<PAGE> 1
SCHEDULE 14A
[Paragraph 26,871] Reg. Section 240.14a-101 (Schedule 14A) Information Required
in Proxy Statement
Reg. Section 240.14a-101.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TransGlobe Energy Corporation
(Name of Registrant as Specified In Its Charter)
---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
TRANSGLOBE ENERGY CORPORATION
#808 - 1111 West Hastings Street
Vancouver, B.C. V6E 2J3
Tel: (604) 683-2568
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders
(the "Meeting") of TransGlobe Energy Corporation (the "Company") will be held at
the Vancouver Renaissance Hotel, 1133 West Hastings Street, Vancouver, British
Columbia, on Friday, March 21, 1997, at the hour of 2:00 p.m. (Vancouver time),
for the following purposes:
1. To receive and consider the consolidated financial statements of the
Company for the fiscal year ended September 30, 1996 and the Auditors'
Report thereon.
2. To increase the number of directors to six and to elect six directors
to serve until the next annual general meeting of shareholders or until
their successors are elected or appointed.
3. To appoint the auditors and to authorize the directors to fix their
remuneration.
4. To approve the granting of incentive stock options to insiders
(directors and senior officers) of the Company in accordance with
Canadian stock exchange policies.
5. To transact such other business as may properly come before the Meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed February 13, 1997 as the record date
for determining the shareholders who are entitled to vote at the Meeting.
Shareholders who are unable to attend the Meeting in person are requested to
read, complete, sign and mail the enclosed Form of Proxy in accordance with the
instructions set out in the proxy form and in the Proxy Statement and
Information Circular accompanying this Notice. Please advise the Company of any
change in your mailing address.
DATED at Vancouver, British Columbia this 14th day of February, 1997.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ross G. Clarkson, President
<PAGE> 3
2
TRANSGLOBE ENERGY CORPORATION
PROXY STATEMENT AND INFORMATION CIRCULAR
Except as otherwise stated, the information contained herein is stated
as of February 14, 1997. This Proxy Statement and Information Circular (the
"Proxy Statement"), accompanying annual report and form of proxy are expected to
be mailed to registered shareholders on or before February 17, 1997. All dollar
amounts in the Proxy Statement, unless otherwise indicated, are stated in United
States currency, with conversion of Canadian dollars at a rate of 1.36495. The
Company has adopted the U.S. dollar as the functional currency for its
consolidated financial statements because the majority of its assets are located
in the United States.
SOLICITATION OF PROXIES
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION
OF PROXIES BY THE MANAGEMENT OF TRANSGLOBE ENERGY CORPORATION (THE "COMPANY")
FOR USE AT THE ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF THE COMPANY TO BE
HELD ON MARCH 21, 1997 (THE "MEETING"), AND AT ANY ADJOURNMENT THEREOF, at the
time and place and for the purposes set forth in the accompanying Notice of
Meeting. While it is expected that the solicitation will be primarily by mail,
proxies may be solicited personally, or by telephone, facsimile or other
electronic means, by employees of the Company at nominal cost. All costs of
solicitation by Management will be borne by the Company.
The Company has made arrangements with Canadian brokerage houses and
other intermediaries to send proxy materials, at the Company's expense, to
unregistered shareholders (beneficial shareholders) of the Company who have
advised their broker or intermediary that they wish to receive such material. In
addition, the Company has asked banks and brokers in the United States to
forward copies to persons for whom they hold shares of the Company and request
authority for execution of the proxies. The Company will reimburse the banks and
brokers for their reasonable out-of-pocket expenses in doing so.
Management has also retained the services of Allen Nelson & Co.,
Incorporated ("Nelson"), a proxy solicitation and shareholder communications
firm, of Seattle, Washington, to assist Management in the dissemination of
materials relating to the Meeting and the solicitation of proxies on behalf of
management in connection with the Meeting. Nelson will be a paid a fee,
estimated to be $5,000, plus expenses, for such services. Approximately 15
persons will be utilized by Nelson in its dissemination and solicitation
efforts. Solicitations may be made personally, or by mail, telephone, facsimile,
Internet, telegraph or messenger/courier.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named as proxy holders in the accompanying form of proxy
are directors of the Company and were designated by the Management of the
Company. A SHAREHOLDER WISHING TO APPOINT SOME OTHER PERSON (WHO NEED NOT BE A
SHAREHOLDER) TO REPRESENT HIM OR HER AT THE MEETING HAS THE RIGHT TO DO SO,
EITHER BY STRIKING OUT THE NAMES OF THOSE PERSONS NAMED IN THE ACCOMPANYING FORM
OF PROXY AND INSERTING THE DESIRED PERSON'S NAME IN THE BLANK SPACE PROVIDED IN
THE FORM OF PROXY OR BY COMPLETING ANOTHER FORM OF PROXY. A proxy will not be
valid unless a properly completed proxy form is received at the office of the
Company's Transfer Agent and Registrar, Montreal Trust Company of Canada, 510
Burrard Street, Vancouver, British Columbia, V6C 3B9, at least 48 hours
(excluding Saturdays and holidays) before the time for holding the Meeting, or
adjournment thereof.
A shareholder who has given a proxy may revoke it by an instrument in
writing executed by the shareholder or by his or her attorney authorized in
writing or, where the shareholder is a corporation, by a
<PAGE> 4
3
duly authorized officer or attorney of that corporation, and delivered to the
said office of Montreal Trust Company of Canada, at any time up to and including
the last business day preceding the day of the Meeting, or any adjournment
thereof, or to the Chairman of the Meeting on the day of the Meeting, or in any
other manner permitted by law. A revocation of a proxy does not affect any
matter on which a vote has been taken prior to the revocation.
ADVICE TO BENEFICIAL SHAREHOLDERS
Shareholders who do not hold their shares in their own name (referred
to herein as "Beneficial Shareholders") are advised that only proxies from
shareholders of record can be recognized and voted upon at the Meeting.
