April 6, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington DC
Dear Sir:
Forwarded herewith is the Proxy Statement, form of Proxy and Notice of Annual
Meeting of the Stockholders, to be held on May 4, 1999. The proxy material will
be mailed to the Stockholders on or about April 6, 1999.
Preliminary proxy material was not filed because the only matter to be acted
upon is the election of the board of directors.
Very truly yours,
THE RESERVE PETROLEUM COMPANY
/s/ JERRY L. CROW
-----------------------------
Jerry L. Crow
Vice President
<PAGE>
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
THE RESERVE PETROLEUM COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other than 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:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
--------------------------------------------------------------------------
[ ] Fee paid with Preliminary Proxy Statement
[ ] 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>
THE RESERVE PETROLEUM COMPANY
PROXY OF ANNUAL MEETING OF STOCKHOLDERS
May 4, 1999
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned holder(s) of common stock of The Reserve Petroleum
Company, a Delaware corporation, does hereby constitute and appoint Mason McLain
and Robert T. McLain as true and lawful attorneys and proxies for the
undersigned, each with full power of substitution and revocation, to vote for
and in the name, place and stead of the undersigned at the Annual Meeting of
Stockholders of the Company to be held at 6801 N. Broadway, Suite 300, Oklahoma
City, Oklahoma, on Tuesday, May 4, 1999, at 1:30 p.m., and any adjournment
thereof, all of the stock of the Company which the undersigned would be entitled
to vote if then personally present, hereby revoking any Proxy heretofore given.
This Proxy will confer discretionary authority to vote upon matters incidental
to the conduct of the meeting, matters not known to management prior to the date
of the Proxy Statement which are presented to the meeting and the approval of
the form of minutes of the 1998 Annual Stockholders' Meeting.
Election of Directors
WITHHOLD
VOTE FOR AUTHORITY TO VOTE NOMINEE
- -------- ----------------- ---------
( ) ( ) Mason McLain
( ) ( ) Robert T. McLain
( ) ( ) Jerry L. Crow
( ) ( ) Loyd Terry
( ) ( ) Robert L. Savage
( ) ( ) Marvin E. Harris, Jr.
( ) ( ) William M. (Bill) Smith
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE NOMINEES.
This Proxy may be revoked at any time before the authority granted therein
is exercised; otherwise, it shall remain in full force and effect.
IN WITNESS WHEREOF the undersigned has executed this Proxy on the____day
_________________1999.
____________________________________________
Signature
____________________________________________
Signature if held jointly
____________________________________________
Address
Please sign your name(s) exactly as it appears on your stock certificate
and return this Proxy promptly to save the Company additional mailing expense.
Executors, administrators, trustees, guardians and others signing in a
representative capacity please give their full titles. When shares are held by
joint tenants both should sign. If a corporation, please sign full corporate
name by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
<PAGE>
THE RESERVE PETROLEUM COMPANY
6801 N. Broadway, Suite 300
Oklahoma City, Oklahoma 73116-9092
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
May 4, 1999
To The Stockholders:
The Annual Meeting of stockholders of The Reserve Petroleum Company (the
"Company") will be held on Tuesday, the 4th day of May, 1999 at 1:30 o'clock
p.m. CDT at the offices of the Company at 6801 N. Broadway, Suite 300, Oklahoma
City, Oklahoma, for the following purposes:
1. Electing seven (7) directors to serve until the next Annual Meeting of
stockholders or until their respective successors are elected and qualified.
2. Transacting such other business as may properly be brought before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on the 3rd day of April
1999, will be entitled to notice of or to vote at the Meeting or any adjournment
thereof. A complete list of the stock- holders entitled to vote at the meeting
will be open for examination by any stockholder during the ordinary business
hours, for a period of ten (10) days preceding the Meeting, at the Company's
offices at 6801 N. Broadway, Suite 300 Oklahoma City, Oklahoma. The list shall
also be produced and kept at the place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present.
STOCKHOLDERS ARE URGED TO VOTE, SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED
PROXY IN THE ENCLOSED PREPAID ENVELOPE. It is desirable that as many
stockholders as possible be represented at the meeting. Consequently, whether or
not you now plan to attend in person, please vote, sign, date and return the
enclosed Proxy. If you attend the meeting you may vote your shares in person
even though you have previously signed and returned your proxy.
