ISRAMCO, INC.
575 Madison Avenue, Suite 1006, New York, New York
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held September 30, 1996
DEAR STOCKHOLDER:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Shareholders of Isramco,
Inc. will be held at The Harmonie Club, 4 East 60th Street, New York, New York
10022, on September 30, 1996 at 10:00 A.M. for the following purposes:
Proposal 1. To elect six (6) directors for the ensuing year.
Proposal 2. To approve the appointment of Richard A. Eisner & Company,
LLP as independent auditors of the Company for 1996.
To consider any other matter which may properly come before the meeting.
A Proxy Statement relating to this meeting is enclosed herewith.
Shareholders of record at the close of business on August 19, 1996 are entitled
to notice of and to vote at the meeting or any adjournment thereof. I hope you
plan to attend the Annual Meeting. It is requested that you read carefully the
attached Proxy Statement for information on matters to be considered and acted
upon.
YOUR VOTE IS IMPORTANT
You are urged to date, sign and promptly return your Proxy so that your shares
may be voted in accordance with your wishes and in order that the presence of a
quorum may be assured. The prompt return of your signed Proxy, regardless of the
number of shares you hold, will aid the Company in reducing the expense of
additional Proxy solicitation. The giving of such Proxy does not affect your
right to vote in person in the event you attend the meeting.
/s/ HAIM TSUFF
------------------------------------
Haim Tsuff
Chairman of the Board
Chief Executive Officer
August 23, 1996
<PAGE>
ISRAMCO, INC.
575 Madison Avenue, Suite 1006, New York, New York
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
September 30, 1996
PROXY STATEMENT
General Information
- -------------------
This Proxy Statement is being furnished in connection with the solicitation
of proxies in the enclosed form on behalf of the Board of Directors of Isramco,
Inc. (the "Company") for use at the annual meeting of stockholders, to be held
on September 30, 1996 at 10:00 A.M., local time, at The Harmonie Club, 4 East
60th Street, New York, New York 10022, and at any adjournments thereof (the
"Annual Meeting").
Voting and Revocability of Proxies
- ----------------------------------
Unless authority to vote is herein withheld or is withheld with respect
to any specific nominee or proposal, all shares represented by properly signed
Proxies received pursuant to this solicitation (and not revoked before they are
voted) will be voted for (i) the election of those persons nominated herein for
election as directors and (ii) the approval of the appointment of Richard A.
Eisner & Company, LLP as the Company's independent auditors.
As of the date of this Proxy Statement, the Board of Directors knows of
no business that will be presented for consideration at the Annual Meeting other
than that referred to above. If any other business property comes before the
Annual Meeting, the persons designated in the enclosed Proxy will vote on such
business in accordance with their best judgment.
Proxy Cards for use by the Company's stockholders accompany this Proxy
Statement.
Any stockholder who executes and returns a Proxy Card may revoke it at any
time before it is exercised by delivering to the Secretary of the Company, at
the offices of the Company at the address set forth above, either an instrument
revoking the proxy, or a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person.
This Proxy Statement is being first given or sent to the Company's
Shareholders on or about August 23, 1996.
- 1 -
<PAGE>
Solicitation of Proxies
- -----------------------
The enclosed Proxy is being solicited by the Board of Directors of the
Company for use in connection with the Annual Meeting. The cost of such
solicitation will be borne by the Company. Solicitation may be made by
directors, officers, employees and management of the Company, however, such
persons will not receive any fees for such solicitation. Proxies may be
solicited in person or by mail, telephone, telegram, mailgram, or other means.
Brokers, nominees, fiduciaries and other custodians have been requested to
forward such soliciting material to the beneficial owners of shares held of
record by such custodians. Such custodians may be reimbursed for their expenses.
Voting Securities and Holders Thereof
- -------------------------------------
As of the close of business on August 19, 1996, the record date for voting
at the Annual Meeting, the Company had 26,691,198 (less treasury shares of
292,675) shares of common stock, par value $0.01 per share outstanding. Such
shares were held by approximately 1,071 shareholders of record. The total number
of votes entitled to be cast at the Annual Meeting is 26,691,198 (less treasury
shares of 292,675).