Beneficial Shareholders who complete and return a proxy must indicate thereon
the person (usually a brokerage house or depository company) who holds their
shares as a shareholder of record. Every such intermediary has its own mailing
procedure and provides its own return instructions, which should be carefully
followed. The form of proxy supplied to Beneficial Shareholders is identical to
that provided to registered shareholders. However, its purpose is limited to
instructing the registered shareholder how to vote on behalf of the Beneficial
Shareholder.
All references to shareholders in this Proxy Statement and the
accompanying form of proxy and Notice of Meeting are to shareholders registered
on the Company's shareholder list maintained by the Company's Registrar and
Transfer Agent unless specifically stated otherwise.
VOTING OF PROXIES
All shares represented by properly executed and deposited proxies will
be voted in accordance with the instructions contained therein. IF NO CHOICE IS
SPECIFIED WITH RESPECT TO ANY MATTERS REFERRED TO HEREIN, THE PERSONS DESIGNATED
IN THE ENCLOSED FORM OF PROXY INTEND ON A BALLOT TO VOTE SUCH SHARES FOR THE
NOMINEES FOR ELECTION AS DIRECTORS LISTED HEREIN AND ON THE FORM OF PROXY, FOR
THE APPOINTMENT OF INDEPENDENT AUDITORS SPECIFIED HEREIN AT A REMUNERATION
ESTABLISHED BY THE BOARD OF DIRECTORS, AND FOR THE RATIFICATION OF INCENTIVE
STOCK OPTIONS GRANTED TO INSIDERS OF THE COMPANY.
The enclosed form of proxy when properly completed and delivered and
not revoked confers discretionary authority upon the person appointed proxy
thereunder to vote with respect to amendments or variations to matters referred
to herein and with respect to other matters which may properly come before the
Meeting. In the event amendments or variations to matters referred to herein are
properly brought before the Meeting, or any further or other business is
properly brought before the Meeting, it is the intention of the persons
designated in the enclosed form of proxy to vote in accordance with their best
judgement on such matters or business. At the time of the printing of this Proxy
Statement, the Management of the Company knows of no such amendment, variation
or other matter which may be presented at the Meeting.
VOTING SECURITIES AND QUORUM
The voting securities of the Company are entitled to one vote each, and
the number outstanding as of the date hereof is 13,781,377 common shares. Only
shareholders of record by 4:30 p.m. (Vancouver time) on February 13, 1997, who
either personally attend the Meeting or who have completed and delivered a form
of proxy in the manner and subject to the provisions described herein will be
entitled to vote or to have their shares voted at the Meeting.
The presence in person or by proxy of at least two persons entitled to
vote and representing not less than 10% of the issued shares is necessary to
convene the Meeting. Each resolution that will be placed before the Meeting will
be an ordinary resolution requiring for its approval a simple majority of the
votes cast in respect of the resolution.
<PAGE> 5
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, to the knowledge of the
Company at the date hereof, as to the beneficial ownership of common shares of
the Company (being the only outstanding class of securities) by each director
and executive officer required to be named in the Summary Compensation Table
herein; and by all directors and executive officers as a group. To the knowledge
of the directors and senior officers of the Company, there are no known persons
or companies who beneficially own, directly or indirectly, or exercise control
or direction over, shares carrying more than 5% of the voting rights attached to
all outstanding common shares of the Company. The table does not include
information as to shares held in the names of certain depositories/clearing
agencies or other nominees for various brokers and individuals, the benefical
owners of such shares being unknown to the Company.
<TABLE>
<CAPTION>
Name and Address Amount and Nature % of Outstanding
of Beneficial Owner of Beneficial Owner Voting Shares
<S> <C> <C>
ROSS G. CLARKSON 3,170 (1) 0.02%
2226-246 Stewart Green S.W.
Calgary, AB T3H 3C8
RICHARD L. COGLON 30,000 (2) 0.2%
2360 Queens Avenue
West Vancouver, BC V7V 2Y6
GEORGE H. LAYCRAFT 507,305 (3) 3.8%
1403 - 2075 Comox Street
Vancouver, BC V6G 1S2
ERWIN L. NOYES Nil (4) 0%
1911 Meadowbank Road
Saanichton, BC V8M 1X9
JOHN E. LUCKEN 18,000 (5) 0.1%
12404 East Vassar Drive
Aurora, CO 80014
------- -----
All Directors and Executive
Officers as a Group 558,475 4.12%
</TABLE>
(1) Mr. Clarkson also holds an option to purchase 200,000 shares at
Cdn.$2.25 per share, expiring November 27, 1998 and warrants to
purchase up to 2,770 shares at Cdn.$4.15 per share, expiring January
25, 1998.
(2) Mr. Coglon also holds an option to purchase 13,100 shares at Cdn.$3.75
per share, expiring January 16, 1999 and a warrant to purchase up to
25,000 shares at Cdn.$4.00 per share, expiring July 11, 1997.
(3) Dr. Laycraft also holds an option to purchase 150,000 shares at
Cdn.$2.25 per share, expiring November 27, 1998 and warrants to
purchase up to 50,000 shares at Cdn.$4.00 per share, expiring to July
11, 1997 and up to 152,687 shares at Cdn.$4.15 per share, expiring
January 25,1998.
(4) Mr. Noyes holds an option to purchase 135,000 shares at Cdn.$2.25 per
share, expiring November 27, 1998.
(5) Mr. Lucken also holds options to purchase 55,000 shares at Cdn.$2.25
per share, expiring November 27, 1998 and 20,000 shares at Cdn.$2.70
per share, expiring June 22, 1997.
