<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FLOTEK INDUSTRIES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
FLOTEK INDUSTRIES, INC.
7030 EMPIRE CENTRAL DRIVE
HOUSTON, TX 77040
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 29, 1998
To the Shareholders:
As a Shareholder of Flotek Industries Inc. (the "Company"), you are hereby
given notice of and invited to attend in person or by proxy the Annual Meeting
of Stockholders of the Company (the "Meeting") to be held at the Ramada Plaza
Hotel, 12801 Northwest Freeway, Houston, Texas 77040, on Wednesday July 29,
1998, at 2:00 p.m., local time, for the following purposes:
1. To receive the consolidated financial statements of the Company for
the year ended February 28, 1998 and the Report of the Auditors on those
statements;
2. To elect a Board of six Directors for one-year terms or until their
successors are duly elected and qualified;
3. To consider and, if deemed appropriate, approve a special
resolution to amend the By-law No. 1 regarding a reduction in the required
percentage of resident Canadians on the Board of Directors and a reduction
in the required percentage of resident Canadian Board members who must be
present at scheduled meetings;
4. To consider and, if deemed appropriate, to approve an ordinary
resolution to authorize and approve the issue, in connection with a
financing of the Company or a subsidiary of the Company, of such number of
securities, being common shares, warrants or a combination thereof, to any
one person or any group of persons who intend to vote their equity shares
as a group, where the number of common shares is equal to or greater than
20% of the Company's common shares outstanding after giving effect to the
issuance of such securities, so long as the Directors of the Company are of
the view that such transaction is in the best interests of the Company;
5. To consider and, if deemed appropriate, to approve an ordinary
resolution to ratify and approve stock options previously granted to
insiders of the Company, to authorize the Directors to grant stock options
to insiders of the Company in the future at such prices and for such
numbers of shares as may be determined by the Directors and acceptable to
the Vancouver Stock Exchange, and to authorize the Directors to renegotiate
any stock options previously granted to insiders of the Company, or which
may hereafter be granted to insiders of the Company, as to price or number
of shares or both, all on such terms as may be acceptable to the Vancouver
Stock Exchange;
6. To consider and, if deemed appropriate, approve an ordinary
resolution to authorize the Board of Directors, discretionary authority, to
amend, postpone, or abandon implementation of any of the above resolutions
if it is not in the Company's best interests to proceed with them;
7. To consider and act upon a proposal to ratify the appointment of
the Company's independent accountants, Grant Thornton LLP;
8. To transact such other business as may properly be transacted at
such Meeting or at any adjournment thereof.
Only Shareholders of record on the books of the Company at the close of
business on June 10, 1998, are entitled to receive notice of and to vote at the
Meeting (or any adjournment or adjournments thereof). Specific details of the
matters proposed to be put before the Meeting are set forth in the Proxy
Statement/ Information Circular, which Proxy Statement/Information Circular
forms a part of this Notice.
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Shareholders are cordially invited to attend the Meeting in person.
However, Shareholders who are unable to attend the Meeting in person are
requested to complete, date and sign the enclosed form of proxy and return it,
in the envelope provided, to the Secretary of the Company, c/o Pacific Corporate
Trust Company, Suite 830, 625 Howe Street, Vancouver, British Columbia, Canada,
V6C 3B8. The enclosed form of proxy must be completed in accordance with the
instructions set out in the form of proxy and in the Proxy Statement/Information
Circular accompanying this Notice and, to be valid, be received by Pacific
Corporate Trust Company not fewer than 48 hours (excluding Saturdays and
holidays) before the time fixed for the Meeting. It is important that your
shares be represented at the Meeting, and your promptness will assist us to
prepare for the Meeting and to avoid the cost of a follow-up mailing. If you
receive more than one proxy card because you own shares registered in different
names or at different addresses, each proxy card should be completed and
returned.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ BROOKII WOOTTON
Brookii Wootton
Corporate Secretary
June 1, 1998
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<PAGE> 4
FLOTEK INDUSTRIES INC.
7030 EMPIRE CENTRAL DRIVE
HOUSTON, TX 77040
PROXY STATEMENT/ INFORMATION CIRCULAR
FOR
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JULY 29, 1998
GENERAL INFORMATION
This Proxy Statement/Information Circular is furnished to shareholders of
Flotek Industries Inc. ("Shareholders" or "Members"), an Alberta Corporation
("Flotek" or the "Company"), in connection with the solicitation of proxies by
the Management of Flotek at the direction of the Board of Directors of Flotek
(the "Board or Directors" or "Board") for use at its Annual Meeting of
Shareholders (the "Meeting") scheduled to be held on Wednesday, July 29, 1998,
at the time and place and for the purposes set forth in the accompanying Notice
of Meeting ("Notice of Meeting"), and at any adjournment thereof. Upon request
additional proxy material will be furnished without cost to brokers and other
nominees to forward to the beneficial owners of shares held in their names.
Flotek will pay persons holding shares in their names, or in the names of their
nominees, but not owning such stock beneficially (such as brokerage houses,
banks and other financial institutions), for the expense of forwarding
soliciting materials to their principals. The expenses of this solicitation will
be paid by Flotek. To the extent necessary to ensure sufficient representation
at the Meeting, proxies may be solicited by any appropriate means by officers,
Directors and regular employees of Flotek, who will receive no additional
compensation therefor. This Proxy Statement and the accompanying form of proxy
will first be mailed to Shareholders on or about June 17, 1998.
VOTING RIGHTS AND VOTES REQUIRED
The close of business on June 10, 1998, has been fixed as the record date
for the determination of Shareholders entitled to receive notice of and to vote
at the Meeting. As of close of business on May 19, 1998, Flotek had outstanding
and entitled to vote of 43,180,795 shares of Common Stock, no par value ("Common
Stock").
Two Shareholders must be present and at least 5% of the outstanding shares
of Common Stock on the record date must be represented in person or by proxy at
the Meeting in order to constitute a quorum for the transaction of business. The
record holder of each share of Common Stock entitled to vote at the Meeting will
have one vote for each share so held.
APPOINTMENT OF PROXYHOLDERS AND REVOCATION OF PROXIES
A Shareholder has the right to appoint as proxyholder a person other than
the officers and Directors of the Company named in the accompanying form of
proxy to attend and vote at the Meeting in his place, and may do so by inserting
the name of such other person, who need not be a Shareholder, in the blank space
provided in the form of proxy or by completing another proper form of proxy.
