SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
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permitted by Rule 14c-5(d)(2))
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GULFPORT ENERGY CORPORATION
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(Name of Registrant as Specified in Its Charter)
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SUBJECT TO COMPLETION, DATED APRIL 14, 1998
GULFPORT ENERGY CORPORATION
1601 NW Expressway, Suite 700
Oklahoma City, Oklahoma 73118-1401
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INFORMATION STATEMENT
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This Information Statement is being furnished to the stockholders of
Gulfport Energy Corporation, a Delaware corporation (the "Company"), in
connection with proposed amendments to the Company's certificate of
incorporation (the "Amendment") to effect a 3 to 1 reverse stock split of
the issued and outstanding shares of the Company's common stock, par value
$0.01 per share (the "Common Stock").
The Board of Directors of the Company believes that approval of the
Amendment is in the best interest of the Company and its stockholders.
Accordingly, on April 5, 1998, the Board of Directors unanimously approved
the adoption of the Amendment.
Under Delaware law, the affirmative vote of the holders of a majority
of the outstanding shares of the Company's Common Stock is required to
approve the Amendment. On April 8, 1998, in accordance with Delaware law,
the holders of a majority of the outstanding shares of the Company's Common
Stock executed a written consent approving the Amendment. ACCORDINGLY, WE
ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. Holders of the Company's Common Stock do not have appraisal rights
in connection with approval of the Amendment.
Under applicable federal securities laws, the Amendment cannot be
effected until at least twenty calendar days after this Information
Statement has been sent or given to the Company's stockholders.
As of April 8, 1998, the Company had outstanding 22,076,315 shares of
Common Stock. Each share of Common Stock entitles the owner thereof to one
vote upon each matter submitted to a vote of stockholders. April 8, 1998
has been fixed as the record date (the "Record Date") for the determination
of the Company stockholders entitled to notice of, and to vote upon, the
Amendment.
This Information Statement is being furnished by the Company and was
first mailed on or about April , 1998 to holders of record of Company
Stock as of the close of business on the Record Date.
The Amendment will not affect the validity or transferability of stock
certificates presently outstanding. This Company's stockholders will not
be required to surrender for exchange any stock certificates presently held
by them.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS INFORMATION STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Information Statement is April , 1998.
Proposed Amendment to Effect Reverse Stock Split
In order to comply with the listing requirements under the Rules of
the National Association of Securities Dealers, Inc., the Board of
Directors has adopted, subject to stockholder approval, an amendment to its
Certificate of Incorporation to effect a reverse stock split ("Reverse
Stock Split") pursuant to which each three outstanding shares of Common
Stock will become one share of the Company's then outstanding Common Stock.
The intent of the Reverse Stock Split is to increase the marketability and
liquidity of the Common Stock and to facilitate the listing of the Common
Stock on the Nasdaq National Market. As the Reverse Stock Split has been
approved by the stockholders, the Reverse Stock Split will become effective
at such time as the Company files a Certificate of Amendment with the
Secretary of State of Delaware. The Board of Directors reserve the right,
notwithstanding stockholder approval and without further action by the
stockholders, not to proceed with the Reverse Stock Split if, at any time
prior to filing the Certificate of Amendment, the Board of Directors, in
its sole discretion, determines that the Reverse Stock Split is no longer
in the best interests of the Company and its stockholders.
Purposes and Effects of the Reverse Stock Split
The effect of the proposed Reverse Stock Split will be to reduce the
number of shares of Common Stock outstanding without a change in the par
value of Common Stock. Consummation of the Reverse Stock Split will not
alter the number of authorized shares of Common Stock. Proportionate
voting rights and other rights of stockholders will not be altered by the
Reverse Stock Split.
The Board of Directors believes that the Reverse Stock Split will
increase the marketability and liquidity of the Common Stock.
Theoretically, the number of shares outstanding should not, by itself,
affect the marketability of the stock, the type of investor who acquires it
or a company's reputation in the financial community, but in practice this
is not necessarily the case, as many investors look upon lower-priced stock
as unduly speculative in nature and, as a matter of policy, avoid
investment in such stocks. The Board of Directors also believes that the
current per share price of the Common Stock has reduced the effective
marketability of the shares because of the reluctance of many brokerage
firms and institutional investors to recommend lower-priced stock to their
clients or to hold them in their own portfolios.
Although there can be no assurance that the price of the Common Stock
after the Reverse Stock Split will actually increase in an amount
proportionate to the decrease in the number of outstanding shares, the
Reverse Stock Split is intended to result in a price level for the Common
Stock that will increase investor interest, reduce resistance of brokerage
firms to recommend the Common Stock and facilitate the Company's listing on
the Nasdaq National Market.
The Reverse Stock Split may leave certain stockholders with one or
more "odd lots" of Common Stock, i.e., stock in amounts of less than 100
shares. These shares may be more difficult to sell, or require a greater
commission per share to sell, than shares in even multiples of 100.
All of the outstanding options and other grants include provisions for
adjustments in the number of shares covered thereby, and the exercise price
thereof, in the event of a reverse stock split by appropriate action of the
Board of Directors.
Exchange of Stock Certificates
As soon as possible after the date the Certificate of Amendment is
filed with the Delaware Secretary of State (the "Effective Date"), holders
of Common Stock will be notified and requested to surrender their present
Common Stock certificates for new certificates representing the number of
whole shares of Common Stock after the Reverse Stock Split. Until so
surrendered, each current certificate representing shares of Common Stock
will be deemed for all corporate purposes after the Effective Date to
evidence ownership of Common Stock in the appropriately reduced whole
number of shares. American Stock Transfer will be appointed exchange agent
to act for stockholders in effecting the exchange of their certificates.
No scrip or fractional share certificates for Common Stock will be
issued in connection with the Reverse Stock Split. All fractional share
interests resulting from the Reverse Stock Split will instead be rounded-up
to a whole share of new Common Stock, and each holder of Common Stock who
would otherwise be entitled to receive a fractional share of Common Stock
after the Reverse Stock Split will, in lieu of such fractional share,
receive a whole share of new Common Stock upon surrender of certificates
representing Common Stock held by such holder.
Federal Income Tax Consequences
The following is a general discussion of certain federal income tax
consequences of the Reverse Stock Split of the Company. This discussion
does not purport to deal with all aspects of federal income taxation that
may be relevant to holders of Common Stock and is not intended to be
applicable to all categories of investors, some of which, such as dealers
in securities, banks, insurance companies, tax-exempt organizations and
foreign persons, may be subject to special rules. Furthermore, the
following discussion is based on current provisions of the Internal Revenue
Code of 1986, as amended, and administrative and judicial interpretations
as of the date hereof, all of which are subject to change. Holders of
Common Stock are advised to consult their own tax advisors regarding the
federal, state, local and foreign tax consequences of the Reverse Stock
Split.
The Company believes that the Reverse Stock Split will be a tax-free
recapitalization for the Company and its stockholders and that the
distribution by the Company to stockholders of a whole share in lieu of
fractional share interests will be a tax-free stock dividend. Accordingly,
stockholders will not recognize any gain or loss for federal income tax
purposes as a result of the Reverse Stock Split. The Common Stock in the
hands of a stockholder following the Reverse Stock Split will have an
aggregate basis for computing gain or loss equal to the aggregate basis of
shares of Common Stock held by that stockholder immediately prior to the
Reverse Stock Split. A stockholder's holding period for the Common Stock
will be the same as the holding period for the shares of Common Stock
exchanged therefor.