ELECTION OF DIRECTORS
The directors of the Company are elected annually and hold office until
the next annual general meeting of shareholders or until their successors are
appointed. Unless authority to do so is withheld, the
<PAGE> 6
5
persons designated in the accompanying form of proxy intend to vote for the
nominees of Management listed below. Management does not contemplate that any of
the nominees will be unable or unwilling to serve as a director but if, for any
reason, any of them are unable or unwilling to serve, it is intended that the
proxies given pursuant to this solicitation will be voted for a substitute
nominee or nominees selected by Management, unless authority to vote the proxies
in the election of directors is withheld.
Pursuant to section 135 of the Company Act (British Columbia), advance
notice of the Meeting was published in The Vancouver Sun newspaper on January
20, 1997 inviting written nominations for directors. No such nominations have
been received by the Company.
A resolution to increase the number of directors to be elected from
five to six will be proposed at the Meeting and the persons named in the
following table are Management's nominees to the Board. Messrs. Laycraft,
Clarkson, Noyes and Halpin are ordinarily resident in Canada and Messrs. Lucken
and Kuich are ordinarily resident in the United States of America. The number
of voting shares of the Company owned by each nominee are set forth in the
preceding table on page 4 hereof, except for Messrs. Halpin and Kuich who do not
presently own any shares or other securities of the Company.
<TABLE>
<CAPTION>
Name and Position Date First
with the Company Age Principal Occupation Appointed
---------------- --- -------------------- ---------
<S> <C> <C> <C>
GEORGE H. LAYCRAFT (1) 74 Retired Physician; Chairman of the Company and a March 28,
Chairman and Director director of 3 other public companies and 2 related 1971
companies (see below).
ROSS G. CLARKSON 43 President and Chief Executive Officer of the Oct. 11,
President, CEO and Company, with over 20 years oil and gas industry 1995
Director experience as a senior geological advisor.
JOHN E. LUCKEN 57 Independent Petroleum Geologist and Project June 13,
Director Manager of the Company's U.S. Operations. 1995
ERWIN L. NOYES 58 Vice-President, Operations of the Company, with Oct. 11,
Vice-President Operations, over 30 years experience in the oil and gas industry. 1995
Secretary and Director
ROBERT A. HALPIN 61 Retired Petroleum Engineer; President and owner, new
Director Nominee Halpin Energy Resources Ltd., which provides
consulting services on international energy projects.
NICHOLAS F. KUICH 58 Retired Geologist with over 30 years domestic and new
Director Nominee international experience with Mobil Oil
Corporation.
</TABLE>
(1) Member of the Company's Audit Committee, which presently has two vacancies
to be filled by non-executive directors. The Board of Directors proposes to
appoint Messrs. Halpin and Kuich to the Audit Committee after they are
elected directors of the Company. The Company does not presently have an
executive committee.
Dr. George H. Laycraft
Dr. Laycraft has served as a director and senior officer of the Company
for the past 25 years; as Vice-President until January, 1991, when he was
appointed President and Chief Executive Officer, which position he served in
until July 19, 1995 when he was appointed to his current position as Chairman
of the Company. Dr. Laycraft
<PAGE> 7
6
also serves as a director of Arrowhead Minerals Ltd., Ultra Petroleum Corp. and
RIS Resources International Corp., all public companies listed on the Vancouver
Stock Exchange and joint venture partners with the Company in a number of oil
and gas properties. He is also a director and shareholder of IPC International
Power Corporation. Dr. Laycraft is also President and owner of Amadeus
Consultants Ltd., which provides consulting fees, office facilities and
secretarial services to the Company (see "Certain Relationships and Related
Transactions" herein for further information).
Ross G. Clarkson
Mr. Clarkson was initially retained by the Company as a technical
advisor to assist its Yemen concession prospect and assist in negotiations with
the Ministry of Oil and Mineral Resources, Republic of Yemen. He was appointed
as President and Chief Executive Officer of the Company on December 4, 1996 and
has served as a director of the Company since October, 1995. Mr. Clarkson was
formerly employed (1988 to 1996) as a senior geological advisor with
PetroCanada, a major Canadian oil company, and has in excess of 20 years
domestic and international oil and gas exploration experience, including
Resident Manager of PetroCanada (Yemen) Inc. (1988 to 1993); Senior Project
Geologist with Canadian Occidental in Yemen in 1987 and Supervisor of
international exploration/geologist with Ranger Oil Ltd. (1979 to 1986). His
international familiarity extends to Oman and the United Arab Emirates,
Indonesia, Thailand, China, Australia, the North Sea, South America and Africa.
John E. Lucken
Mr. Lucken has served as a director of the Company since June 13, 1995
and as a long-time consultant to the Company as Project Manager of U.S.
Operations. He has over 22 years extensive experience as an independent senior
petroleum geologist in the oil and gas industry through the Rocky Mountain
States and the Gulf Coast of Texas.
Erwin L. Noyes
Mr. Noyes was initially engaged by the Company as a consultant to
assess its Yemen concession prospect and to assist with related negotiations. He
was appointed acting President on November 8, 1996, pending Mr. Clarkson's
appointment as President, and Vice-President, Operations of the Company (on a
part-time basis) on November 8, 1996 and has served as a director since October,
1995. Mr. Noyes brings to the Company in excess of 30 years of oil and gas
exploration and production experience in both domestic and international
operations; including as General Manager in the Republic of Yemen for Canadian
Occidental Petroleum (1987 to 1991), during which time he managed that company's
oil exploration program, and with several Canadian Occidental affiliates, as
Production Manager in Calgary (1982 to 1986) and as Gas Operations Manager for
Canada Cities Service, responsible for all gas production/processing, pipeline
and facilities construction (1978-1982).
