SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. 2)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GULF EXPLORATION CONSULTANTS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than
the Registrant)
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(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $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:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
GULF EXPLORATION CONSULTANTS, INC.
_______________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE __, 1996
To the Stockholders of Gulf Exploration Consultants, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of
Stockholders (the "Meeting") of Gulf Exploration Consultants,
Inc., a Delaware corporation (the "Company"), will be held at the
offices of Reid & Priest LLP, 40 West 57th Street, New York, New
York on __________________, June __, 1996 at 10:00 A.M., local
time, for the following purposes:
1. To elect the following persons as directors of the
Company: Jeremy Metcalfe, Michael H. Nolan and L. George Rieger.
2. To approve the transactions contemplated by the
Subscription Agreement and Option, dated December 7, 1995, among
the Company, Minmet plc, Micron Ltd., and Emerging Money Limited
("Emerging Money"), a wholly-owned subsidiary of the Company, and
related corporate restructuring, including the exchange of the
Company's interest in Emerging Money (collectively, the "Micron
Transaction").
3. To approve amendments to the Company's Certificate of
Incorporation to effect a recapitalization whereby (i) the number
of outstanding shares of the Company's Common Stock, $.01 par
value (the "Common Stock"), would be reduced through a reverse-
stock-split in which one new share will be exchanged for every
fifty shares of Common Stock presently issued and outstanding,
and (ii) the number of authorized shares of Common Stock would be
reduced from 100,000,000 to 10,000,000 shares.
4. To consider and act upon such other matters as may
properly come before the Meeting or any adjournment thereof.
Only stockholders of record of the Common Stock of the
Company at the close of business on May 3, 1996 shall be entitled
to receive notice of, and to vote at, the Meeting, and at any
adjournment or adjournments thereof. A Proxy and a Proxy
Statement for the Meeting are enclosed herewith.
<PAGE>
All stockholders are cordially invited to attend the
Meeting. If you do not expect to be present, you are requested
to fill in, date and sign the enclosed Proxy, which is solicited
by the Board of Directors of the Company, and to mail it promptly
in the enclosed envelope to make sure that your shares are
represented at the Meeting. In the event you decide to attend
the Meeting in person, you may, if you desire, revoke your Proxy
and vote your shares in person.
By Order of the Board of Directors
Michael H. Nolan
Secretary
New York, New York
Date: June 5, 1996
IMPORTANT
---------
THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
<PAGE>
GULF EXPLORATION CONSULTANTS, INC.
1270 Avenue of the Americas
Suite 2900
New York, New York 10020
____________________
PROXY STATEMENT
Special Meeting of Stockholders
June __, 1996
____________________
GENERAL
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Gulf
Exploration Consultants, Inc., a Delaware corporation (the
"Company"), to be voted at a Special Meeting of Stockholders of
the Company (the "Meeting"), and any adjournments thereof. The
Meeting will be held at the place and time, and for the purposes
set forth in the accompanying Notice of Special Meeting of
Stockholders.
VOTING SECURITIES
Stockholders of record as of the close of business on May 3,
1996 (the "Record Date") will be entitled to notice of, and to
vote at, the Meeting or any adjournments thereof. On the Record
Date, 93,552,625 shares of the Company's Common Stock, $.01 par
value (the "Common Stock"), were outstanding. Each record holder
of Common Stock is entitled to one vote for each share held,
respectively. The Company has authorized 5,000,000 shares of
Preferred Stock, $1.00 par value (the "Preferred Stock"), none of
which is outstanding.
A Proxy, in the accompanying form, which is properly
executed, duly returned to the Company and not revoked will be
voted in accordance with the instructions contained therein and,
in the absence of specific instructions, will be voted as
recommended by the Board of Directors of the Company. The Proxy
will also be voted in accordance with the judgment of the person
or persons voting the proxies on any other matter that may be
properly brought before the Meeting. Each such Proxy granted may
be revoked at any time thereafter by writing to the Secretary of
the Company prior to the Meeting, or by execution and delivery of
a subsequent proxy or by attendance and voting in person at the
Meeting, except as to any matter or matters upon which, prior to
such revocation, a vote shall have been cast pursuant to the
authority conferred by such Proxy.
