SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT
(Pursuant to Section 14(a) of the Securities Exchange Act of 1934)
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or rule 14a-12
GeoResources, Inc.
(Name of Registrant as Specified in its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other that 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)(1) 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:
May 1, 2002
TO OUR SHAREHOLDERS:
You are cordially invited to attend our Annual Meeting of Shareholders to
be held on Tuesday, June 11, 2002, at 2:00 P.M. Central Daylight Savings
Time, at the Airport International Inn, Highway 2 and 85 North, Williston,
North Dakota. The other directors and officers join me in extending this
invitation.
The formal matters to be acted upon at the meeting are described in the
accompanying Notice of Annual Meeting of Shareholders and Proxy Statement.
In addition to the formal issues, a brief report of our operations will
also be presented.
It is very important that your shares are represented at the meeting. If
you are unable to attend the meeting but have questions or comments about
our operations, we would like to hear from you.
The form of proxy is enclosed. To assure that your shares will be voted
at the meeting, please complete and sign the enclosed postage paid proxy
and return it promptly. No additional postage is required if mailed in the
United States. The giving of a proxy will not affect your right to vote in
person if you attend the meeting.
Sincerely,
GEORESOURCES, INC.
/s/ J.P. Vickers
J.P. VICKERS
President
GeoResources, Inc.
1407 W. Dakota Parkway, Suite 1-B
Williston, ND 58801
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NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
To be held on June 11, 2002
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TO OUR SHAREHOLDERS:
The 2002 Annual Meeting (the "Meeting") of Shareholders of GeoResources,
Inc. will be held at the Airport International Inn, Highway 2 and 85 North,
Williston, North Dakota, on Tuesday, June 11, 2002 at 2:00 P.M., Central
Daylight Savings Time, for the following purposes:
1. To set the number of directors for the ensuing year;
2. To elect directors for the ensuing year; and
3. To consider and act upon such other matters as may properly come
before the Meeting and any adjournments thereof.
Only shareholders of record at the close of business on April 24, 2002
are entitled to notice of and to vote at the meeting.
Shareholders are requested to sign and date the enclosed proxy and return
it to our offices. The proxy requires no postage if mailed in the United
States.
By Order of the Board of Directors.
CATHY KRUSE
Corporate Secretary
/s/ Cathy Kruse
May 1, 2002
GEORESOURCES, INC.
PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
The accompanying proxy is solicited by our Board of Directors for use at
our Annual Meeting of Shareholders to be held at 2 p.m. on Tuesday, June
11, 2002, at the Airport International Inn, Highway 2 and 85 North,
Williston, North Dakota, and for the purposes set forth in the Notice of
Annual Meeting of Shareholders and at any adjournments thereof.
The cost of soliciting proxies, including the preparation, assembly, and
mailing of the proxies and solicitation material, as well as the cost of
forwarding such material to the beneficial owners of stock, will be borne
by us. Directors, officers and regular employees may, without compensation
other than their regular remuneration, solicit proxies personally or by
telephone.
Any shareholder giving a proxy may revoke it at any time prior to its use
at the meeting by giving written notice of revocation to our Secretary or
by attending the meeting and voting in person. At any time before the vote
on a proposal, you can change your vote either by giving our Secretary a
written notice revoking your proxy or by signing, dating, and returning to
us a new proxy. We will honor the proxy with the latest date. If the
enclosed proxy is executed properly and returned in time to be voted at the
meeting, the shares represented will be voted as instructed. Proxies which
are signed but which lack any voting instructions will be voted in favor of
the number and slate of directors proposed by the Board of Directors and
will be deemed to grant discretionary authority to vote upon any other
matters properly before the meeting.
The mailing address of our principal executive office is P. O. Box 1505,
Williston, North Dakota 58802-1505. This Proxy Statement and the
accompanying proxy card were mailed to our shareholders on or about May 1,
2002.
Our Board of Directors fixed April 24, 2002, as the record date for the
determination of shareholders entitled to vote at the meeting. Persons who
were not shareholders on that date will not be allowed to vote at the
meeting.