Submission of Shareholder Proposals for 1996 Annual Meeting
- -----------------------------------------------------------
Under the rules of the Securities and Exchange Commission, Shareholder
proposals intended to be presented at the 1996 Annual Meeting of the Company
must be received by the Company at its principal executive offices at 575
Madison Avenue, Suite 1006, New York, New York by November 8, 1996 for inclusion
in the Proxy Statement and form of Proxy relating to that meeting.
Quorum and Voting Requirements
- ------------------------------
The holders of a majority of the shares issued and outstanding and
entitled to vote in person or represented by proxy will constitute a quorum for
the transaction of business at the Annual Meeting. Assuming a quorum is present,
the affirmative vote of a majority of shares present in person or by proxy and
voting on a matter is necessary for approval.
- 2 -
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
---------------------
Board of Directors and Committees
- ---------------------------------
The business of the Company is managed by its Board of Directors. The Board
of Directors is presently comprised of five (5) directors, of which only four
(4) directors are standing for re-election. The number of members of the Board
of Directors is fixed by a majority of the Board of Directors. The Board of
Directors held seven (7) meetings during the period from December 31, 1994
through December 31, 1995 and each director attended at least 83% of the
scheduled meetings.
At the Annual Meeting, six (6) directors are to be elected, to hold office
pursuant to the Company's By-laws, for a term of one year and until a successor
shall be elected and qualified. Unless otherwise instructed, the shares
represented by the Proxies, will be voted FOR the election of the nominees in
the Proxy Statement and on the Proxy Card.
Because of the size of the Board of Directors the Company does not require
a standing audit, nominating or compensation committee of the Board of
Directors.
Each Director receives a fee of $750.00 for attendance at a meeting of the
Board of Directors. Directors participate in the Company's Stock Incentive Plan
and are eligible to receive stock options granted under this Plan.
Information Concerning Nominees
- -------------------------------
Each of the six (6) nominees named on the following pages has been
nominated for election as a director of the Company to serve until the 1997
Annual Meeting of Shareholders, or until his successor has been duly elected and
qualified. Four (4) of the nominees are currently directors of the Company. If
so authorized, the persons named in the accompanying Proxy Card intend to vote
FOR the election of each nominee. Shareholders who do not wish their shares to
be voted for a particular nominee may so indicate in the space provided on the
Proxy Card. If one or more of the nominees should become unavailable to serve at
the time of the Annual Meeting, the shares presented by proxy will be voted for
the remaining nominees and for any substitute nominee or nominees designated by
the Board of Directors. The Board of Directors knows of no reason why any of the
nominees will be unavailable to serve.
There follows a brief description of each of the nominees principal
occupation and business experience, age and directorships held in other
corporations.
The Board of Directors recommends a vote FOR each of the nominees
identified on the following pages.
- 3 -
<PAGE>
Daniel Avner has been a director of the Company since May 1996. Mr. Avner since
1992 has been the General Manager of E.D.R. GMBH Co., a company which engages in
investment, development and management of residential property in Germany. From
1991 to 1992 Mr. Avner was a Financial Analyst with Proctor & Gamble Company in
Germany. Mr. Avner holds a BA Degree in Accounting and Economics from the
University of Tel Aviv and a Masters of Business Administration from Duke
University. Age 34.
Zvika Livnat has not previously served as a director of the Company. Since 1981
Mr. Livnat has been the commercial manager of Taavura Cement Containers Ltd., a
company located in Israel which is engaged in a number of businesses including
inland transportation. Mr. Livnat holds a H.N.D.Degree in Business Studies and
Transportation Studies from the Dorset Institute of Higher Education in the
United Kingdom. Age 43.