By Order of The Board of Directors,
/s/ Mason McLain, President
-----------------------------------
Mason McLain, President
<PAGE>
THE RESERVE PETROLEUM COMPANY
Suite 300
6801 N. Broadway
Oklahoma City, Oklahoma 73116-9092
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 1999
SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of The Reserve
Petroleum Company (the "Company") for use at the Annual Meeting of Stockholders
of the Company to be held in Oklahoma City, Oklahoma, on Tuesday the 4th day of
May, 1999, and at any adjournment thereof. The Company will bear the costs of
solicitation, which are estimated to be approximately $ 9,200, of which amount
approximately $7,800 has been spent to date. Solicitation of proxies may be made
by personal interview, mail, telephone or telegram by directors, officers, and
regular employees of the Company. The Company may also request banking
institutions, brokerage firms, custodians, trustees, nominees, and fiduciaries
to forward solicitation material to the beneficial owners of common stock held
of record by such persons. The Company will reimburse the forwarding expense.
When proxies on the enclosed form are returned, properly executed, and in time
for the meeting, the shares represented thereby will be voted at the meeting.
When a stockholder specifies on the proxy form a choice on a matter with respect
to which a ballot is provided, the shares will be voted according to the
specifications made. If a stockholder fails to so specify with respect to such
proposals, the proxy will be voted for the nominees. The giving of a proxy does
not preclude the right to vote in person, should the person giving the proxy so
desire. The person giving the proxy has the right to revoke the same by written
notice to the Secretary of the Company at any time before it has been exercised.
This proxy statement is first being sent to stockholders on or about April 6,
1999.
ANNUAL REPORT
The Company's annual report for the year ended December 31, 1998, on Form 10-KSB
as filed with the Securities and Exchange Commission, is enclosed herewith, but
neither the report nor the financial statements included therein are
incorporated in this proxy statement or are deemed to be a part of the material
for the solicitation of proxies.
VOTING RIGHTS AND PRINCIPAL SECURITY HOLDERS
Voting rights are vested exclusively in the holders of the Company's common
stock, par value $.50 per share, with each share entitled to one (1) vote on
each matter coming before the meeting. Only stockholders of record at the close
of business on April 3, 1999, will be entitled to receive notice of and to vote
at the stockholders' meeting. On the record date, there were outstanding and
entitled to be voted 167,729.73 shares of common stock of the Company.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock of the Company entitled to vote is necessary
to constitute a quorum at the meeting. The shares represented by any and all
proxies received by the Company will be counted towards a quorum,
notwithstanding that any such proxies contain thereon an abstention or a broker
non-vote. Notwithstanding the record date of April 3, 1999, specified above, the
Company's stock transfer books will not be closed and shares may be transferred
subsequent to the record date. However, all votes must be cast in the names of
the shareholders of record on the record date.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative votes, abstentions and broker
non-votes. The election of the nominees to the Board of Directors requires the
affirmative vote of a majority of the shares of common stock represented at the
Meeting and entitled to vote, provided a quorum is present. Proxies specifying
"withheld" authority will have the same effect as a vote "against" the nominees,
while a broker non-vote will have no effect.
If sufficient shares are not present to provide a quorum on May 4th, the
meeting, after the lapse of at least half an hour, will be adjourned by those
present or represented and entitled to vote. Those stockholders entitled to
receive notice of and to vote will be sent written notice of an adjournment
meeting to be held with a quorum of those present in person or by proxy at such
meeting. Under the by-laws of the Company, any number of stockholders, in person
or by proxy, will constitute a quorum at the adjournment meeting.
The following table sets forth information regarding the only persons known by
management to be beneficial owners of over 5% of the
Company's voting stock at April 3, 1999.
<TABLE>
<CAPTION>
Name and Address Amount & Nature Percent
of of Beneficial of
Beneficial Owner Ownership Class (2)
---------------------------- -------------------- ----------
<S> <C> <C>
Mason McLain (1) 28,408 Directly 16.93
6801 N. Broadway, Suite 300 3,333 By Wife 1.98
Oklahoma City, OK 73116-9092
Robert T. McLain (1) 11,732 Directly 6.99
6403 N. Grand, #203 3,333 By Wife 1.98
Oklahoma City OK 73116
</TABLE>
(1) Mason McLain and Robert T. McLain are brothers.
(2) Calculations of percent of class is based on the number of shares of common
stock outstanding as of April 3, 1999, excluding shares held by or for the
Company.