At the close of business on April 24, 2002, there were issued and
outstanding 3,787,477 shares of our Common Stock, par value $0.01 per
share, our only class of voting securities. A majority of the shares of
Common Stock outstanding must be represented at the meeting in person or by
proxy to constitute a quorum for the two proposals and for the transaction
of any other business that is properly brought before the meeting. On
matters other than the election of directors, holders of the Common Stock
are entitled to one vote per share held as of the record date. With
respect to the election of directors, each holder of Common Stock is
entitled to cumulative voting rights, that is, to cast all of his votes
(determined by multiplying the number of shares owned by the total number
of other directors to be elected) for any one nominee or to distribute his
votes among any two or more nominees. There are no conditions precedent to
the exercise of cumulative voting rights. Discretionary authority to
cumulate votes in the election of directors is solicited in this proxy
statement.
PROPOSAL NUMBER 1 - NUMBER OF DIRECTORS
Our Articles of Incorporation provide that the number of directors shall
not be less than three nor more than ten. In accordance with the Board's
recommendations over the past several years, the Board recommends that the
number of directors for the ensuing year be set at five and that five
directors be elected. This proposal does not involve a change in the
Articles of Incorporation or Bylaws. Each proxy will be voted for or
against such number or not voted at all as directed in the proxy. An
affirmative vote by a majority of the shares represented in person or by
proxy at the meeting is necessary to adopt Proposal Number 1 setting the
number of directors for the ensuing year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO SET THE
NUMBER OF DIRECTORS AT FIVE.
PROPOSAL NUMBER 2 - ELECTION OF DIRECTORS
In the election of directors, each proxy will be voted for each of the
nominees listed in the table below (with discretionary authority to
cumulate votes) unless the proxy withholds authority to vote for one or
more of the nominees. If elected, each nominee will serve until the next
annual meeting of shareholders and until his successor shall be duly
elected and shall qualify.
If, prior to the meeting, it should become known to the Board of
Directors that any one of the nominees named below will be unable to serve
as a director after the meeting, the proxy will be voted for substitute
nominee(s) selected by the Board of Directors. The Board has no reason to
believe that any of the nominees will be unable to serve. In the election
of directors, the number of nominees equaling the number of directors to be
elected, having the highest number of votes cast in favor of their
election, are elected to the Board of Directors.
The following table provides certain information with respect to our
nominees for directors.
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Current Position(s)
With the Company and
Business Experience Director
Name of Nominee Age During Past Five Years Since
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H. Dennis Hoffelt 61 Director; President and 1967;
Chief Operations Officer except
of Triangle Electric, Inc., for 1986
Williston, North Dakota,
an electrical contracting
firm from 1975 to 1997.
Jeffrey P. Vickers 49 President and Director 1982
since January 1983 and
June 1982, respectively.
Cathy Kruse 47 Secretary since October 1981; 1996
Treasurer, October 1981 to
May 1985 and June 1990 to June 2000.
Director since June 1996.
Office Manager since May 1981.
Paul A. Krile 74 Director; President and 1997
owner of Ranco Fertiservice,
a manufacturer of dry fertilizer
handling equipment, for over
five years.
Duane Ashley 54 Director; Senior Salesman 1999
for Weatherford Enterra, Inc. since
September 2000 and for over five years
prior to January 1999.
Senior Salesman for GRACO Fishing
and Rental Tools, Inc. from
January 1999 to September 2000.
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Cathy Kruse is the sister-in-law of Jeffrey P. Vickers. No other family
relationship exists between or among any of the officers or nominees.
There are no arrangements or understandings between any of the directors or
nominees and any other person pursuant to which any person was or is to be
elected as a director or nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE NOMINEES.
BOARD OF DIRECTORS
During the fiscal year ended December 31, 2001, our Board of Directors
held five meetings. All directors attended 100% of the meetings. The
Board of Directors has a standing Audit Committee composed of Messrs.
Ashley, Hoffelt and Krile. The function of the Audit Committee is to
provide assistance to the Board of Directors in fulfilling its
responsibility to the shareholders, potential shareholders and the
investment community in respect of corporate accounting, our reporting
practices, and the quality and integrity of the financial reports of the
Company. The Audit Committee held two meetings during the fiscal year
ended December 31, 2001. The Board does not have standing nominating or
compensation committees.
Information as to ownership of our securities by the nominees for
director is included under the heading "Security Ownership of Certain
Beneficial Owners and Management."
