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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, 1998
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 2:00
P.M. Central Standard Time on September 15, 1998, for the following purposes:
1. To elect seven directors of the Company.
2. To ratify the selection of auditors for the Company.
3. 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, 1998, 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, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
DONNA GAIL YANKO, Secretary
INFORMATION STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
MEXCO ENERGY CORPORATION
To be held September 15, 1998
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 2:00 p.m.,
Central Standard Time.
The Annual Report to stockholders respecting the Company's fiscal year
ending March 31, 1998, and the Information Statement were mailed to stockholders
August 26, 1998.
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, 1998 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 1,623,289 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, 1998
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.
Number of Shares Percent
of Common Stock of
Beneficially Owned Class
------------------ -----
Howard E. Cox, Jr. 194,000 11.95
Thomas R. Craddick 5,000 .31
Thomas Graham, Jr. 77,000 4.74
Jack D. Ladd 1,478 .09
Gerald R. Martin 15,040 .93
Nicholas C. Taylor 1,110,770 68.43
Donna Gail Yanko 7,340 .45
All Officers and Directors as a Group 1,410,628 86.90
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 1,079,770 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 31,000 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 46,000 shares of the common stock of the
Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
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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.
Ownership of and transactions in Company stock by executive officers
and Directors of the Company are required to be reported to the Securities and
Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of
1934. On June 24, 1998, Terry L. Cox and Donna Gail Yanko each filed a Form 4 to
report stock options which were granted on April 2, 1998. Also on June 24, 1998
Thomas R. Craddick, Thomas Graham, Jr., Jack D. Ladd and Gerald R. Martin each
filed a Form 3 to report the initial number of shares owned upon their election
as directors. Thomas Graham, Jr. also reported stock options which were granted
on April 2, 1998 on his Form 3. These forms were filed after the due date.
DIRECTORS AND EXECUTIVE OFFICERS
At the Annual Meeting to be held on September 15, 1998, seven (7)
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 seven (7) directorships are set forth in the following
table, together with certain information as to each person as of the date of
this Information Statement.
NOMINEES FOR ELECTION AS DIRECTORS
Director of the
Name Age Position with the Company Company Since
---- --- ------------------------- ---------------
Thomas R. Craddick 54 Director 1998
William G. Duncan 56 Director 1994
Thomas Graham, Jr. 64 Director and Chairman of
the Board of Directors 1997
Director 1990 to 1994
Jack D. Ladd 48 Director 1998
Gerald R. Martin 52 Director 1998
Nicholas C. Taylor 60 President, Treasurer and
Director 1983
Donna Gail Yanko 54 Vice President, Secretary
and Director 1990
THOMAS R. CRADDICK, 54, was elected to the Board of Directors of the
Company on March 2, 1998 and is a member of the Compensation Committee.
Since 1968 to the present, Mr. Craddick has served as State Representative
for the State of Texas. Throughout his tenure of the past 15 sessions of
the Legislature, Representative Craddick has served on various committees
and conferences, most recently serving on the Legislative Budget Board,
Legislative Audit Committee, the State Affairs Committee and the Revenue &
Public Education Funding, Select Committee, along with serving as Chairman
of the House Ways and Means Committee and Chairman of the Republican
Legislative Caucus. For more than the past five years Mr. Craddick has been
Sales Representative for Mustang Mud, Inc., as well as the owner of
Craddick Properties and Owner and President of Craddick, Inc. both of which
invest in oil and gas properties and real estate.
WILLIAM G. DUNCAN, Jr., 56, 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 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.
THOMAS GRAHAM, JR., 64, 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 the 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. Since July
1997, he has served as President of the Lawyers Alliance for World
Security.
JACK D. LADD, 48, was elected to the Board of Director of the Company
on March 2, 1998 and is a member of the Compensation Committee. For 22
years, Mr. Ladd has been a shareholder of the law firm of Stubbeman, McRae,
Sealy, Laughlin & Browder, Inc. Mr. Ladd is also a partner in various real
estate partnerships, an arbitrator for the National Association of
Securities Dealers, and a mediator certified by the Attorney Mediation
Institute. Mr. Ladd has served as a Director and advisory director of other
oil and gas corporations.