Yeheskel Nathaniel has not previously served as a director of the Company. Since
1990 Mr. Nathaniel has been a managing director of Tanax BMBG, a company located
in Berlin, Germany which is engaged in the business of commercial and
residential real estate. Mr. Nathaniel holds a post graduate diploma in
management studies (DMS) at Middelsex University, London and a masters in
business administration from Henley University, England. Age 34.
Ido Rosen has been a director of the Company since May 1996. Mr. Rosen since
1995 has been the Director and Chief Financial Officer of the El-AD Group, a
private company which invests, develops and manages real estate in the New York
Metropolitan Area. From 1993 through 1995 Mr. Rosen was Controller of Y.L.R.
Capital Markets (1992) Ltd. and from 1990 to 1993 was Senior Accountant with
Kesselman & Kesselman, CPAs. Mr. Rosen holds a Bachelor of Accounting and
Economics from Tel Aviv University. Age 30.
Natan Schwartz has been a director of the Company since November 3, 1995 and
also serves a director of Isramco Oil and Gas Ltd. Mr. Schwartz in the past five
(5) years has served as manager and a board member of Prime 2000 Ltd. and Prime
Financial Consultants (finance and financial consulting activities), Promote
Construction Ltd. (construction), Promote Finance and Credit Ltd. (real estate)
and Promote Underwriters Ltd. (real estate and investment activities). Mr.
Schwartz is also a member of the board of directors of the following public
companies: Navigator Real Estate Ltd. (real estate), Octova Holdings Ltd.
(investments), and Navigator Investment Ltd. (investment company in the capital
markets). Age 53.
Haim Tsuff has been a director of the Company since January 8, 1996 and the
Chairman of the Board of Directors and Chief Executive Officer since May 1996.
Mr. Tsuff is Chairman of the Board of Pass-port Ltd. and a director of Isramco
Oil and Gas Ltd. During the past five years, Mr. Tsuff has served as General
Manager of Firestone Chemical Industries Ltd., a private company which produces
printed material. Mr. Tsuff is also the Managing Director or Chairman of the
Board of Y. Habaron Ltd. (real estate), Firestone Chemical Factors Ltd. (printed
material), Madad Ltd. (printed material), Benfica Holdings Ltd. (construction)
and Benfica Ltd. (construction), all of which are private companies. Age 38.
- 4 -
<PAGE>
SUMMARY OF COMPENSATION
-----------------------
The following table sets forth the compensation paid for years 1993 - 1995
to the Chief Executive Officer and the five (5) other highly paid officers
and/or key employees of the Company.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-Term Compensation
Name and Year Salary Bonus Other Annual Securities All Other
Principal Compensation Underlying Compensation
Position (4) Options
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joseph Elmaleh (1) 1995 -- $99,000
Former Chairman of the Board 1994 -- $100,000 99,000
Chief Executive 1993 -- -- 85,250
Danny Toledano (2) 1995 30,000 -- --
Former President 1994 -- 80,000 --
Chief Operating Officer 1993 -- 57,000 30,000
Chief Financial Officer
Alex Helfman 1995 126,211 55,000 --
Oil and Gas Supervisor 1994 114,100 77,100 --
1993 120,356 78,000 30,000
Joshua Folkman 1995 92,777 20,000 --
Exploration Manager 1994 92,468 10,000 --
Branch Office 1993 103,082 5,000 20,000
Raanan Wiessel 1995 67,962 34,000 --
Treasurer 1994 56,128 39,000 --
Controller 1993 57,199 48,000 25,000
Branch Office
Conrad E. Maher (3) 1995 112,005 -- -- --
Operations and 1994 109,791 -- 78,000 25,000
Technical Manager 1993 25,270 -- 19,500 75,000
Branch Office
Notes
(1) From January 1993 through May 1993 the Company paid to Dr. Joseph Elmaleh a consultant fee of $5,500 per month for his
services. Effective June 1, 1993 Dr. Elmaleh's consultant fee was increased to $8,250 per month and on July 20, 1995 the
Company entered into a Consulting Agreement with Dr. Elmaleh for an annual fee of $99,000. On April 17, 1996 Dr. Elmaleh
resigned as Chairman of the Board, Chief Executive Officers and a director. In April 1996 the Company pursuant to a
Termination Agreement paid to Dr. Elmaleh the sum of $393,750 and purchased shares of the Company held by Southern Shipping
and Energy Inc. - See Certain Transactions.
