SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(SIXTH AMENDMENT)
Under the Securities Exchange Act of 1934
PetroCorp Incorporated
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
71645N 10 1
(CUSIP Number)
TAMARA R. WAGMAN
FREDERIC DORWART, LAWYERS
Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
(918) 583-9922
(918) 583-8251 (Facsimile)
-------------------------------------
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
August 3, 1999
----------------- -------------------
(Date of Event Which Required Filing)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b) (3) or (4), check this box [ ].
<PAGE>
CUSIP No. 71645N 10 1
(1) Name of Reporting Person S.S. Kaiser-Francis Oil Co.
or I.R.S. Identification No. I.R.S. ID. #73-1006655
of Above Person
(2) Check the Appropriate Box (a) [ ]
if a Member of a Group (b) [ ]
(See instructions)
(3) SEC Use Only
(4) Source of Funds (See instructions) WC
(5) Check if Disclosure of Legal
Proceedings is Required
Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place State of Delaware
of Organization
Number of Shares Beneficially
Owned by Each Reporting
Person With:
(7) Sole Voting Power 4,327,457
(8) Shared Voting Power None
(9) Sole Dispositive Power 4,327,457
(10) Shared Dispositive Power None
(11) Aggregate Amount Beneficially Owned 4,327,457
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares
(See instructions)
(13) Percent of Class Represented by 49.99%
Amount in Row (11)
(14) Type of Reporting Person CO
(See instructions)
<PAGE>
SCHEDULE 13D
Filed by Kaiser-Francis Oil Company
In Connection with Transactions in the
Shares of PetroCorp Incorporated
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $.01 per share
(the "Common Stock"), of PetroCorp Incorporated, a Texas corporation
(the "Issuer"). The principal executive offices of the Issuer are
located at 16800 Greenspoint Park Drive, Suite 300, North Atrium,
Houston, Texas.
ITEM 2. IDENTITY AND BACKGROUND.
(1) General. GBK Corporation owns all of the issued and
outstanding capital stock of Kaiser-Francis Oil Company
("Kaiser-Francis"). George B. Kaiser ("Kaiser") owns 78.23% of
the issued and outstanding capital stock of GBK Corporation.
Affiliates of Kaiser own 21.77% of the issued and outstanding
capital stock of GBK Corporation.
(2) GBK Corporation. GBK Corporation is a Delaware corporation,
whose principal business is a holding company. The address of
the principal business and principal office of GBK Corporation
is:
6733 South Yale
Tulsa, Oklahoma 74136
With respect to paragraphs (d) and (e) of this Item 2, none.
(3) Kaiser-Francis Oil Company. Kaiser-Francis is a Delaware
corporation, whose principal business is the exploration for
and production of oil and gas and the acquisition and
disposition of producing oil and gas properties. The address
of the principal business and principal office of
Kaiser-Francis Oil Company is:
6733 South Yale
Tulsa, Oklahoma 74136
With respect to paragraphs (d) and (e) of this Item 2, none.
(4) The executive officers, directors, and each person who may be
deemed to be controlling GBK Corporation and Kaiser-Francis
are as follows:
President: George B. Kaiser
Executive Vice President: James A. Willis
Chief Financial Officer: D. Joseph Graham
Secretary: Frederic Dorwart
Treasurer: Reece A. Hembree
Director: George B. Kaiser
(5) (a) George B. Kaiser
(b) 6733 South Yale
Tulsa, OK 74136
(c) Independent Oil and Gas Producer KAISER-FRANCIS OIL
COMPANY 6733 South Yale Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
(6) (a) James A. Willis
(b) 6733 South Yale
Tulsa, OK 74136
(c) Executive Vice President KAISER-FRANCIS OIL COMPANY
6733 South Yale Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
(7) (a) D. Joseph Graham
(b) 6733 South Yale
Tulsa, OK 74136
(c) Chief Financial Officer KAISER-FRANCIS OIL COMPANY
6733 South Yale Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
(8) (a) Frederic Dorwart
(b) Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
(c) Law
Old City Hall
124 East Fourth Street
Tulsa, OK 74103-5010
(d) No
(e) No
(f) United States of America
(9) (a) Reece A. Hembree
(b) 6733 South Yale
Tulsa, OK 74136
(c) Treasurer KAISER-FRANCIS OIL COMPANY 6733 South Yale
Tulsa, OK 74136
(d) No
(e) No
(f) United States of America
ITEM 3. SOURCE OR AMOUNT OF FUNDS OR OTHER CONSIDERATION.
N/A. The purpose of this amendment is not related to an acquisition of shares.
ITEM 4. PURPOSE OF TRANSACTION.
On August 3, 1999, Kaiser-Francis Oil Company and PetroCorp Incorporated entered
into (i) an Interim Consulting Agreement and (ii) a Management Agreement.
Pursuant to the Interim Consulting Agreement, Kaiser-Francis Oil Company will
operate PetroCorp's oil and gas wells on a contract basis and provide
administrative services as requested by PetroCorp commencing September 1, 1999.
The Interim Consulting Agreement is subject to termination on 30 days notice by
either party. The Management Agreement is subject to the approval of PetroCorp's
shareholders. If approved by the shareholders of PetroCorp, Kaiser-Francis Oil
Company will manage PetroCorp's oil and gas exploration and production business
and corporate affairs, subject to the Board of Directors of PetroCorp. The
Interim Consulting Agreement and the proposed Management Agreement are filed
herewith as Exhibits G and H.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The number of shares of PetroCorp, beneficially owned by
Kaiser-Francis is 4,327,457 which increased 50,000 shares from
its October 16, 1998 filing of the Fourth Amendment to
Schedule 13D. The 50,000 shares were purchased in open market
transactions and were reflected on Form 4 filed with the SEC.
(b) On June 25, 1996, Gary R. Christopher purchased 500 shares of
Petro-Corp Common Stock at $8-1/8 per share. On May 3, 1996,
Mr. Christopher purchased 1,000 shares at $7-1/2 per share.
Kaiser-Francis disclaims any beneficial interest in the share
held by Mr. Christopher and the shares are not included in the
interests reported in this filing.
ITEM 6. CONTRACTS, ARRANGEMENTS, OR UNDERSTANDINGS WITH RESPECT TO SECURITIES
OF ISSUER.
None; except as described in Item 5.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Agreement Dated June 21, 1996 between First Reserve
Corporation and Kaiser-Francis Oil Corporation respecting
purchase of shares of PetroCorp Common Stock (previously
filed).
(b) Registration Rights Agreement dated January 18, 1994
(previously filed).
(c) Assignment Agreement dated July 26, 1996 (previously filed).
(d) Agreement Dated October 9, 1996 between LHS Holding Company
and Kaiser-Francis Oil Corporation respecting purchase of
shares of PetroCorp Common Stock (previously filed).
(e) Registration Rights Agreement dated August 24, 1993 between
PetroCorp Incorporated and L. S. Holding Company (previously
filed).
(f) Letter of Intent dated May 20, 1999 between PetroCorp
Incorporated and Kaiser-Francis Oil Company (previously
filed).
(g) Interim Consulting Agreement dated August 3, 1999 between
Kaiser-Francis Oil Company and PetroCorp Incorporated
(attached hereto).
(h) Management Agreement dated August 3, 1999 between
Kaiser-Francis Oil Company and PetroCorp Incorporated
(attached hereto).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Signed: /s/ Gary R. Christopher
-------------------------------
Gary R. Christopher
Exhibit G
INTERIM CONSULTING AGREEMENT
This Interim Consulting Agreement (the "Agreement") is made this 3rd
day of August, 1999, but effective for all purposes as of September 1, 1999 (the
"Effective Date"), between PetroCorp Incorporated, a Texas corporation and
Kaiser-Francis Oil Company, a Delaware corporation ("Kaiser-Francis") (each a
"Party" and collectively the "Parties").
W I T N E S S E T H
WHEREAS, PetroCorp Incorporated is engaged in the oil and gas exploration
and production business in the United States and Canada; and
WHEREAS, Kaiser-Francis, the beneficial owner of approximately
forty-nine and nine-tenths percent (49.9%) of the issued and outstanding
PetroCorp Incorporated Common Stock, is also engaged in the oil and gas
exploration and production business; and
WHEREAS, contemporaneously herewith, the parties have executed a
Management Agreement, to be effective after receipt of approval thereof by
PetroCorp Incorporated's shareholders, pursuant to which Kaiser-Francis will
perform certain Oil and Gas Operations and Administrative Services, each as
defined in the Management Agreement, on behalf of PetroCorp Incorporated and its
wholly-owned subsidiaries, (i) PCC Energy, Inc., and (ii) PCC Energy Corp. and
its subsidiary, PCC Energy, Limited (PetroCorp Incorporated and its subsidiaries
being referred to herein as "PetroCorp"); and
WHEREAS, PetroCorp's current personnel cannot presently perform all of
the Oil and Gas Operations and Administrative Services (collectively, the
"Services") on an efficient, cost-effective basis; and
WHEREAS, PetroCorp Incorporated desires to retain Kaiser-Francis to
perform certain of the Services on behalf of PetroCorp, pending receipt of
shareholder approval of the Management Agreement; and
WHEREAS, Kaiser-Francis desires to perform such Services on behalf of
PetroCorp in accordance with the terms hereof and in consideration of the
compensation set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
<PAGE>
1. Services. During the term of this Agreement, Kaiser-Francis shall
perform on behalf of PetroCorp such of the Services as PetroCorp Incorporated
may from time to time request in writing. On or before the 15th day of each
calendar month during the term hereof, Kaiser-Francis will furnish to PetroCorp
Incorporated a statement, in form reasonably satisfactory to PetroCorp, setting
forth a brief narrative description of the Services performed by Kaiser-Francis
during the preceding calendar month.