<PAGE>
The following table sets forth information regarding the Company's stock
beneficially owned by its officers and directors at April 3, 1999. All directors
are nominees for re-election as directors.
<TABLE>
<CAPTION>
Title of Amount & Nature of Percent
Directors Class Beneficial Ownership of Class
--------- ----- -------------------- ---------
<S> <C> <C> <C>
Mason McLain Common 28,408 Owned Directly 16.93
3,333 By Wife 1.98
Robert T. McLain Common 11,732 Owned Directly 6.99
3,333 By Wife 1.98
Robert L. Savage Common 1,269 Owned Directly .75
1,200 Owned as Custodian .71
Loyd Terry Common 200 Owned Directly .11
Jerry L. Crow Common 5,379 Owned Directly 3.20
------ -----
Total Directors 54,854 32.65
====== =====
Total Officers & Directors as a Group 54,854 32.65
====== =====
</TABLE>
DIRECTORS AND OFFICERS
The seven (7) persons named below are nominees for election as directors of the
Company to serve until the next Annual Meeting of stockholders and until their
respective successors are elected and qualified. If any nominee is unable to
serve, which the Board of Directors has no reason to expect, the persons named
in the accompanying proxy intend to vote for the balance of those named and, if
they deem it advisable, for a substitute nominee. Each nominee has served
continuously as a director since the date of his or her first election or
appointment to the Board.
<TABLE>
<CAPTION>
Position/Office Held Continuously
Name Age With Company Since
---- --- ------------------------ -----------------
<S> <C> <C> <C>
(1) Mason McLain 72 President May 3, 1955
(1) Robert T. McLain 69 1st Vice President May 2, 1972
Loyd Terry 84 None May 8, 1956
Robert L. Savage 51 None May 6, 1975
(1) Jerry L. Crow 62 2nd Vice President May 4, 1982
Secretary/Treasurer
Marvin E. Harris, Jr. 47 None May 7, 1991
William M. (Bill) Smith 40 None May 5, 1998
1) Member of Executive Committee
</TABLE>
<PAGE>
The persons named below are the executive officers of the Company and at the
next board of directors meeting to be held on May 4, 1999, all are expected to
be chosen to serve another term of office in the same capacity as they are now
serving:
<TABLE>
<CAPTION>
Office Held
Position/Office Held Continuously
Name Age With Company Since
- ---- --- ------------------------ -----------------
<S> <C> <C> <C>
Mason McLain 72 President May 6, 1969
Robert T. McLain 69 1st Vice President May 4, 1976
Jerry L. Crow 62 2nd Vice President, May 4, 1982
Secretary/Treasurer
</TABLE>
The persons named below are not directors or executive officers of the Company,
but they are expected to make significant contributions to the Company.
<TABLE>
<CAPTION>
Position Held
Position/Office Held Continuously
Name Age With Company Since
- ---- --- ------------------------ -----------------
<S> <C> <C> <C>
Cameron R. McLain 40 Exploration Manager May 9, 1982
Kyle L. McLain 44 Production Manager May 12, 1984
</TABLE>
Mason McLain, Director and President, and Robert T. McLain, Director and Vice
President, are brothers, and Loyd Terry, Director, is a cousin of Mason and
Robert T. McLain. Cameron R. McLain, Exploration Manager and Kyle L. McLain,
Production Manager are sons of Mason McLain.
Mason McLain became President of the Company on May 6, 1969. He had previously
served as First Vice President since May 3, 1966, and as Second Vice President
since May 6, 1958. Mr. McLain devotes substantially all of his time to the
affairs of the Company, although he is permitted to and does devote part of his
time and efforts to the activities of affiliated and family organizations. These
organizations are Mesquite Minerals, Inc., (formerly Royalty Pooling Company),
Mid-American Oil Company, Lochbuie Holding Company and Lochbuie Limited
Partnership, all of which are engaged in varying aspects of the oil and gas
industry, Mr. McLain holds a Bachelors degree in petroleum engineering from the
University of Oklahoma. Mr. McLain is also a director of Webber Investment
Company, Mid-American Oil Company, Mesquite Minerals, Inc., and Lochbuie Holding
Company.
Robert T. McLain has served as Vice President of the Company since May 4, 1976.
Prior to that date, he was Secretary-Treasurer of the Company from May 2, 1972.
