================================================================================
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.1a-11(c) or ss.240.1a-12
GULFWEST OIL COMPANY
(Name of Registrant as Specified In Its Charter)
GULFWEST OIL COMPANY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2) [ ]
$500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3)
[ ] 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:*
4) Proposed maximum aggregate value of transaction:
* Set forth amount on which the filing is calculated and state
how it was determined.
[ ] 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.:
3) Filing Party:
4) Date Filed:
Notes:
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<PAGE>
GULFWEST OIL COMPANY
2644 Sherwood Forest Plaza
Suite 229
Baton Rouge, Louisiana 70816
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 2, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
GulfWest Oil Company (the "Company") will be held at the Country Club of
Louisiana, 18400 Boulevard Louisiane, Baton Rouge, Louisiana, on Tuesday, July
2, 1996 at 6:00 p.m., local time, for the following purposes:
(1) To elect five members of the Board of Directors, which presently
consists of five directors, for the term of one year or until the next
Annual Meeting of Shareholders.
(2) To transact such other business as may properly come before the
Meeting or any adjournments thereof.
The close of business on May 3, 1996 has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Annual
Meeting of Shareholders or any adjournments thereof. For a period of at least 10
days prior to the Annual Meeting, a complete list of shareholders entitled to
vote at the Annual Meeting will be open to the examination of any shareholder
during ordinary business hours at the offices of the Company at 2644 Sherwood
Forest Plaza, Suite 229, Baton Rouge, Louisiana 70816 or 16800 Dallas Parkway,
Suite 250, Dallas, Texas 75248.
Information concerning the matters to be acted upon at the Annual
Meeting is set forth in the accompanying Proxy Statement.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
Jim C. Bigham
Secretary
Baton Rouge, Louisiana
June 3, 1996
<PAGE>
GULFWEST OIL COMPANY
2644 Sherwood Forest Plaza
Suite 229
Baton Rouge, Louisiana 70816
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 2, 1996
This Proxy Statement is being first mailed on June 3, 1996 to
shareholders of GulfWest Oil Company (the "Company") by the Board of Directors
to solicit proxies (the "Proxies") for use at the Annual Meeting of Shareholders
(the "Meeting") to be held at the Country Club of Louisiana, 18400 Boulevard
Louisiane, Baton Rouge, Louisiana, at 6:00 p.m., local time, on Tuesday, July 2,
1996, or at such other time and place to which the Meeting may be adjourned.
All shares represented by valid Proxies, unless the shareholder
otherwise specifies, will be voted (i) FOR the election of the persons named
herein under "Election of Directors" as nominees for election as directors of
the Company for the term described therein, and (ii) at the discretion of the
Proxy holders with regard to any other matter that may properly come before the
Meeting or any adjournments thereof.
Where a shareholder has appropriately specified how a Proxy is to be
voted, it will be voted accordingly. The Proxy may be revoked at any time by
providing written notice of such revocation to GulfWest Oil Company, 2644
Sherwood Forest Plaza, Suite 229, Baton Rouge, Louisiana 70816, Attention: Jim
Bigham. If notice of revocation is not received by the Meeting date, a
shareholder may nevertheless revoke a Proxy if he attends the Meeting and
desires to vote in person.
RECORD DATE AND VOTING SECURITIES
The record date for determining the shareholders entitled to vote at
the Meeting is the close of business on Friday, May 3, 1996 (the "Record Date"),
at which time the Company had issued and outstanding 1,087,325 shares of Common
Stock, par value $.001 per share (the "Common Stock"). Common Stock is the only
class of outstanding voting securities of the Company.
QUORUM AND VOTING
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of Common Stock is necessary to
constitute a quorum to transact business. Each share represented at the Meeting
in person or by proxy will be counted toward a quorum. In deciding all questions
and other matters, a holder of Common Stock on the Record Date shall be entitled
to cast one vote for each share of Common Stock registered in his or her name.