In order for proxies to be recognized at the Meeting, the completed forms
of proxy must be received at the Company's registrar and transfer agent, Pacific
Corporate Trust Company, Suite 830, 625 Howe Street, Vancouver, British
Columbia, V6C 3B8, or at the registered office of the Company, 30th Floor,
237 - 4th Avenue S.W., Calgary, Alberta, T2P 4X7, not later than 2:00 p.m.
(Vancouver time) on July 24, 1998.
A Shareholder, or his attorney authorized in writing, who executed a form
of proxy may revoke it in any manner permitted by law including the depositing
of an instrument of revocation in writing at the registered office of the
Company, 30th Floor, 237 - 4th Avenue S.W., Calgary, Alberta, T2P 4X7, or with
the Company's registrar and transfer agent, Pacific Corporate Trust Company,
Suite 830, 625 Howe Street, Vancouver, British Columbia, V6C 3B8, at any time up
to and including the last business day preceding the day of the
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Meeting or an adjournment thereof or with the chairman of the Meeting on the day
of the Meeting or an adjournment thereof but prior to the use of the proxy at
the Meeting.
EXERCISE OF DISCRETION OF PROXYHOLDERS
The persons whose names are printed on the accompanying form of proxy will,
on a show of hands or any ballot that may be called for, vote or withhold from
voting the shares in respect of which they are appointed in accordance with the
direction of the Shareholder appointing them. If no choice is specified by the
Shareholder, the shares will be voted (i) in favour of the election of the
nominees for Directors (see "Election of Directors"), (ii) in favour of a
special resolution confirming the amendment to By-law No. 1 providing for a
reduction in the required percentage of resident Canadians on the Board of
Directors and a reduction in the required percentage of resident Canadian Board
members who must be present at scheduled Board of Directors meetings, (iii) in
favour of an ordinary resolution authorizing the issuance of more than 20% of
the Company's current number of outstanding shares (see "Approval of Issuance of
Shares") for purposes of a private placement to raise capital, (iv) in favour of
an ordinary resolution (x) authorizing the Board of Directors to grant new stock
options to insiders and (y) ratifying the Board's prior stock option grants to
insiders and renegotiation of previously granted stock options (see "Options to
Purchase Securities"), (v) in favour of an ordinary resolution granting certain
discretionary authority to the Board of Directors, and (vi) for the appointment
of auditors (see "Appointment and Remuneration of Auditors"). The Board of
Directors recommends a vote "FOR" the foregoing proposals.
The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments or variations to the matters identified
in the Notice of Meeting and to other matters which may properly be brought
before the Meeting. Management knows of no such amendment, variation or other
matters to come before the Meeting. If any matters which are not now known to
Management should properly come before the Meeting, the persons named in the
form of proxy will vote upon such matters in accordance with their best
judgment.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As at May 19, 1998, the Company had 43,180,795 Common Shares issued and
outstanding. Each Shareholder is entitled to one vote for each Common Share
registered in his name as at the close of business on June 10, 1998, being the
record date (the "Record Date") fixed by the Board of Directors for the
determination of the registered Shareholders who are entitled to receive the
Notice of Meeting of Shareholders accompanying this Proxy Statement/Information
Circular. If a Shareholder transfers the ownership of any of his Common Shares
after the Record Date, the transferee will be entitled to vote at the Meeting if
he produces properly endorsed share certificates or otherwise establishes proof
of his ownership of the Common Shares and demands, not later than ten days
before the Meeting, that his name be included in the list of Shareholders
entitled to vote. This list of Shareholders will be available for inspection
after the Record Date during usual business hours at the office of the Company's
registrar and transfer agent, Pacific Corporate Trust Company, Suite 830, 625
Howe Street, Vancouver, British Columbia, V6C 3B8, and at the Meeting.
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<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND
MANAGEMENT
The following table sets forth, as of May 19, 1998, certain information
regarding the beneficial ownership of common stock by (i) each person known by
the Company to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock, (ii) each director nominee and Named
Executive Officer identified Under "Executive Compensation" below, and (iii) all
Directors and executive officers as a group:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP OF
COMMON STOCK(1)
------------------------
NAME AMOUNT PERCENTAGE
---- ---------- ----------
<S> <C> <C>
Marlin Investors, LLC(2).................................... 18,666,668 24.9%
Charles A. Dickinson, Jr.(3)................................ 5,817,160 7.7%
Camuri Holdings Ltd(4)...................................... 7,882,784 10.5%
TOSI, L.P.(5)............................................... 14,000,000 18.7%
William G. Jayroe(6)........................................ 706,562 *
Wallace Robertson(7)........................................ 1,458,919 1.9%
David A. Spencer(8)......................................... 205,000 *
Larry R. Shaben(9).......................................... 154,500 *
William R. Ziegler(10)...................................... 100,000 *
Gary M. Pittman(11)......................................... 100,000 *
All Directors and Executive Officers as a group (8
Persons).................................................. 21,797,684 29.1%
---------- ----
</TABLE>
- ---------------
* less than 1.0% of class
(1) This information was furnished by the respective beneficial owners
(2) As reported by Marlin Investors, LLC in a Statement on Schedule 13D filed
with the Securities and Exchange Commission (the "Commission"). Includes
warrants to acquire 9,333,334 shares. Mr. William R. Ziegler, a director of
the Company, has the sole power to vote and the sole dispositive power for
Marlin Investor's shares.
(3) As reported by Charles A. Dickinson, Jr. in a Statement on Schedule 13D
filed with the Commission. Includes warrants to acquire 2,333,333 shares.
(4) As reported by Camuri Holdings Ltd., in a Statement on Schedule 13D filed
with the Commission. Includes warrants to acquire 1,012,500 shares.
(5) Includes warrants to acquire 7,000,000 shares on or before September 14,
1998 and the conversion on or before September 14, 1998 of all of the
original principal amount of a U.S. $750,000 convertible loan to the
Company.
(6) Includes options to acquire 700,000 shares
(7) Includes options to acquire 150,000 shares
(8) Includes options to acquire 150,000 shares
(9) Includes options to acquire 150,000 shares
(10) Includes options in favor of Mr. Ziegler, individually, to acquire 100,000
shares. Does not include 18,666,668 shares owned by Marlin Investors, LLC
of which Mr. Ziegler has the sole power to vote and sole dispositive power,
as managing director. Mr. Ziegler owns a 9.62% interest in Marlin
Investors, LLC.