A majority of the outstanding shares of Common Stock
represented at the Meeting, in person or by proxy, will
constitute a quorum. Under Delaware law, a plurality of the
quorum is necessary for election of directors, the affirmative
vote of the holders of a majority of the outstanding shares of
Common Stock is required to approve the amendments to the
Company's Certificate of Incorporation, and the affirmative vote
of a majority of the votes cast at the Meeting is required to
approve the Micron Transaction. Minmet plc, which owns more than
a majority of the outstanding shares of the Company's Common
Stock, has indicated that it intends to vote its shares in favor
of the proposals, thereby assuring their adoption. There is no
requirement for approval of the proposals by the minority
stockholders of the Company.
Abstentions will have the effect of a negative vote. A
broker non-vote will have the effect of a negative vote with
respect to the amendment to the Company's Certificate of
Incorporation, but will have no effect on the outcome of any of
the other proposals.
As of the Record Date, 93,552,625 shares of the Company's
Common Stock were issued and outstanding.
SECURITY OWNERSHIP
The following table sets forth certain information regarding
the ownership of the Common Stock by each person who is known to
the management of the Company to have been the beneficial owner
of more than 5% of the outstanding shares of Common Stock as of
the Record Date:
Amount and Nature of Percent of
Name and Address Beneficial Ownership(1) Ownership
---------------- ----------------------- ----------
Minmet plc 52,735,246 shs. 56.4%
Grand Canal House Direct
1 Upper Grand Canal Street
Dublin 4 Ireland
The following table sets forth certain information regarding
the ownership of Common Stock by each director, and by all
directors and officers of the Company as a group, as of the
Record Date:
Amount and Nature of Percent of
Name and Address Beneficial Ownership(1) Ownership
---------------- ----------------------- ----------
L. George Rieger -0- --
Michael H. Nolan 52,735,246 (2) 56.4%
Jeremy Metcalfe 52,735,246 (2) 56.4%
All officers and directors
as a group (3 persons) 52,735,246 (2) 56.4%
_______________________
(1) All persons named have sole voting and investment power,
except as otherwise stated.
(2) Includes 52,735,246 shares owned by Minmet plc, of which
Messrs. Nolan and Metcalfe serve as officers and directors.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
At the Meeting three persons will be elected directors
to serve until the next Annual Meeting and until their successors
are elected and qualified. Management's nominees for director to
be elected at the Meeting are L. George Rieger, Jeremy Metcalfe
and Michael H. Nolan. They serve as the current Board of
Directors.
Unless otherwise indicated, all proxies received will
be voted in favor of the three nominees named above. Should a
nominee not remain a candidate for election at the date of the
Meeting (which contingency is not now contemplated or foreseen by
the Board of Directors), proxies solicited hereby will be voted
in favor of the nominees who do remain as candidates and may be
voted for a substitute nominee selected by the Board of
Directors.
The following table sets forth the names of the
directors and nominees, their ages, their current positions with
the Company and the year that they were first elected or
appointed as directors of the Company.
Year First Elected or
Appointed to the
Name Age Position Board
---- --- -------- ---------------------
L. George Rieger 56 President, Chairman 1988
and Director
Michael H. Nolan 33 Chief Financial 1995
Officer, Secretary and
Director
Jeremy Metcalfe 56 Director 1995
L. George Rieger has served as director of the Company
since June 1988. Mr. Rieger was appointed President of the
Company effective January 1, 1993. In 1984, Mr. Rieger founded
Rieger Robinson & Harrington, which is engaged in funds
management in New York, N.Y., and has served as its Chairman of
the Board since such time.
Michael H. Nolan, a chartered accountant, has been the
Chief Financial Officer of the Company since May 1994. Since
April 1994, he has also served as Finance Director of Minmet plc,
a Republic of Ireland corporation ("Minmet"), which is engaged in
mining and horticulture. From 1989 through 1994, Mr. Nolan was
an associate director of Equity and Corporate Finance plc, a
London based investment company.