EXECUTIVE OFFICERS
The Company's executive officers as of April 24, 2002, were as follows:
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Name Age Position
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J. P. Vickers 49 Chairman of the Board
President, Chief Executive
Officer and Chief Financial Officer
Jeffrey B. Jennings 45 Vice President of
Land and Finance
Thomas F. Neubauer 67 Vice President of
Leonardite Operations
Cathy Kruse 47 Secretary
Connie Hval 41 Treasurer
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Mr. Vickers has been a director since June 1982. He became the
President, Chief Executive Officer and Chief Financial Officer in January
1983. He was the Drilling and Production Manager from August 1981 to
January 1983.
Mr. Jennings has been the Vice President of Land and Finance since June
2000. He was a consultant for us for two years prior to his employment
with us in January 1996.
Mr. Neubauer has been the Vice President of Leonardite Operations since
June 1992. He has been the plant manager since July 1965.
Cathy Kruse has been the Corporate Secretary since October 1981 and a
director since June 1996. She served as Treasurer from October 1981 to May
1985 and from June 1990 to June 2000. She has been the Office Manager
since May 1981.
Connie Hval has been the Treasurer since June 2000. She has been the
comptroller since January 1981.
COMPENSATION AND OTHER MATERIAL TRANSACTIONS
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table presents the aggregate compensation earned by our
Chief Executive Officer for each of the past three years. We do not have
an employment contract with any of our executive officers. None of our
employees earned total annual salary and bonus in excess of $100,000.
There has been no compensation awarded to, earned by or paid to any
employee required to be reported in any table or column in any fiscal year
covered by any table, other than what is set forth in the following table.
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Annual Compensation Long Term Compensation
----------------------------- --------------------------------------
Awards Payouts
---------------------- ---------------
All
Other Restricted Securities Other
Name and Annual Stock Underlying LTIP Compen-
Principal Salary Bonus Compen- Award(s) Options Payouts sation
Position Year ($) ($) sation ($) SARs(#) ($) ($)
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Jeffrey 2001 $90,579 -0- -0- N/A -0- N/A $4,529
P. 2000 $84,978 -0- -0- N/A -0- N/A $6,091
Vickers, 1999 $76,307 -0- -0- N/A -0- N/A $8,722
CEO
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In the preceding table, the column titled "All Other Compensation" is
comprised entirely of profit sharing amounts and the 401(k) matching funds
discussed below.
If we achieve net income in a fiscal year, our Board of Directors may
determine to contribute an amount based on our profits to the Employees'
Profit Sharing Plan and Trust (the "Profit Sharing Plan"). An eligible
employee may be allocated from 0% to 15% of his other compensation
depending upon the total contribution to the Profit Sharing Plan. A total
of 20% of the amount allocated to an individual vests after three years of
service, 40% after four years, 60% after five years, 80% after six years
and 100% after seven or more years. On retirement, an employee is eligible
to receive the vested amount. On death, 100% of the amount allocated to an
individual is payable to the employee's beneficiary. We made total
contributions to the Profit Sharing Plan, matching and discretionary, for
the years ended December 31, 2001, 2000 and 1999 of $24,614, $36,474, and
$37,312, respectively. As of December 31, 2001, vested amounts in the
Profit Sharing Plan for all officers as a group was approximately $613,000.
Effective July 1, 1997, we executed an Adoption Agreement Nonstandardized
Code 401(k) Profit Sharing Plan that incorporated a 401(k) Plan into the
existing Profit Sharing Plan. Eligible employees are allowed to defer up
to 15% of their compensation and we match up to 5%.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table summarizes for our Chief Executive Officer (i) the
total number of shares received upon exercise of stock options during the
fiscal year ended December 31, 2001, (ii) the aggregate dollar value
realized upon such exercise, (iii) the total number of unexercised options,
if any, held at December 31, 2001, and (iv) the value of unexercised in-the-
money options, if any, held at December 31, 2001.
In-the-money options are options where the fair market value of the
underlying securities exceeds the exercise or base price of the option.