In order to be elected a director, a nominee must receive the affirmative vote
of the holders of a majority of the shares of Common Stock present in person or
by proxy at the Meeting. Abstentions and broker non-votes will not be counted in
the election of directors.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of five
directors, all of whom have been nominated for re-election. Each director shall
serve until the next Annual Meeting of Shareholders and until his successor is
elected and qualified.
It is expected that the nominees named below will be able to accept
such nominations. If any of the below nominees for any reason is unable or is
unwilling to serve at the time of the Meeting, the Proxy holders will have
discretionary authority to vote the Proxy for a substitute nominee or nominees.
The following sets forth information as to the nominees for election at the
Meeting, including their ages, present principal occupations, other business
experience during the last five years, memberships on committees of the Board of
Directors and directorships in other publicly-held companies.
<TABLE>
<CAPTION>
Year First
Elected
Director
Name Age Position or Officer
<S> <C> <C> <C>
John E. Loehr(1)(2)(3) 51 Chairman of the Board and 1992
Director
Marshall A. Smith III(1)(2) 48 President, Chief Executive 1989
Officer and Director
Jim C. Bigham 60 Executive Vice President, 1991
Secretary and Director
Ned W. Fowler(2)(3) 68 Director 1990
Alan J. Ostrowe(2)(3) 55 Director 1990
<FN>
(1) Member of the Audit Committee.
(2) Member of the Budget Committee.
(3) Member of the Compensation Committee.
</FN>
</TABLE>
John E. Loehr was elected chairman of the board on September 1, 1993.
Mr. Loehr was formerly president of Star-Tex Asset Management, a commodity
trading advisor, a position he held from 1988 until 1992, when he sold his
ownership interest. Mr. Loehr is currently president and sole shareholder of ST
Advisory Corporation and vice-president of Star-Tex Trading Company. Mr. Loehr
is a CPA and is a member of the American Institute of Certified Public
Accountants and Texas Society of Certified Public Accountants.
Marshall A. Smith III has served as an officer and a director of the
Company since July 1989. From July, 1989 to November 20, 1992, he served as
president and chairman of the board of directors. On November 20, 1992, he
resigned as president but continued as chief executive officer and chairman of
the board. Upon the resignation of Charles Major as president on September 1,
1993, Mr. Smith assumed the duties as president and resigned the position of
chairman of the board. Prior to joining the Company, Mr. Smith served in various
capacities in a number of family controlled companies.
Jim C. Bigham is a retired United States Air Force Major. During his
career, he served in both command and staff officer positions in the
operational, intelligence and planning areas. Prior to joining the Company, Mr.
Bigham held management and sales positions in the real estate and printing
industries.
2
<PAGE>
Ned W. Fowler currently serves as a special advisor to OGERD
Corporation, a company engaged in the marketing of equipment and supplies to the
petroleum and petrochemical industries worldwide. In December, 1994, Mr. Fowler
retired as executive vice president and a director of IRI International, Inc.,
positions he had held since 1985. IRI International, Inc. manufactures, markets
and services oil well drilling rigs nationally and internationally. The company
was formed in 1985 as a merger of the Ideco Division of Dresser Industries and
Ingersoll-Rand Oil Field Products Company. Mr. Fowler was president of Ideco-
Dresser from 1982 until the merger with Ingersoll-Rand.
Alan J. Ostrowe, M.D., F.A.C.A. is a physician practicing in Baton
Rouge, Louisiana. He is currently the Medical Director of Amedisys Mobile Health
Case Services, Inc. He is also president and a director of General Anesthesia
Services, Inc., a firm which he and two associates founded in 1987 for the
purpose of supplying medical anesthesiology services in southern Mississippi and
Louisiana. He is also vice-president of Nursing Enterprises, Inc., a position he
has held since 1988.
Meetings and Committees of the Board of Directors
The business of the Company is managed under the direction of the Board
of Directors. The Board meets on a regularly scheduled basis to review
significant developments affecting the Company and to act on matters requiring
Board approval. It also holds special meetings when an important matter requires
Board action between scheduled meetings. The Board of Directors met four times
during the calendar year ended December 31, 1995 ("1995").