Jeremy Metcalfe has served as the Chairman of the Board
of Directors of Minmet since September 1995 and is also on the
Board of Directors of several Minmet subsidiaries. Mr. Metcalfe
has also served as a director of City Venture Properties Limited,
a real estate brokerage firm since 1989 and he has been a senior
partner in JP Metcalfe Associates, a corporate finance firm in
Kent, England specializing in the venture capital industry, since
1980.
Board of Directors and Committees
---------------------------------
The Board of Directors of the Company held three
meetings during the 1995 fiscal year.
The Company does not have any standing audit,
nominating or compensation committees of the Board of Directors
or committees performing similar functions.
Compensation of Directors and Executive Officers
------------------------------------------------
None of the executive officers or Directors of the
Company received any compensation during the 1995 fiscal year,
and no compensation is expected to be paid to such persons in
fiscal 1996.
The Company has not granted stock options or other
compensatory awards to any officer or director during fiscal 1995
and no such options or awards are intended to be granted in
fiscal 1996.
PROPOSAL 2
THE MICRON TRANSACTION
As a result of the inability of Minmet to continue
funding Emerging Money and in order to discharge the Notes (as
hereinafter defined) and to settle the loans advanced by Minmet
to Emerging Money and the Company, the Board of Directors of the
Company has unanimously adopted a resolution approving and
recommending to the Company's stockholders for their approval the
transactions contemplated on behalf of the Company under (i) the
Subscription Agreement and Option, dated December 7, 1995 (the
"Micron Subscription"), among the Company, Minmet, Micron Ltd., a
Republic of Ireland corporation ("Micron") and Emerging Money
Limited, a Republic of Ireland corporation and wholly-owned
subsidiary of the Company ("Emerging Money") and (ii) the Letter
Agreement, dated December 22, 1995 (the "Letter Agreement"),
among the Company, Minmet, DRM&S, Inc., now known as Osprey
Investments Inc. ("DRM&S") and Dennis Mensch ("Mensch"). (The
transactions contemplated on behalf of the Company under the
Micron Subscription and the Letter Agreement are collectively
referred to herein as the "Micron Transaction").
Enclosed with this Proxy Statement is the Company's
Annual Report for 1995 and the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1996 which contain
background information regarding the Company and audited
financial information for the fiscal year ended December 31, 1995
and unaudited financial information for the fiscal quarter ended
March 31, 1996. The financial information in those reports is
incorporated by reference herein and made a part of this Proxy
Statement.
Operating History and Ceasing of Operations
-------------------------------------------
The Company was incorporated under the laws of the
State of Delaware on October 2, 1987. On September 15, 1988, the
Company effected a roll-up transaction pursuant to which its
wholly-owned subsidiaries Bengal Oil & Gas Corporation, a
Colorado corporation, Gopher Exploration, Inc., a Texas
corporation, GEC Texas, Inc. (formerly Gulf Exploration
Consultants, Inc.), a Texas corporation, Dornoch Exploration,
Inc., a Texas corporation and Vanderbilt Petroleum, Inc., a
Delaware corporation, were rolled-up into the Company.
In 1988 and 1989, the Company incurred losses in the
amount of $4.3 million and $4.1 million, respectively. These
substantial losses eroded the Company's capital base and made it
more difficult to obtain additional capital through borrowing or
equity offerings. In addition, the Company had already incurred
a substantial amount of debt. In 1990, in order to repay such
debt the Company was forced to dispose of certain of its major
oil and gas interests.
As of July 6, 1989, the National Association of
Securities Dealers, Inc. ("NASD") delisted the Company's Common
Stock from the Nasdaq Small-Cap Market because of the lack of
active market makers registered to trade in the Company's
securities. There is no active market for the Company's Common
Stock.
An additional barrier to the Company's ability to
obtain sufficient financing to fund its operations was the
presence of a class of Preferred Stock of the Company which had a
liquidation preference over the Company's Common Stock.