The aggregate value realized upon exercise of a stock option is the
difference between the aggregate exercise price of the option and the fair
market value of the underlying stock on the date of exercise. The value of
unexercised, in-the-money options at fiscal year-end is the difference
between the exercise price of the option and the fair market value of the
underlying stock on December 31, 2001, which was $1.55 per share. With
respect to unexercised, in-the-money options, the underlying options have
not been exercised, and actual gains, if any, on exercise will depend on
the value of our Common Stock on the date of exercise.
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Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at FY-End(#) at FY-End($)
Acquired on Value Exercisable/ Exercisable
Name Exercise(#) Realized($) Unexercisable Unexercisable
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Jeffrey P.
Vickers, CEO -0- -0- 71,000/0 0/0
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OPTION GRANTS IN LAST FISCAL YEAR
At our 1993 Annual Meeting of Shareholders, a 1993 Employees' Incentive
Stock Option Plan (the "Plan") was approved by shareholders. The purpose
of the Plan is to enable us to attract persons of training, experience and
ability to continue as employees and to furnish additional incentive to
them, upon whose initiative and efforts the successful conduct and
development of our business largely depends, by encouraging them to become
owners of our Common Stock.
The term of the Plan expires on February 17, 2003. If within the
duration of an option, there is a corporate merger consolidation,
acquisition of assets or other reorganization and if this transaction
affects the optioned stock, the optionee will thereafter be entitled to
receive upon exercise of his option those shares or securities that he
would have received had the option been exercised prior to the transaction
and the optionee had been a stockholder with respect to such shares.
Our Board of Directors administers the Plan. The exercise price of the
Common Stock offered to eligible participants under the Plan by grant of an
option to purchase Common Stock may not be less than the fair market value
of the Common Stock at the date of grant; provided, however, that the
exercise price will not be less than 110% of the fair market value of the
Common Stock on the date of grant in the event an optionee owns 10% or more
of the Common Stock. A total of 300,000 shares have been reserved for
issuance pursuant to options to be granted under the Plan. Of the 300,000
reserved shares, options are issued for 178,000 shares at an average
exercise price of $2.34, and 98,000 shares remain in the plan that could be
granted.
No grants of stock options were made by the Company during the fiscal
year ended December 31, 2001.
LONG TERM INCENTIVE PLANS-AWARDS IN LAST FISCAL YEAR
The Company made no awards under a long-term incentive plan in the fiscal
year ended December 31, 2001.
DIRECTOR COMPENSATION
We pay each director who is not also an employee $200 per month and
reimburse the directors for travel expenses.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
We have no employment contracts in place with any of our executive
officers. We also have no compensatory plan or arrangement with respect to
any executive officer where such plan or arrangement will result in
payments to such officer upon or following his resignation, retirement, or
other termination of employment with us and our subsidiaries, or as a
result of a change-in-control of the Company or a change in the executive
officers' responsibilities following a change-in-control.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of our common
stock. Executive officers, directors and greater than 10% shareholders are
required by SEC regulations to furnish us with copies of all Section 16(a)
reports they file. To our knowledge, based solely on review of the copies
of such reports furnished to us or advice that no filings were required
during fiscal year 2001, all executive officers, directors and greater than
10% beneficial owners complied with the Section 16(a) filing requirements.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of our Common Stock
beneficially owned by each of our officers and directors and by all
directors and officers as a group, as of April 24, 2002. Unless otherwise
indicated, the shareholders listed in the table have sole voting and
investment powers with respect to the share indicated.
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Class of Name and Address Amount and Nature Percent
Securities of Beneficial Owner of Beneficial Ownership of Class
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Common Stock, Jeffrey P. Vickers, 331,934-Direct and 8.8%
$.01 par value 1814 14th Ave. W. Indirect(a)
Williston, ND 58801
President and Director
Common Stock, Paul A. Krile, 253,000-Direct 6.7%
$.01 par value P. O. Box 329
Sioux Rapids, IA 50585
Director
Common Stock, Cathy Kruse, 13,700-Direct(c) (b)
$.01 par value 723 14th St. W.
Williston, ND 58801
Secretary and Director
Common Stock, Thomas F. Neubauer, 20,500-Direct(d) (b)
$.01 par value 910 Park Place
Williston, ND 58801
Vice President,
Leonardite Operations
Common Stock, H. Dennis Hoffelt, 41,000-Direct and 1.1%
$.01 par value 9421 East Desert Lake Indirect(e)
Sun Lakes, AZ 85248
Director
Common Stock, Connie R. Hval, 9,500-Direct(f) (b)
$.01 par value 7400 3rd Ave. E.
