PRELIMINARY
IPTM--- IMPERIAL PETROLEUM, INC.
Com ($0.006)
SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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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 Addition Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-12
Imperial Petroleum, 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):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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IMPERIAL PETROLEUM, INC.
329 MAIN STREET, SUITE 801
EVANSVILLE, IN 47708
Ph 812-867-1433
Fax 812-867-1678
September 28, 2005
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Imperial Petroleum, Inc. (the "Company") which will be held on Friday, October
21, 2005 at 10:00 a.m. to be held at TLC's Restaurant located at 3117 N. First
Avenue, Evansville, IN 47710.
The formal notice of the Annual Meeting and Proxy Statement have been made
a part of this invitation.
After reading the Proxy Statement, please mark, date, sign and return the
enclosed Proxy as soon as possible in the envelope provided. YOUR SHARES CANNOT
BE VOTED UNLESS YOU SIGN AND RETURN THE ENCLOSED PROXY OR ATTEND THE ANNUAL
MEETING IN PERSON.
The Board of Directors and management look forward to seeing you at the
meeting.
Very Truly Yours,
Jeffrey T. Wilson
Chairman, President and
Chief Executive Officer
Encls.
IMPERIAL PETROLEUM, INC.
329 Main Street
Suite 801
Evansville, Indiana 47708
(812-867-1433)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 21, 2005
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of Imperial Petroleum, Inc. (the 'Company" or "Imperial") will be held at TLC's
Restaurant located at 3117 N. First Avenue, Evansville, Indiana 47710, on
Friday, October 21, 1996 at 10:00 a.m., local time. A Proxy and a Proxy
Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of five directors;
2. A proposal to ratify the selection of Briscoe, Burke and Grigsby LLP
as independent public accountants for 2005;
3. A reverse split of the company's capital stock of 1 for 10.
4. An amendment to the Articles of Incorporation to increase the
authorized capital of the Company from 50,000,000 shares common
stock and no preferred shares to 150,000,000 common shares and
5,000,000 Series A preferred stock.
5. Such other matters as may properly come before the Meeting or any
adjournments thereof.
The close of business on August 25, 2005, has been fixed as the record date for
determining Stockholders of the Company entitled to notice of and to vote at the
Meeting or any postponement or adjournment thereof. For a period of at least ten
days prior to the Meeting, a complete list of Stockholders entitled to vote at
the Meeting shall be open to examination by any Stockholder during ordinary
business hours at the offices of the Company, 329 Main Street, Suite 801,
Evansville, Indiana 47708.
Information concerning the matters to be acted upon at the Meeting is set forth
in the accompanying Proxy Statement.
We hope that you will use this opportunity to take an active part in the affairs
of your Company by voting on the business to come before the Meeting either by
executing and returning the enclosed proxy or by casting your vote in person at
the Meeting. The granting of a proxy will not affect your right to vote in
person should you decide to attend the Meeting.
IF YOU DO NOT EXPECT TO ATTEND IN PERSON, PLEASE PROMPTLY DATE, SIGN AND RETURN
THE ENCLOSED PROXY, WHICH IS SOLICITED BY AND ON BEHALF OF THE BOARD OF
DIRECTORS. A PREPAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. IF A STOCKHOLDER
RECEIVES MORE THAN ONE PROXY BECAUSE HE OR SHE OWNS SHARES REGISTERED IN
DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE COMPLETED AND RETURNED.
By Order of the Board of Directors
Annalee C. Wilson
Secretary
Evansville, Indiana
September 19, 2005
IMPERIAL PETROLEUM, INC.
329 Main Street
Suite 801
Evansville, Indiana 47708
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held October 21, 2005
This Proxy Statement is being first mailed on September 28, 2005 to Stockholders
of record on August 25, 2005 of Imperial Petroleum, Inc., a Nevada corporation
(the "Company" or "Imperial"), by the Board of Directors to solicit proxies (the
"Proxies') for use at the Annual Meeting of Stockholders (the "Meeting') to be
held at TLC's Restaurant, 3117 N. First Avenue, Evansville, Indiana, on Friday,
October 21, 2005, at 10:00 a.m., local time, or at such other time and place to
which the Meeting may be postponed or adjourned.
The purpose of the Meeting is to consider and act upon (i) the election of five
directors; (ii) a proposal to ratify the selection of Briscoe, Burke & Grigsby
LLP as the Company's independent public accountants for 2006; (iii) a reverse
split of the company's capital stock of 1 for 10; (iv) an amendment to the
Company's Articles of Incorporation to increase the authorized capital of the
Company from 50,000,000 shares of common stock and no preferred shares to
150,000,000 shares of common stock and 5,000,000 shares of Series A preferred
stock; and (iv) such other matters as may properly come before the Meeting or
any adjournments thereof.