Management determined that it would not be able to successfully
obtain capital through the issuance of equity securities until it
redeemed all of the Preferred Stock. Thus, over the period from
1990 through 1994, the Company redeemed all of the outstanding
Preferred Stock. The Preferred Stock redemption, however,
resulted in the Company disposing of all of its remaining
significant oil and gas assets. Subsequent to the redemption the
Company did not have any active business or operations.
Emerging Money
--------------
In December 1994, after engaging in negotiations with
several other parties in an attempt to acquire a viable business
opportunity for the Company, the Company issued 37,942,269 shares
of its Common Stock in connection with the acquisition of a 100%
interest in Emerging Money from Minmet. Efforts were made to
raise capital for developmental purposes and to have the
Company's shares included for trading on the Nasdaq Small-Cap
Market; however, the Company was not able to raise sufficient
capital for such purposes and accordingly, no request was made
for inclusion on the Nasdaq System. As a result of the Company's
inability to raise sufficient capital, Minmet continued to fund
Emerging Money's operations.
Minmet had formed Emerging Money in June 1994 to hold
investments in companies which provide electronically distributed
market information on the world's emerging capital markets. In
December 1994, Minmet contributed its interest in Emerging Money
to the Company in exchange for 37,942,269 shares of the Company's
Common Stock. Emerging Money's principal operating subsidiary
was Russiamoney Limited ("Russiamoney"), of which it held a 50%
interest with the Investment & Analytical Centre of Moscow (the
"IAC") owning the remaining 50% interest. The IAC is a Moscow-
based economic consultancy. In November 1995, the IAC terminated
the arrangement as to Russiamoney because of non-payment by
Emerging Money.
Emerging Money has formed India Money Limited and South
Africa Money Limited as subsidiaries; however, neither became
actively engaged in business.
Russiamoney is an information services company
specializing in background analysis of financial, political and
economic events in Russia's developing capital markets.
Russiamoney obtains information from the IAC, which it
translates, formats, edits and data processes. The processed
information is then provided to Bloomberg Financial Markets
system for worldwide transmission to the financial community.
In January and February of 1995, Emerging Money hired
two executives to oversee and develop Emerging Money's U.S. sales
and marketing presence and to develop new products. Despite the
retention of such persons, Emerging Money incurred substantial
losses.
The Company believes that the development of Emerging
Money was curtailed for three reasons. First, Emerging Money was
unable to meet its capital raising plan. It planned to raise
$500,000 by January 1995, but was only able to raise $200,000 by
March 1995. Second, sales of the existing Russiamoney services
failed to grow at a significant level. Third, the retention of
personnel placed further strains on Emerging Money's cash
resources.
By September 1995, year to date losses had reached more
than $600,000 and Minmet, which had already provided Emerging
Money with more than $350,000 in funding, was unable to continue
providing financial support.
Micron Subscription
-------------------
The Micron Subscription relates to the acquisition by
Micron of 3,954,545 newly issued shares of the common stock of
Emerging Money. The acquisition would result in Micron owning
72.5% of the then outstanding shares of Emerging Money and the
Company's ownership interest in Emerging Money would be reduced
to 27.5% of Emerging Money shares then to be outstanding. In
consideration for such Emerging Money shares, Micron has paid the
Company 39,546 Irish Pounds (US$ 63,293 equivalent as of December
31, 1995), and has paid on behalf of Emerging Money approximately
US$ 80,000 which enabled Emerging Money to discharge certain
agreed creditors. In addition, pending the closing, Micron is to
pay or advance additional funds to creditors of Emerging Money to
pay off certain liabilities and Micron shall have the right to
control the management and finances of Emerging Money on a daily
basis and to request Emerging Money to provide to Micron
exclusive editing and administration services upon a fee basis.