2. Standard of Care. Kaiser-Francis shall perform the requested
Services in good faith, in compliance with applicable laws and contractual
obligations, and using that degree of care and skill which (i) with respect to
Administrative Services, is usually and customarily observed by publicly traded
corporations; and (ii) with respect to Oil and Gas Operations, is usually and
customarily observed in the oil and gas industry (and with respect to operation
of PetroCorp's oil and gas properties, is consistent with that degree of care
and skill which would be employed by a reasonable prudent operator).
Notwithstanding the foregoing, Kaiser-Francis shall not be required to expend
its own funds or make any payment or incur any liability to any third party to
assure compliance with such laws or agreements. As used herein, "good faith"
means conduct that is honest in fact and free of improper motive.
3. Compensation. Commencing on October 1, 1999 and on the 1st day of
each calendar month thereafter during the term hereof, PetroCorp shall pay
Kaiser-Francis, as Kaiser-Francis' sole compensation for providing the Services
during the term hereof, a services fee of fifty-thousand dollars ($50,000.00)
("Fee").
4. Indemnification.
a. Indemnification by Kaiser-Francis. Kaiser-Francis hereby
agrees to defend, indemnify and hold harmless PetroCorp Incorporated and its
officers, directors, shareholders, employees, agents and Affiliates
(collectively, the "PetroCorp Indemnitees") from any and all threatened or
actual claims, demands, causes of action, suits, proceedings, losses, damages,
fines, penalties, liabilities, costs and expenses of any nature, including
attorneys' fees and court costs (collectively, "Claims"), sustained or incurred
by or asserted against the PetroCorp Indemnitees arising from (i) the breach of
this Agreement by Kaiser-Francis; and (ii) the gross negligence or willful
misconduct of Kaiser-Francis in connection with the rendering of the Services.
b. Indemnification by PetroCorp Incorporated. PetroCorp
Incorporated hereby agrees to defend, indemnify and hold harmless Kaiser-Francis
and its officers, directors, shareholders, employees, agents and Affiliates
(collectively, the "Kaiser-Francis Indemnitees") from any and all threatened or
actual Claims sustained or incurred by or asserted against the Kaiser-Francis
Indemnitees arising from (i) the breach of this Agreement by PetroCorp; (ii)
Kaiser-Francis's performance of the Services, except to the extent PetroCorp is
entitled to indemnification with respect thereto from Kaiser-Francis pursuant to
paragraph 4(a) above.
c. Indemnification Procedures. A Party requesting
indemnification pursuant to this Paragraph 4 (the "Indemnified Party") shall
promptly give notice to the Party from whom indemnification is sought (the
"Indemnifying Party") of the Claim for which indemnification is sought, and the
Indemnifying Party shall defend such Claim by counsel selected by the
Indemnifying Party (provided that such counsel shall be reasonably satisfactory
to the Indemnified Party), and the Indemnifying Party shall pay all expenses
therefor. The Indemnified Party may, at its own expense, employ separate counsel
and participate in defense of such Claims.
5. Term. Either party may terminate this Agreement upon thirty (30)
days prior written notice to the other party hereto. If not sooner terminated by
either party, this Agreement shall terminate upon the Effective Date of the
Management Agreement.
6. Confidentiality The parties recognize that Kaiser-Francis will have
access to certain information and records with respect to PetroCorp's business
and properties that are of a nature that is customarily maintained as
confidential and not disclosed by publicly traded companies engaged in the oil
and gas exploration and production business. Such information may include, but
is not limited to, seismic data, reserve reports, prospect analyses, and
privileged attorney-client communications. Kaiser-Francis shall maintain the
confidentiality of all such information, together with reports, analyses,
summaries, spreadsheets, evaluations, memoranda or other documents prepared or
generated by Kaiser-Francis or its consultants or agents on the basis of such
information, whether in written, graphic, electronic or any other format;
provided, however, that Kaiser-Francis may disclose such information (i) in any
judicial or alternative dispute resolution proceeding to resolve disputes
between PetroCorp and Kaiser-Francis arising hereunder; (ii) to the extent
disclosure is legally required under applicable laws or any agreement to which
PetroCorp is a party or by which it is bound, provided, however, that prior to
making any legally required disclosures in any judicial, regulatory or dispute
resolution proceeding, Kaiser-Francis shall, if so advised by counsel, seek a
protective order or other relief to prevent or reduce the scope of such
disclosure; and (iii) to PetroCorp's existing or potential lenders, investors,
joint interest owners, purchasers, or other parties with whom PetroCorp may
enter into contractual relationships, to the extent deemed by Kaiser-Francis to
be reasonably necessary or desirable to enable it to perform the Services,
provided that Kaiser-Francis shall require such third parties to execute
agreements to maintain the confidentiality of the information so disclosed; and
(iv) if authorized by the Board of Directors of PetroCorp Incorporated.
Kaiser-Francis acknowledges that the information is being furnished to
Kaiser-Francis for the sole and exclusive purpose of enabling it to perform the
Services, and such information may not be used by it for any other purpose.
7. Miscellaneous.
a. Survival. The indemnification provisions of paragraph 4 of
this Agreement shall survive the termination of this Agreement for a period of
four (4) years, and the confidentiality provisions of paragraph 6 hereof shall
survive the termination of this Agreement without limitation as to duration.
b. Notices. All notices or advices required or permitted to be
given by or pursuant to this Agreement, shall be given in writing. All such
notices and advices shall be (i) delivered personally, (ii) delivered by
facsimile or delivered by U.S. Registered or Certified Mail, Return Receipt
Requested mail, or (iii) delivered for overnight delivery by a nationally
recognized overnight courier service. Such notices and advices shall be deemed
to have been given (i) the first business day following the date of delivery if
delivered personally or by facsimile, (ii) on the third business day following
the date of mailing if mailed by U.S. Registered or Certified Mail, Return
Receipt Requested, or (iii) on the date of receipt if delivered for overnight
delivery by a nationally recognized overnight courier service. All such notices
and advices and all other communications related to this Agreement shall be
given as follows:
If to PetroCorp: To such person or
persons as the Board of Directors by
Resolution shall designate and in
the absence of such designation to
each member of the Board of
Directors.
With Copy to: Mayor, Day, Caldwell & Keeton,L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Cheryl S. Phillips
(713) 225-7059 - Telephone
(713) 225-7047 - Facsimile
If to Kaiser-Francis: Steve Berlin
KAISER-FRANCIS OIL COMPANY
P.O. Box 21468
Tulsa, OK 74121-1468
(918) 491-4501 - Telephone
(918) 491-4694 - Facsimile
With Copy to:Frederic Dorwart
Old City Hall
124 East Fourth Street
Tulsa, OK 74103
(918) 583-9945 - Telephone
(918) 583-8251 - Facsimile
or to such other address as the party may have furnished to the other parties in
accordance herewith, except that notice of change of addresses shall be
effective only upon receipt.
c.Governing Law. This Agreement shall be subject to, and interpreted by
and in accordance with, the laws (excluding conflict of law provisions) of the
State of Oklahoma.
d. Entire Agreement. This Agreement is the entire Agreement of the
parties respecting the subject matter hereof. There are no other agreements,
representations or warranties, whether oral or written, respecting the subject
matter hereof.
e. Construction. This Agreement, and all the provisions of this
Agreement, shall be deemed drafted by all of the parties hereto.
f. Authority. Each of the persons signing below on behalf of a party
hereto represents and warrants that he or she has full requisite power and
authority to execute and deliver this Agreement on behalf of the parties for
whom he or she is signing and to bind such party to the terms and conditions of
this Agreement.
g. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original. This Agreement shall become effective only
when all of the parties hereto shall have executed the original or counterpart
hereof. This agreement may be executed and delivered by a facsimile transmission
of a counterpart signature page hereof.
h. Successors and Assigns. This Agreement may not be assigned
(including performance by subcontract) by either Party hereto. This Agreement
shall be binding upon and shall inure to the benefit of the Parties and their
respective successors.
i. Amendments. This Agreement may be amended or modified only in a
writing which specifically references this Agreement.
j. Relationship of the Parties. Nothing in this Agreement shall be
construed to create a partnership or joint venture, nor to authorize either
Party to act as agent for or representative of the other Party. Each Party shall
be deemed an independent contractor and neither Party shall act as, or hold
itself out as acting as, agent for any other Party.
k. No Waiver. A Party to this Agreement may decide not to require, or
fail to require, full or timely performance of any obligation arising under this
Agreement. The decision not to require, or failure of a Party to require, full
or timely performance of any obligation arising under this Agreement (whether on
a single occasion or on multiple occasions) shall not be deemed a waiver of any
such obligation. No such decisions or failures shall give rise to any claim of
estoppel, laches, course of dealing, amendment of this Agreement by course of
dealing, or other defense of any nature to any obligation arising hereunder.
l. Time of the Essence. Time is of the essence with respect to each
obligation arising under this Agreement.
m. Unenforceability. In the event any provision of this Agreement, or
the application of such provision to any person or set of circumstances, shall
be determined to be invalid, unlawful, or unenforceable to any extent for any
reason, the remainder of this Agreement, and the application of such provision
to persons or circumstances other than those as to which it is determined to be
invalid, unlawful, or unenforceable, shall not be affected and shall continue to
be enforceable to the fullest extent permitted by law.