(11) Includes options to acquire 100,000 shares
BUSINESS OF THE MEETING
As set forth in the accompanying Notice of Meeting, the business to be
conducted at the Meeting consists of the usual annual Meeting business which the
Company is required to conduct, including the election of Directors and the
appointment of auditors and any ordinary items of special business, namely:
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(i) an ordinary resolution authorizing the issuance of more than 20% of the
Company's current number of outstanding shares for purposes of a private
placement to raise capital; (ii) an ordinary resolution authorizing the Board of
Directors to grant new stock options to insiders and ratifying the Board's prior
stock option grants to insiders and the renegotiation of previously granted
stock options; (iii) a special resolution to amend the By-laws to provide for a
reduction in the required percentage of resident Canadians on the Board of
Directors and a reduction in the required percentage of resident Canadian Board
members who must be present at scheduled Meetings of the Board of Directors; and
(iv) an ordinary resolution granting certain discretionary authority to the
Board of Directors.
ELECTION OF DIRECTORS
Management will propose the persons named below, all of whom, are currently
Directors of the Company, as nominees for election as Directors to continue to
hold office until the next annual Meeting of Shareholders of the Company or
until their successors are elected or appointed.
Management does not contemplate that any of the nominees will be unable to
serve as a director. In addition to the slate of nominees herein listed,
Shareholders present at the Meeting shall be entitled to nominate and vote for
the election of any other person or persons as a director. The Company has not
received notice of, and Management is not aware of, any proposed nominees in
addition to those named.
If any of the above nominees is for any reason unavailable to serve as a
director, proxies in favour of Management will be voted for another nominee in
the discretion of the persons named in the form of proxy unless the Shareholder
has specified in the proxy that his Common Shares are to be withheld from voting
on the election of Directors. Management recommends voting in favour of each of
the nominees.
MANAGEMENT
The following table sets forth certain information with respect to the
executive officers and Directors of the Company as of May 19, 1998:
<TABLE>
<CAPTION>
NAME & MUNICIPALITY OF RESIDENCE(1) AGE(1) POSITION
- ----------------------------------- ------ --------
<S> <C> <C>
William G. Jayroe................... 41 President and Chief Executive Officer,
Director
Houston, Texas
Scott W. Cook....................... 30 Executive Vice President and Chief
Financial Officer
Houston, Texas
Brookii E. Wootton.................. 33 Investor Relations and Corporate Secretary
Houston, Texas
Gary M. Pittman(2)(3)............... 35 Director
McLean, Virginia
William R. Ziegler.................. 56 Director
New York, New York
Wallace Robertson................... 74 Director
Houston, Texas
Larry R. Shaben(3).................. 63 Director
Edmonton, Alberta
David A. Spencer(2)................. 40 Director
Calgary, Alberta
</TABLE>
- ---------------
(1) This information was furnished by the respective nominees.
(2) Member of the Audit Committee
(3) Member of the Compensation/Succession Committee
William G. Jayroe has served as the President and CEO and a director of
Flotek Industries Inc. since May, 1995. In March 1994, Mr. Jayroe sold Turbeco,
Inc. to Flotek Industries Inc. and accepted the position
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of President of USA Petrovalve, Inc. with the responsibility for introducing its
new technology into the American oilfield markets of Texas, California,
Oklahoma, and Colorado. For seven years prior to his tenure with the Company Mr.
Jayroe served as president CEO of Turbeco, Inc. Mr. Jayroe is on the Board of
Nevada Gold & Casinos, Inc.
Scott W. Cook Executive Vice President and Chief Financial Officer, joined
the Company in June of 1995, as controller. Mr. Cook was promoted to Executive
Vice-President and Chief Financial Officer in January 1997. Prior to joining the
Company, Mr. Cook spent approximately seven years in public accounting with
Grant Thornton LLP and Ernst & Young LLP, both international accounting and
management consulting firms. Mr. Cook is a Certified Public Accountant in the
State of Texas.
Brookii E. Wootton has served as Corporate Secretary and Investor Relations
for Flotek Industries Inc. since June 1997. For six years prior to serving in
her executive officer capacity for Flotek, Ms. Wootton was accounting and human
resources manager for Turbeco, Inc. She is a member of the National Investor
Relations Institute and the American Society of Corporate Secretaries.
Gary Pittman has been a director of the Company since 1997, Mr. Pittman is
a merchant banker and investor with Benevento Financial Corp. for the past eight
years focusing primarily on the oil and gas industry. Mr. Pittman previously was
a Limited Partner and Vice President in The Energy Recovery Fund, a $125 million
fund with investments in the oil and natural gas industries of North America and
the United Kingdom. Mr. Pittman is a member of the Audit Committee and the
Compensation/Succession Committee.
William R. Ziegler has been a director of the Company since 1997. Mr.
Ziegler is a partner in the law firm of Parson & Brown, LLP. Prior to joining
Parson & Brown, LLP in May 1994, Mr. Ziegler was a partner at Whitman Breed
Abbott & Morgan and a predecessor firm for more than the preceding five years.
Mr. Ziegler is a director of R&B Falcon Corporation, Ponder Industries, Inc.,
Grey Wolf, Inc. and Geokinetics, Inc.
Wallace Robertson joined Flotek Industries Inc. in March of 1994, as a
special advisor to the Company and was elected to the Board in 1997. For seven
years prior to his service to the Company, Mr. Robertson served as president of
Wallace Robertson, Inc. a Company primarily responsible for the introduction and
acceptance of the Milam Turbulator in Michigan, Alaska, West Texas, California,
the Rocky Mountains and the Gulf Coast Area.
Larry R. Shaben has been a director of the Company since 1993. Mr. Shaben
is currently Chairman of Western New Ventures Capital Corp. and has served in
that capacity since 1991. Mr. Shaben is also a director of Alberta Power Limited
and a director of Canadian Utilities Limited. Mr. Shaben was a former cabinet
minister in the Alberta government from 1975 to 1986. Mr. Shaben is a member of
the Compensation/ Succession Committee.
David A. Spencer has been a director of the Company since 1995. Mr. Spencer
has been a partner of Milner Fenerty, an Alberta, Canada law firm with offices
in Calgary and Edmonton since 1987. Mr. Spencer is a member of the Audit
Committee.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held twelve Meetings during the year. Each incumbent
director attended at least 75 percent of the aggregate of the Meetings of the
Board of Directors and of the committees of which he was a member.