The Board of Directors has three standing committees: the Audit
Committee, the Finance and Budget Committee and the Compensation Committee. The
functions of these committees, their current members, and the number of meetings
held during 1995 are described below.
The Audit Committee was established to review the professional services
and independence of the Company's independent auditors, and the Company's
accounts, procedures and internal controls. The Audit Committee is comprised
of Mr. John E. Loehr (Chairman) and Mr. Marshall A. Smith III. The Audit
Committee met twice in 1995.
The Finance and Budget Committee was established to make
recommendations to the Board of Directors in the areas of financial planning,
strategies and business alternatives. The Finance and Budget Committee is
comprised of Dr. Alan J. Ostrowe (Chairman), Mr. Ned W. Fowler, Mr. John E.
Loehr and Mr. Marshall A. Smith III. The Finance and Budget Committee met once
in 1995.
The function of the Compensation Committee is to fix the annual
salaries and other compensation for the officers and key employees of the
Company. It also approves and administers the Company's Stock Option Plan. The
Compensation Committee is comprised of Mr. Ned W. Fowler (Chairman), Mr. John
E. Loehr and Dr. Alan J. Ostrowe. The Compensation Committee met twice in 1995.
The Company does not have a nominating committee. The functions
customarily performed by a nominating committee are performed by the Board of
Directors as a whole.
Compensation of Directors
The Company does not pay fees to directors for their Board activities.
The Company has paid travel and entertainment expenses incurred by certain
directors.
On May 11, 1995, the Board of Directors granted Mr. John E. Loehr,
chairman, the right and option to acquire equity securities of the Company as
long-term compensation for his services to the Company and as an incentive to
assist the Company in arranging an underwriting of a private placement
debenture. The
3
<PAGE>
rights granted to Mr. Loehr were vested upon the successful close of the private
placement debenture and were retroactive to May 11, 1995. With respect to each
issuance by the Company of equity securities, Mr. Loehr shall have the right to
receive or acquire equity securities in a quantity which would enable him to
acquire ten percent (10%) of the aggregate equity securities issued, sold, or
granted by the Company in connection with the issuance at the same price and
under the same conditions, except that Mr. Loehr shall be entitled to exercise
his rights to acquire such securities for a period of ten years following
issuance. No securities were issued to Mr. Loehr under this grant during 1995.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of May 3, 1996, regarding
the beneficial ownership of Common Stock by each person known by the Company to
own 5% or more of the outstanding Common Stock, each director of the Company,
certain named executive officers, and the directors and executive officers of
the Company as a group. The persons named in the table have sole voting and
investment power with respect to all shares of Common Stock owned by them,
unless otherwise noted.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent
<S> <C> <C>
John E. Loehr 111,2441 9.6%
16800 Dallas Parkway
Suite 210
Dallas, Texas 75248
Marshall A. Smith III 18,2492 1.7%
2644 Sherwood Forest Plaza
Suite 229
Baton Rouge, LA 70816
Jim C. Bigham 39,0003 3.5%
1051 Hatchell Lane
Denham Springs, LA 70726
John F. Bendure 5,0004 *
1228 Irvine Drive
Allen, Texas 75013
A. Van Nguyen 5,0005 *
2222 Via Del Norte
Carrollton, Texas 75006
Ned W. Fowler 32,8336 3.0%
360 Masterson
Beaumont, Texas 77707
Alan J. Ostrowe, M.D. 23,4157 2.1%
3029 S. Sherwood Forest
Suite 310
Baton Rouge, LA 70816
4
<PAGE>
Senior Drilling Company
8126 One Calais Avenue 231,9828 18.5%
Suite 2-C
Baton Rouge, LA 70809
HS Energy Private Rig 216,6679 16.8%
Partnership 1981, Ltd.