Executed on this 3rd day of August, 1999, but effective for all
purposes as of the Effective Date set forth above.
KAISER-FRANCIS OIL COMPANY
By: /s/ D. Joseph Graham
---------------------
D. Joseph Graham
PETROCORP INCORPORATED
By: /s/ W. Neil McBean
---------------------
W. Neil McBean
Exhibit H
MANAGEMENT AGREEMENT
This Management Agreement (the "Agreement") is made this 3rd day of
August, 1999 between PetroCorp Incorporated, a Texas corporation and
Kaiser-Francis Oil Company, a Delaware corporation ("Kaiser-Francis") (each a
"Party" and collectively the "Parties").
W I T N E S S E T H
WHEREAS, PetroCorp Incorporated, is a Texas corporation engaged in the
oil and gas exploration and production business, whose shares of common stock
(the "PetroCorp Common Stock") are registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 and are traded on the facilities of the American
Stock Exchange under the trading symbol "PEX"); and
WHEREAS, Kaiser-Francis, a privately held Delaware corporation also
engaged in the oil and gas exploration and production business, owns
beneficially approximately forty-nine and nine-tenths percent (49.9%) of the
issued and outstanding PetroCorp Common Stock; and
WHEREAS, in order to maximize shareholder value and in an effort to
manage its affairs in a more cost effective and efficient manner, PetroCorp
Incorporated desires to engage Kaiser-Francis to provide management and
administrative support services, as more fully described herein, with respect to
all of PetroCorp's operations and the operations of its wholly-owned
subsidiaries, both in the United States of America and in Canada;
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. The following terms, when used herein, shall have the
meanings set forth below:
"Administrative Services" means the services to be rendered by
Kaiser-Francis as described in Section 2.2 below.
"Affiliate" means, with respect to a person or entity, any person or
entity that directly or indirectly through one or more intermediaries controls,
is controlled by, or is under common control with such person, and the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management, activities or policies of any person
or entity.
"Affiliated Transactions" has the meaning provided in Section 4.2
below.
"Affiliated Transaction Standard" has the meaning provided in Section
4.2 below.
"Agreement" means this Agreement, as it may be amended from time to
time.
"Back-In" has the meaning provided in Section 3.1C below.
"Business" means PetroCorp's business activities during the term of
this Agreement.
"Effective Date" has the meaning provided in Section 8.1 below.
"Geological and Geophysical Costs" means the cost of (i) acquiring
licenses to any geological or geophysical data which is owned by third parties
("speculative" or "spec" data), (ii) acquiring any geological or geophysical
data proprietary to PetroCorp, and (iii) any processing, reprocessing and third
party interpretation of either spec or proprietary data.
"Good Faith" means honesty in fact and free of improper motive.
"Kaiser-Francis" has the meaning set forth in the above preamble.
"Kaiser-Francis Compensation" means the Services Fee, the ORRI
Interest, and the Back in, collectively.
"Land Costs" means the cost and expense incurred to acquire leases
and/or farm out agreements, including, but not limited to lease bonus, delay
rentals, shut-in payments, option payments, brokers' fees, title examination and
legal fees, and other land costs.
"Material Decisions" has the meaning set forth in Section 2.5 herein.
"New Prospect" means a Prospect first identified by or to PetroCorp
after the date hereof and prior to the Termination Date.
"New Prospects on Acquired Lands" means New Prospects that are
comprised of all or any portion of the lands covered by oil and gas leases
and/or fee or other mineral interests of whatsoever nature acquired by PetroCorp
after the Effective Date, provided, however, that New Prospects on Acquired
Lands shall in no event include leases or lands acquired by PetroCorp that
constitute Proved Oil and Gas Reserves.
"New Prospects on Existing Lands" means New Prospects that are
comprised of all or any portion of the lands covered by the oil and gas leases
and/or fee or other mineral interests of whatsoever nature described in Exhibit
1.1 attached hereto.
"Non-Operated Properties" means all properties in which PetroCorp now
or hereafter owns an oil and gas lease and/or fee or other mineral interest of
whatsoever nature but of which PetroCorp is not the operator.
"Non-Operator's Fees" means, with respect to the Non-Operated
Properties, the sum of $50.00 per month per well (whether a drilling, producing,
water source or disposal well); provided, however, that with respect to multiple
well leases or units that are treated as a single accounting unit, the
Non-Operator's fees shall be $50.00 per month per such lease or unit unless
Kaiser-Francis in Good Faith concludes that the administrative burdens
associated with such lease or unit are proportional to the number of wells
thereon, in which case Kaiser-Francis may charge up to $50.00 per well.
"Non-Public Information" means information and records furnished by
PetroCorp with respect to its business and properties, together with any
reports, analyses, summaries, spreadsheets, evaluations, memoranda or other
documents prepared or generated by Kaiser-Francis or its consultants or agents
on the basis of such information, whether in written, graphic, electronic or any
other format, to the extent such information is of a nature that is customarily
maintained as confidential and not disclosed by publicly traded companies
engaged in the oil and gas exploration and production business. Such information
includes, but is not limited to, seismic data, reserve reports, Prospect
analyses, and privileged attorney-client communications.
"Oil and Gas Operations" means the operations to be conducted by
Kaiser-Francis on behalf of PetroCorp as described in Section 2.3 below.
"Operator's Fees" means, with respect to the PetroCorp Operated
Properties, all administrative and overhead fees received by PetroCorp under
applicable joint operating or unit operating agreements(including, without
limitation, administrative and overhead fees attributable to PetroCorp's working
interest).
"ORRI Interest" has the meaning provided in Section 3.1B below.
"PetroCorp" means PetroCorp Incorporated and its wholly-owned
subsidiaries, (i) PCC Energy, Inc., and (ii) PCC Energy Corp. and its
subsidiary, PCC Energy, Limited (each of such subsidiaries being Alberta, Canada
corporations).
"PetroCorp Common Stock" has the meaning set forth in the above preamble.
"PetroCorp Operated Properties" means properties, now or hereafter
acquired, that are operated by PetroCorp.
"Prospect" means a geological structure, feature or anomaly that is
believed to have potential for producing oil and/or gas in commercial
quantities.
"Prospect Allocation" has the meaning provided in Section 4.1B below.
"Prospect Area" means the lands within the boundaries of an area
comprising the Prospect, as such boundaries are designated by PetroCorp (with
respect to Prospects identified prior to the Effective Date) or Kaiser-Francis
(with respect to Prospects identified after the Effective Date), as the case may
be.
"Prospect Exploration and Development Costs" means the following costs
incurred in exploring, developing and operating the Prospect Area or lands
pooled therewith: (i) Land Costs, (ii) Geological and Geophysical Costs; (iii)
the cost and expenses incurred in connection with administrative proceedings
relating to the Prospect Area or lands pooled therewith, including but not
limited to proceedings for the forced integration or unitization of lands in the
Prospect Area or lands pooled therewith; (iv) the cost of drilling, redrilling,
testing, logging, coring, evaluating, completing, equipping and operating,
sidetracking, recompleting, reworking and plugging any and all wells drilled on
the Prospect Area or lands pooled therewith (and including overhead borne by
PetroCorp as determined in accordance with applicable joint operating agreements
the accounting procedures); (v) the cost of acquiring or constructing any
surface facilities and/or pipelines for or related to the transporting,
servicing or treating of oil, gas or other hydrocarbons produced from the
Prospect Area or lands pooled therewith; and (vi) all other costs and losses
borne by PetroCorp relating to the Prospect Area or lands pooled therewith.