All shares represented by valid Proxies, unless the stockholder otherwise
specifies, will be voted FOR (i) the election of the five persons named under
"Proposal I -- Election of Directors" as nominees for election as directors of
the Company; (ii) Proposal II - to ratify the selection of Briscoe, Burke &
Grigsby LLP as the Company's independent public accountants for 2005; (iii)
Proposal III - to reverse split the company's capital stock of 1 for 10; (iv)
Proposal IV - an amendment to the Company's Articles of Incorporation to
increase the authorized capital of the Company from 50,000,000 shares of common
stock and no preferred shares to 150,000,000 shares of common stock and
5,000,000 shares of Series A preferred stock; and (v) at the discretion of the
Proxy holders with regard to any other matter that may properly come before the
Meeting or any postponements or adjournments thereof. Where a stockholder has
appropriately specified how a Proxy is to be voted, it will be voted
accordingly.
A Proxy may be revoked at any time by providing written notice of such
revocation to the Company at Imperial Petroleum, Inc. 329 Main Street, Suite
801, Evansville, Indiana 47708, which notice must be received prior to 5:00
p.m., local time, October 14, 2005. If notice of revocation is not received by
such date, a stockholder may nevertheless revoke a Proxy if he attends the
Meeting and desires to vote in person.
RECORD DATE AND VOTING SECURITIES
The record date for determining stockholders entitled to vote at the Meeting was
the close of business on August 25, 2005 (the "Record Date"), at which time the
Company had issued and outstanding 43,464,505 shares of Common Stock, $.006 par
value ("Common Stock"), each share of which is entitled to one vote per share
with respect to each matter to be acted upon at the Meeting. The Common Stock
constitutes the only outstanding voting securities of the Company entitled to be
voted at the Meeting.
QUORUM AND VOTING
The presence at the Meeting, in person or by Proxy, of the holders of a majority
of the outstanding Common Stock is necessary to constitute a quorum. Each share
of Common Stock represented at the Meeting, in person or by Proxy, will be
counted toward a quorum. Each share of Common Stock is entitled to one vote with
respect to each matter to be voted on at the Meeting. The affirmative vote of a
majority of the issued and outstanding shares of the Common Stock present in
person or by proxy at the Meeting is required for the election of directors and
for the ratification of the appointment of the independent public accountants.
Abstentions from voting will be treated as shares that are present for purposes
of determining a quorum and for purposes of determining whether the requisite
number of affirmative votes are received on any matters submitted to the
stockholders for a vote. If a broker indicates on the Proxy that it does not
have discretionary authority as to certain shares to vote on a particular
matter, those shares will not be considered as present with respect to that
matter, however, they will be treated as shares that are present for purposes of
determining a quorum.
PROPOSAL I -- ELECTION OF DIRECTORS
There are five directors to be elected for one-year terms expiring at the
Company's Annual Meeting of Stockholders in 2005 or at such time as their
successors have been elected and qualified. It is intended that the names of the
persons indicated below will be placed in nomination. Each of the nominees has
indicated his willingness to serve as a member of the Board of Directors if
elected. However, in case any nominee shall become unavailable for election to
the Board of Directors for any reason not presently known or contemplated, the
Proxy holders will have discretionary authority in that instance to vote the
Proxy for a substitute.
Approval of the proposal to elect the five nominees to serve as directors
requires the affirmative vote of the holders of a majority of the shares of
Common Stock present, in person or by Proxy, at the Meeting. The Board of
Directors recommends a vote "FOR" the following nominees.
The nominees (the "Nominees") are as follows:
Jeffrey T. Wilson, age 51, has been a director, Chairman of the Board and Chief
Executive Officer of the Company since August 1993. Mr. Wilson became President
of the Company in August 1993. Mr. Wilson has been Chairman and Chief Executive
Officer of LaTex Resources, Inc., an affiliate of the Company, since December
1991. Mr. Wilson was a director and Executive Vice President of Vintage
Petroleum, Inc. ("Vintage") from May 1990 to July 1991. He was Vice
President--Production of Vintage from January 1984 to May 1990 and
Manager-Acquisitions of Vintage from May 1983 to January 1984. From August 1980
to May 1983, Mr. Wilson was an engineer with Netherland, Sewell & Associates,
Inc., a petroleum engineering consulting firm, where his assignments included
annual reserve appraisals, reserve acquisition appraisals and field studies.