(2) From January 1992 through 1995 the services of Mr. Toledano have been provided to the Company by J.O.E.L. for a fee of $6,000
per month. On October 15, 1995 Mr. Toledano was elected President, Chief Financial Officer and Chief Operating Officer. The
Company on October 16, 1995 entered into an Employment Agreement with Mr. Toledano at the annual salary of $144,000. On June
23, 1996 Mr. Toledano resigned from all of his offices with the Company and the Company pursuant to a Termination Agreement,
Non-Compete Agreement and Consulting Agreement paid to Mr. Toledano the sum of $344,000. - See Certain Transactions.
(3) Mr. Maher started employment with the Company in September 1993. Mr. Maher had an Employment Agreement with the Company for
$6,000 per month and his company had a Consulting Agreement for $6,500. Pursuant to provisions of said Agreements the Company
paid to Conrad E. Maher a housing allowance of $800.00 per month and a transportation allowance in addition to a one time
moving allocation of $20,800. As of January 1, 1996 these two Agreements were cancelled and Mr. Maher's company entered into
a Consulting Agreement with the Company which provides for a consulting fee of $8,300 per month.
(4) Does not include personal benefits which do not exceed 10% of the cash compensation of all officers as a group.
</TABLE>
- 5 -
<PAGE>
The following table sets forth information concerning the exercise of stock
options during 1995 by each of the named executive officer and key employee and
the year end value of unexercised options.
<TABLE>
<CAPTION>
Aggregated Option Exercises
in 1995
and Year End Option Values
--------------------------
Name Shares Value Number of Value of
Acquired Realized ($) Securities Unexercised
on Exercise (4) Underlying In the Money
Unexercised Options at
Options (#) Year End ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Joseph Elmaleh (1) 0 0 20,000 0
Danny Toledano (2) 0 0 30,000 0
Alex Helfman 0 0 30,000 0
David Malkin (3) 0 0 20,000 0
Joshua Folkman 0 0 20,000 0
Raanan Wiessel 0 0 25,000 0
Conrad Maher 0 0 100,000 0
Notes
(1) Ceased to be an Officer and Director of the Company in April 1996.
(2) Director of the Company. Ceased to be President in June 1996.
(3) Ceased to be Corporate Secretary in May 1996.
(4) The value reported is based on the closing price of the common stock of the Company as reported on NASDAQ on the date of the
exercise less the exercise price.
- 6 -
</TABLE>
<PAGE>
The following table sets forth information concerning individual grants of
stock options made during the 1995 fiscal year to each named executive officer
and key employee. The Corporation did not grant any stock appreciation rights
during 1995 and has no outstanding SAR's.
================================================================================
Option Grants in 1995
---------------------
Individual Grants (1)
---------------------
Name No. of % of Total Exercise Expiration
Shares Options Price Date
Underlying Granted to ($/SH)
Options Employees
Granted (1)
- -------------------------------------------------------------------------------
NONE
Notes
(1) All stock options were granted with an exercise price equal to the market
price of the common stock on the date of grant.
================================================================================
The Company during 1995 did not amend or adjust the exercise price of
outstanding stock options previously awarded to any of the named executive
officers or directors or employees. The only incentive plan which the Company
has is its 1993 Stock Option Plan (the "Stock Option Plan").
Stock Option Plan
- -----------------
The Company's Stock Option Plan was adopted with the intention of
encouraging stock ownership by directors, officers, employees and consultants of
the Company and its subsidiaries. The plan provides for stock options of up to
500,000 shares of common stock of the Company. Options may either be options
intended to qualify as "incentive stock options" or "non-statutory stock
options", as those terms are defined in the Internal Revenue Code.