"Prospect Net Proceeds" means the proceeds, payments, income or value
received by, or attributable to, the parties or their successors and assigns,
with respect to the Prospect or lands pooled therewith from all sources
whatsoever, including without limitation, the following:
i. in the case of sales (including advance sales) of oil, gas, sulphur
and/or other hydrocarbons or hydrocarbons products or any other substances
produced and sold from or attributable to the Prospect Area or lands pooled
therewith, the actual amounts or value received therefor (and in the case of
utilization of products out of the Prospect Area or lands pooled therewith, the
market value thereof; for purposes hereof, "market value" means the amount or
value received by the parties with respect to first sales of comparable quality
and quantity occurring in the Prospect Area, except that where gas is processed
in a plant either on or off the premises, it means the gross amount or value
received from the first sale at the tailgate of the plant, after deducting plant
processing costs, of that portion of the processed liquids, condensate,
gasoline, distillate, sulphur and plant products extracted and saved from such
gas together with the residue gas attributable to the oil, gas, sulphur and
other hydrocarbons produced from the Prospect Area or lands pooled therewith),
after deducting therefrom all royalties, overriding royalties and other
leasehold burdens payable out of production, and all production, excise,
severance, ad valorem and other taxes applicable to such production, together
with any applicable dehydration, compression, transportation or other charges
incurred to render the oil or gas or other products merchantable or deliverable;
ii. the actual price or value received from the salvage or sale of any
interest in any personal property, fixtures or equipment located on the Prospect
Area or lands pooled therewith or used or obtained in connection therewith and
including any rental proceeds received from the rental thereof, less the cost of
salvaging;
iii. contributions, goods or services or payments of cash received from
third parties toward the drilling of a well or any other operation on the
Prospect Area or lands pooled therewith;
iv. any insurance proceeds received pursuant to any insurance contract
relating to any loss including, without limitation, loss of control, blowout or
loss of income with respect to any well or operation on the Prospect Area or
lands pooled therewith; and
v. proceeds from the licensing of proprietary seismic data, the cost of
which forms part of the Prospect Exploration and Development Costs, which data
covers the Prospect Area or lands pooled therewith.
"Prospect Payout" means that point in time at which the cumulative
Prospect Net Proceeds are equal to the cumulative Prospect Exploration and
Development Costs.
"Proved Developed Oil and Gas Reserves" means reserves that can be
expected to be recovered through existing wells with existing equipment and
operating methods. Additional oil and gas expected to be obtained through the
application of fluid injection or other improved recovery techniques for
supplementing the natural forces and mechanisms of primary recovery should be
included as "proved developed reserves" only after testing by a pilot project or
after the operation of an installed program has confirmed through production
response that increased recovery will be achieved.
"Proved Undeveloped Reserves" means reserves that are expected to be
recovered from new wells on undrilled acreage, or from existing wells where a
relatively major expenditure is required for recompletion. Reserves on undrilled
acreage shall be limited to those drilling units offsetting productive units
that are reasonably certain of production when drilled. Proved reserves for
other undrilled units can be claimed only where it can be demonstrated with
certainty that there is continuity of production from the existing productive
formation. Under no circumstances should estimates for proved undeveloped
reserves be attributable to any acreage for which an application of fluid
injection or other improved recovery technique is contemplated, unless such
techniques have been proved effective by actual tests in the area and in the
same reservoir.
"Proved Oil and Gas Reserves" means Proved Oil and Gas Reserves
(including Proved Developed Oil and Gas Reserves and Proved Undeveloped Oil and
Gas Reserves), as defined in the Securities and Exchange Commission's Reg.
Section 210.4-10, as determined by an independent engineering firm.
"Services" means (i) the Administrative Services and (ii) the Oil and
Gas Operations.
"Services Fee" has the meaning provided in Section 3.1A below.
"Term" has the meaning provided in Section 8.2 below.
"Termination Date" has the meaning provided in Section 8.2 below.
ARTICLE II.
KAISER-FRANCIS SERVICES
2.1 Kaiser-Francis Services.
A. Standard of Care. During the Term of this Agreement and on the terms
and conditions set forth herein, Kaiser-Francis shall perform the
Services in Good Faith and using that degree of care and skill which
(i) with respect to the Administrative Services, is usually and
customarily observed by publicly traded corporations; and (ii) with
respect to the Oil and Gas Operations, is usually and customarily
observed in the oil and gas industry (and with respect to
Kaiser-Francis's operation of PetroCorp's Operated Properties, is
consistent with that degree of care and skill which would be employed
by a reasonable prudent operator).
B. Compliance. Kaiser-Francis shall perform the Services (i) in
compliance with the Articles of Incorporation and Bylaws of PetroCorp;
and (ii) in compliance in all material respects with applicable
federal, state, provincial and local laws. Kaiser-Francis shall use
commercially reasonable efforts to comply with all contracts, leases,
orders, security instruments and other agreements to which PetroCorp is
a party or by which PetroCorp is bound. Notwithstanding the foregoing,
Kaiser-Francis shall not be required to expend its own funds or make
any payment or incur any liability to any third party to assure
compliance with such governing documents, laws or agreements.
2.2 Conduct of Administrative Services. Subject to the provisions of Section 2.5
respecting Material Decisions, Kaiser-Francis shall perform the following
functions for and on behalf of PetroCorp:
A. All management and administrative services as may be required for
the reasonable conduct of PetroCorp's business as presently or
hereafter conducted, including, without limitation, human resources
(including, without limitation, coordination of employee benefits,
including severance payments, COBRA coverages and quarterly separation
benefit payments to Lealon Sargent), audit, accounting, tax, insurance,
payroll, and investor relations. Without limiting the foregoing,
throughout the Term, Kaiser-Francis shall maintain, for the benefit of
PetroCorp and at PetroCorp's expense, insurance coverages that are
usual and customary for publicly traded corporations in the oil and gas
industry and consistent with past practices of PetroCorp. Such
coverages shall include but not be limited to the following: Commercial
General Liability Insurance, Excess/Umbrella Liability Insurance,
Boiler and Machinery/Business Interruption Insurance covering the
Hanlan-Robb Plant and related facilities, "All Risk" Property
Insurance, Operator's Extra Expense Insurance, Directors and Officers
Liability Insurance and other insurance coverages as appropriate;
B. Making such arrangements with and employing, at the expense and for
the benefit of PetroCorp, such accountants, attorneys, banks, transfer
agents, custodians, underwriters, insurance companies and other persons
as may from time to time be reasonably necessary for the conduct of
PetroCorp's business;
C. Functions appropriate to a corporation organized under the laws of
the State of Texas with a class of capital stock consisting of common
shares registered under Section 12(g) of the Securities Exchange Act of
1934 and traded on the facilities of the American Stock Exchange,
including, but not limited to, duties imposed by the provisions of the
Texas Business Corporation Act, the Securities Exchange Act of 1934,
and the Rules and Regulations of the American Stock Exchange; and
D. Such other administrative functions as are routinely and customarily
conducted in the ordinary course of business by publicly traded
corporations engaged in oil and gas exploration and production.
2.3 Conduct of Oil and Gas Operations. Subject to the provisions of Section 2.5
respecting Material Decisions, Kaiser-Francis shall perform the following
functions on behalf of PetroCorp:
A. Land. Maintenance of land records, including, but not limited to,
maintenance of records relating to lease and well names, numbers,
status, and locations, payment of shut-in and delay rentals an other
lease maintenance functions, preparation and maintenance of division
orders, and the like;
B. Well. Well performance reviews, including, but not limited to,
preparation and review of, and making of recommendations and elections
with respect to, proposals for drilling, completion, workovers, or
other operations with respect to the wells, preparation and submission
of regulatory applications, compliance with plugging and abandoning
requirements, making of recommendations and decisions concerning
equipment requirements, and, where applicable, monitoring of the
operator's performance of such activities with respect to the wells;
C. Engineering. Engineering and general oil field operations including,
but not limited to, evaluation of outside proposals for exploration and
exploitation of oil and gas properties, reserve evaluations and
production forecasting, AFE costs, joint interest billings, and
invoices, preparation and filing of regulatory reports, monitoring of
allowables, monitoring of well profitability, and pursuit of
opportunities for enhancement of existing oil and gas production;
D. Geological and Geophysical. Geological and seismic operations,
including, but not limited to, acquisition, processing and
interpretation of seismic data (whether internally or externally), and
evaluation of internally and externally developed proposals and review
of logs, isopach maps, and structure maps;
E. Acquisitions and Divestitures. Identification of, and, with respect
to Material Decisions, making of recommendations to PetroCorp
Incorporated's Board of Directors with respect to, acquisition or
disposition of existing or hereafter acquired properties of PetroCorp,
including, but not limited to lease purchases, acreage trades, farm
out, and farmins, and other arrangements relating to the acquisition or
disposition of properties;
F. Marketing. Contracting for the gathering, treating, processing,
transportation and sale of oil, gas and other hydrocarbons produced
from or attributable to PetroCorp's properties (including, but not
limited to, gas balancing with respect thereto) and collection of
revenue from such sales;
G. Operations. Performance of PetroCorp's duties as well operator,
where applicable;
H. Contracts. Contract negotiation, administration, and review,
including, but not limited to, joint operating agreement, farm out,
farmins, and production sale agreements;
I. Accounting. Payment and collection of operating expenses,
including, but not limited to, joint interest billings; revenue
disbursements; and budgeting and forecasting of capital and operating
revenues and expenses;
J. Purchasing. Procurement in the ordinary course of business of
equipment, supplies and other goods and services reasonably necessary
for the efficient day to day operation of the Business
K. Compliance. Regulatory compliance, including, but not limited to,
application for, or maintenance of, and compliance with all required
governmental permits and authorizations with respect to PetroCorp's
properties or the Business; preparation and filing of all applications,
reports, notices, and other regulatory filings or reports required by
any federal, state (or provincial), or local authority with respect to
PetroCorp's properties or Business; and participation in hearings and
other administrative proceedings on behalf of PetroCorp.
L. Institutional Investors. Performance of PetroCorp's obligations with
respect to its institutional investors, including, but not limited to,
Queen Sand Resources, Inc. and UBS, pursuant to assignments by
PetroCorp to such institutional investors of overriding royalty
interests, net profits interests or other like interests in oil and gas
properties and ancillary agreements between PetroCorp and the
institutional investors.