GERALD R. MARTIN, 52, co-founded River Hill Capital, LLC, a private
investment company, in June 1996. For the prior 23 years, Mr. Martin had
worked for J.J.B. Hilliard, W. L. Lyons, Inc., a member of the New York
Stock Exchange, 17 years were spent as Senior Vice President of Investment
Banking. Mr. Martin has experience as a financial consultant or advisor to
several local government agencies and non-profit organizations. In December
1996, he completed fifteen years of volunteer service as Vice Chairman of
the Board of Commissioners of the Housing Authority of Louisville. Mr.
Martin is a director of Orr Safety Corporation in Louisville, Kentucky and
Begley Company in Richmond, Kentucky. He was elected to the Board of
Directors of the Company on March 2, 1998 and is a member of the
Compensation Committee.
NICHOLAS C. TAYLOR, 60, was elected President, Treasurer and Director
of the Company 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 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, 54, 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, 1998, five meetings of the Board of
Directors were held and attended by all Directors. Three meetings were held in
the first quarter ending June 30, 1998 and attended by all Directors, except Mr.
Craddick who did not attend the April or May meeting. The Compensation Committee
currently consists of Messrs. Craddick, Duncan, and Martin, all of whom are
non-employee directors. The Board of Directors does not have a standing audit or
nominating 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 a ninety-three percent (93%)
working interest in three wells in which the Company also owns an interest and
operates. The Company 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 $50,097 for the year ended March 31,
1998, with accounts receivable balance at that date of approximately $8,473.
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, 1998.
Summary Compensation Table*
Name and
Principal
Position Year Salary
----------- ---- -------
5 Officers .............................. 1998 $44,825
& Directors ............................. 1997 $52,381
as a group .............................. 1996 $38,400
* All annual compensation is comprised of salary and insurance. There
are no long-term compensation awards, employment agreements, retirement benefits
or any other basis of compensation. Directors are paid $100 per meeting of which
there were five (5) during the year ended March 31, 1998, and three (3) in the
quarter ended June 30, 1998. 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
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The Board of Directors is solely responsible for setting executive
compensation including base pay and Board of Directors' fees. Such payment is
based on performance, including hours worked and effectiveness.
EMPLOYEE INCENTIVE STOCK OPTION PLAN
The Company adopted an employee incentive stock plan effective
September 15, 1997. Under the plan, 350,000 shares are available for
distribution. Awards, granted at the discretion of a committee of the Board,
include stock options and restricted stock. Stock options may be an incentive
stock option or a non-qualified stock option. The exercise price of each option
will not be less than the market price of the Company's stock on the date of
grant. The maximum term of the options is ten years. Restricted stock may be
granted with a condition to attain a specified goal. The purchase price will be
at least $5.00 per share of restricted stock. The awards of restricted stock
must be accepted within sixty days and will vest as determined by agreement.
Holders of restricted stock have all rights of a shareholder of the Company. At
March 31, 1998, no stock or stock options had been granted under the plan.
On April 2, 1998, the Board of Directors granted stock options for
40,000 shares of common stock at $7.75 per share which vest at 25% on each
annual anniversary date and expire ten years from date of grant. On that date
Terry L. Cox, Ronald M. Frederick, Thomas Graham, Jr. and Donna Gail Yanko were
each granted stock options for 10,000 shares of common stock. Effective with her
resignation, the options granted to Terry L. Cox expired on July 31, 1998. On
August 5, 1998, Linda J. Crass was granted stock options to purchase 10,000
shares of common stock at $7.75 per share under the same conditions. The Company
will account for the options under the intrinsic value method pursuant to APB
Opinion 25.
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 year period beginning
March 31, 1993 and ending March 31, 1998. The selected Peer Group consists of
several larger independent oil and gas producers: Noble Affiliates, Inc., Pogo
Producing Company, Anadarko Petroleum Corporation, Apache Corporation, and Oryx
Energy Company. This group of companies is used by the Company for certain
compensation and performance comparisons.
[GRAPH APPEARS HERE]
1993 1994 1995 1996 1997 1998
-------- -------- --------- ---------- --------- ---------
MEXCO $100 $184 $267 $333 $733 $1017
S&P 500 $100 $ 99 $111 $143 $168 $ 244
PEER GROUP $100 $ 96 $102 $124 $144 $ 159
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, 1998. 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 15, 1999. Appropriate proposals of stockholders intended to
be presented at the 1999 Annual Meeting must be received by Ms. Gail Yanko,
Secretary, no later than June 25, 1999, 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.
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, 1998, BY WRITING THE SECRETARY, MEXCO ENERGY CORPORATION, SUITE 1101,
214 WEST TEXAS AVENUE, MIDLAND, TEXAS 79701.