Williston, ND 58801
Treasurer
Common Stock, Jeffrey B. Jennings, 11,500-Direct(g) (b)
$.01 par value 1410 1st Ave. W.
Williston, ND 58801
Vice President,
Land and Finance
Common Stock, Duane Ashley, 0-Direct and (b)
$.01 par value 910 W. 15th St. Indirect
Williston, ND 58801
Director
Common Stock, Officers and 681,134-Direct and 18.0%
$.01 par value Directors as Indirect
a Group- (a)(b)(c)(d)(e)(f)(g)
(eight persons)
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- --------------------
(a) Includes 139,634 shares owned directly by Mr. Vickers, 2,500 in a
self-directed individual retirement account, 72,000 shares held jointly
with his wife, Nancy J. Vickers, 25,500 shares held directly by his
wife, 1,300 shares in his wife's self-directed individual retirement
account, and an aggregate 20,000 shares held by him as custodian for his
children. Also included are 71,000 shares that may be purchased by Mr.
Vickers under presently exercisable stock options granted pursuant to
our 1993 Employees' Incentive Stock Option Plan.
(b) Less than 1%.
(c) Included are 9,500 shares which may be purchased by Ms. Kruse under
presently exercisable stock options granted pursuant to our 1993 Employees'
Incentive Stock Option Plan.
(d) Included are 9,500 shares which may be purchased by Mr. Neubauer under
presently exercisable stock options granted pursuant to our 1993 Employees'
Incentive Stock Option Plan.
(e) Mr. Hoffelt has sole voting and investment power over 11,500 of shares
and has shared voting and investment powers over the remaining 29,500
shares.
(f) Included are 9,500 shares which may be purchased by Ms. Hval under
presently exercisable stock options granted pursuant to our 1993 Employees'
Incentive Stock Option Plan.
(g) Included are 9,500 shares which may be purchased by Mr. Jennings under
presently exercisable stock options granted pursuant to our 1993 Employees'
Incentive Stock Option Plan.
The following table sets forth information concerning persons known to us
to be the beneficial owners of more than 5% of our outstanding Common Stock
as of April 24, 2002.
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Amount of
Class of Name and Shares and Nature of Percent
Securities Address of Person Beneficial Ownership of Class
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Common Stock, Jeffrey P. Vickers 331,934-Direct and 8.8%
$.01 par value 1814 14th Ave. W. Indirect(a)
Williston, ND 58801
Common Stock, Paul A. Krile 253,000-Direct 6.7%
$.01 par value P. O. Box 329
Sioux Rapids, IA 50585
Common Stock, Kyle Krueger 190,900-Direct and 5.0%
$.01 par value 3934 Bayshore Blvd NE Indirect(b)(c)
St. Petersburg, FL 33073
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(a) See footnote (a) of the immediately preceding table
(b) This information was obtained from our transfer agent, Wells Fargo
Bank Minnesota, N.A., on March 12, 2002 and the Depository Trust Company's
non-objecting beneficial owners' list dated December 31, 2001.
(c) Includes 108,000 shares owned by Apollo Capital Management Group,
54,700 shares owned by Apollo Micro Cap Fund and 27,000 shares held jointly
with his wife Anne Krueger.
INDEPENDENT PUBLIC ACCOUNTANTS
Our independent public accounting firm is Richey, May & Co., P. C.,
("Richey"), of Englewood, Colorado. Richey audited our accounts for the
2000 and 2001 fiscal years. Richey is expected to be our independent
auditor for 2002.
AUDIT FEES
The aggregate fees billed or estimated to be billed for professional
services rendered by our independent auditors for the audit of our annual
financial statements for the fiscal year ended December 31, 2001 and for
the reviews of the financial statements included in the Company's quarterly
reports on Form 10-QSB for that fiscal year were approximately $25,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Our independent auditors did not perform any financial information
systems design or implementation work for us during the fiscal year ended
December 31, 2001.