Employees (including officers) of the Company are eligible to receive
incentive stock options, however, non-statutory stock options may be granted to
officers, directors, employees and consultants of the Company and its
subsidiaries. Options are granted for a period of up to ten years from the grant
date for an exercise price of not less than 100% of the fair market value of the
securities of the Company's common stock on the date of grant. During 1995 Mr.
Danny Toledano and Mr. William W. Houck were appointed as members of the
committee to administer the Stock Option Plan. Both Mr. Houck and Mr. Toledano
have resigned as members of the committee and no replacement has been
designated.
- 7 -
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND KEY EMPLOYEES
On August 1, 1996 the Directors, executive Officers and certain key
employees of the Company beneficially owned, the aggregate 205,000 shares of the
Company's common stock (comprising less than 1% of the shares outstanding)
including 205,000 shares under options which are currently exercisable. Unless
otherwise indicated, the individuals named hold sole voting and investment power
over the shares listed below.
Name Position Number of
Shares
Owned
Beneficially
- -------------- ----------------------- ------------
Haim Tsuff (1) Chairman of the Board, 0
Chief Executive Officer,
and Director
Youval Ran (2) President 0
Daniel Avner (3) Secretary and Director 0
Danny Toledano Director 30,000
(4)
Alex Helfman Oil and Gas Supervisor 30,000
Branch Office (5)
Conrad Maher Operations and 100,000
Technical Manager (6)
Joshua Folkman Exploration Manager 20,000
(7)
Raanan Wiessel Treasurer - Controller 25,000
(8)
Natan Schwartz Director 0
Ido Rosen Director 0
All Directors, Officers and Key Employees as a Group _________
(ten persons) 205,000
Notes
(1) Haim Tsuff is the Chairman of the Board of Pass-port Ltd. which owns and
controls 28.4% of JOEL. See Security Ownership of Certain Beneficial
Owners.
(2) Elected President on August 1, 1996.
(3) Elected Secretary on August 1, 1996.
(4) Includes 30,000 shares of common stock issuable upon exercise of Stock
Options.
(5) Includes 30,000 shares of common stock issuable upon exercise of Stock
Options.
(6) Includes 100,000 shares of common stock issuable upon exercise of Stock
Options.
(7) Includes 20,000 shares of common stock issuable upon exercise of Stock
Options.
(8) Includes 25,000 shares of common stock issuable upon exercise of Stock
Options.
- 8 -
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information with respect to ownership of the
Company's securities as of August 1, 1996 by persons or entities who are known
by the Company to own beneficially more than 5% of the outstanding shares of the
common stock, as determined in accordance with Rule 13d-3 under the Act.
Name of No. of
Beneficial Owner Common Shares Percentage
- ---------------- ------------- ----------
J.O.E.L. - 14,674,225 46.73% +
Jerusalem Oil Exploration Ltd. *
4 Raoul Wallenberg St.
Shavit House
Tel Aviv 69174
Israel
Notes
* Based on the last Form 4 filing made by J.O.E.L. with the Company, J.O.E.L.
holds 9,674,225 shares of the common stock. In addition, J.O.E.L.
owns 2,500,000 Class A Warrants and 2,500,000 Class B Warrants.
Accordingly, J.O.E.L. may be deemed to be the beneficial owner of
14,674,225 shares of the common stock of Isramco, Inc. representing 46.73%
of the common stock.
K.U. Limited Partnership holds 44.68% of the equity of Pass-port Ltd. which
holds approximately 43.45% of the outstanding shares of J.O.E.L. J.O.E.L.
holds approximately 10.14% of the shares of Pass-port Ltd. The General
Partner of K.U. Limited Partnership is K.U. Integrated Holdings Ltd. (the
"General Partner"). Pursuant to the Partnership Agreement for K.U. Limited
Partnership, the General Partner has agreed to cause to be elected to the
Board of Directors of Pass-port Ltd. and any corporation directly or
indirectly controlled by Pass-port Ltd. an equal number of candidates
nominated by Michlol Kanot Holdings Ltd. ("Michlol") and United Kingsway
Ltd. ("Kingsway") (the limited partners of the K.U. Limited Partnership).