Furthermore, pursuant to the Micron Subscription, Micron controls
marketing for Emerging Money's services and collects and is
entitled to use in its sole discretion all revenues obtained from
new subscribers. Revenues obtained from Russiamoney subscribers
as of November 30, 1995 have been used by Emerging Money for
working capital purposes. Micron has also been given the right
to use all names, trademarks and copyrights used in connection
with the business of Emerging Money or its subsidiaries on an
exclusive basis. As of the entry into the Micron Subscription,
neither the Company nor Emerging Money had sufficient capital to
maintain the continuing operations of Emerging Money. In
December 1995, Micron made a separate arrangement with the IAC as
to the former operations of Russiamoney. Accordingly, Micron is
essentially conducting the business of Emerging Money. Prior to
the Micron Subscription, Micron had no relationship with the
Company or Minmet.
The Micron Subscription had provided that the closing
of the transactions contemplated thereby must occur by June 1,
1996. The parties to the Micron Subscription, however, have
agreed to extend the time by which the closing must occur to June
17, 1996. Therefore, all conditions precedent to the closing
must occur by June 17, 1996.
Corporate Restructuring
-----------------------
The Letter Agreement relates to the payment of certain
outstanding liabilities and future expenses of the Company.
Pursuant to the Letter Agreement, Minmet will assume 25.4% of the
Company's outstanding liabilities, or $10,804 for legal and
accounting services, and upon the completion of the Micron
Transaction, DRM&S and Mensch will lend to the Company such funds
as necessary to settle 74.6% of the total liabilities of the
Company or $31,732, as of December 1995. In addition, Minmet has
agreed to bear all expenses to be incurred by the Company in
connection with (i) the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1995, (ii) the
Company's Annual Report on Form 10-K for the fiscal year ending
December 31, 1995, (iii) this Proxy Statement and related
documents and related expenses, (iv) the negotiation of the
Micron Subscription, (v) the retention of Casey, McGrath &
Associates, Dublin, Ireland in connection with the rendering of
the evaluation opinion, and (vi) related legal, accounting and
other fees.
In March 1995, DRM&S and Mensch each invested $100,000
in the Company as part of a proposed "bridge" financing by the
Company and were issued Promissory Notes (the "Notes"), payable
on June 30, 1995 together with interest at the rate of 9% per
annum. The bridge financing was never completed and a proposed
private equity placement was never commenced by the Company.
Upon the closing of the Micron Subscription, (i) each
of DRM&S and Mensch will exchange its Notes for Common Stock of
the Company amounting to 22% of the Common Stock then
outstanding, (ii) the Company will transfer its 27.5% interest in
Emerging Money to Minmet in exchange for shares of the Company's
Common Stock presently owned by Minmet which would reduce
Minmet's holding of the Company's Common Stock from 56.4% to 15%
of the shares then to be outstanding (subject to adjustment if
the valuation of the Emerging Money shares would exceed the
valuation of the Common Stock to be exchanged), (iii) the
existing public stockholders of the Company will own the balance
of the outstanding shares of Common Stock and (iv) the Company
would have no interest in Emerging Money nor any obligation for
any liabilities of Emerging Money.
On April 30, 1996, Casey, McGrath & Associates rendered
an opinion that the transaction between the Company and Minmet as
part of the corporate restructuring is fair from a financial
point of view to the Company, as of the date thereof.
Until the Micron Transaction is consummated DRM&S and
Mensch will remain creditors of the Company under the Notes and
Minmet will remain the majority stockholder of the Company. If
the Micron Transaction is not consummated, Minmet will reimburse
DRM&S and Mensch for all payments made by each of them pursuant
to the Letter Agreement.
After the Micron Transaction, the Company will have no
business activity; however its management will seek business
opportunities for the Company. The intention is to identify and
enter into an arrangement for a business which would present
growth prospects to stockholders. The arrangement would be
subject to approval by stockholders. Management plans to review
possible acquisition prospects, but will not enter into any
binding arrangement prior to the closing of the Micron
Transaction. The Micron Subscription contains a non-competition
covenant which restricts the Company from competing directly or
indirectly in any business activities of the type carried on by
Emerging Money and any of its subsidiaries at the closing of the
Micron Transaction for a period of two years following such
closing. Management has no plans to seek a business opportunity
in the field of dissemination of financial information on
emerging markets.