Mr. Robert A. Halpin
Mr. Halpin brings to the Company 40 years experience in the petroleum
industry worldwide; as Vice-President of International Exploration & Production
with PetroCanada Resources of Calgary, Alberta (1988 to October, 1993) and in
similar positions with Trend International Ltd. of Denver, Colorado; Saga
Petroleum A.S. of Oslo, Norway; Amerada Hess Corporation and American
Independent Oil Company, both of New York; Chevron Canada in Saskatchewan and
Manitoba and Mobil Oil Corporation in New York, Libya and Alberta. Mr. Halpin is
also a non-executive director of Fountain Oil Inc., a public company listed on
NASDAQ.
<PAGE> 8
7
Mr. Nicholas F. Kuich
Mr. Kuich brings to the Company over 30 years of international and
domestic experience as a geologist with Mobil Oil Corporation, including 3 years
as a technical consultant for the Asia/Pacific region, where he conducted
regional studies in Malaysia, the South China Sea, Western Indonesia, the
Philippines and New Zealand; and 14 years of supervisory and management roles in
geological work and evaluations, with operations in the Gulf Coast of Texas;
Morocco, Angola and surrounding countries; off-shore Alaska in the Bering Sea;
off-shore Norway and Nigeria; and geophysical studies in Libya and Nigeria.
STATEMENT OF EXECUTIVE COMPENSATION
The Company is registered with the U. S. Securities and Exchange
Commission and on December 29, 1996 it filed a report on Form 12b-25 disclosing
that as of at least September 30, 1996, the Company was no longer a "foreign
private issuer" as defined in Rule 3b-4 under the Securities Exchange Act of
1934 (the "1934 Act"). The following information is provided for a "small
business issuer" (as defined in Rule 12b-2) in accordance with Item 402 of
Regulation SB under the 1934 Act.
1. Compensation of Executive Officers
During the most recently completed financial year there were two
executive officers of the Company, namely Mr. Richard Coglon, in his former
capacity as President and Chief Executive Officer and Dr. George Laycraft,
Chairman of the Company. The following table sets out all compensation awarded
to, earned by or paid to the executive officers and directors of the Company
(the "Named Executive Officers") for each of the Company's three most recently
completed financial years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation (7)
Name Position with Company Year ------------------------------------------------------
Salary Other Securities Under Options
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RICHARD President & CEO, Director 1996 $ 87,915 $23,261(2) 300,000
COGLON(1) 2,788(5)
President from Aug. 1/95 1995 $ 14,541 2,181(2) 150,000
Secretary/Director $88,808(3) 205,000 (168,600 cancelled)
150,000 (cancelled)
Secretary/Counsel, Director 1994 $ 0.00 $55,268(3) Nil
- -------------------------------------------------------------------------------------------------------------
GEORGE Chairman, Director 1996 $ 26,375 $ 4,762(4) 75,000(8)
LAYCRAFT(1)
President, Director 1995 $ 19,631 $ 35,990(4) 150,000(8)
President, Director 1994 $ 13,285 $ 38,949(4) Nil
- -------------------------------------------------------------------------------------------------------------
ROSS Director, Consultant 1996 $ 0.00 $ 11,726(6) 50,000(8)
CLARKSON(1)
Consultant 1995 $ 0.00 $12,771(6) 19,000 (cancelled)
- -------------------------------------------------------------------------------------------------------------
JOHN Director, Consultant 1996 $ 0.00 $ 32,000(6) Nil
LUCKEN
Director, Consultant 1995 $ 0.00 $ 18,000(6) 40,000
- -------------------------------------------------------------------------------------------------------------
ERWIN Director, Consultant 1996 $ 0.00 $ 43,632(6) 50,000(8)
NOYES
Consultant 1995 $ 0.00 $ 12,270(6) 23,000 (cancelled)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 9
8
(1) Dr. Laycraft served as President and Chief Executive Officer of the Company
until July 19, 1995, when he was appointed Chairman. Mr. Coglon served as
President and Chief Executive Officer of the Company for the period of July
19, 1995 to November, 8, 1996. Mr. Clarkson, who has served as a director
and geological adviser to the Company since October, 1995, was appointed
President and Chief Executive Officer on December 4, 1996. Mr. Coglon,
currently a director of the Company, will not be nominated by Management
for re-election at the Meeting.
(2) Rent and secretarial services to a company controlled by Mr. Coglon.
(3) Legal fees to Richard L. Coglon Law Corporation, a law firm controlled by
Mr. Coglon.
(4) Consulting fees, rent and secretarial services paid to a company controlled
by Dr. Laycraft.
(5) Parking and club membership fees
(6) Consulting fees
(7) There are no outstanding restricted shares or units and the Company does
not have a long term incentive plan, pension plan or other compensatory
plan for its executive officers.
(8) Subsequent to the Company's last completed financial year, the balance of
these options were cancelled and replaced with new options (refer to
"Incentive Stock Options" herein).
2. Incentive Stock Options and SARs
The Company does not have a formalized stock option plan but has
granted incentive stock options to its senior officers, directors, employees and
others, pursuant to applicable securities laws and the policies of the Vancouver
Stock Exchange (refer to the sub-heading "Incentive Stock Options" herein for
further information).
The Company has not granted, and does not intend to grant, stock
appreciations rights (SARs) representing rights to receive a payment in cash or
an issue or transfer of securities of the Company based wholly or in part on
changes in the trading prices thereon.
The following tables set out particulars concerning incentive stock
option grants and exercises to or by the Named Executive Officers during the
last completed financial year and the fiscal year-end value of unexercised
options.
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
<CAPTION>
% of Total Options
Shares Under Granted to Employees in Exercise Price
Name Options Granted Financial Year ($/Security) Expiration Date
---- --------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Richard Coglon 300,000(1) 46% Cdn.$ 3.75 01-16-99
George Laycraft 75,000 11% Cdn.$ 3.75 01-16-99
Ross Clarkson 50,000(1) 7% Cdn.$ 3.75 01-16-98
Erwin Noyes 50,000(1) 7% Cdn.$ 3.75 01-16-98
</TABLE>
(1) These options replaced existing options (refer to the sub-heading
"Incentive Stock Options" herein).