From May 1975 to August 1980, he gained experience in the oil and gas industry
with Exxon Company USA in various engineering and supervisory capacities in the
Louisiana and South Texas areas. Mr. Wilson holds a Bachelor of Science Degree
in Mechanical Engineering from the Rose-Hulman Institute of Technology.
Annalee C. Wilson, age 48, has been a Director of the Company since August 2001.
Mrs. Wilson is the President of HN Corporation, an affiliate of the Company
engaged in the operation of retail franchise outlets in malls selling motivation
and inspiration material developed by Successories, Inc. and others and in the
operation of a Christian restaurant and gift shop. Mrs. Wilson has an Associate
Degree in Nursing from the University of Evansville.
Aaron M. Wilson, age 26, has been a Director of the Company since August 2001.
Mr. Wilson is a Vice president of HN Corporation and is the Manager of its
Operations. Mr. Wilson received a dual degree in Business Economics and
Political Science from the University of Kentucky in 2002.
Malcolm W. Henley, age 53, was a Director and Vice President of the Company from
May 1996 until 1999 when he left the Company to pursue other interests. Mr.
Henley was a Director and Vice President of LaTex Resources, Inc. and was
founder of Enpro, Inc. a crude oil and natural gas marketing subsidiary of
LaTex. Mr. Henley's prior experience includes Manager of Operations for Champlin
Pipeline Company from 1976 to 1979 and Continental Oil Company from 1975-1976.
Mr. Henley has a Bachelor of Arts Degree in Business Administration from
Oklahoma State University and an Associate Degree in Petroleum Land Technology
from Tulsa Junior College.
James M. Clements, age 33, is the President and CEO of Clements Company
Investments located in San Diego, California. Mr. Clements is a certified
financial planner and held a broker dealer license with the NASD from 1995-2003.
Mr. Clements holds a Bachelor of Science degree in financial services from San
Diego State University.
Each director is elected for a period of one year at the Company's Annual
Meeting of Stockholders and serves until his successor is duly elected.
Directors who are not officers of the Company receive no cash compensation for
their services. Officers are elected by and serve at the will of the Board of
Directors. The nominees, Jeffrey T. Wilson, Annalee C. Wilson and Aaron M.
Wilson are family related. .
BOARD AND COMMITTEE MATTERS
The business of the Company is managed under the direction of the Board of
Directors. The Board meets from time to time during its fiscal year as necessary
to review significant developments affecting the Company and to act on matters
requiring Board approval. The Board of Directors met one time during the fiscal
year ended July 31, 2004 at which directors' meetings all directors were present
.. The Board of Directors also acted by unanimous written consent four times
during the fiscal year ended July 31, 2004
Shareholders may communicate with the Board of Directors, including the
non-management Directors, by sending a letter to the Board of Directors of
Imperial Petroleum, Inc., c/o Corporate Secretary, 329 Main Street, Suite 801,
Evansville, IN 47708. The Corporate Secretary has the authority to disregard any
inappropriate communications. If deemed an appropriate communication, the
Corporate Secretary will submit your correspondence to the Board or to any
specific Director to whom the correspondence is directed.
The Board of Directors has established an audit committee that is comprised of
its entire Board. The Board has not established a compensation or any other
committee.
The Company does not have a nominating committee or a charter for such a
committee. Instead it is anticipated that the independent Directors, if
approved, will fulfill the role of a nominating committee in the future. Prior
to January 2004, the Company had limited operations and only infrequent changes
in its membership, therefore, the Board has not felt it necessary to have a
standing nominating committee. If and when future vacancies occur, the Board
would consider director nominees recommended by shareholders, as well as
director nominees recommended by a majority of the Directors who are then
independent. The Board does not have a formal policy regarding the consideration
of, procedures to be followed by, minimum qualifications of or process for
identifying or evaluating nominees recommended by security holders.
The Audit Committee is currently comprised of the entire Board of the Company.
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of its
activities to the Board. The Audit Committee meets with the accountants to
review their effectiveness during the annual audit and to discuss the Company =s
internal control policies and procedures. The Audit Committee and the
independent public accountants met and discussed the audit of the financials
statements for the year ended July 31, 2004; the Audit Committee and the
auditors further discussed the financial statements for the first three quarters
of 2005. Thus far in 2005, on three occasions the Audit Committee has met or
discussed with the auditors the financial statements of the Company.