Reasons for the Proposal
------------------------
The Board of Directors believes that the Micron
Transaction is desirable for the following reasons:
1. Financial Condition.
As of the entry into the Micron Subscription, neither
the Company nor Emerging Money had sufficient capital to maintain
the continuing operations of Emerging Money or to conduct any
operations. In addition, the Company has been unable to obtain
financing for the operations of Emerging Money. The Micron
Transaction provides the Company with the opportunity to dispose
of its interest in Emerging Money without any contingent exposure
for Emerging Money's liabilities and for satisfaction of certain
of the Corporation's liabilities which will permit it to find
prospective new business opportunities. The alternative is to
cease all activity. The Company does not have sufficient assets
to bear the costs of a liquidation.
2. Lack of Financing.
The Company has experienced difficulties in obtaining
bank financings and effecting equity placements. Banks and other
financial institutions have refused to finance the Company's
activities because of past negative financial results and the
Company's small overall capital and liquidity structure.
Management has spent considerable time trying to attract capital,
but for several reasons, including the low market price which
would result in substantial dilution to stockholders and lack of
a trading market, these efforts were not successful. The Company
believes that as a result of its inability to obtain adequate
financing, it would not be able to successfully develop and grow
Emerging Money.
Under applicable Delaware law, stockholders are not
entitled to dissenters' rights of appraisal with respect to the
proposed Micron Transaction.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE
THE MICRON TRANSACTION.
PROPOSAL 3
CHARTER AMENDMENTS
General
-------
The Board of Directors of the Company has unanimously
adopted a resolution approving and recommending to the Company's
stockholders for their approval amendments (the "Charter
Amendments") to Article Fourth of the Company's Certificate of
Incorporation which would (i) effect a 1-for-50 reverse split of
the presently issued and outstanding shares of the Company's
Common Stock (the "Reverse Split") and (ii) reduce the number of
authorized shares of Common Stock to 10,000,000 shares from
100,000,000 shares. The Charter Amendments would not effect the
authorized shares of Preferred Stock.
Reverse Split
-------------
The purpose of the Reverse Split is to reduce the
number of outstanding shares of the Company's Common Stock to
approximately 1,871,053 shares (or approximately 1,991,092 after
the proposed restructuring) from 93,552,625 shares. The Board of
Directors believes that the Reverse Split is desirable for
several reasons. The Reverse Split should enhance the possible
acceptability of the Common Stock by the financial community and
investing public as an entity the size and the status of the
Company should not have an outstanding capitalization of
93,552,625 shares. There has not been any trading market in the
Common Stock for the past several years, which is attributable to
the lack of business, revenues, income and also to the very large
capitalization. When the Company acquired Emerging Money, its
plan was to follow the acquisition with a financing and a
recapitalization similar to the Reverse Split. Unfortunately,
the Company was unable to complete the financing so it delayed
the recapitalization. The reduction in the number of issued and
outstanding shares of Common Stock caused by the Reverse Split
may permit the commencement of a trading market for the Common
Stock, although there can be no assurance any market will develop
and, if so, what the price for the shares and the activity would
be. In addition, the smaller capitalization should facilitate
any acquisition by the Company as the consideration for any
acquisition would be shares of its Common Stock and/or Preferred
Stock. See "Proposal 2 - The Micron Transaction - Corporate
Restructuring."
Assuming consummation of the Micron Transaction and
implementation of the Reverse Split (including Minmet exchanging
a portion of its shares of the Company's Common Stock for the
Company's interest in Emerging Money and the exchange of the
Notes for Common Stock), the Company would have outstanding
approximately 1,991,092 shares of Common Stock, of which the
public stockholders would own approximately 816,348 shares, and
the balance of the outstanding shares would be owned as follows:
Holder Number of Shares Percent
------ ---------------- -------
DRM&S 438,040 22%
Mensch 438,040 22%
Minmet 298,664(1) 15%
____________________
(1) Subject to adjustment, see "Proposal 2-The Micron
Transaction."