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares Underlying Value of Unexercised
Shares Acquired Aggregate Value Unexercised Options In- the-Money Options
Name on Exercise (#) Realized ($) at FY-End (#) at FY-End ($)(3)
---- --------------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Richard Coglon 348,300 $319,380 13,100 $ 0.00
</TABLE>
<PAGE> 10
9
<TABLE>
<S> <C> <C> <C> <C>
George Laycraft 55,000 $ 31,213 90,000 $ 1,500
Ross Clarkson 7,500 $ 11,250 42,500 $ 0.00
Erwin Noyes 7,500 $ 11,250 42,500 $ 0.00
</TABLE>
(1) Subsequent to year-end, these options were replaced with new options
(refer to disclosure under the subheading "Incentive Stock Options"
herein).
(2) Based on the closing price of the Company's shares as traded on NASDAQ
on September 30, 1996.
3. Compensation of Directors
The directors, in their capacity as directors of the Company, receive
no fees on an annual or per meeting basis, but the Company has periodically
granted to its directors incentive stock options to purchase common shares (see
prior tables).
Messrs. Ross Clarkson and Erwin Noyes, both directors of the Company
who have expertise in the oil and gas industry, have provided geological
consulting services to the Company, when required, at a rate of Cdn.$500 per
day. Mr. John Lucken, also a director of the Company, in his capacity as Project
Manager, U.S. Operations, receives a monthly retainer from the Company's U.S.
subsidiary company, TransGlobe Oil and Gas Inc. ("TransGlobe US") in the amount
of US$3,000 pursuant to a consulting contact with TransGlobe US. (Refer to the
"Summary Compensation Table" for consulting fees paid to the directors during
the three most recently completed financial years).
4. Employment Contracts and Termination of Employment, and Change in
Control Arrangements
Mr. Richard Coglon was employed as the President and Chief Executive
Officer of the Company from August, 1995 to November, 1996. Mr. Coglon's
employment was ended on November 8, 1996, and the Company took the position that
the termination was for cause.
On February 10, 1997, the Company was served with a lawsuit issued by
Mr. Coglon in the Supreme Court of British Columbia. He claims an unquantified
amount of damages for wrongful termination, breach of contract and breach of
privacy. Mr. Coglon also seeks certain equitable relief, including replacement
of his exercised options.
The Company has not yet filed a Statement of Defence, but its lawyers
will be doing so in the near future. The Company considers Mr. Coglon's claims
to be entirely without merit, and intends to defend against them. The Company is
also considering advancing counterclaims against Mr. Coglon.
Mr. Ross Clarkson was appointed President and Chief Executive Officer
of the Company on December 4, 1996, which appointment will continue until
November 30, 1998 unless sooner terminated by the Company. Mr. Clarkson has
entered into an employment contract with the Company, which provides for a
monthly salary of Cdn.$10,000 per month (approximately US$7,500) in return for
a full-time commitment to the Company. The Company has also agreed to pay Mr.
Clarkson an amount of $15,000 for agreeing to become President of the Company
and he is also entitled to a performance bonus payable in fully paid shares,
upon the Company's "Cash Flow" (as defined in the contract) reaching specified
amounts, and an incentive option to purchase 200,000 shares of the Company
shares with an exercise price calculated at market price.
The contract also provides for the customary medical, dental and life
insurance benefits and vacation entitlement. The Company has also agreed to
reimburse Mr. Clarkson for all reasonable expenses incurred by him in
connection with the Company's business, including travel and accommodation
expenses from Calgary to Vancouver until such time as he relocates to Vancouver,
in which case the Company will pay Mr. Clarkson's reasonable relocation costs.
The Company has also agreed to pay the cost of club membership dues for
business purposes to a maximum of $1,000 per year.
Mr. Erwin Noyes was appointed Vice-President, Operations of the
Company on November 8, 1996, which appointment will continue until November 30,
1997 unless sooner terminated by the Company. Mr. Noyes has entered into an
employment contract with the Company, which provides for a monthly salary of
Cdn.$5,000 per month (approximately US$3,750) in return for a part-time
commitment to the Company. The contract also provides for the customary
medical, dental and life insurance benefits and vacation entitlement and an
incentive option entitlement to purchase 135,000 shares of the Company shares
with an exercise price calculated at market price. The Company has agreed to
reimburse Mr. Noyes for all reasonable expenses incurred by him in connection
with the Company's business, including travel and accommodation expenses from
Saanichton to Vancouver.
<PAGE> 11
10
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
Messrs. George Laycraft, Richard Coglon and John Lucken, all directors
of the Company, are joint venture partners with the Company in its East Grieve
oil and gas interest in Wyoming, USA, and in that respect were indebted to the
Company as of September 30, 1996 in the aggregate amount of $55,426.79 (see the
following table for individual amounts owing).
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Name and Position With Involvement of Company Largest Amount o/s during Amount o/s as at
the Company or Subsidiary last completed financial year January 31, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
G.L. Laycraft, Director (see above) $ 9,682.28 $32,721.03(1)
- ------------------------------------------------------------------------------------------------------------------
R.L. Coglon, Director (see above) $36,702.57 $59,741.37(2)
- ------------------------------------------------------------------------------------------------------------------
J. Lucken, Director (see above) $ 9,041.94 $ 5,359.19(3)
- ------------------------------------------------------------------------------------------------------------------
(1) $137.66 of this amount is current and the balance is between 30 and over 90 days overdue.
(2) $9,060.03 of this amount is current and the balance is between 30 and over 90 days overdue.
(3) This amount is current.
</TABLE>
No other director or senior officer of the Company, or any of their
associates, has been indebted to the Company or any of its subsidiaries at any
time during the Company's last completed financial year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1995 and 1996, the Company paid $24,497 for consulting fees to
Geosphere Resources Ltd., a Company controlled by Mr. Ross Clarkson, now
President and Chief Executive Officer of the Company.