He is Chairman of the Board of Bunte' General Corporation as well as Golf USA
and Mull Corporation. He had previously served as Chairman and Chief Executive
Officer of Bunte' Candies, Inc., from 1972 to 1991. He devotes only a small
portion of his time to the affairs of the Company. Mr. McLain holds a Bachelor
of Science degree in Business Administration and a Bachelor of Law degree from
the University of Oklahoma. Mr. McLain is also a director of Mid-American Oil
Company and Mesquite Minerals, Inc.
<PAGE>
Loyd Terry has been employed as a petroleum landman for J. Lee Youngblood, an
independent oil and gas producer, since 1944. He holds a Bachelor of Business
Administration degree from the University of Oklahoma.
Robert L. Savage is President of Leonard Securities, Inc. which he formed. He
was Vice President with Century Investment Group, Inc., from May, 1994 to
October, 1997. He was previously employed as an Account Executive with Park
Avenue Securities, Inc., from January, 1989 to May 1994. Mr. Savage has a
Bachelors degree in business administration from Trinity University, San
Antonio, Texas, and a Masters of Business Administration degree from Southern
Methodist University, Dallas, Texas.
Jerry L. Crow was employed by the Company on April 7, 1976, and became
Secretary-Treasurer on May 4, 1976. He was elected Second Vice President May 4,
1982. Mr. Crow devotes substantially all of his time to the affairs of the
Company, although he devotes a part of his time and efforts to the activities of
the affiliated organizations. Mr. Crow holds a Bachelors and Masters degree in
Business Administration from West Texas A&M University and is a Certified Public
Accountant in both Texas and Oklahoma. Mr. Crow is also a director of
Mid-American Oil Company and Mesquite Minerals, Inc.
Marvin E. Harris, Jr. is President of Tetron Software, a computer software
company, which he formed on January 3, 1994. Until that date he had been
employed as President of RDA Services, Inc., a computer software company, since
April 15, 1991. He was previously employed by Intel Corporation from 1984 until
his resignation in 1991. His last position at Intel was District Sales Manager.
Mr. Harris holds a Bachelor of Science degree from the University of Alabama, a
Master of Science degree from the University of Alabama in Birmingham and a
Master of Business Administration degree from Southern Methodist University.
William M. (Bill) Smith has served as Manager of Geology at Bracken Operating,
LLC since 1994, and is also a part owner. He joined Bracken Exploration Co., as
an Exploration Geologist in 1981, and became Vice President of Geology until
1986. In 1986 he assisted in forming Bracken Energy Company, for whom he is an
employee and a part owner. Mr. Smith earned a Bachelor of Science degree in
Geology from the University of Oklahoma in 1980, and was employed by Samedan Oil
Corporation from 1980 through 1981. He has held several positions with the
Oklahoma City Geological Society and is currently President.
Cameron R. McLain was employed by the Company on May 9, 1982 as Exploration
Manager and has served in that capacity continuously since his employment. Mr.
McLain devotes substantially all of his time to Company affairs; however, he
devotes a part of his time and efforts to the activities of affiliated
organizations. Mr. McLain was previously employed from May, 1980 to May 1982 as
a Southern Oklahoma exploration geologist for Cities Service Oil and Gas
Company. Mr. McLain has a Bachelor of Science degree in Geology from the
University of Oklahoma and a Master of Business Administration degree from
Oklahoma City University. Mr. McLain is a director of Mid-American Oil Company
and an advisory director of Mesquite Minerals, Inc.
Kyle McLain was employed as Production Manager for the Company on May 17, 1984
and continues to serve in that capacity. Mr. McLain devotes substantially all of
his time to the affairs of the Company, although he spends a part of his time
and efforts on the activities of affiliated organizations. Mr. McLain was
previously employed as a reservoir engineer for Gulf Oil Corporation from May,
1980 to May, 1984. Mr. McLain has a Bachelor of Science degree in Petroleum
Engineering from the University of Oklahoma. Mr. McLain is a director of
Mesquite Minerals, Inc. and an advisory director of Mid-American Oil Company.
<PAGE>
The Company has no standing audit, nominating or compensation committees of the
Board of Directors, or Committees performing similar functions.
The Board of Directors held two meetings during the Company's year ended
December 31, 1997. Marvin E. Harris was absent from one meeting and Robert L.
Savage the other meeting. All other directors were present at both meetings.
SECTION 16(a) REPORTING.