6309 N. O'Connor Blvd.
Bldg. II, Suite 210
Irving, Texas 75039
All current directors and officers 234,74110 19.1%
as a group (7 persons)
<FN>
* Less than 1%
1 Includes 56,000 shares subject to presently exercisable options and
20,494 shares held directly, 15,000 shares subject to presently
exercisable warrants and 17,750 shares held by ST Advisory Corporation,
and 2,000 shares held by the Joanna Drake Loehr Trust. Mr. Loehr is
president and sole shareholder of ST Advisory Corporation.
2 Includes 14,000 shares subject to presently exercisable options and 333
shares owned directly, 83 shares owned by Joyce Smith, the wife of Mr.
Smith, and 3,833 shares owned by Marshall A. Smith IV and Mark Shelton,
sons of Mr. Smith. Mr. Smith III disclaims beneficial ownership of the
shares of Common Stock and Warrants owned by Senior Drilling Company,
which is controlled by Mitchell D. Smith, the brother of Mr. Smith III.
3 Includes 31,800 shares subject to presently exercisable options and
warrants, and 7,200 shares held directly.
4 Includes 5,000 shares subject to presently exercisable options.
5 Includes 5,000 shares subject to presently exercisable options.
6 Includes 7,200 shares subject to presently exercisable warrants and
25,633 shares held directly.
7 Includes 7,800 shares subject to presently exercisable warrants and
65,228 shares held directly, 166 shares owned by Lisa Anne Ostrowe, the
daughter of Dr. Ostrowe and 166 shares of Common Stock owned by Pearl
Ostrowe, the mother of Dr. Ostrowe.
8 Includes 166,754 shares subject to presently exercisable warrants and
65,228 shares held directly. Senior Drilling Company is controlled by
Mitchell D. Smith, the brother of the president of the Company.
9 Includes 200,000 shares subject to presently exercisable warrants and
16,667 shares held directly. The general partner of HS Energy Private
Rig Partnership 1981, Ltd. is HS Energy, Inc. whose president is Ray
Holifield.
10 Includes 141,800 shares subject to presently exercisable options and
92,941 shares held directly or indirectly.
</FN>
</TABLE>
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information regarding compensation paid
to the Company's Chief Executive Officer ("CEO") during each of the last three
years. No other executive officer's total annual compensation is $100,000 or
more.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Year Other Annual All Other
Name and Principal Position End Salary($) Bonus($) Compensation($) Options(#) Compensation($)
<S> <C> <C> <C> <C> <C> <C>
Marshall A. Smith 1995 100,000 - - - -
President and Chief 1994 100,000 - - 30,000 -
Executive Officer 1993 100,000 - - - -
</TABLE>
Option Grants During 1995
There were no options granted to the named executive officer during the
year ended December 31, 1995.
<TABLE>
Option Exercises During 1995 and
Year End Option Values (1)
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options Options
at FY-End (#) at FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
<S> <C> <C>
Marshall A. Smith 14,000(2) -0-
-0- -0-
<FN>
(1) Since no options were exercised by the above-named executive in 1995,
no shares were acquired or value realized upon the exercise of options
of such person in the last fiscal year.
(2) Mr. Smith transferred 16,000 unexercised options to Mr. Loehr during
1995.
</FN>
</TABLE>
Stock Performance Chart
The following chart compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during the
five years ended December 31, 1995 with the cumulative total return on The
Nasdaq Stock Market Index and The Nasdaq Non-Financial Stock Index. The
comparison assumes $100 was invested on December 31, 1990 in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
dividends. The Company paid no dividends during such five-year period.