In 1994 and 1995, the Company paid $144,076 to Richard L. Coglon Law
Corporation, a law firm controlled by Mr. Richard Coglon, a director of the
Company. In 1995 and 1996, the Company also paid to the law firm $25,442 for
rent and secretarial services.
In 1994, 1995 and 1996, the Company paid $79,701 for consulting fees,
rent and secretarial services provided by Amadeus Consultants Ltd., a company
controlled by Dr. George Laycraft, the Chairman and a director of the Company.
Dr. George Laycraft is also a director of Ultra Petroleum Corp.
("Ultra") and Arrowhead Minerals Ltd., public companies which are joint venture
partners with the Company in a number of oil and gas properties. For fiscal
1996, Ultra owed $122,680 (1995-$143,675) to the Company in respect of its joint
venture with the Company.
The Company completed a private placement during the last completed
financial year of 159,758 units at a price of Cdn.$3.61 per unit, each unit
consisting of one share and one warrant for an additional share at an exercise
price of Cdn.$4.15, expiring January 25, 1998. Messrs. George Laycraft and Ross
Clarkson both directors of the Company, purchased 152,687 and 2,770 units,
respectively.
In January, 1996, the Company acquired a 15% equity interest in IPC
International Power Corporation ("IPC") which owns a 60% equity interest in
British Columbia Hydro International Power Development Corporation ("BCHI
Power"). The remaining 40% equity interest in BCHI Power is held by a
wholly-owned subsidiary of British Columbia Hydro and Power Authority. BCHI
Power holds, directly or indirectly, a 33.8% interest in a new 117-megawatt
multi-unit power station project being built in Pakistan. The Company's
acquisition cost was $750,000, which was paid from the proceeds of a private
placement of shares. The Company is currently attempting to sell its interest in
IPC at a profit. As there is no market for the shares of IPC, the Company will
sell its shares by a private sale, subject to approval of the directors of IPC.
Dr. George Laycraft, the Chairman and a director of the Company and of IPC, and
associates of Richard Coglon, a director and formerly the President and Chief
Executive Officer of the Company, own equity interests in IPC.
Other than transactions carried out in the normal course of business of
the Company, no other director or senior officer of the Company or of its
subsidiaries, nor any of their associates or affiliates has since the
commencement of the Company's last completed financial year had any material
interest, direct or indirect, in any other transactions which materially
affected the Company or in any proposed transaction which has or would
materially affect the Company.
<PAGE> 12
11
APPOINTMENT OF AUDITORS
Unless such authority is withheld, the persons named in the
accompanying form of proxy intend to vote for the reappointment of KPMG,
Chartered Accountants of Abbotsford, British Columbia, as independent auditors
of the Company to hold office until the next regularly scheduled annual general
meeting at a remuneration to be fixed by the Board of Directors. KPMG, and its
predecessor firms, has served as independent auditors for the Company for
approximately 20 years.
A representative of KPMG is expected to be present at the Meeting and
will be given the opportunity to make a statement, if so desired, and will be
available to respond to appropriate questions.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The directors and nominees listed herein for election as directors are
interested in the matter to be dealt with under the heading "Incentive Stock
Options" described below.
PARTICULARS OF OTHER MATTERS TO BE ACTED UPON
Incentive Stock Options
At the Meeting, shareholders will be asked to ratify the granting of
certain incentive stock options that have been previously granted to insiders of
the Company (directors and senior officers).
The policies of Canadian stock exchanges permit the Company to grant
incentive stock options for the purchase of shares of the Company to its
directors, senior officers and employees, or of its subsidiaries, or to other
persons who perform consulting services (other than investor relations) for the
Company on an ongoing basis, or are expected to provide a service of value to
the Company, subject to available prospectus and registration exemptions under
applicable securities legislation. The number of shares subject to each stock
option is determined by the directors within the guidelines set forth in
policies of the exchanges ("The Stock Option Policy"). The exercise price of
stock options is determined by the directors at the time of the grant and may
not be less than the average closing price of the Company's shares on the ten
trading days immediately preceding the day on which the option is granted and
publicly announced (the "Exchange Trading Price"), less an available 10-20%
discount depending on the market price, and may not otherwise be less than
Cdn.$0.15 per share.
The Stock Option Policy generally provides that stock options must be
non-transferable and the aggregate number of shares that may be reserved for
issuance pursuant to stock options must not exceed ten per cent (10%) of the
issued shares of the Company at the time of granting and may not exceed five per
cent (5%) to any individual, other than consultants who may not receive in the
aggregate more than 2% of the issued shares at the time of the grant. The term
of exercise of a stock option must not exceed ten years and an optionee may not
hold stock options in more than 15 listed companies.
The Stock Option Policy and, accordingly, the stock option agreements
entered into by the Company while its common shares were listed on the Vancouver
Stock Exchange (the"Exchange"), also require that, prior to exercise, all
incentive stock options granted to insiders and any amendments to options
previously granted to insiders must be approved by the shareholders of the
Company.
At last year's annual general meeting, the shareholders authorized the
directors to grant incentive options to directors, employees and other insiders
of the Company to purchase shares of the Company for such periods, in such
amounts and at such prices, in their absolute discretion, may determine and to
amend
<PAGE> 13
12
any existing options granted by the Company to insiders, all in accordance with
the policies of the Exchange for the time being in force.
On January 16, 1996 the Company granted incentive options for the
purchase of an aggregate of 648,500 shares at an exercise price of Cdn.$3.75 per
share (the "January Options") to directors, senior officers and employees of the
Company and to other persons providing consulting services to the Company. The
exercise price was based on the Exchange Trading Price and directors and senior
officers (insiders) of the Company received a total of 510,000 of these options
(see below). The January Options replaced all outstanding incentive options in
excess of an exercise price of Cdn.$2.70 per share, including options held by
Ross Clarkson for 19,000 shares and Erwin Noyes for 23,000 shares, both at an
exercise price of Cdn.$5.75 per share and options held by Richard Coglon for
168,600 shares at exercise prices of Cdn.$5.71 and Cdn.$6.11 per share.