Kingsway and Michlol are each a 50% shareholder in the General Partner.
Michlol is owned 66 2/3% by Carmen Assets Investments Ltd.("Carmen") and 33
1/3% by Credit Lines. Mr. Livnat and his family members own a controlling
interest in Carmen. Kingsway is owned by Robert Jean Erckins. K.U. Limited
Partnership is owned 49.9% by Kingsway, 49.9% by Michlol and .2% by the
General Partner. Carmen also directly holds 2.47% of the equity of J.O.E.L.
Haim Tsuff is the Chairman of the Board, Chief Executive Officer and a
director of the Company and Chairman of the Board and a director of
Pass-port Ltd., K.U. Integrated Holdings Ltd. and Kingsway. Youval Ran, the
President of the Company is the Chairman of the Board and Chief Executive
Officer of Israel Credit Lines Complimentary Financial Services Ltd. and
Israel Credit Lines (Central)Ltd. ("Credit Lines") and a director of K.U.
Integrated Holdings Ltd., Credit Lines and Michlol. Mr. Ran and Mr. Livnat,
jointly by power of attorney act on behalf of four corporations which are
board members of J.O.E.L. and on behalf of two corporations which are board
members of Pass-port Ltd. Zvika Livnat is a director of Carmen and Michlol.
Natan Schwartz is a director of Israel Credit Lines (Central)Ltd.
Information regarding these relationships is more fully available in a
Schedule 13d filing and amendments thereto made on behalf of the above
entities.
As a result of the foregoing, K.U. Limited Partnership, K.U. Integrated
Holdings Ltd., Credit Lines, United Kingsway Ltd., Michlol and Carmen may
be deemed to control Pass-port Ltd. and J.O.E.L.
+ This percentage is based on 26,691,198 (less 292,675 shares held in
treasury) shares of common stock outstanding August 1, 1996 plus the
required issuance of an additional 5,000,000 shares of common stock in the
event of the exercise of the Class A and Class B Warrants by J.O.E.L.
- 9 -
<PAGE>
CERTAIN TRANSACTIONS
Office Facilities and Various Agreements
License of New York Offices
The Company has a license from Petronav Inc. to use its New York office.
During 1995, the Company paid or accrued $33,000 to Petronav Inc. under this
Agreement. Petronav Inc. is a company 100% owned and controlled by Dr. Elmaleh
(the former Chairman of the Board of Directors and Chief Executive Officer of
the Company). Petronav Inc. has notified the Company that it intends to
terminate this License Agreement. The Agreement provides the Company the right
to use the office facilities of Petronav Inc. on a full-time basis and may be
terminated by either party on thirty days' notice. Management believes that the
cost for these office premises is comparable to other similar office space in
New York City.
Service Agreement with J.O.E.L.
During 1995 the Company paid to J.O.E.L. $15,000 per month for office
rental, office services, secretarial services and computer services in Tel Aviv,
Israel. The payment for 1995 was $180,000. The charge also includes the usage of
offices and office services for Isramco- Negev 2 Limited Partnership. Management
believes that the amount which it pays to J.O.E.L. for rent and office services
is comparable to charges for rent and office services in comparable locations in
Israel.
Consulting Agreement with J.O.E.L.
During 1995 the Company paid J.O.E.L. a consulting fee of $6,000 per month
for the services of Danny Toledano. During 1995 Mr. Toledano, as an employee of
J.O.E.L., performed supervisory services for the Company's Branch Office in
Israel and spent approximately 30% of his time on the Company's business. Mr.
Toledano is a director of the Company. Management believes that the consulting
fee paid to J.O.E.L. was fair and reasonable.
Agreements with Danny Toledano
In October 1995 the Company entered into an Employment Agreement with Mr.