6
<PAGE>
<TABLE>
[GRAPHIC EXHIBIT OMITTED AT THIS LOCATION IS BASED ON THE INFORMATION BELOW]
COMPARISON OF FIVE-YEAR CUMULATIVE
TOTAL RETURN
AMONG COMPANY, NASDAQ INDEX & NASDAQ NON-FINANCIAL STOCK INDEX
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
116.598 187.214 217.882 250.116 244.49 345.484
1 1.605636 1.86866 2.145114 2.096863 2.963035
NASDAQ Stock Market 100 160.5636 186.866 214.5114 209.6863 296.3035
128.113 206.24 225.593 260.483 249.635 343.244
1 1.609829 1.760891 2.033228 1.948553 2.679228
NASDAQ Non Financial 100 160.9829 176.0891 203.3228 194.8553 267.9228
3 3 5.75 2.75 2.625 1.875
1 1 1.916667 0.916667 0.875 0.625
GulfWest Oil Company 100 100 191.6667 91.66667 87.5 62.5
</TABLE>
Report of the Compensation Committee of the
Board of Directors on Executive Compensation
The Board of Directors approved an annual salary for the CEO of
$100,000 on July 1, 1991 and it has remained at that level through 1995. The
salary for the CEO was not set pursuant to a specific formula but was the result
of negotiations between the Board of Directors and the CEO.
On April 16, 1993, the Board established the Compensation Committee and
authorized it to develop and administer an executive compensation system which
will enable the Company to attract and retain qualified executives. Compensation
for the CEO and other executive officers is determined by the Compensation
Committee which functions under the philosophy that compensation of executive
officers, specifically including that of the CEO, should be directly and
materially linked to the Company's performance.
On May 11, 1995, the Compensation Committee recommended and the Board
of Directors granted to Mr. Marshall A. Smith III, president and CEO, the right
to acquire equity securities of the Company as long-term compensation for his
past performance to the Company and for efforts in arranging a successful
underwriting of the Company's private placement debenture. The rights granted to
Mr. Smith are for 10 years, were vested upon the successful close of the private
placement debenture and were retroactive to May 11, 1995. With respect to each
issuance by the Company of equity securities, Mr. Smith shall have the right to
acquire ten percent (10%) of the aggregate equity securities issued, sold, or
granted by the Company in connection with the issuance at the same price and
under the same conditions, except that Mr. Smith shall be entitled to exercise
his rights to acquire such securities for a period of 10 years following
issuance. No
7
<PAGE>
securities were issued to Mr. Smith under this grant during 1995.
On May 7, 1996, the Compensation Committee recommended entering into an
Employment Agreement with John E. Loehr, effective June 1, 1996, for a period of
5 years. Mr. Loehr will serve as a consultant until he assumes the duties of
Chief Financial Officer, as of January 1, 1997. (See: "Employment and Change of
Control Agreements".)
This report is submitted by the members of the Compensation Committee:
Compensation Committee:
Ned W. Fowler, Chairman
John E. Loehr
Alan J. Ostrowe
Employment and Change of Control Agreements
Effective July 1, 1995, the Company entered into employment agreements
with Mr. Marshall A. Smith III, the president and CEO of the Company, and Mr.
Jim C. Bigham, secretary of the Company. The agreements provide for the
following while the officers are employed during the three-year employment
period after a change of control; (i) a monthly base salary at least equal to
the officer's highest monthly salary earned in the twelve-month period preceding
the change of control, plus salary increases commensurate with those of peer
executives of the Company; (ii) an annual bonus at least equal to the lesser of
the average annual bonus for the three years preceding the change of control or
100% of current annual base salary; and (iii) pension, welfare and fringe
benefits, perquisites, and a title and level of responsibility at least equal to
those in effect before the change of control. The agreements also provide that
the officers would be entitled to severance benefits if their employment
terminates under certain circumstances during the employment period, including a
lump sum cash severance payment equal to 250% of their annual base salaries.
On May 7, 1996, the Board of Directors approved entering into an
Employment and Change of Control Agreement with John E. Loehr, effective June 1,
1996, for a period of 5 years. Mr. Loehr will serve as a consultant until he
assumes the duties of Chief Financial Officer, as of January 1, 1997. Under the
Agreement, Mr. Loehr will receive a base annual salary of $150,000, increasing a
minimum of 15% annually, with deferred compensation in the form of cash or stock
as determined by the Board of Directors. Any common stock received by Mr. Loehr
under the Agreement shall be based at 60% of the average bid price for the
Company's common stock for the 20 days preceding issuance.