Pursuant to the Company's By-laws, the Board of Directors has established
two committees an Audit Committee and a Compensation/Succession Committee. The
Board has combined the functions of the Compensation and nominating committee in
the Compensation/Succession Committee.
The Audit Committee, currently consisting of David Spencer and Gary Pittman
makes recommendations to the Board concerning the selection and discharge of the
Company's independent auditors, reviews the plan and scope of any audit of the
Company's financial statements, reviews the financial statements of the Company
and reviews such other matters pertaining to the accounting, auditing and
financial reporting
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practices and procedures of the Company as it deems appropriate. The primary
function of the Audit Committee is to strengthen the independence and
objectivity of the external auditors and to evaluate the Company's system of
internal accounting controls. It should be noted, however, that the members of
the Committee are not necessary experts in the fields of auditing and accounting
and do not provide special assurances on such matters. The Audit Committee met
four times during the year.
The Compensation/Succession Committee, consisting of Larry Shaben and Gary
Pittman, makes recommendations to the Board regarding the compensation of
executive officers and the grant of Flotek's stock options. The
Compensation/Succession Committee met two times during the year. Two outside and
no inside Directors comprise the Compensation/Succession Committee. In addition,
the Compensation/Succession Committee identifies, on an as needed basis,
successors for Directors and executive officers when a vacancy exists. The
Compensation/Succession Committee will consider nominees recommended by
Shareholders. Any Shareholder wishing to recommend a nominee should write to the
Secretary of the Company, specifying the name and qualifications of the nominee.
The Committee has access to outside consultants and counsel at the discretion of
the Committee. The Committee oversees the base pay or salary, annual performance
bonus, and the number of options awarded to executives.
EXECUTIVE COMPENSATION AND RELATED MATTERS
COMPENSATION OF DIRECTORS
The Directors of the Company do not receive any cash compensation but are
entitled to reimbursement for traveling and other expenses properly incurred
while attending Meetings of the Board of Directors or any committee thereof or
in the performance of their duties as Directors of the Company. The Directors of
the Company are eligible to receive options to purchase Common Shares. An
aggregate total of 1,350,000 options to purchase Common Shares were held by
Directors of the Company as of May 19, 1998.
EXECUTIVE OFFICERS
Both Form 41 under the Securities Act (British Columbia) and the rules and
regulations arising under the U.S. Securities Exchange Act of 1934, as amended
requires the disclosure of compensation received by certain named executive
officers of the Company. These "named executive officers" are generally defined
to mean (i) the Chief Executive Officer of the Company, despite the amount of
compensation of that individual, (ii) each of the Company's four most highly
compensated executive officers, other than the CEO, who were serving as
executive officers at the end of the most recently completed financial year and
whose total salary and bonus exceeds $100,000, and (iii) any additional
individual for whom disclosure would have been provided under (ii) but for the
fact that the individual was not serving as an executive officer of the Company
at the end of the most recently completed financial year end of the Company.
"Executive Officer" is defined in Form 41 to mean (i) the chair of the Company,
(ii) a vice-chair of the Company, (iii) the President of the Company, (iv) a
vice-president of the Company in charge of a principal business unit, division
or function such as sales, finance or production, or (v) an officer of the
issuer or any of its subsidiaries or any other person who performed a
policy-making function in respect of the Company. Under the U.S. securities laws
an "Executive Officer" includes individuals listed in clauses (iii), (iv) and
(v) of the immediately preceding sentence. During the Company's last completed
financial year, the Company had one Named Executive Officer.
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SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation earned
by the Company's named executive officer during the three most recently
completed fiscal years of the Company.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
------------------ UNDERLYING ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
YEAR ($) ($) (#) ($)
------ ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
William G. Jayroe.................... 1998 150,000 -- 700,000 $6,000(1)
President and Chief Executive
Officer 1997 150,000 -- -- --
1996 150,000 -- -- --
</TABLE>
- ---------------
(1) This amount represents the Company's payment for $1,000,000 of term life
insurance.
OPTIONS AND STOCK APPRECIATION RIGHTS (SARS)
The Company does not have a formal stock option plan. Options are granted
by the Board of Directors from time to time to Directors, officers and employees
as an incentive and, once granted, such options are administered by the
Company's secretary.
The following table sets forth individual grants of stock options during
the fiscal year ended February 28, 1998 to the named executive officer.
OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS/SARS OF STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE ---------------------------
NAME (#) FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- ---- ---------- ------------ ----------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
William G. Jayroe....... 700,000 17.8% $0.17 Cdn Dec. 15, 2002 $0.27 Cdn $0.34 Cdn
President and CEO
</TABLE>
The following table sets forth details of all exercises of stock
options/SARs during the fiscal year ended February 28, 1998 by the named
executive officer and the fiscal year end value of unexercised options/SARs on
an aggregated basis.
AGGREGATED OPTION/SAR EXERCISES DURING THE MOST RECENTLY
COMPLETED FISCAL YEAR AND FISCAL YEAR-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
SHARES YEAR-END(#) YEAR-END($)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
William G. Jayroe........... -- -- 700,000/-- $20,000/--
</TABLE>
- ---------------
(1) The value of exercisable in-the-money options at fiscal year end is based on
the closing price of the Common Shares on the Vancouver Stock Exchange on
February 28, 1998, which was $0.21CDN/$0.15US (conversion rate of
$1CDN=$1.40US).
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COMPENSATION/SUCCESSION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION/SUCCESSION COMMITTEE DECISIONS
During the Company's 1998 fiscal year, no executive officer of the Company
served as (i) a member of the Compensation/Succession Committee (or other Board
committee performing equivalent functions) of another entity, one of whose
executive officers served on the Compensation/Succession Committee of the
Company, (ii) a director of another entity, one of whose executive officers
served on the Compensation/Succession Committee of the Company, or (iii) a
member of the Compensation/Succession Committee (or other Board committee
performing equivalent functions) of another entity, one of whose executive
officers served as a director of the Company.
No member of the Compensation/Succession Committee of the Board of
Directors of the Company was, during the 1998 fiscal year, an officer or
employee of the Company or any of its subsidiaries, or was formerly an officer
of the Company or any of its subsidiaries, or had any relationship requiring
disclosure according to applicable rules and regulations of the Securities and
Exchange Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules issued thereunder, and Section 87 of the British Columbia Securities Act.