AUDIT COMMITTEE REPORT
The Audit Committee reports to and acts on behalf of the Board of
Directors by providing oversight of our financial management, independent
auditors and financial reporting procedures. The Audit Committee's
Charter, which was adopted in 2000, was enclosed with our 2001 proxy
statement. Our management is responsible for preparing our financial
statements and the independent auditors are responsible for auditing those
financial statements. The Audit Committee is responsible for overseeing
the conduct of these activities by our management and the independent
auditors. In this context, the Audit Committee has met and held
discussions with management and the independent auditors. Management
represented to the Audit Committee that our consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, and the Audit Committee has reviewed and discussed the
consolidated financial statements with management and the independent
auditors.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not financial experts in the
fields of accounting or auditing, including auditor independence. The
members of the Audit Committee rely without independent verification on the
information provided to them and on the representations made by management
and the independent accountants. Accordingly, the Audit Committee's
oversight does not provide an independent basis to determine that
management has maintained appropriate accounting and financial reporting
principles or appropriate internal controls and procedures designed to
assure compliance with accounting standards and applicable laws and
regulations. Furthermore, the Audit Committee's considerations and
discussions referred to above do not assure that the audit of our financial
statements have been carried out in accordance with generally accepted
auditing standards, that the financial statements are presented in
accordance with generally accepted accounting principles, or that the our
auditors are in fact "independent".
The Audit Committee has discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). In addition, the independent
auditors provided to the Audit Committee the written disclosures required
by Independent Standards Board Standard No. 1 (Independence Discussions
with Audit Committees), and the Audit Committee and the independent
auditors have discussed the auditors' independence from the company and its
management, including the matters in those written disclosures.
Additionally, the Audit Committee considered the fees and costs billed and
expected to be billed by the independent auditors for our audit services.
The Audit Committee has discussed with management the procedures for
selection of consultants and the related competitive bidding practices and
fully considered whether those services provided by the independent
auditors are compatible with maintaining auditor independence.
The Audit Committee has discussed with the independent auditors, with and
without management present, their evaluations of our internal accounting
controls and the overall quality of our financial reporting.
In reliance on the reviews and discussions with management and the
independent auditors referred to above, the Audit Committee recommended to
the Board of Directors and the Board has approved, the inclusion of the
audited financial statements in our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2001, for filing with the Securities and
Exchange Commission. The Audit Committee also recommended to the Board of
Directors, and the Board has approved the selection of Richey, May & Co.,
P.C. as our independent auditors for 2002.
The Audit Committee
Duane Ashley
H. Dennis Hoffelt
Paul A. Krile
SHAREHOLDER PROPOSALS
Shareholders may present proposals for inclusion in the 2003 Proxy
Statement and form of proxy relating to that meeting provided they are
received by our Secretary no later than January 31, 2003, and are otherwise
in compliance with applicable Securities and Exchange Commission
regulations.
If a Shareholder who wishes to present a proposal at our 2003 Annual
Meeting that will not be included in our proxy statement for such Annual
Meeting fails to notify us of his or her desire to do so by March 31, 2003,
then the proxies that the Board of Directors solicits for the 2003 Annual
Meeting will include discretionary authority to vote on the Shareholder's
proposal, if such proposal is properly brought before the meeting.
OTHER BUSINESS
We know of no other matters to be presented at the meeting. If any other
matter properly comes before the meeting, the appointed proxies will vote
the proxies in accordance with their best judgment.
ANNUAL REPORT TO SHAREHOLDERS
A copy of our Annual Report to Shareholders for the fiscal year ended
December 31, 2001, accompanies this Notice of Annual Meeting of Shareholders
and Proxy Statement. No part of such Annual Report is incorporated herein
and no part thereof is to be considered proxy soliciting material.
AVAILABILITY OF REPORT ON FORM 10-KSB
We will provide at no charge a copy of our Annual Report on Form 10-KSB for
the Year Ended December 31, 2001, as filed with the Securities and Exchange
Commission, to any beneficial owner of shares entitled to vote at the meeting.
Please address your request to the attention of the Secretary, GeoResources,
Inc., P.O. Box 1505, Williston, North Dakota 58802-1505.
By order of The Board of Directors
GEORESOURCES, INC.
/s/ Cathy Kruse
CATHY KRUSE
Corporate Secretary
Williston, North Dakota
Dated: May 1, 2002