In the event of a change of control, Mr. Loehr will have the option to
continue as an employee of the Company under the terms of the agreement or
receive a lump-sum cash severance payment equal to 300% of his annual base
salary for the year following the change of control.
A "change of control" is defined in the Agreements as: (i) an
acquisition (other than from the Company) by an individual, entity or a group
(excluding the Company, its subsidiaries, a related employee benefit plan or a
corporation the voting stock of which is beneficially owned following such
acquisition 50% or more by the Company's stockholders in substantially the same
proportions as their holdings in the Company prior to such acquisition) of
beneficial ownership of 20% or more of the Company's voting stock; (ii) a change
in a majority of the Board of Directors (excluding any persons approved by a
vote of at least a majority of the incumbent Board other than in connection with
a proxy contest); (iii) the approval by the stockholders of a reorganization,
merger or consolidation (other than a reorganization, merger or consolidation in
which all or substantially all of the stockholders of the Company receive 50% or
more of the voting stock of the surviving company); or (iv) a complete
liquidation or dissolution of the Company or the sale of all, or substantially
all, of its assets.
8
<PAGE>
CERTAIN TRANSACTIONS
In connection with the successful completion of the Company's public
offering on June 18, 1993, Sendrex, Inc. and HS Energy Private Rig Partnership
1981, Ltd. returned to the Company an aggregate of 366,754 shares of Common
Stock in exchange for warrants exercisable at anytime after June 8, 1994 but
before June 8, 1998 to purchase an aggregate of 366,754 shares with an exercise
price per share equal to the public offering price of $6.00. On July 11, 1995,
Sendrex, Inc. agreed to transfer 31,250 shares of its GulfWest stock as part of
the settlement of the lawsuit of Major v. GulfWest Oil Company and Sendrex, in
exchange for GulfWest's agreement to reduce the exercise price from $6.00 to
$3.00 and extend the expiration date until June 17, 2003 of the warrants held by
Sendrex for 166,754 shares of the Company's Common Stock. Sendrex subsequently
transferred its remaining stock and warrants to Senior Drilling Company. None of
the above warrants has been exercised to date.
On October 1, 1993, the Company sold 100% of the Common Stock of its
wholly-owned subsidiary, GulfWest Drilling Company, to Williams Southwest
Drilling Company, Inc. ("Williams"), and received a promissory note in the
amount of $150,000, payable in six equal monthly installments and bearing
interest at the floating prime rate, and 40% of the outstanding stock of
Williams (the "Williams Stock"). As part of the Stock Purchase Agreement, the
Company extended a line of credit to Williams in the amount of $250,000 bearing
interest at 10% per annum and secured by all accounts receivable of the
borrower. The line of credit matured on December 31, 1995, at which time all
outstanding balances were due. At December 31, 1995, $4,895 was outstanding
under this line of credit.
On December 30, 1993, the Company sold its 40% of the Williams Stock to
Williams. The Company received a promissory note in the amount of $100,000,
payable in four equal monthly installments beginning May 1, 1994. On July 1,
1994, the Company renegotiated terms of the promissory note from Williams to
allow for the remaining unpaid principal balance of $50,000 to be payable in
twelve quarterly payments of principal and interest. The interest rate on the
renegotiated note is 10% per annum. The outstanding balance on this note was
$40,599 at December 31, 1995.