Flotek's executive officers and Directors and any persons holding more than ten
percent of the Company's Common Stock are required to file with the Securities
and Exchange Commission and the British Columbia Securities Commission reports
of their initial ownership of the Company's Common Stock and any changes in
ownership of such common stock. Under U.S. law specific due dates have been
established and the Company is required to disclose in its Annual Report on Form
10-K and Proxy Statement any failure to file such reports by these dates. Copies
of such reports are required to be furnished to Flotek. Based solely on its
review of the copies of such reports furnished to Flotek, or written
representations from certain reporting persons that no Form 5 reports were
required for those persons, Flotek believes that during 1998 fiscal year, all of
its executive officers (including the Named Executive Officers), Directors and
persons owning more than 10% of its common stock complied with the Section 16(a)
requirements except, Messrs. Jayroe, Spencer, Pittman, Shaben, Robertson, Cook
and Ms. Wootton, as well as Camuri Holdings, Ltd. and Mr. Hector Dominguez, each
filed one Form 3 late. These Form 3 filings were late as a result of the sudden
shift in the percentage of U.S. Shareholders of the Company resulting in the
loss of its foreign private issuer ("FPI") status under the U.S. securities
laws. During the period the Company had FPI status, these individuals were
exempt from reporting under Section 16. Mr. Dominguez and Camuri Holdings, Ltd.
amended a timely filed Form 3 and 4 to correct typographical errors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as disclosed in this Proxy Statement/Information Circular,
Management is unaware of any material interest, direct or indirect, of any
director or officer of the Company, of any Management nominee for election as a
director of the Company or of any person who beneficially owns or exercises
control or direction over shares carrying more than 10% of the voting rights
attached to all shares of the Company, or any associate or affiliate of any such
person, in any transaction since the beginning of the Company's last completed
fiscal year or in any proposed transaction that has materially affected of would
materially affect the Company or any of its subsidiaries other than as described
below.
On November 4, 1997, the Company closed a private placement of a
$750,000.00 convertible loan with 7,000,000 detachable warrants with TOSI, LLP.
The loan matures on October 16, 1998, and can be converted into common shares of
the Company at $0.15 CND per share at any time prior to maturity, at the option
of the payee. The loan accrues interest at the rate of 10% per annum, and is
secured by a senior lien on certain assets of Flotek and its subsidiaries. Each
detachable warrant entitles the holder to purchase one common share at $0.15
CND. Gary Pittman, a nominee for director, owns a 10% limited partnership
interest in TOSI, LLP.
11
<PAGE> 12
On November 21, 1997, the Company converted a portion of its trade and
short-term debt into common shares of the Company. The Company issued 4,715,165
common shares to retire $516,135.00 in trade and short-term debt. Included in
the common shares issued was 1,531,419 shares issued to a director, Wallace
Robertson, for consulting fees of $175,019.40 ($100,000 of which was for the
Company's 1998 fiscal year), and 2,405,832 common shares to Camuri Holdings,
Ltd., a security holder known to own more than ten percent of the Company's
outstanding common shares, to retire short-term debt and accrued interest of
$257,767.76. In addition, the Company paid Wallace Robertson approximately
$95,000 in cash for consulting fees to promote the sale of the Company's
products.
The Company has retained the law firm of Milner Fenerly to perform legal
services during the past fiscal year. Mr. David A. Spencer, a director of the
Company is a partner with Milner Fenerly.
EMPLOYMENT ARRANGEMENTS
The Company is a party to an employment agreement with its CEO, William G.
Jayroe. Such employment agreement specifies a minimum salary and benefits
payable to him during the term of the employment agreement. The employment
agreement also contains certain provisions restricting Mr. Jayroe's ability to
compete against the Company after termination of the agreement, and his ability
to use or disclose confidential information. The term of the employment
agreement is three years ending September 16, 2000.
COMPENSATION/SUCCESSION COMMITTEE REPORT
The following Report of the Compensation/Succession Committee and the
performance graph located on page 13 shall not be deemed to be "soliciting
material" or to be "filed" with the Securities Exchange Commission (the
"Commission") or subject to Regulations 14A or 14C of the Commission or to the
liabilities of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") and shall not be deemed incorporated by reference into any filing under
the Securities Act of 1933 or the Exchange Act, notwithstanding any general
incorporation by reference of this Proxy Statement/Information Circular into any
other document.
The Committee seeks to provide a competitive compensation package that
enables the Company to attract and retain key executives, to integrate pay
programs with the business objectives of the Company and to link individual
executive compensation with the Company's performance. The salary paid to the
Company's executives is targeted to be in line with related industry companies
of similar size, while taking into account the experience of individual officers
and the requirements of attracting prospective key executives to join Flotek. In
general, the Committee attempts to fix base salaries at levels deemed
appropriate by the Committee in order that compensation packages may also
emphasize result-oriented factors reflected in a bonus potential and the value
of stock options and stock ownership. The Committee reviews salaries and pay
ranges for its executives, and salaries may be increased based on the
Committee's assessment of an individual's performance and contributions to
Flotek's goals. Salary adjustments are general based on historical performance.
In June of 1997, the Compensation/Succession Committee approved an Employment
Agreement with the President and Chief Executive Officer, Mr. William G. Jayroe,
in which he agreed to provide continued services to the Company through
September 16, 2000. The Company agreed to continue Mr. Jayroe's base salary as
was in effect in 1997 and to continue certain life and health insurance
benefits. No executive officers of the Company received bonuses for fiscal year
ending February 28, 1998.
Compensation/Succession Committee
Gary M. Pittman
Larry R. Shaben
12
<PAGE> 13
STOCK PERFORMANCE GRAPH
The graph below compares cumulative total returns (changes in stock price
plus reinvested dividends) on the hypothetical investment of $100 in the
Global-US (Dow Equity) Market, the peer group of Other Oilfield Equipment and
Service Companies, and the Common Stock of Flotek, for the period commencing
February 28, 1993, and ending February 28, 1998.
<TABLE>
<CAPTION>
Other Oilfield Flotek
Measurement Period Equip. Industries
(Fiscal Year Covered) Global-US Services Inc.