M. Other. Such other functions as are usually and customarily performed
by an oil and gas exploration and production company not heretofore
enumerated in this Paragraph.
2.4 Duties Retained by PetroCorp. Notwithstanding the delegation to
Kaiser-Francis in Section 2.3 above of responsibility for negotiation of
contracts on behalf of PetroCorp, it is expressly understood and agreed that
PetroCorp, acting through its officers appointed in accordance with Section 10.1
hereof, retains all responsibility and authority for execution on behalf of
PetroCorp of such contracts, agreements, assignments, documents and other
instruments as may be useful or necessary in the conduct of PetroCorp's Business
during the term hereof. Further, except with respect to the Kaiser-Francis'
Compensation, Kaiser-Francis shall not take title to any properties owned by
PetroCorp as of the date hereof, and, with respect to properties subsequently
acquired on behalf of PetroCorp, Kaiser-Francis shall either take title in
PetroCorp's name or assign, or cause to be assigned, record title to PetroCorp
within a reasonable time thereafter.
2.5 Material Decisions. Kaiser-Francis, whether or not acting through or
together with PetroCorp officers as provided in Section 10.1 herein, shall not
make any commitment on behalf of PetroCorp without the prior approval of the
Board of Directors of PetroCorp Incorporated if the commitment (a "Material
Decision") would:
A. obligate PetroCorp to an expenditure or liability of in excess of
two hundred and fifty thousand dollars ($250,000), or its non-cash
equivalent, over the term of the agreement or commitment;
B. obligate PetroCorp to sell or dispose of an asset or group of assets
having a value in excess of five hundred thousand dollars ($500,000);
C. obligate PetroCorp to sell oil, gas or other hydrocarbons produced
from or attributable to PetroCorp's properties under a contract having
a term longer than one (1) year;
D. place a lien, security interest, mortgage, pledge, production
payment, or other encumbrance upon any of PetroCorp's properties (other
than such liens and security interests as arise in the ordinary course
of PetroCorp's business, including liens arising by operation of law,
under joint operating agreements, or under mechanics and materialmen's
lien laws);
E. initiate or compromise any litigation or threatened litigation
matter involving potential rights or liabilities of PetroCorp asserted
to be in excess of Fifty Thousand Dollars ($50,000.00).
2.6 Record-Keeping and Reporting.
A. Reporting to the Board of Directors. Kaiser-Francis shall prepare
and submit to the Board of Directors of PetroCorp Incorporated the
following information and reports:
1. Annually: Budget for operations and capital expenditures.
2. Quarterly: the following reports, all substantially
comparable to the form of such reports historically
presented to the Board of Directors by PetroCorp's
management:
a. Summary Financial Information,
b. Summary Income Statement,
c. Summary Results of Operations from Oil and Gas Producing
Activities, and Full Cost Ceiling Test Report,
d. Summary Year-to-Date Comparison of actual performance to
budget and reforecasted budget, and
e. Summary narrative description of operations in the
calendar quarter.
3. At each meeting of the Board of Directors:
a. Information relevant to any Material Decision,
together with Kaiser-Francis's recommendation with
respect thereto and reasons therefor, and a summary
of actions taken pursuant to Material Decisions since
the preceding meeting of the Board of Directors;
b. Filings made with the Securities and Exchange
Commission since the preceding meeting of the Board
of Directors;
c. Such other summary reports and information as the
PetroCorp Incorporated Board of Directors may
reasonably require.
B. Reporting to Third Parties. Kaiser-Francis shall prepare and submit
to third parties, including regulatory authorities, joint interest
owners and institutional investors, such reports and information as may
be required by applicable law or PetroCorp's contracts with such third
parties.
C. Maintenance of Books and Records. Kaiser-Francis shall maintain the
books and records of PetroCorp, utilizing Kaiser-Francis software and
hardware or third party software or hardware, in accordance with
applicable laws and with generally accepted accounting principles
applied on a basis consistent with the prior practices of PetroCorp.
2.7 Commingling of Assets. Kaiser-Francis shall separately maintain and not
commingle the assets of PetroCorp with those of Kaiser-Francis.
2.8 Transition Period. PetroCorp acknowledges that the first six months
following the Effective Date shall be a transition period in which
Administrative Services and Oil and Gas Operations are shifted from PetroCorp to
Kaiser-Francis (the "Transition" and "Transition Period"). During this period,
Kaiser-Francis will cause PetroCorp to continue certain employees in the
employment of PetroCorp until the completion of the Transition. Kaiser-Francis
shall use its best efforts to complete the Transition as soon as practicable and
shall complete the Transition within the Transition Period.
ARTICLE III.
KAISER-FRANCIS COMPENSATION
3.1 Compensation. PetroCorp shall pay Kaiser-Francis, as Kaiser-Francis' sole
compensation for providing the Services, the Kaiser-Francis Compensation,
comprised of the following:
A. Services Fee. PetroCorp shall pay Kaiser-Francis a
monthly fee for the Services equal to 100% of the Operator's
Fees and Non-Operator's Fees, respectively, for each of the
PetroCorp Operated Properties and Non-Operated Properties.
B. Overriding Royalty. As additional consideration for the
performance of the Services, Kaiser-Francis shall receive
the following proportionately reduced overriding royalty
interests (collectively, the '"ORRI Interest"):
(i) New Prospects on Existing Lands. With respect to each New
Prospect on Existing Lands, Kaiser-Francis shall receive a
proportionately reduced overriding royalty interest equal to 1% of
8/8ths of oil, gas and other hydrocarbons produced from or attributable
to, PetroCorp's existing or hereafter acquired oil and gas leases
and/or fee or other mineral interests covering lands within the
respective Prospect Area.
Notwithstanding the foregoing, Kaiser-Francis shall
not be entitled to an overriding royalty interest in the lands
described in Exhibit 3.1B, except that, with respect to each New
Prospect (a) covering lands included in any of the respective Areas of
Mutual Interest described in such Exhibit 3.1B, and (b) identified
after the expiration of the respective Area of Mutual Interest,
Kaiser-Francis shall receive a proportionately reduced overriding
royalty interest equal to 2% of 8/8ths of oil, gas and other
hydrocarbons produced from or attributable to, PetroCorp's oil and gas
leases and/or fee or other mineral interest covering lands within such
Prospect Area.
(ii) New Prospects on Acquired Lands. Except as provided
below, with respect to each New Prospect on Acquired Lands,
Kaiser-Francis shall receive a proportionately reduced overriding
royalty interest equal to 2% of 8/8ths of oil, gas and other
hydrocarbons produced from or attributable to, PetroCorp's hereafter
acquired oil and gas leases and/or fee or other mineral interests
covering lands within the respective Prospect Area.
Notwithstanding the foregoing, Kaiser-Francis shall
not be entitled to an overriding royalty interest on hereafter acquired
lands to the extent the lands are Proved Oil and Gas Reserves. Further,
if, in an acquisition of Proved Oil and Gas Reserves, PetroCorp also
hereafter acquires lands that are not Proved Oil and Gas Reserves
("Unproved Lands") then (i) with respect to Unproved Lands within
Prospects identified by parties other than Kaiser-Francis prior to such
acquisition, Kaiser-Francis shall not be entitled to an overriding
royalty interest; and (ii) with respect to Unproved Lands within
Prospects identified by Kaiser-Francis after such acquisition,
Kaiser-Francis shall receive a proportionately reduced overriding
royalty interest equal to 1% of 8/8ths of oil, gas and other
hydrocarbons produced from or attributable to, PetroCorp's oil and gas
leases and/or fee or other mineral interest covering lands within such
Prospect Area.
(iii) Form of Assignment of ORRI. After a New Prospect has
been identified, PetroCorp shall execute, acknowledge and deliver to
Kaiser-Francis an Assignment of Overriding Royalty Interest,
substantially in the form of Exhibit 3B-1 (with respect to properties
in the United States) or Exhibit 3B-2 (with respect to properties in
Canada) attached hereto, with respect to such New Prospect promptly
upon request by Kaiser-Francis. Such Assignment shall provide that the
overriding royalty interest shall be proportionately reduced in the
event that PetroCorp owns less than the entire working interest in and
to the leases or mineral interests subject thereto or such leases cover
less than the entire mineral estate.
C. Back-In. As further additional consideration for the performance of
the Services, Kaiser-Francis shall receive after Prospect Payout with
respect to each New Prospect an undivided working interest as provided
below (herein, collectively, the "Back-In"):
(i) New Prospects on Existing Lands. With respect to each New
Prospect on Existing Lands, Kaiser-Francis shall receive a Back-In
equal to 15% of PetroCorp's existing or hereafter acquired interest in
the oil and gas leases and fee mineral interests covering lands within
the respective Prospect Area.
Notwithstanding the foregoing, Kaiser-Francis shall
not be entitled to a Back-In in and to the lands described in Exhibit
3.1B; provided, however, that with respect to each New Prospect (a)
covering lands included in any of the respective Areas of Mutual
Interest described in such Exhibit 3.1B, and (b) identified after the
expiration of the respective Area of Mutual Interest, Kaiser-Francis
shall receive after Prospect Payout an undivided working interest equal
to 25% of PetroCorp's interest in oil and gas leases and fee mineral
interests covering lands within such Prospect Area.