Audit Committee Report
The Audit Committee assists the Board of Directors in its oversight of the
integrity of the Company's financial statements and the Company's accounting and
financial reporting processes and systems of internal control. Management has
primary responsibility for the Company's internal controls and the preparation
of financial statements in accordance with generally accepted accounting
principles. The Committee also reviews the qualifications, independence and
performance of the Company's independent accountants, who are in turn
responsible for performing an audit of the Company's financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon. Members of the Committee should not be assumed to be accounting experts
and are not deemed to have accepted a duty of care greater than other members of
the Board of Directors. In discharging their responsibilities, the Committee
members rely on the representations made, and information provided to them, by
management and the independent accountants.
The current Committee reviewed with management and the independent accountants
the following financial statements: Year ended July 31, 2004 and the quarters
ended October 31, 2004, January 31, 2005 and April 30, 2005.
The Committee recommended to the Board of Directors that these financial
statements be accepted.
The Committee performed all procedures described in its Charter including a
review and approval of all press releases made by management prior to their
release.
Jeffrey T. Wilson
Chairman
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
The Board of Directors has appointed Briscoe, Burke & Grigsby LLP as the
independent auditor of the Company for the fiscal year ending July 31, 2005.
Briscoe, Burke & Grigsby LLP was appointed by the Board of Directors to be the
independent auditors of the Company during fiscal 2005 after the resignation of
Weaver & Tidwell. Briscoe Burke & Grigsby LLP had been the Company's independent
auditors since 1993 with the exception of the fiscal year ended 2004. The
Company's Board had determined to change auditors in connection with a pending
merger to facilitate its merger partner's proposed securities filings in
connection therewith, however, the merger has subsequently been terminated and
the Board believes the ratification of Briscoe, Burke & Grigsby LLP will reduce
the cost of its annual audits considerably and allow the Company to make timely
filings. A proposal will be presented at the Meeting asking the Stockholders to
ratify the appointment of Briscoe, Burke & Grigsby LLP as the Company's
independent auditors.
The affirmative vote of a majority of the shares present in person or by proxy
at the Meeting and entitled to vote is required for the adoption of the proposal
to ratify the selection of Briscoe, Burke & Grigsby LLP as the Company's
independent auditors for 2005. The Board of Directors recommends a vote 'FOR"
the ratification of Briscoe, Burke & Grigsby LLP as the independent auditor for
2005.
A representative of each of Briscoe, Burke & Grigsby LLP and Weaver & Tidwell
LLP (the Company's prior auditors, will be available telephonically at the
Meeting. Such representative will be given the opportunity to make a statement
if he desires to do so and will be available to respond to appropriate
questions.
PROPOSAL III--- REVERSE SPLIT OF CAPITAL STOCK 1 FOR 10
The Board of Directors has approved a reverse split of the Company's capital
stock in the amount of 1 share for 10 shares and seeks a ratification of the
reverse split by an affirmative vote of the shareholders. The Board deems the
reverse split advisable at this time prior to seeking to raise capital. The
Board of Directors is of the opinion that the current price per share of the
Company's common stock has a tendency to diminish the effective marketability of
such stock because of the reluctance of many leading brokerage firms to
recommend lower-priced stocks to their clients. Additionally, the policies and
practices of a number of brokerage houses tend to discourage individual brokers
within those firms from dealing in lower-priced stocks. Some of such policies
and practices pertain to the payment of broker's commissions and to time
consuming procedures that operate to render the handling of lower-priced stocks
unattractive to brokers from an economic perspective. The structure of trading
commissions also tends to have an adverse impact upon the holders of
lower-priced stocks because the brokerage commission payable on the sale of a
lower-priced stock generally represents a higher percentage of the sales price
than the commission on a relatively higher-priced stock.
It is the Company's intention to seek to raise capital to retire debt and to
fund its on-going acquisition and capital expenditure budget. In connection
therewith, the Company intends to engage an investment banking firm to assist
the Company in that effort. In discussions with representatives from several
investment banking firms, the Board has deemed it advisable to better insure the
success of a public offering of securities by the Company to approve the reverse
split as proposed.
A proposal will be presented at the Meeting asking the Stockholders to ratify
the reverse stock split of 1 for 10.
The affirmative vote of a majority of the shares present in person or by proxy
at the Meeting and entitled to vote is required for the adoption of the proposal
to ratify the reverse stock split of 1 for 10. The Board recommends a vote "FOR"
the ratification of the reverse stock split.