<S> <C> <C> <C>
2/28/93 100 100 100
2/28/94 110 98 208
2/28/95 120 102 240
2/29/96 160 135 95
2/28/97 195 178 52
2/28/98 260 255 30
</TABLE>
PARTICULARS OF OTHER MATTERS TO BE ACTED UPON
CONFIRMATION OF BY-LAW NO. 1
The Board of Directors has approved the adoption of the By-law to regulate
the business and affairs of the Company. Pursuant to Section 98 of the ABCA, the
Directors have the power to make by-laws that regulate the business and affairs
of the Company. Section 98 of the ABCA requires such by-laws to be confirmed by
the Shareholders of the Company by special resolution at the next Meeting of
Shareholders. If the By-law is confirmed by the Shareholders, the By-law will be
effective as of October 15, 1997. If the By-law is rejected, it will not become
effective. Shareholders also have the option to propose amendments to the By-law
and to confirm or reject the By-law as amended. The Shareholders are asked to
confirm the By-law amendments by the following special resolution:
BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:
1. Section 4.2 of the Corporation's By-law No. 1 is hereby amended
effective October 15,1997, by deleting the following sentence in its
entirety:
"A Majority of the Directors shall be resident Canadians."
and replacing it with the following:
"Subject to subsection 100(4) of the Act, not more than one-third of the
Directors of the Corporation must be resident Canadians if the
Corporation earns in Canada, directly or through its subsidiaries, less
than 5% of the gross revenues of the holding corporation and all of its
subsidiary bodies."
13
<PAGE> 14
2. Section 4.8 of the Corporation's By-law No. 1 is hereby amended
effective October 15, 1997, by deleting the section in its entirety and
replacing it with the following:
"4.8 Canadian Presence at Meetings. The Board shall not transact
business at a Meeting, other than filing a vacancy in the Board unless
at least one-third of the Directors present are resident Canadians,
except where a resident Canadian Director who is unable to be present
approves in writing or by telephone, electronic or other means of
communication the business to be transacted at the Meeting."
3. Any director or officer of the Corporation is hereby authorized and
directed, for and on behalf of the Corporation, to execute and deliver
all such documents and to do all such acts and things as he may
determine to be necessary or advisable to give effect to this
resolution, the execution of any such document or the doing of any such
other act or thing being conclusive evidence of such determination.
The Company is asking the shareholders to confirm the By-laws amendment to
allow it more flexibility in attracting qualified Board members and in
implementing corporate action. Additionally, from time to time certain
non-Canadian investors have requested the right to nominate a qualified Board of
Directors member in connection with their investment in the Company. Often, the
proposed nominees are not Canadian residents. The Board of Directors believes it
is in the best interests of the Company to (i) reduce the required percentage of
Canadian residency requirements so that the Company will have a wider pool of
candidates from which it can nominate qualified Board members and (ii) reduce
the percentage of resident Canadians required to be present at Board meetings.
APPROVAL OF ISSUANCE OF SHARES
At the Meeting, Management proposes to seek approval, as required by the
Vancouver Stock Exchange, of an ordinary resolution authorizing the issuance in
connection with a financing of the Company, of such number of shares of common
stock, warrants to purchase common stock, or a combination thereof, to any one
person or any group of persons who intend to vote their shares as a group, where
the number of common shares is equal to or greater than 20% of the Company's
Common Stock outstanding, after giving effect to the issuance of such
securities, so long as the Directors of the Company are of the view that such
transaction is in the best interests of the Company ("Stock Issuance
Resolution.") The Company is seeking approval of the Stock Issuance Resolution
to enable the Company to expeditiously seek equity capital for its working
capital needs.
The Stock Issuance Resolution, if approved, may be used in the near future
if the Company consummates a private offering of its common stock in a
transaction which it is currently discussing with two possible investors. The
terms of the proposed issuance of its common stock are described below. If this
offering is not consummated, there are no other offerings contemplated in the
proximate future, however, the Company will continue to review investor
proposals which may ultimately result in the issuance of common stock under the
Stock Issuance Resolution. If the Stock Issuance Resolution is approved, the
Company would not seek further shareholder approval of a future issuance of
Common Stock meeting the criteria set forth in the Stock Issuance Resolution
unless required by applicable law or the Vancouver Stock Exchange.
The Company is negotiating a private placement of 9,333,333 shares of its
common stock and 9,333,333 share purchase warrants to two qualified investors
for an aggregate cash consideration of $1,000,000 US (CDN$1,400,000). The
proposed consideration for the common stock to be issued with attached warrant
is $0.15 CDN per share. As of June 1, 1998 the Company's closing price on the
Vancouver Stock Exchange was $.13 CDN per share of common stock. Each warrant
would be exercisable at the issue price CDN $0.15 per warrant for the first year
following the closing of the transaction and CDN $0.17 per warrant for the
second year following the closing of the transaction. The shares of common stock
to be issued will have the same rights and preferences as the Company's
outstanding Common Stock. The holders of the Company's outstanding Common Stock,
as well as any proposed holders of resulting from the new issuance, will have no
statutory preemptive rights but certain existing holders of the Company's common
stock have contractual preemptive rights. The Common Stock to be issued if the
transaction is consummated will not be registered and will be issued in a
private transaction, exempt from registration. The proceeds of the proposed
offering will
14
<PAGE> 15
be used to fund working capital. If the proposed transaction is consummated, the
new investors, if voting as a group, would represent approximately 19.8% of the
Company's outstanding shares of Common Stock on a fully diluted basis and 17.6%
of the Company's outstanding shares of Common Stock on an undiluted basis using
beneficial ownership information available to the Company as of May 19, 1998.
Currently there are 20,741,667 warrants outstanding; after consummation of the
transaction there will be 30,075,000 warrants outstanding. See "Security
Ownership of Certain Beneficial Owners, Directors and Management" described
earlier in this Proxy Statement. A finder's fee is being negotiated for up to 5%
of the transaction face amount payable in common stock to a maximum of 466,666
shares.
Management recommends that the Shareholders vote "For" the approval of the
Stock Issuance Resolution set forth below:
"BE IT RESOLVED, AS AN ORDINARY RESOLUTION, THAT the issuance, in
connection with a financing of the Company or a subsidiary of the Company,
of such number of equity securities, being common shares, warrants or a
combination thereof, to any one person or any group of persons who intend
to vote their equity shares as a group, where the number of common shares
to be issued, including any common shares which might be issued upon any
conversion or exchange, is equal to or greater than 20% of the Company's
common shares outstanding after giving effect to the issuance of such
securities, so long as the Directors of the Company are of the view that
such transaction is in the best interests of the Company, be approved."