(ii) New Prospects on Acquired Lands. With respect to each New
Prospect on Acquired Lands, Kaiser-Francis shall receive a Back-In
equal to 25% of PetroCorp's hereafter acquired interest in the oil and
gas leases and fee mineral interests covering lands within the
respective Prospect Area.
Notwithstanding the foregoing, Kaiser-Francis shall
not be entitled to a Back-In in and to hereafter acquired lands to the
extent the lands are Proved Oil and Gas Reserves. Further, if, in an
acquisition of Proved Oil and Gas Reserves, PetroCorp also hereafter
acquires Unproved Lands, then (i) with respect to Unproved Lands within
Prospects identified by parties other than Kaiser-Francis prior to such
acquisition, Kaiser-Francis shall not be entitled to a Back-In; and
(ii) with respect to Unproved Lands within Prospects identified by
Kaiser-Francis after such acquisition, Kaiser-Francis shall receive a
Back-In equal to 15% of PetroCorp's hereafter acquired interest in the
oil and gas leases and fee mineral interests covering lands within the
respective Prospect Area.
(iii) Form of Assignment of Back-In. For each New Prospect,
PetroCorp shall furnish Kaiser-Francis quarterly Prospect Payout
statements setting forth the cumulative Prospect Net Proceeds and
Prospect Exploration and Development Costs, and, within thirty (30)
days after Prospect Payout has occurred, PetroCorp shall execute,
acknowledge and deliver to Kaiser-Francis a Partial Assignment of Oil
and Gas Leases, substantially in the form of Exhibit 3.1C attached
hereto, of Kaiser-Francis's undivided working interest in the oil and
gas leases and fee mineral interests in the Prospect Area, such
assignment to be made without warranty, except that PetroCorp shall
warrant the interest so assigned to be free of claims and encumbrances
arising by, through, or under PetroCorp but not otherwise.
3.2 Provisions Respecting Payment of Costs of Administrative Services.
Kaiser-Francis shall pay all costs of the Services except the following expenses
which shall be borne by PetroCorp:
A. Oil and Gas Operations. Direct expenses of oil and gas
operations (including, without limitation, drilling,
completion, plugging and abandoning, production, gathering,
processing, and transportation) charged to working interests
owners;
B. Consulting Fees. Third-party legal, accounting, engineering, and
consulting fees and expenses; provided, however, that Kaiser-Francis
shall not charge as a third-party expense the cost of performing such
services that (i) either were performed in-house by PetroCorp prior to
the date hereof; or (ii) are customarily performed in-house by
Kaiser-Francis after the date hereof;
C. Filing Fees. Filing, processing, and other fees of regulatory
agencies, including, but not limited to, state oil and gas commissions,
state securities commissions, the Securities and Exchange Commission,
the American Stock Exchange, Department of Justice, and the like;
D. Director, Officer and Employee Expenses. The costs and expenses of
PetroCorp's directors, officers, and employees (except officers and
employees of Kaiser-Francis), including: (i) Director and Officer
Liability Insurance; (ii) Directors' fees and expenses; (iii) all
compensation and other expenses of any officers of PetroCorp who are
not KF Nominees; and (iv) PetroCorp officer and employee expenses,
including but not limited to insurance and other benefits;
E. Facility Expenses. Rent for facilities and other
occupancy expenses, except rent for facilities of
Kaiser-Francis and occupancy expenses associated with
facilities of Kaiser-Francis;
F. Travel and Entertainment. Travel and entertainment expense
reasonably incurred directly for the benefit of PetroCorp in the
performance of the Services and not covered by the provisions of
applicable joint operating agreements;
G. Other. Other third-party expenses not heretofore enumerated which an
oil and gas exploration and development company registered under
Section 12(g) of the Securities Exchange Act of 1934 with a class of
capital stock listed for trading on the American Stock Exchange would
incur in the usual and customary conduct of its own corporate affairs.
As used in this section, third-party expenses shall include expenses,
whether payable to an Affiliate of Kaiser-Francis or to a non-affiliated entity,
only to the extent such expenses are competitive with those otherwise generally
available in the area in which services or materials were furnished.
ARTICLE IV.
CONFLICTS OF INTEREST
4.1 Corporate Opportunities.
A. Kaiser-Francis Opportunities. PetroCorp hereby acknowledges that
Kaiser-Francis and its Affiliates are actively and substantially
engaged in the oil and gas exploration business, and agrees that
Kaiser-Francis and its Affiliates (including the officers of
Kaiser-Francis who may be KF Officer Nominees) shall be free to
continue to engage in such business, whether or not such business is
deemed to be in competition with PetroCorp. Subject to Kaiser-Francis's
compliance with the Section 4.1B no business in which Kaiser-Francis or
its Affiliates (including officers of Kaiser-Francis who may be KF
Officer Nominees) engage shall be deemed to be a corporate opportunity
of PetroCorp.
B. Prospect Allocation. Kaiser-Francis shall cause Prospects developed
by Kaiser-Francis employees after the Effective Date to be (i)
developed for the account of Kaiser-Francis or (ii) to be developed for
the account of PetroCorp or (iii) for the account of both
Kaiser-Francis and PetroCorp in such percentages as Kaiser-Francis
shall determine (the "Prospect Allocation") based upon the following
factors:
(1) the geographic proximity of the Prospect to existing oil
and gas production, non-producing oil and gas leasehold
positions, or Prospects of Kaiser-Francis and/or PetroCorp;
(2) the geological comparability of the Prospect to existing
oil and gas production, non-producing oil and gas leasehold
positions, or exploration or exploitation prospects of
Kaiser-Francis and/or PetroCorp; (3) the potential adverse
impact of the Prospect on existing oil and gas production,
non-producing oil and gas leasehold positions, or Prospects of
Kaiser-Francis and/or PetroCorp, as a result of drainage or
other factors;
(4) the nature and extent of the risk involved in the
Prospect; and,
(5) budgetary constraints.
The Prospect Allocations by Kaiser-Francis shall be binding upon
PetroCorp provided, and subject to the conditions, that: (i) Kaiser-Francis
shall have reported in writing a reasonable summary (including a summary of the
factors set forth above) to the Board of Directors of PetroCorp Incorporated
prior to or as soon as possible after the acquisition of the Prospect, but in no
event later than the commencement of any drilling or reworking operation thereon
and the Board of Directors of PetroCorp Incorporated shall not have adopted at
such meeting a resolution objecting to the Prospect Allocation; and (ii)
Kaiser-Francis made the Prospect Allocation in Good Faith. If the Board of
Directors adopts a resolution objecting to any Prospect Allocation and PetroCorp
establishes that Kaiser-Francis's determination was unreasonable or not in Good
Faith, then the Prospect Allocation shall not be binding upon PetroCorp and the
acquired Prospect (or such portion thereof as PetroCorp may elect to acquire)
shall be offered to PetroCorp under the same terms and conditions as the
Prospect was acquired by Kaiser-Francis.
4.2 Affiliated Transactions. All transactions between Kaiser-Francis and its
Affiliates and PetroCorp ("Affiliated Transactions") shall be on terms and
conditions at least as favorable to PetroCorp as those prevailing in the
exploration and production industry for comparable transactions between
unaffiliated parties (the "Affiliated Transaction Standard"). The determination
of Kaiser-Francis that the Affiliated Transaction Standard in respect of an
Affiliated Transaction is met shall be binding upon PetroCorp provided, and
subject to the conditions, that (i) Kaiser-Francis shall have reported in
writing a reasonable summary (including, but not limited to, a reasonable
summary of the terms and conditions of the Affiliated Transaction) of the
Affiliated Transaction to the Board of Directors at the meeting of the Board
next following the consummation of the Affiliated Transaction (or prior to the
consummation of the Affiliated Transaction if required under the Texas Business
Corporation Act or other applicable law) and the Board of Directors of PetroCorp
Incorporated shall not have adopted at such meeting a resolution objecting to
the Affiliated Transaction; and (ii) Kaiser-Francis made the determination in
Good Faith. If the Board of Directors adopts a resolution objecting to any
Affiliated Transaction and PetroCorp establishes that Kaiser-Francis's
determination was unreasonable or not in Good Faith, then the Affiliated
Transaction shall not be binding upon PetroCorp.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Kaiser-Francis. Kaiser-Francis represents
and warrants to PetroCorp that the following are, and at all times during the
term of this Agreement shall remain, true and correct:
A. Organization and Authority. Kaiser-Francis has all requisite power
and capacity, is under no legal restraint, and has all necessary
authority to enter into this Agreement and perform its obligations
hereunder. Kaiser-Francis is a corporation duly organized and
constituted and existing under the laws of the State of Delaware and is
qualified to conduct business in each of the jurisdictions in which
such qualification is necessary to perform its obligations hereunder.