On January 10, 1994, the Company entered into a consulting agreement
with Williams whereby the Company would provide management and accounting
services for $25,000 per month for a period of one year. The Company received
$97,140 in consulting fee payments during 1994. Effective January 1, 1995, the
Company received a promissory note from Williams for consulting fees of
$202,860, bearing interest at the rate of 10% per annum and payable in quarterly
installments of principal and interest. Subsequent to the October 1, 1993 sale
of GulfWest Drilling Company to Williams, Mr. Marshall A. Smith III and Mr. John
E. Loehr, both directors of the Company, were elected directors of Williams. It
is the intention of Mr. Smith and Mr. Loehr to serve as directors of Williams as
long as there is an outstanding indebtedness of Williams to the Company.
On March 31, 1994, the Company extended a line of credit to Wilco
Exploration, Inc., formerly Williams Drilling Equipment Company ("Wilco",
formerly "WDE"), in the amount of $100,000 bearing interest at 10% per annum.
The line of credit was secured by the borrower's equity in a lease/purchase
agreement on drilling equipment and was further secured by a guaranty of 70% of
the net cash flow from its interests in oil and gas properties. The principal
was paid in full on May 26, 1995. At December 31, 1995, interest of $10,103 was
outstanding. Star-Tex Trading Company ("Star-Tex") and MAS Partners, Inc.
("MAS") are major shareholders of Wilco. Mr. John E. Loehr, a director of the
Company and of Wilco, is vice-president of Star-Tex. Mr. Marshall A. Smith,
Jr., president of MAS, is the father of the president of the Company. Mr.
Marshall A. Smith III, president and director of the Company, is also a director
of Wilco.
On May 31, 1994, the Company executed a $40,000 note bearing interest
at the rate of 10% per annum, payable to Star-Tex, a related entity owned by a
shareholder of the Company. Principal and interest on the note were originally
due one year from the date of the note. At December 31, 1995, the full principal
9
<PAGE>
amount of $40,000 was outstanding. Subsequently, on March 26, 1996, the note
holder agreed to extend payment of principal and interest to April 1, 1997. The
note holder was granted a warrant to purchase 12,000 shares of the Company's
common stock at an exercise price of $5.00 per share, which expires three years
from the date the warrant was issued. Additionally, the note holder was issued
3,000 shares of the Company's common stock on November 20, 1995. Mr. John E.
Loehr, a director of the Company is vice-president of Star-Tex.
On January 17, 1995, the Company borrowed $20,000 from Marshall A.
Smith, Sr., grandfather of the president of the Company, in the form of a note
payable which bears interest at a rate of 10% and was originally due one year
from the date of the note. At December 31, 1995, the full principal amount of
$20,000 was outstanding. However, on March 26, 1996, the note holder agreed to
extend payment of principal and interest to April 1, 1997. The note holder was
granted a warrant to purchase 6,000 shares of the Company's common stock at an
exercise price of $5.00 per share. The warrant expires three years from the date
of issuance. In addition, the note holder was issued 1,500 shares of the
Company's common stock on November 120, 1995.
On February 6, 1995, the Company borrowed $50,000 from ST Advisory
Corporation in the form of a note which bears interest at 10% per annum and was
originally due one year from the date of the note. At December 31, 1995, the
full principal amount of $50,000 was outstanding. However, on March 25, 1996,
the note holder agreed to extend payment of principal and interest to April 1,
1997. The note holder was granted a warrant to purchase 15,000 shares of common
stock at an exercise price of $5.00 per share. The warrant expires three years
from the date of issuance. In addition, the note holder is to be issued 3,750
shares of the Company's common stock on November 20, 1995. Mr. John E. Loehr, a
director of the Company, is president and sole shareholder of ST Advisory
Corporation.
On November 20, 1995, the Company issued Ned W. Fowler, a director,
10,000 shares of common stock as payment for consulting fees.
During 1995, the Company issued 13,100 shares of common stock and
warrants to purchase 48,000 shares of common stock at a price of $5.00 per share
to other related parties. On March 27, 1996, these parties agreed to extend
payment of principal and interest on their outstanding notes to April 1, 1997.
Also on March 27, 1996, the Company entered into agreements with two of its
officers to convert deferred compensation in the amount of $47,340 to notes
payable due April 1, 1997.