Toledano which provided for a payment of annual salary of $144,000 per annum
payable in installments of $12,000 per month. The term of the Agreement was for
two (2) years. In June of 1996 the Company terminated its Employment Agreement
with Mr. Toledano and paid to Mr. Toledano a lump sum of $72,000 for the balance
of the employment term. Pursuant to the terms of a Termination Agreement between
the Company and Mr. Toledano, Mr. Toledano resigned as President and Chief
Operating Officer of the Company, and executed a Covenant Not to Compete
Agreement with the Company. Pursuant to the terms of the Covenant Not to
Compete, Mr. Toledano agreed that for a period of five (5) years he would not
directly or indirectly compete with the Company in connection with the
exploration for oil and gas in the State of Israel, the territorial waters off
Israel or the territories currently under control of the State of Israel. In
consideration for the covenant not to compete, the Company paid to Mr. Toledano
the sum of $200,000. The Company also entered into a Consulting Agreement with
Natural Resources Exploration Services B.V., a Netherlands corporation
controlled by Mr. Toledano. Pursuant to the Consulting Agreement between the
Company and Natural Resources Exploration Services B.V., the Company paid a lump
sum payment of $72,000 to Natural Resources Exploration Services B.V. to provide
the services of Mr. Toledano to the Company through June 23, 1997.
- 10 -
<PAGE>
Consulting Agreement with Dr. Joseph Elmaleh
During 1995 the Company paid to Dr. Joseph Elmaleh a consulting fee of
$8,250 per month. Dr. Elmaleh during 1995 spent approximately 30% to 40% of his
time on the Company's business. During the year ending December 31, 1995
payments of $99,000 were paid pursuant to this understanding. The Company
believes that the consulting fee paid to Dr. Elmaleh was fair and reasonable.
Consulting Agreement with Dr. Joseph Elmaleh and Termination
In July of 1995 the Company formalized its existing oral consulting
agreement with Dr. Joseph Elmaleh and entered into a written Consulting
Agreement for the payment to Dr. Elmaleh of an annual fee of $99,000 payable in
equal monthly installments of $8,250. The term of the Consulting Agreement
commenced August 1, 1995 and was to expire July 31, 1997. On April 17, 1996
pursuant to a Termination Agreement entered into between the Company and Dr.
Joseph Elmaleh, Dr. Elmaleh resigned as the Chairman of the Board, Chief
Executive Officer and a director of Isramco and its subsidiaries. The Company
terminated the 1995 Consulting Agreement with Dr. Elmaleh and (i) paid to him
the sum of $123,750 representing the balance of unpaid consulting fees; (ii) Dr.
Elmaleh agreed not to directly or indirectly compete with the Company in
connection with the exploration for oil and gas in the State of Israel, the
territorial waters off Israel or the territories currently under control of the
State of Israel for a term of three (3) years in consideration for the lump sum
payment of $270,000. The Company also purchased from Southern Shipping and
Energy Inc., a company controlled by Dr. Elmaleh, 292,675 shares of the common
stock of the Company held by Southern Shipping and Energy Inc. for a purchase
price of $208,238.21.
Consulting Agreement with Haim Tsuff
In May of 1996 the Company entered into a Consulting Agreement with a
company owned and controlled by Haim Tsuff, the Chairman of the Board of
Directors and Chief Executive Officer of the Corporation. Pursuant to this
Consulting Agreement which has a term commencing June 1, 1996 through May 31,
1998, the Company agreed to pay consultant the sum of $144,000 per annum payable
in installments of $12,000 per month, in addition to reimbursing all reasonable
business expenses incurred during the consulting term in connection with the
performance of consulting services on behalf of the Company.
Consulting Agreement with Youval Ran
In August of 1996 the Company entered into a Consulting Agreement with
Youval Ran, the President of the Corporation. Pursuant to this Consulting
Agreement which has a term commencing August 1, 1996 through July 31, 1999, the
Company agreed to pay Mr. Ran the sum of $144,000 per annum payable in
installments of $12,000 per month, in addition to reimbursing all reasonable
business expenses incurred during the consulting term in connection with the
performance of consulting services on behalf of the Company.