The Agreement has been duly executed and delivered by Kaiser-Francis,
and the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby and the compliance by
Kaiser-Francis with the terms of this Agreement do not and will not
conflict with or result in a breach of any terms of, or constitute a
default under, the Articles of Incorporation or Bylaws of
Kaiser-Francis or any other material agreement, instrument, writ,
order, judgment or decree to which Kaiser-Francis is a party or is
subject or by which it is bound. This Agreement constitutes a valid
obligation of Kaiser-Francis enforceable in accordance with its terms
except as limited by bankruptcy, insolvency, reorganization or other
such laws concerning the rights of creditors.
B. No Claims. To the knowledge of Kaiser-Francis, except with respect
to such matters that would not, if determined adversely to
Kaiser-Francis, have a material adverse effect on Kaiser-Francis or its
ability to perform its obligations hereunder, Kaiser-Francis is not in
default under any applicable laws or under any order of any court or
governmental administrative body having jurisdiction, and there are no
claims, actions, suits or proceedings, pending or threatened, against
Kaiser-Francis at law or in equity, or before or by any administrative
body having jurisdiction, and no notice of any claim, action, suit or
proceeding, whether pending or threatened, has been received. To the
knowledge of Kaiser-Francis, there is no claim, litigation, action,
suit or proceeding, administrative or judicial, pending or threatened
which seeks to restrain or seeks damages in connection with the
consummation of the transactions contemplated herein.
C. Personnel. Except with respect to third-party legal, accounting,
consulting and other services for which it is contemplated herein that
Kaiser-Francis will contract with consultants, Kaiser-Francis has and
at all times during the term of this Agreement shall have in its employ
or available to it personnel sufficient in numbers and training to
enable it to perform its obligations hereunder.
D. Intellectual Property Rights. To the extent Kaiser-Francis uses
third-party software, seismic data or other intellectual property in
the performance of the Services, Kaiser-Francis has (or at the time it
uses such third-party property in connection with the performance of
the Services will have) such licenses and authorizations necessary to
authorize its use of such third-party software, seismic data or other
intellectual property. Kaiser-Francis has not received any notification
that it has infringed upon or is infringing upon, or has engaged in or
is engaging in any unauthorized use or misappropriation of, any
intellectual property owned by or belonging to any other person; and
there is no pending or threatened claim, and no basis for the assertion
of any claim, against Kaiser-Francis with respect to any such
infringement, unauthorized use or misappropriation.
ARTICLE VI.
INDEMNIFICATION
6.1 Indemnification by Kaiser-Francis. Kaiser-Francis hereby agrees to defend,
indemnify and hold harmless PetroCorp and its officers, directors, shareholders,
employees, agents and Affiliates (collectively, the "PetroCorp Indemnitees")
from any and all threatened or actual claims, demands, causes of action, suits,
proceedings, losses, damages, fines, penalties, liabilities, costs and expenses
of any nature, including attorneys' fees and court costs (collectively,
"Claims"), sustained or incurred by or asserted against the PetroCorp
Indemnitees arising from (i) the breach of this Agreement by Kaiser-Francis; and
(ii) the gross negligence or willful misconduct of Kaiser-Francis in connection
with the rendering of the Services.
6.2 Indemnification by PetroCorp. PetroCorp hereby agrees to defend, indemnify
and hold harmless Kaiser-Francis and its officers, directors, shareholders,
employees, agents and Affiliates (collectively, the "Kaiser-Francis
Indemnitees") from any and all threatened or actual Claims sustained or incurred
by or asserted against the Kaiser-Francis Indemnitees arising from (i) the
breach of this Agreement by PetroCorp; (ii) Kaiser-Francis's performance of the
Services, except to the extent PetroCorp is entitled to indemnification with
respect thereto from Kaiser-Francis pursuant to Section 6.1 above.
6.3 Indemnification Procedures. A Party requesting indemnification pursuant to
this Article VI (the "Indemnified Party") shall promptly give notice to the
Party from whom indemnification is sought (the "Indemnifying Party") of the
Claim for which indemnification is sought, and the Indemnifying Party shall
defend such Claim by counsel selected by the Indemnifying Party (provided that
such counsel shall be reasonably satisfactory to the Indemnified Party), and the
Indemnifying Party shall pay all expenses therefor. The Indemnified Party may,
at its own expense, employ separate counsel and participate in defense of such
Claims.
6.4 Survival. The indemnification provisions of this Article VI shall survive
the termination of this Agreement for a period of four (4) years.
ARTICLE VII.
CONFIDENTIALITY
7.1 Confidentiality. Kaiser-Francis shall maintain the confidentiality of all
Non-Public Information with respect to PetroCorp, its business or its assets;
provided, however, that Kaiser-Francis may disclose such Non-Public Information
(i) in any judicial or alternative dispute resolution proceeding to resolve
disputes between PetroCorp and Kaiser-Francis arising hereunder; (ii) to the
extent disclosure is legally required under applicable laws or any agreement to
which PetroCorp is a party or by which it is bound, provided, however, that
prior to making any legally required disclosures in any judicial, regulatory or
dispute resolution proceeding, Kaiser-Francis shall, if so advised by counsel,
seek a protective order or other relief to prevent or reduce the scope of such
disclosure; and (iii) to PetroCorp's existing or potential lenders, investors,
joint interest owners, purchasers, or other parties with whom PetroCorp may
enter into contractual relationships, to the extent deemed by Kaiser-Francis to
be reasonably necessary or desirable to enable it to perform the Services,
provided that Kaiser-Francis shall require such third parties to execute
agreements to maintain the confidentiality of the Non-Public Information so
disclosed; and (iv) if authorized by the Board of Directors of PetroCorp
Incorporated. Kaiser-Francis acknowledges that the Non-Public Information is
being furnished to Kaiser-Francis for the sole and exclusive purpose of enabling
it to perform the Services, and the Non-Public Information may not be used by it
for any other purpose. The provisions of this Section shall survive the
termination of this Agreement.
7.2 Insider Trading. Kaiser-Francis acknowledges that it is aware that the
United States securities laws prohibit any person who has material, non-public
information concerning PetroCorp from purchasing or selling any securities of
PetroCorp or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities, and Kaiser-Francis will prohibit its
employees, consultants and agents who are involved in the rendering of the
Services from engaging in such practices.
ARTICLE VIII.
TERM AND TERMINATION
8.1 Effective Date. The effective date ("Effective Date") of this Agreement
shall be the opening of business on the first day of the month next following
the month in which the shareholders of PetroCorp shall approve this Agreement.
8.2 Term. The term of this Agreement (the "Term") shall commence at the
Effective Date and end (the "Termination Date") at the close of business on the
last day of the sixth (6th) full calendar month following notice of termination
by a Party; provided, however, no Party shall give notice of termination of this
Agreement until after the first anniversary date of the Effective Date of this
Agreement.
8.3 Renegotiation. At any time during which Kaiser-Francis and its Affiliates
own less than thirty-five percent (35%) of the issued and outstanding common
stock of PetroCorp, either Party (the "Proposing Party") may propose to the
other Party (the AResponding Party") changes in any of the terms and provisions
of this Agreement (a ARenegotiation Proposal"). Promptly upon receipt of a
Renegotiation Proposal, the Parties shall, for a period of at least twenty (20)
business days, negotiate in Good Faith in an effort to reach an agreement
respecting the Renegotiation Proposal. The provisions of this section shall not
be in derogation of the provisions of the preceding section respecting notice of
termination of this Agreement.
ARTICLE IX.
AUDIT RIGHTS AND DISPUTE RESOLUTION
9.1 Audit Rights. PetroCorp shall have the right at any time during the Term of
this Agreement, but not more than once in any twelve-month period, to audit,
examine and make copies of or extracts from the books and records of PetroCorp
and, to the extent necessary to verify the performance by Kaiser-Francis of its
obligations under this Agreement ( including, without limitation, the
Kaiser-Francis Compensation), the books and records of Kaiser-Francis (the
AAudit Right"). PetroCorp may exercise the Audit Right through such auditors
(excluding legal counsel) as the Board of Directors of PetroCorp Incorporated
may determine in its sole discretion. PetroCorp shall (i) exercise the Audit
Right only upon reasonable notice to Kaiser-Francis and (ii) use reasonable
efforts to conduct the Audit Right in such a manner as to minimize the
inconvenience and disruption to Kaiser-Francis.
9.2 Resolution Committee. Either Party may request at any time during the Term
hereof a resolution committee (the AResolution Committee") to attempt to resolve
disputes arising hereunder. The Resolution Committee shall be comprised of three
members, being the Chairman of the Board of PetroCorp Incorporated, who shall
chair the Resolution Committee, and one member selected by of each of the
respective Boards of the Parties (provided that the representative of the
PetroCorp Incorporated Board shall not be an officer, director or employee of
Kaiser-Francis). The Board of Directors of either Party may submit any dispute
to the Resolution Committee by written request to the chairman of the Resolution
Committee, who shall, within twenty (20) days thereafter call a meeting of the
Resolution Committee. The Resolution Committee shall attempt to resolve the
dispute, provided, however, that the recommendation of the Resolution Committee
shall not be binding upon either Party. If within thirty (30) days after the
Resolution Committee is convened, the Resolution Committee is unable to reach a
consensus on resolution of the dispute, or either of the Parties is dissatisfied
by the resolution proposed by the Resolution Committee, then either Party may
pursue its legal and equitable remedies in an arbitration proceeding as provided
hereinbelow.