OPTIONS TO PURCHASE SECURITIES
At the Meeting, Management proposes to seek approval of (i) the grant of
new stock options to insiders of the Company in the future at such prices and
for such numbers of shares as may be determined by the Board of Directors and
acceptable to the Vancouver Stock Exchange, (ii) the ratification of the Board's
prior stock option grants to insiders of the Company and (iii) the renegotiation
of stock options previously granted to insiders of the Company, as same may be
amended or extended from time to time, at prices and in amounts as may from time
to time be determined by the Directors and acceptable to the applicable
regulatory authorities.
Shareholder approval to the grant and re-negotiation of insiders' stock
options is required pursuant to the policies of the Vancouver Stock Exchange. If
such approval is not obtained, the Company will not grant further options to
insiders or re-negotiate existing insider options. The term "insider" is defined
in the Securities Act (British Columbia) and includes Directors, executive
officers, the five highest-paid employees and holders of greater than 10% of the
voting securities of the Company.
The text of such resolution is set forth below.
"BE IT RESOLVED, AS AN ORDINARY RESOLUTION, THAT stock options
previously granted to insiders of the Company be ratified and
approved, that the Directors be authorized to grant stock options to
insiders of the Company in the future at such prices and for such
numbers of shares as may be determined by the Board of Directors and
acceptable to the Vancouver Stock Exchange and that the Directors be
authorized to renegotiate any stock options previously granted to
insiders of the Company or which may hereafter be granted to insiders
of the Company, as to price or number of shares or both, all on such
terms as may be acceptable to the Vancouver Stock Exchange."
The Company is seeking shareholder approval for the foregoing proposals
relating to stock options in accordance with requirements of the Vancouver Stock
Exchange. The Company believes stock options are necessary to motivate employees
and consultants to achieve long-range goals and to provide incentive
compensation opportunities that are competitive to those of similar companies.
DIRECTORS' DISCRETIONARY AUTHORITY
Management recommends that the Shareholders approve an ordinary resolution
to grant the Board of Directors authority to amend, postpone or abandon
implementation of any of the resolutions set out above if
15
<PAGE> 16
the Board decides, in its sole discretion, that it is not in the best interests
of the Company to proceed with the actions authorized by the resolutions. The
text of the resolution is as follows:
"BE IT RESOLVED, AS AN ORDINARY RESOLUTION, THAT the Board of
Directors be authorized to amend, postpone or abandon implementation
of any of the special resolutions set forth above if, in the sole
discretion of the Board of Directors, it is not necessary, advisable
or in the best interests of the Company to proceed with them."
APPOINTMENT AND REMUNERATION OF AUDITORS
At the Meeting, Management will seek Shareholder approval of the Board's
re-appointment of Grant Thornton LLP, as the Company's independent auditors, to
hold office until the next annual Meeting of Shareholders at such remuneration
as may be fixed by the Board of Directors. Grant Thornton LLP was first
appointed the Company's auditors on August 22, 1996. Representatives of Grant
Thornton LLP are expected to be present at the Annual Meeting, with an
opportunity to make a statement if they desire to do so, and are expected to be
available to respond to appropriate questions.
REQUIRED VOTE
Each of the nominees for director who receive the affirmative vote of the
holders of a majority of shares of Common Stock, represented in person or by
proxy and entitled to vote at the Annual Meeting, will be elected. Additionally,
all proposals before the Meeting will be approved if they receive the
affirmative vote of the holders of a majority of shares of Common Stock,
represented in person or by proxy and entitled to vote at the Annual Meeting.
Abstentions will not be treated as a vote for or against any particular director
or proposal and will not affect the outcome of the election of directors or the
proposal.
16
<PAGE> 17
SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals to be presented at the 1999 Annual Meeting of
Shareholders of Flotek must be received at Flotek's executive offices at 7030
Empire Central Drive, Houston, TX 77040, addressed to the attention of the
Secretary, by February 15, 1999, in order to be included in the proxy statement
and form of proxy relating to such Meeting.
INCORPORATION BY REFERENCE
The Company hereby incorporates by reference Items 6, 7 and 8 of Part II of
its Form-KSB for the fiscal year ended February 28, 1998 filed with the
Securities and Exchange Commission on June 11, 1998.
APPROVAL OF DIRECTORS
The contents and the sending of this Proxy Statement/Information Circular
have been approved by the Directors of the Company.
/s/ WILLIAM G. JAYROE
William G. Jayroe
President and Chief Executive Officer
June 1, 1998
17
<PAGE> 18
PROXY
ANNUAL GENERAL MEETING OF MEMBERS OF FLOTEK INDUSTRIES INC. TO BE HELD AT
RAMADA PLAZA HOTEL, 12801 NORTHWEST FREEWAY, HOUSTON, TEXAS ON WEDNESDAY, JULY
29, 1998, AT 2:00 P.M.
THE UNDERSIGNED MEMBER OF THE COMPANY HEREBY APPOINTS, WILLIAM G. JAYROE, a
Director of the Company, or failing this person, WALLACE ROBERTSON, a Director
of the Company, or in the place of the foregoing, __________________________,
(print the name), as proxyholder for and on behalf of the Member of the power
of substitution to attend, act and vote for and on behalf of the Member in
respect of all matters that may properly come before the aforesaid meeting of
the Members of the Company (the "Meeting") and at every adjournment thereof,
to the same extent and with the same powers as if the undersigned Member were
present at the said Meeting, or any adjournment thereof.
The Member hereby directs the proxyholder to vote the securities of the Company
registered in the name of the Member as specified herein.
RESOLUTIONS (for full details of each item, please see the enclosed Notice of
Meeting and Proxy Statement/Information Circular)
<TABLE>
<CAPTION>
For Against Abstain
<S> <C> <C> <C>
1. To approve amendments to By-law No. 1 regarding Canadian
residency requirements ____ ____ ____
2. To approve an issuance of >20% of outstanding shares for a
private placement ____ ____ ____
3. To approve stock option grants ____ ____ ____
4. To grant discretionary authority to the Board of Directors ____ ____ ____
5. To appoint, as Auditors, GRANT THORNTON LLP ____ ____ ____
6. To grant the proxyholder authority to vote at his/her discretion
on any other business or amendment or variation to the previous
resolutions ____ ____ ____
<CAPTION>
For Withhold Abstain
<S> <C> <C> <C>
7. To elect, as Director, GARY M. PITTMAN ____ ____ ____
8. To elect, as Director, WILLIAM R. ZIEGLER ____ ____ ____
9. To elect, as Director, WILLIAM G. JAYROE ____ ____ ____
10. To elect, as Director, WALLACE ROBERTSON ____ ____ ____
11. To elect, as Director, LARRY R. SHABEN ____ ____ ____
12. To elect, as Director, DAVID A. SPENCER ____ ____ ____
</TABLE>
THE UNDERSIGNED MEMBER HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN TO ATTEND AND
VOTE AT SAID MEETING.