Reduction in Authorized Shares of Common Stock
----------------------------------------------
Management believes that reducing the number of
authorized shares to 10,000,000 shares should be sufficient for
any future transaction or other corporate needs. The Company has
no present plans to issue any shares of its Common Stock other
than in connection with the Micron Transaction.
Since the amount of the Delaware franchise taxes
payable by the Company is based in part upon the number of shares
of capital stock which are authorized by the Company's
Certificate of Incorporation, the reduction in the number of
shares of authorized Common Stock would save the Company
approximately $10,000 per year by a reduction in such franchise
taxes.
Effect of Reverse Split
-----------------------
If the Charter Amendments are approved, upon filing of
the Certificate of Amendment to the Certificate of Incorporation
of the Company with the Secretary of State of the State of
Delaware, the Reverse Split will be effective, and each
certificate representing shares of Common Stock outstanding
immediately prior to the Reverse Split (the "Old Shares") will be
deemed automatically without any action on the part of the
stockholders to represent one-fiftieth the number of shares of
Common Stock after the Reverse Split (the "New Shares");
provided, however, that no fractional New Shares will be issued
as a result of the Reverse Split. In lieu of fractional shares,
each stockholder whose Old Shares are not evenly divisible by
fifty will be rounded up or down to the nearest whole share,
except that record holders of 25 or fewer shares will receive one
New Share. After the Reverse Split becomes effective,
stockholders will be asked to surrender certificates representing
Old Shares in accordance with the procedures set forth in a
letter of transmittal to be sent to the stockholders by the
Company. Upon such surrender, a certificate representing the New
Shares will be issued and forwarded to the stockholders.
The Common Stock issued pursuant to the Reverse Split
will be fully paid and nonassessable. The voting and other
rights that presently characterize the Common Stock will not be
altered by the Reverse Split.
The receipt of New Shares solely in exchange for Old
Shares will not result in recognition of tax gain or loss to
stockholders. The adjusted tax basis of each stockholders' New
Shares will be the same as its adjusted tax basis in the
exchanged Old Shares. The holding period of New Shares received
solely in exchange for Old Shares will include the stockholders'
holding periods in the exchanged Old Shares. No gain or loss
will be recognized by the Company upon the Reverse Split. The
foregoing is a general discussion of certain federal income tax
consequences of the Reverse Split. Stockholders should consult
their own tax advisors as to the tax effects of the Reverse Split
in light of their individual circumstances.
Under applicable Delaware law, stockholders are not
entitled to dissenters' rights of appraisal with respect to the
proposed amendments to the Company's Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS APPROVE
THE CHARTER AMENDMENTS.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Michael H. Nolan, Chief Financial Officer, Secretary, a
Director and nominee for director of the Company, is the Finance
Director of Minmet, and Jeremy Metcalfe, a Director and nominee
for director of the Company, is the Chairman of the Board of
Directors of Minmet. Minmet owns a majority of the Common Stock.
Pursuant to the Letter Agreement, Minmet will assume certain
liabilities of the Company and exchange shares of the Company's
Common Stock held by it for the Company's interest in Emerging
Money as part of the Micron Transaction. Messrs. Nolan and
Metcalfe have an indirect interest in the Micron Transaction and
the exchange of the Emerging Money Shares by reason of their
executive positions in Minmet.
Compliance with Section 16(a) of the Securities Exchange
Act of 1934
--------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934,
as amended, requires the Company's directors, executive officers
and holders of more than 10% of the Company's Common Stock to
file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission (the
"SEC"). The Company believes that, during the fiscal year ended
December 31, 1995, its executive officers, directors and holders
of more than 10% of the Company's Common Stock complied with all
Section 16(a) filing requirements. In making these statements,
the Company has relied upon a review of reports on Forms 3, 4 and
5 furnished to the Company during, or with respect to, its last
fiscal year.
AUDITORS
The Company's independent public auditors are Berry,
Dunn, McNeil & Parker. A representative of Berry, Dunn, McNeil &
Parker, will not be present at the Meeting.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the
next annual meeting of stockholders must be received by the
Company by February 6, 1997 in order to be considered for
inclusion in proxy materials distributed in connection with such
meeting. All such proposals should be in compliance with
applicable SEC regulations.