9.3 Arbitration. In the event of a dispute between PetroCorp and Kaiser-Francis
hereunder that has not been resolved by the Dispute Resolution Committee within
thirty (30) days after the Resolution Committee is convened, then the dispute
may, upon the written notice of any party, be submitted to the American
Arbitration Association (AAAA") for binding arbitration in Tulsa, Oklahoma,
before a panel of three (3) arbitrators, one selected by each party and the
third selected by the two so selected. If either party fails to timely designate
an arbitrator or if the two so selected are unable to agree upon the appointment
of a third, then any party may apply to the AAA requesting the appointment of
the arbitrator. The arbitration shall be conducted under the United States
Arbitration Act (9 U.S.C. ' 1 et seq). Except as contradicted by the United
States Arbitration Act or the provisions of this Agreement, the arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association then in effect, including, without limitation, the Code of Ethics
for Arbitrators in Commercial Disputes. The majority decision of the arbitrators
on any point or points will be final. Judgment may be entered upon any award
made hereunder in any court having jurisdiction in the premises. Each Party
shall pay its own costs of the arbitration including attorneys' fees,
preparation and travel expenses. All other costs of arbitration, including the
cost of the arbitrators, shall be borne equally by the parties.
9.4 Attorneys' Fees and Expenses. In any action brought by a party hereto to
enforce the obligations of any other party hereto, the prevailing party shall be
entitled to collect from the opposing party to such action such party's
reasonable litigation costs and attorneys fees and expenses (including court
costs, reasonable fees of accountants and experts, and other expenses incidental
to the litigation).
ARTICLE X.
PETROCORP INCORPORATED GOVERNANCE
10.1 Officers of PetroCorp Incorporated. During the Term of this Agreement:
A. Kaiser-Francis shall nominate annually for election as officers of
PetroCorp Incorporated such persons (which may include employees of
Kaiser-Francis) as Kaiser-Francis deems appropriate to conduct the
business and affairs of PetroCorp (the "KF Officer Nominees"); and,
B. Subject to the exercise by the members of the Board of Directors of
their fiduciary obligations arising under the Texas Business
Corporations Act, the Board of Directors of PetroCorp Incorporated
shall elect the KF Nominees as the officers of PetroCorp Incorporated
and,
C. Subject to their election by the Board of Directors, Kaiser-Francis
shall cause the KF Officer Nominees to serve as the officers of
PetroCorp Incorporated at the sole cost of Kaiser-Francis.
D. The officers of PetroCorp Incorporated for the period of time
commencing on the Effective Date and continuing until the annual
meeting of shareholders of PetroCorp Incorporated and thereafter until
their successors are elected are set forth in Schedule 10.1 attached
hereto.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1 Notices. All notices or advices required or permitted to be given by or
pursuant to this Agreement, shall be given in writing. All such notices and
advices shall be (i) delivered personally, (ii) delivered by facsimile or
delivered by U.S. Registered or Certified Mail, Return Receipt Requested mail,
or (iii) delivered for overnight delivery by a nationally recognized overnight
courier service. Such notices and advices shall be deemed to have been given (i)
the first business day following the date of delivery if delivered personally or
by facsimile, (ii) on the third business day following the date of mailing if
mailed by U.S. Registered or Certified Mail, Return Receipt Requested, or (iii)
on the date of receipt if delivered for overnight delivery by a nationally
recognized overnight courier service. All such notices and advices and all other
communications related to this Agreement shall be given as follows:
If to PetroCorp: To such person or
persons as the Board of Directors of
PetroCorp Incorporated by Resolution
shall designate and in the absence
of such designation to each member
of the Board of Directors.
With Copy to: Mayor, Day, Caldwell & Keeton,L.L.P.
700 Louisiana, Suite 1900
Houston, Texas 77002
Attn: Cheryl S. Phillips
(713) 225-7059 - Telephone
(713) 225-7047 - Facsimile
If to Kaiser-Francis: Steve Berlin
KAISER-FRANCIS OIL COMPANY
P.O. Box 21468
Tulsa, OK 74121-1468
(918) 491-4501 - Telephone
(918) 491-4694 - Facsimile
With Copy to:Frederic Dorwart
Old City Hall
124 East Fourth Street
Tulsa, OK 74103
(918) 583-9945 - Telephone
(918) 583-8251 - Facsimile
or to such other address as the party may have furnished to the other parties in
accordance herewith, except that notice of change of addresses shall be
effective only upon receipt.
11.2 Year 2000 Compliance. Kaiser-Francis shall take reasonable steps to insure
(i) that any wells, pipelines or other facilities or equipment and any
operations, systems or applications used directly or indirectly to support the
operations contemplated by this Agreement, including any components thereof or
systems related thereto or embedded therein, correctly process date information
before, during and after midnight, December 31, 1999 (including accepting date
input, providing date output, and performing calculations and comparisons on
dates or portions of dates) and function accurately and without interruption
before, during and after January 1, 2000 through January 1, 2005 without any
change in operations associated with the advent of January 1, 2000; and (ii)
that operations under or in support of this Agreement will not be materially
disrupted by the inability of any material vendors, suppliers, or subcontractors
for goods or services to likewise correctly process such date information and
continue operations without interruption due to the advent of January 1, 2000.
11.3 Governing Law. This Agreement shall be subject to, and interpreted by and
in accordance with, the laws (excluding conflict of law provisions) of the State
of Oklahoma.
11.4 Entire Agreement. This Agreement is the entire Agreement of the parties
respecting the subject matter hereof. There are no other agreements,
representations or warranties, whether oral or written, respecting the subject
matter hereof.
11.5 Construction. This Agreement, and all the provisions of this Agreement,
shall be deemed drafted by all of the parties hereto.
11.6 Authority. Each of the persons signing below on behalf of a party hereto
represents and warrants that he or she has full requisite power and authority to
execute and deliver this Agreement on behalf of the parties for whom he or she
is signing and to bind such party to the terms and conditions of this Agreement.
11.7 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original. This Agreement shall become effective only when all
of the parties hereto shall have executed the original or counterpart hereof.
This agreement may be executed and delivered by a facsimile transmission of a
counterpart signature page hereof.
11.8 Successors and Assigns. This Agreement may not be assigned (including
performance by subcontract) by either Party hereto. This Agreement shall be
binding upon and shall inure to the benefit of the Parties and their respective
successors.
11.9 No Third Party Beneficiaries. This is not a third party beneficiary
contract. No person or entity other than Kaiser-Francis, the Kaiser-Francis
Indemnitees, PetroCorp, and the PetroCorp Indemnitees shall have any rights
under this Agreement.
11.10 Amendments. This Agreement may be amended or modified only in a writing
which specifically references this Agreement.
11.11 Relationship of the Parties. Nothing in this Agreement shall be construed
to create a partnership or joint venture, nor to authorize either Party to act
as agent for or representative of the other Party. Each Party shall be deemed an
independent contractor and neither Party shall act as, or hold itself out as
acting as, agent for any other Party.
11.12 No Waiver. A Party to this Agreement may decide not to require, or fail to
require, full or timely performance of any obligation arising under this
Agreement. The decision not to require, or failure of a Party to require, full
or timely performance of any obligation arising under this Agreement (whether on
a single occasion or on multiple occasions) shall not be deemed a waiver of any
such obligation. No such decisions or failures shall give rise to any claim of
estoppel, laches, course of dealing, amendment of this Agreement by course of
dealing, or other defense of any nature to any obligation arising hereunder.
11.13 Time of the Essence. Time is of the essence with respect to each
obligation arising under this Agreement.
11.14 Unenforceability. In the event any provision of this Agreement, or the
application of such provision to any person or set of circumstances, shall be
determined to be invalid, unlawful, or unenforceable to any extent for any
reason, the remainder of this Agreement, and the application of such provision
to persons or circumstances other than those as to which it is determined to be
invalid, unlawful, or unenforceable, shall not be affected and shall continue to
be enforceable to the fullest extent permitted by law.
Dated the date first set forth above.
KAISER-FRANCIS OIL COMPANY
By: /s/ D. Joseph Graham
-------------------------------
D. Joseph Graham
PETROCORP INCORPORATED
By: /s/ W. Neil McBean
--------------------------------
W. Neil McBean, President & CEO
<PAGE>
SCHEDULE 10.1
PETROCORP INCORPORATED OFFICERS
Gary Christopher, President and Chief Executive Officer*
Tony Pelletier, Executive Vice President and Chief Operating Officer
Richard Dunham, Vice President for Engineering
Steve Berlin, Vice-President and Chief Financial Officer
Ted Jacobson, Vice-President for Operations
Les Watson, Vice President of Canadian Operations
Michael W. Moore, Vice-President for Marketing
Reece A. Hembree, Treasurer
Frederic Dorwart, Secretary
Sheryl Green, Assistant Secretary
Eric C. Lowe, Assistant Secretary
Michael W. Moore, Assistant Secretary
Bruce Kenney, Assistant Secretary
Matthew M. Browne, Assistant Secretary
* The Chairman of the Board shall be elected by the Board of Directors.
PCC ENERGY CORP. & PCC ENERGY, INC. OFFICERS
Les Watson, Vice President