SIGN HERE: ___________________________________________
PLEASE PRINT NAME: ___________________________________________
DATE: ___________________________________________
THIS PROXY FORM MAY NOT BE VALID UNLESS IT IS SIGNED AND DATED. SEE IMPORTANT
INFORMATION AND INSTRUCTIONS ON REVERSE.
<PAGE> 19
INSTRUCTIONS FOR COMPLETION OF PROXY
1. THIS PROXY IS SOLICITED BY THE MANAGEMENT OF THE COMPANY.
2. This form of proxy ("Instrument of Proxy") MAY NOT BE VALID UNLESS IT IS
SIGNED by the Member or by his attorney duly authorized by him in writing,
or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and IF EXECUTED BY AN ATTORNEY, OFFICER,
OR OTHER DULY APPOINTED REPRESENTATIVE, the original or a notarial copy of
the instrument so empowering such person, or such other documentation in
support as shall be acceptable to the Chairman of the Meeting, must
accompany the Instrument of Proxy.
3. IF THIS INSTRUMENT OF PROXY IS NOT DATED in the space provided, authority
is hereby given by the Member of the proxyholder to date this proxy on the
date on which it is received by Pacific Corporate Trust Company.
4. A MEMBER WHO WISHES TO ATTEND THE MEETING AND VOTE ON THE RESOLUTIONS IN
PERSON, may do so as follows:
(a) IF THE MEMBER IS REGISTERED AS SUCH ON THE BOOKS OF THE COMPANY,
simply register the Member's attendance with the scrutineers at
the Meeting.
(b) IF THE SECURITIES OF A MEMBER ARE HELD BY A BROKERAGE FIRM OR
FINANCIAL INSTITUTION, (i) cross off the management appointees'
names and insert the Member's name in the blank space provided;
(ii) indicate a voting choice for each resolution or,
alternatively, leave the choices blank if you wish not to vote
until the Meeting; and (iii) sign, date and return the Instrument
of Proxy to the brokerage firm or financial institution, or its
agent, according to the instructions received with the proxy. At
the Meeting, a vote will be taken on each of the resolutions set
out on this Instrument of Proxy and the Member's vote will be
counted at that time.
5. A MEMBER WHO IS NOT ABLE TO ATTEND THE MEETING IN PERSON BUT WISHES TO
VOTE ON THE RESOLUTIONS, may do either of the following:
(a) TO APPOINT ONE OF THE MANAGEMENT APPOINTEES named on the Instrument
of Proxy, leave the wording appointing a nominee as is, and simply
sign, date and return the Instrument of Proxy. Where no choice is
specified by a Member with respect to resolution set out on the
Instrument of Proxy, a management appointee acting as proxyholder
will vote the securities as if the Member had specified an
affirmative vote.
(b) TO APPOINT ANOTHER PERSON, who need not be a Member of the Company,
to vote according to the Member's instructions, cross off the
management appointees' names and insert the Member's appointed
proxyholder's name in the space provided, and then sign, date and
return the Instrument of Proxy. Where no choice is specified by the
Member with respect to a resolution set out on the Instrument of
Proxy, this Instrument of Proxy confers discretionary authority
upon the Member's appointed proxyholder.
6. THE SECURITIES REPRESENTED BY THIS INSTRUMENT OF PROXY WILL BE VOTED OR
WITHHELD FROM VOTING IN ACCORDANCE WITH THE INSTRUCTIONS OF THE MEMBER ON
ANY POLL of a resolution that may be called for and, if the Member
specifies a choice with respect to any matter to be acted upon, the
securities will be voted accordingly. Further, if so authorized by this
Instrument of Proxy, the securities will be voted by the appointed
proxyholder with respect to any amendments or variations of any of the
resolutions set out on the Instrument of Proxy or matters which may
properly come before the Meeting as the proxyholder in its sole discretion
sees fit.
7. If a registered Member has returned the Instrument of Proxy, THE MEMBER
MAY STILL ATTEND THE MEETING and may vote in person should the Member
later decide to do so. However, to do so, the Member must record his/her
attendance with the scrutineers at the Meeting and revoke the Instrument
of Proxy in writing.
================================================================================
TO BE REPRESENTED AT THE MEETING, THIS INSTRUMENT OF PROXY MUST BE RECEIVED AT
THE OFFICE OF "PACIFIC CORPORATE TRUST COMPANY" BY MAIL OR BY FAX NO LATER THAN
FORTY-EIGHT ("48") HOURS (EXCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS) PRIOR TO
THE TIME OF THE MEETING, OR ADJOURNMENT THEREOF.
THE MAILING ADDRESS OF PACIFIC CORPORATE TRUST COMPANY IS SUITE 830, 625 HOWE
STREET, VANCOUVER, BRITISH COLUMBIA, V6CB8 AND ITS FAX NUMBER IS (604) 689-8144.
================================================================================
<PAGE> 20
FLOTEK INDUSTRIES INC.
ANNUAL RETURN CARD FORM
(Supplemental Mailing List and Request for Interim Financial Statements)
ANNUAL GENERAL MEETING, JULY 29, 1998
TO: SECURITIES HOLDERS OF FLOTEK INDUSTRIES INC.
(the "Corporation")
National Policy Statement No. 41, entitled "Shareholder Communication" provides
security holders with the opportunity to elect annually to have their names
added to the Corporation's Supplemental Mailing List in order to receive
interim financial statements and other selected shareholder communications.
If you wish your name to be added to the Corporation's Supplemental Mailing
List for the aforesaid purposes, please complete, sign and mail this form to
Pacific Corporate Trust Company, Suite 830, 625 Howe Street, Vancouver, British
Columbia, V6C 3B8.
Name of Security Holder, or if the
Security Holder is a company, name and
office of authorized signatory.
-------------------------------------
-------------------------------------
Address (including post code) of
Security Holder
I, as evidenced by my signature affixed hereto, HEREBY CERTIFY THAT I am a
security holder (other than debt securities) of the Corporation and request
that my name be placed on the Corporation's Supplemental Mailing List.
- ------------------------------------ -------------------------------------
Date Signature of Security Holder or, if
the Security Holder is a company,
signature of authorized signatory