Section 16(a) of the Securities Exchange Act of 1934 requires executive officers
and directors, and persons beneficially owning more than 10% of the Company's
stock to file initial reports of ownership and reports of changes in ownership
with the Securities and Exchange Commission and with the Company. Based solely
on a review of the reports sent to the Company and written representations from
the executive officers and directors, the Company believes that all of these
persons complied with their Section 16(a) filing obligations.
EXECUTIVE COMPENSATION
The Company qualifies as a "small business issuer" as defined under applicable
Securities and Exchange Commission Regulations; therefore, only that information
as to executive compensation required of small business issuers is presented.
Compensation of Executive Officers.
- ----------------------------------
The following table sets forth summary information regarding the compensation
paid to Mason McLain, President, who functions as Chief Executive Officer.
Information as to the compensation of other executive officers is not presented
because no person's combined annual salary and bonus exceeded $100,000 during
the year ended December 31, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual
Name and Current Cash Compensation All Other
Principal Position Year Salary Bonus Compensation
- ------------------ ---- ---------- ----- ------------
<S> <C> <C> <C> <C>
Mason McLain 1998 $ 68,040 $ 5,670 $ 3,939
President 1997 $ 75,600 $ 6,300 $ 1,000
1996 $ 72,000 $ 6,000 $ 6,446
</TABLE>
All Other Compensation includes director fees of $1,000 paid in each of the
three years presented. Also included is the value of life insurance premiums
paid for Mr. McLain of $5,446 in 1996 and $2,939 in 1998.
Compensation of Directors.
- -------------------------
Directors are compensated on a per meeting basis and only for those board
meetings attended. The amount of compensation is set by a vote of the directors
at each board meeting. In the years ended December 31, 1998, 1997 and 1996, the
directors were compensated in the amount of $500 for each Board meeting
attended. Officers of the Company do not receive additional compensation for
Committee Meetings.
<PAGE>
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
The Company is affiliated with Mesquite Minerals, Inc. (formerly Royalty Pooling
Company), ("Mesquite") and Mid-American Oil Company ("Mid-American"). The
Company also owns interests in certain producing and non-producing oil and gas
properties as tenants in common with Mesquite and Mid-American.
Mason McLain, Robert T. McLain and Jerry L. Crow, Directors of the Company, are
Directors and officers of Mesquite. Of the outstanding common shares of
Mesquite, 29.79% are beneficially owned as follows: Mason McLain, 16.76% and
Robert T. McLain, 13.03%.
Mason McLain, Robert T. McLain and Jerry L. Crow are also officers and serve as
Directors of Mid-American. Of the outstanding common shares of Mid-American,
16.18% are beneficially owned as follows: Mason McLain, 11.71%; Robert T.
McLain, 4.23%; Cameron R. McLain, .12%; Jerry L. Crow .06%; Kyle McLain .06%.
Mesquite and Mid-American share facilities and employees with the Company. The
Company has been reimbursed for such services, facilities and miscellaneous
business expenses incurred during 1998 by payments to the Company in the amount
of $38,760 by Mesquite and $27,360 by Mid-American. Mesquite paid $100,648 and
Mid-American $71,046 in salaries to the employees of the Company in 1997,
including amounts to officers and directors of $45,148 for Mesquite and $31,870
for Mid-American. These compensation amounts are not included in the
compensation of the Company's officers and directors shown elsewhere herein.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
For the current year management will recommend the Board of Directors approve
Grant Thornton as the Company's principal public accountants. Grant Thornton
served in that capacity for the year ended December 31, 1998.
Representatives of Grant Thornton are not expected to be at the Annual Meeting
of the stockholders; however, if questions arise which require their comments,
arrangements have been made to solicit their response.
<PAGE>
APPROVAL OF MINUTES OF
ANNUAL MEETING
Approval of the form of minutes of the 1998 Annual Meeting does not amount to
ratification of any action taken at such meeting.
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the next Annual
Meeting of the stockholders which is scheduled for May 2, 2000, should be
received in the Company's offices at 6801 N. Broadway, Suite 300, Oklahoma City,
Oklahoma 73116-9092, not later than Wednesday, December 8, 1999.
OTHER MATTERS
Management knows of no other business which will be presented for consideration
at the Annual Meeting, other than the matters described in the Notice of Annual
Meeting, but if other matters are presented, it is the intention of the persons
designated as proxies or their substitutes to vote in accordance with their
judgment on such matters.
By Order of the Board of Directors,
/s/ Mason McLain
----------------------------------
Mason McLain,
President
Dated April 6, 1999
Oklahoma City, Oklahoma