- 11 -
<PAGE>
PROPOSAL NO. 2
Appointment of Independent Auditors
- -----------------------------------
Subject to the approval of the shareholders, the Board of Directors has
selected Richard A. Eisner & Company, LLP as independent auditors to audit the
accounts of the Company for the 1996 calendar year.
The Company's financial statements for the year ended December 31, 1995
were audited by Richard A. Eisner & Company, LLP.
Richard A. Eisner & Company, LLP has no interest or relationship with the
Company except in the capacity of independent public accountants, nor has that
firm had any other interest or relationship with the Company in the past.
A representative of the firm is expected to be present at the 1995 Annual
Meeting. Such representative will have the opportunity to make a statement, if
they so desire, and will be available to respond to appropriate stockholder
questions.
Recommendation of Board of Directors
- ------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSAL:
RESOLVED, that the appointment by the Board of Directors of the firm
Richard A. Eisner & Company, LLP as Independent Auditors for the
Company for the year 1996 is hereby approved.
OTHER MATTERS
-------------
Management does not know of any other matters to come before the Annual
Meeting. However, if any other matters properly come before the Annual Meeting,
it is the intention of the persons designated as proxies to vote in accordance
with their judgment on such matters.
IT IS IMPORTANT THAT YOU RETURN YOUR SIGNED PROXY PROMPTLY, REGARDLESS OF
THE NUMBER OF SHARES YOU OWN. PLEASE COMPLETE, SIGN AND MAIL THE ENCLOSED PROXY
IN THE ACCOMPANYING ENVELOPE PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING.
By Order of the Board of Directors,
/s/ HAIM TSUFF
------------------------------------
Haim Tsuff
Chairman of the Board
August 23, 1996
A copy of the Company's Annual Report on Form 10-K, filed with the
Securities and Exchange Commission, is available without charge to shareholders
upon written request to:
Secretary, Isramco, Inc., 575 Madison Avenue, Suite 1006, N.Y., N.Y.
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<PAGE>
ISRAMCO, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
September 30, 1996
This Proxy is solicited on behalf of the Board of
Directors of ISRAMCO, INC. and the Board of Directors
recommends a vote FOR Proposal 1 and Proposal 2.
The undersigned having received the Notice and Proxy Statement for the
Annual Meeting of Shareholders hereby revokes all prior proxies, and appoints
Haim Tsuff and Daniel Avner and each of them, proxies, with power of
substitution, to vote in the manner indicated below, and with discretionary
authority as to any other matter that may properly come before the meeting, all
my (our) shares of record of Isramco, Inc. at the Annual Meeting of Shareholders
to be held September 30, 1996, and at any postponements and adjournments
thereof. Unless you indicate otherwise, this Proxy will be voted in accordance
with the Board of Directors' recommendations. The Directors recommend a vote FOR
Items 1 and 2.
(1) The election of Daniel Avner, Zvika Livnat, Yeheskel Nathaniel, Ido
Rosen, Natan Schwartz, and Haim Tsuff as directors of the Company to hold office
until their successors are elected.
FOR [ ] WITHHOLD VOTE [ ]
If you desire to withhold authority to vote for the election of any one or more
of the nominees listed above, please print the name of such nominee or nominees:
.
- ------------------------------------------
(2) Approve appointment of Richard A. Eisner & Company, LLP as independent
auditors of the Company for 1996.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(SEE OVER)
<PAGE>
If no instructions are given, the proxies will vote FOR Items (1) and (2).
Dated: , 1996
------------------------
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(Signature(s) of Shareholder(s))
Note: Please sign exactly as your name
appears on your stock certificates. If
this stock is jointly held, each owner
should sign. Executors, administrators,
trustees, guardians and attorneys should
so indicate when signing. Attorneys
should submit powers of attorney.
PLEASE MARK, SIGN, DATE AND MAIL THIS
PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
SO THAT IT MAY BE COUNTED AT THE ANNUAL
MEETING ON SEPTEMBER 30, 1996.