Subsequent to the Company's last completed financial year, on November
27, 1996, the balance of the January Options held by insiders (except the option
held by Richard Coglon) were subsequently cancelled and the directors approved
the granting of replacement options for the purchase of up to an aggregate of
610,000 shares to the directors and employees set out below at an exercise price
of Cdn.$2.25 per share ("New Options"). The exercise price of the New Options is
based on the Exchange Trading Price and the New Options were accepted by the
Exchange prior to the Company delisting its shares from the Exchange on February
3, 1997.
The New Options replace all outstanding options (including the January
Options) held by insiders of the Company, except an option held by John Lucken
for the purchase of 20,000 shares at an exercise price of Cdn.$2.70 per share,
expiring June 22, 1997 and the balance of an option held by Richard Coglon for
13,100 shares at an exercise price of Cdn.$3.75 per share, expiring April 21,
1997.
In January, 1996, the market price of the Company's shares had dropped
considerably in relation to the exercise price of outstanding options
previously granted to directors, senior offices, employees and other persons
performing consulting services for the Company on an ongoing basis. The
directors decided that it was in the best interests of the Company to ensure
the stock options represented an incentive to all optionees. Therefore all
outstanding options (except those at an exercise price of Cdn.$2.70 per share)
were cancelled and new options granted at Cdn.$3.75 per share, being the
then-market price of the Company's shares as traded on the Exchange and the
number of stock options issued to certain directors increased in consideration
of their increased activities on behalf of the Company.
On December 4, 1996, after the directors had terminated Mr. Coglon's
employment (as discussed above), the directors decided that it was in the best
interests of the Company to ensure that the other directors and new senior
officers had incentive stock options. Their efforts would have a material effect
on the Company's performance. The existing options were priced far above the
market price of the Company's common shares, so such options would be little or
no incentive. Therefore their existing options were canceled and new options
granted at the then-market price of the Company's shares as traded on the
Exchange (which is above the current market price) to provide an incentive for
the optionees to work hard for the Company to create shareholder value. Also
additional options were granted to the new senior officers in accordance with
the terms of their employment contracts proportionate with their increased
responsibilities.
Under the terms of the Company's stock option agreements representing
the New Options, shareholder approval (by ordinary resolution) is required prior
to the exercise of such options held by insiders. Accordingly, a resolution to
ratify the granting of the New Options will be proposed at the Meeting. The
Board of Directors unanimously recommends a vote FOR such resolution to ratify
the granting of the New Options.
<TABLE>
<CAPTION>
No. of Shares Under No. of Shares Under
January Options @ Cdn.$3.75 New Options @ Expiry Date
Name of Insider Per Share (cancelled) Cdn.$2.25 Per Share of New Options
- --------------- --------------------- ------------------- --------------
<S> <C> <C> <C>
Ross Clarkson 50,000 (7,500 exercised) 200,000 11-27-98
Erwin Noyes 50,000 (7,500 exercised) 135,000 11-27-98
George Laycraft 75,000 (35,000 exercised)(1) 150,000 11-27-98
John Lucken Nil 55,000(2) 11-27-98
Richard Coglon 300,000 (286,900 exercised) Nil n/a
Pamela Pescott 10,000 (5,000 exercised) 20,000 11-27-98
Thomas Ross 25,000 (5,000 exercised) 50,000 11-27-97
</TABLE>
(1) The balance of an option for 50,000 shares @ Cdn.$2.70 per share held
by Dr. Laycraft was also cancelled.
(2) Mr. Lucken also holds an option for 20,000 shares @ Cdn.$2.70 per
share, expiring June 22, 1997.
<PAGE> 14
13
OTHER MATTERS
Management of the Company knows of no other matter to come before the
Meeting other than as set forth above and in the notice of meeting. Should any
other matters properly come before the Meeting, the shares represented by the
proxies solicited hereby will be voted on such matters in accordance with the
best judgment of the person voting by proxy.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL GENERAL MEETING
Shareholder proposals intended to be presented at the 1998 annual
general meeting of shareholders must be received by the Company no later than
November 21, 1997. Proposals may be mailed to the Company, to the attention of
the Secretary, #808 - 1111 West Hastings Street, Vancouver, BC V6E 2J3.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended September
30, 1996 accompanies this Proxy Statement. The consolidated financial statements
of the Company, the accompanying notes and report of the independent auditors, a
letter to shareholders and financial analysis summary are included in the Annual
Report.
A COPY OF THE COMPANY'S ANNUAL REPORT FILED WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION ON FORM 10-KSB MAY ALSO BE OBTAINED WITHOUT CHARGE BY
WRITING TO THE COMPANY AT THE ADDRESS LISTED ABOVE.
DIRECTORS' APPROVAL
The contents and the sending of the Notice of Meeting and this Proxy
Statement and Information Circualr have been approved by the Board of Directors
of the Company.
Dated at Vancouver, British Columbia, this 14th day of February, 1997.
CERTIFIED CORRECT ON BEHALF OF THE
BOARD OF DIRECTORS BY:
/s/ Ross G. Clarkson, President.