At a Board of Directors meeting on May 7, 1996, a majority of the
disinterested directors approved a resolution whereby the Company may grant
loans, if requested, to directors (other than disinterested directors), officers
and employees to exercise warrants and/or options beneficially own.
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than 10%
of a registered class of the Company's equity securities, to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission (the "SEC"). Such persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it
with respect to 1995, or written representations from certain reporting persons,
the Company believes that its officers, directors and persons who own more than
10% of a registered class of the Company's equity securities have complied with
all applicable filing requirements, with the exception of John E. Loehr, a
director, who was late filing one Form 4 reporting one transaction.
10
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INDEPENDENT AUDITORS
The Board of Directors has engaged Weaver & Tidwell, L.L.P. as
independent auditors to examine the Company's accounts.
SHAREHOLDERS' PROPOSALS
Shareholders may submit proposals on matters appropriate for
shareholder action at subsequent annual meetings of the Company consistent with
Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended.
For such proposals to be considered in the Proxy Statement and Proxy relating to
the 1997 Annual Meeting of Shareholders, such proposals must be received by the
Company not later than December 31, 1996. Such proposals should be directed to
GulfWest Oil Company, 2644 Sherwood Forest Plaza, Suite 229, Baton Rouge,
Louisiana 70816, Attn: Secretary.
OTHER BUSINESS
The Board of Directors knows of no matter other than those described
herein that will be presented for consideration at the Meeting. However, should
any other matters properly come before the Meeting or any adjournments thereof,
it is the intention of the persons named in the accompanying Proxy to vote in
accordance with their best judgment in the interest of the Company.
MISCELLANEOUS
All costs incurred in the solicitation of Proxies will be borne by the
Company. In addition to solicitation by mail, the officers and employees of the
Company may solicit Proxies by telephone, telegraph or personally, without
additional compensation. The Company may also make arrangements with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of shares of Common Stock held
of record by such persons, and the Company may reimburse such brokerage houses
and other custodians, nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith. The Company has not engaged a proxy solicitor.
The Annual Report to Shareholders of the Company, including financial
statements for the year ended December 31, 1995, accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.
By Order of the Board of Directors
Jim C. Bigham
Secretary
Baton Rouge, Louisiana
June 3, 1996
11
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GULFWEST OIL COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JULY 2, 1996
The undersigned hereby appoints Jim C. Bigham proxy of the undersigned,
with power of substitution, to vote all shares of Common Stock of the Company
held by the undersigned which are entitled to be voted at the Annual Meeting of
Shareholders to be held July 2, 1996, and any adjournment(s) thereof as
effectively as the undersigned could do if personally present.
(1) To elect the following persons as directors, each to serve until
the next Annual Meeting of Shareholders, and until his successor is duly elected
and qualified:
John E. Loehr Jim C. Bigham Ned W. Fowler
Marshall A. Smith III Alan J. Ostrowe
For all persons listed (except as marked to the contrary below.)
Withhold authority to vote for all nominees
Instructions: To withhold authority to vote for any individual
nominees(s), write the name(s)of the Nominee(s) on the line below:
2) In the discretion of the proxy, on any other matter that may
properly come before the meeting or any adjournments thereof.
The shares represented by this proxy will be voted as directed. WHERE
NO DIRECTION IS GIVEN, THE SHARES WILL BE VOTED FOR MATTERS (1) and (2) above.
The undersigned hereby revokes any proxy or proxies heretofore given to
vote or act with respect to the Common Stock of the Company and hereby ratifies
and confirms all that the proxy, or his substitutes, or any of them, may
lawfully do by virtue hereof.
Please sign below, date, and return promptly in the enclosed envelope.
Dated: , 1996
IMPORTANT: Please date this
proxy and sign your name
exactly as it appears to
the left. When signing on
behalf of a corporation,
partnership, estate, trust
or in other representative
capacity, please sign name
and title. Where there is
more than one owner, each
owner must sign.