MISCELLANEOUS
As of the date of this Proxy Statement, the Board of
Directors of the Company does not know of any other matter to be
brought before the Meeting. However, if any other matters not
mentioned in the Proxy Statement are properly brought before the
Meeting or any adjournments thereof, the persons named in the
enclosed Proxy or their substitutes will have discretionary
authority to vote proxies given in said form, or otherwise act,
in respect of such matters, in accordance with their best
judgment.
All of the costs and expenses in connection with the
solicitation of Proxies with respect to the matters described
herein will be borne by the Company. In addition to solicitation
of Proxies by use of the mails, directors and officers (who will
receive no compensation therefor) of the Company may solicit the
return of Proxies by telephone or personal interview. The
Company will request banks, brokerage houses and other
custodians, nominees and fiduciaries to forward copies of the
proxy material to their principals and to request instructions
for voting the Proxies.
The Company's Annual Report on Form 10-K will be
provided without charge to each stockholder as of the Record Date
so requesting in writing. The request should be directed to:
Gulf Exploration Consultants, Inc., c/o Minmet plc, Grand Canal
House, 1 Upper Grand Canal Street, Dublin 4, Ireland, Attention:
Corporate Secretary.
It is important that Proxies be returned promptly.
Stockholders are, therefore, urged to fill in, date, sign and
return the Proxy immediately. No postage need be affixed if
mailed in the enclosed envelope in the United States.
By order of the Board of Directors
Michael H. Nolan
Secretary
June 5, 1996
<PAGE>
GULF EXPLORATION CONSULTANTS, INC.
SPECIAL MEETING OF STOCKHOLDERS
JUNE __, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of GULF EXPLORATION CONSULTANTS,
INC., a Delaware corporation (the "Company"), acknowledges
receipt of the Notice of Special Meeting of Stockholders and
Proxy Statement, dated June _____, 1996, and hereby constitutes
and appoints L. GEORGE RIEGER or MICHAEL H. NOLAN, or either of
them acting singly in the absence of the other, with the power of
substitution in either of them, the proxies of the undersigned to
vote all shares of Common Stock of the Company which the
undersigned would be entitled to vote at the Special Meeting of
Stockholders, and at any adjournment or adjournments thereof,
hereby revoking any proxy or proxies heretofore given and
ratifying and confirming all that said proxies may do or cause to
be done by virtue thereof with respect to the following matters:
1. The election of three directors nominated by the Board of
Directors:
FOR all nominees listed below WITHHOLD AUTHORITY to vote
(except as indicated) [box] for all nominees listed below [box]
Jeremy Metcalfe, Michael H. Nolan and L. George Rieger
(Instruction: To withhold authority to vote for any individual
nominee or nominees write such nominee's or
nominees' name(s) in the space provided below.)
2. The Subscription Agreement and Option with Micron Ltd. and
related restructuring transactions:
[box] FOR [box] AGAINST [box] ABSTAIN
3. The recapitalization involving a reverse split of the Common
Stock and the reduction in the number of authorized shares of
Common Stock:
[box] FOR [box] AGAINST [box] ABSTAIN
4. Other matters as may properly come before the meeting or any
adjournment or adjournments thereof.
<PAGE>
This Proxy, when properly executed, will be voted as directed.
If no direction is indicated, the Proxy will be voted FOR each of the
above proposals.
Dated:____________________, 1996
________________________________
________________________________
Please sign your name exactly as it
appears hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title as it appears
hereon. When signing as joint
tenants, all parties in the joint
tenancy must sign. When a proxy is
given by a corporation, it should
be signed by an authorized officer
and the corporate seal affixed. No
postage is required if returned in
the enclosed envelope and mailed in
the United States.
PLEASE SIGN, DATE AND MAIL THIS
PROXY IMMEDIATELY IN THE ENCLOSED
ENVELOPE.