<PAGE> 15
FORM OF PROXY
Type of Meeting: Annual General Meeting (the "Meeting")
Name of Company: TransGlobe Energy Corporation
Meeting Date: Friday, March 21, 1997
Meeting Time: 2:00 p.m. (Vancouver Time)
Meeting Location: The Vancouver Renaissance Hotel, 1133 West Hastings Street,
Vancouver, British Columbia
The undersigned shareholder of the Company hereby appoints Ross G. Clarkson, or
in his absence, Erwin L. Noyes, both directors of the Company, or instead of the
foregoing, ________________________________ (please print the name) as
proxyholder for and on behalf of the undersigned with the power of substitution
to attend, act and vote for and on behalf of the shareholder in respect of all
matters that may properly come before the Meeting and at every adjournment
thereof, to the same extent and with the same powers as if the undersigned
shareholder were present at the Meeting, or any adjournment thereof.
Resolutions (for full details of each item, please see the accompanying Notice
of Annual General Meeting and Information Circular):
For Against
1. To increase the number of directors to six ____ ____
For Withhold
2. To elect George H. Laycraft as a director ____ ____
3. To elect Ross G. Clarkson as a director ____ ____
4. To elect John E. Lucken as a director ____ ____
5. To elect Erwin L. Noyes as a director ____ ____
6. To elect Robert A. Halpin as a director ____ ____
7. To elect Nicholas F. Kuich as a director ____ ____
8. To appoint KPMG as auditors of the Company ____ ____
For Against
9. To authorize the directors to fix the auditors'
remuneration ____ ____
10. To ratify the grant of incentive options to
insiders of the Company ____ ____
THE UNDERSIGNED SHAREHOLDER HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN TO ATTEND
AND VOTE AT THE MEETING
PLEASE SIGN: _________________________________ DATE: ____________________, 1997
THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED AND DATED. IF SOMEONE OTHER
THAN THE SHAREHOLDER OF THE COMPANY SIGNS THIS PROXY FORM ON BEHALF OF THE NAMED
SHAREHOLDER OF THE COMPANY, DOCUMENTATION ACCEPTABLE TO THE CHAIRMAN OF THE
MEETING MUST BE DEPOSITED WITH THIS PROXY FORM, AUTHORIZING THE SIGNING PERSON
TO DO SUCH. TO BE PRESENTED AT THE MEETING, THIS PROXY FORM MUST BE RECEIVED AT
THE OFFICE OF MONTREAL TRUST COMPANY OF CANADA BY MAIL OR BY FAX NO LATER THAN
FORTY EIGHT (48) HOURS PRIOR TO THE TIME OF THE MEETING. THE MAILING ADDRESS OF
MONTREAL TRUST COMPANY IS 4TH FLOOR, 510 BURRARD STREET, VANCOUVER, BRITISH
COLUMBIA, V6C 3B9 AND ITS FAX NUMBER IS (604) 683-3694.
<PAGE> 16
NOTES TO FORM OF PROXY
1. THIS PROXY IS SOLICITED BY THE MANAGEMENT OF THE COMPANY.
2. (i) IF THE SHAREHOLDER WISHES TO ATTEND THE MEETING TO VOTE ON THE
RESOLUTIONS IN PERSON, please register your attendance with the
Company's scrutineers at the Meeting.
(ii) IF THE SHAREHOLDER HAS ITS SECURITIES HELD BY ITS FINANCIAL
INSTITUTION AND WISHES TO ATTEND THE MEETING TO VOTE ON THE
RESOLUTIONS IN PERSON, please cross off the management appointee name
or names, insert the shareholder's name in the blank space provided,
do not indicate a voting choice by any resolution, sign and date and
return the proxy form. At the Meeting a vote will be taken on each of
the resolutions as set out on this proxy form and the shareholder's
vote will be counted at that time.
3. IF THE SHAREHOLDER CANNOT ATTEND THE MEETING BUT WISHES TO VOTE ON THE
RESOLUTIONS, THE SHAREHOLDER CAN APPOINT ANOTHER PERSON, who need not be a
shareholder of the Company, to vote according to the shareholder's
instructions. To appoint someone other than the person named, please cross
off the management appointee name or names and insert your appointed
proxyholder's name in the space provided, sign and date and return the
proxy form. Where no choice on a resolution is specified by the
shareholder, this proxy form confers discretionary authority upon the
shareholder's appointed proxyholder.
4. IF THE SHAREHOLDER CANNOT ATTEND THE MEETING BUT WISHES TO VOTE ON THE
RESOLUTIONS AND TO APPOINT ONE OF THE MANAGEMENT APPOINTEES NAMED, please
leave the wording appointing a nominee as shown, sign and date and return
the proxy form. Where no choice is specified by a shareholder on a
resolution shown on the proxy form, a nominee of management acting as
proxyholder will vote the securities as if the shareholder had specified an
affirmative vote.
5. The securities represented by this proxy form will be voted or withheld
from voting in accordance with the instructions of the shareholder on any
ballot of a resolution that may be called for and, if the shareholder
specifies a choice with respect to any matter to be acted upon, the
securities will be voted accordingly. With respect to any amendments or
variations in any of the resolutions shown on the proxy form, or matters
which may properly come before the Meeting, the securities will be voted by
the nominee appointed as the nominee in its sole discretion sees fit.
6. If the shareholder votes on the resolutions and returns the proxy form, the
shareholder may still attend the Meeting and vote in person should the
shareholder later decide to do so. To attend the Meeting, the shareholder
must revoke the proxy form by sending a new proxy form with the revised
instructions.
<PAGE> 17
SUPPLEMENTAL MAILING LIST
RETURN CARD
TRANSGLOBE ENERGY CORPORATION
c/o Montreal Trust Company
510 Burrard Street
Vancouver, B.C.
V6C 3B97
If you wish to receive interim financial statements of the Company
please complete and return this card to the Company at the above address.
Name: ___________________________________
Address: ___________________________________
City: ___________________________________
Province/State: ___________________________________
Postal/Zip Code: ___________________________________
I hereby certify that I am the owner of securities of TransGlobe Energy
Corporation and request that I be placed on the Company's Supplemental Mailing
List to receive its interim financial statements.
DATED: ___________________, 1997 ___________________________________
(Signature)