PROPOSAL IV--- AMENDMENT TO ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL
The Board of Directors recommends that the Company's shareholders approve an
amendment to the Company's Articles of Incorporation to increase the authorized
capital stock of the corporation from its current amount of 50,000,000 shares of
common stock (par value $0.006) to the proposed capitalization level of
150,000,000 shares of common stock (par value $0.06 ) and to authorize the
Company to issue up to 5,000,000 shares of Series A preferred stock (par value
$25 per share). Additional terms of the Series A preferred stock would be
determined by the Board of Directors upon issuance. There are no current plans
to issue any Preferred Stock.
The Board of Directors believes that the Company will need to continue to raise
capital from time-to-time to pursue its growth strategy and that the
authorization of additional shares provides flexibility in management's pursuit
of acquisitions through the issuance of shares, when appropriate. The lack of
availability of preferred shares has not provided the Company with an
opportunity to complete smaller and less costly forms of registered offerings in
the past. As a result, the Board believes that authorizing preferred shares will
provide management with additional opportunities to raise capital as the Company
grows.
PRINCIPAL STOCKHOLDERS AND MANAGEMENT OWNERSHIP
As of August 25, 2005, the Company had 43,464,505 issued and outstanding shares
of Common Stock. The following table sets forth, as of August 25, 2005, the
number and percentage of shares of Common Stock of the Company owned
beneficially by (i) each director and Nominee of the Company, (ii) each officer
of the Company named in the Summary Compensation Table included elsewhere in
this Proxy Statement, (iii) all directors and executive officers of the Company
as a group, and (iv) each person known to the Company to own of record or
beneficially more than 5% of the Company's Common Stock. Except as otherwise
indicated, the persons named in the table have sole voting and investment power
with respect to the shares indicated. As of August 25, 2005 , the Company had
626 holders of Common Stock of record.
Number of Shares
Name of Beneficial Owner Beneficially Owned Percent of Class
Jeffrey T. Wilson (1) 6,594,816 15.2%
Annalee C. Wilson(2) 2,004,661 4.61%
Aaron M. Wilson (3) 203,234 0.5%
All officers and directors as a
Group (3 people) at 7/31/2004 8,802,711 20.25%
Estate of Luther Henderson(4) 2,266,457 5.2%
Taghmen Ventures Ltd(5) 2,750,000 6.3%
RAB Special Situations LP(6) 4,000,000 9.20%
James M. Clements(7) 3,307,500 7.61%
Total officers, directors and
5% shareholders 21,126,668 48.61%
(1) The mailing address of Mr. Jeffrey Wilson is 11600 German Pines, Evansville,
IN 47725. Includes 589,584 shares held jointly with Mrs. Wilson; includes
706,478 shares owned by HN Corporation in which Mr. Wilson owns 33.3%. Does not
include 300,000 shares held in Trust by Old National Bank for Mr. Wilson's
children.
(2) The mailing address of Mrs. Annalee Wilson is 11600 German Pines,
Evansville, IN 47725. Includes 589,584 shares held jointly with Mr. Wilson;
includes 1,415,077 shares owned by HN Corporation in which Mrs. Wilson owns
66.7%. Does not include 300,000 shares held in Trust by Old National Bank for
Mrs. Wilson's children.
(3) The mailing address for Mr. Aaron Wilson is 11600 German Pines Drive,
Evansville, IN 47725. Includes 203,234 shares held in Trust by Old National
Bank.
(4) The Executor of Mr. Henderson's Estate is Mr. Ajit Jhangiani. The address is
5608 Malvey, Suite 104, Fort Worth, TX 76107.
(5) The address of Taghmen Ventures Ltd. is EFG House, St Julian's Avenue, St
Peter Port Guernsey
(6) The mailing address of RAB Special Situations LP is C/O Morgan Stanley 25
Cabot Square, 3rd Floor, Canary Wharf, London, E144QA (7) The address of james
M. Clements is 5972 Arboles Street, San Diego, CA 92120
EXECUTIVE OFFICERS
The executive officers of the Company, their ages, positions held with the
Company and length of time in such positions are set forth below. All executive
officers serve until their successors are elected and qualified. All of the
named individuals below are related through family. There are no arrangements or
understandings between any of the named individuals and any other person or
persons pursuant to which any of the named individuals are to be elected as
officers.
Name Age Position
---- --- --------
Jeffrey T. Wilson 51 Director, Chairman of the Board,
President and Chief Executive Officer
Annalee C. Wilson 47 Director
Aaron M. Wilson 25 Director
Jeffrey T. Wilson has been Director, Chairman of the Board, President and Chief
Executive Officer of the Company since August 1993. Mr. Wilson was a Director,
Chairman and President of LaTex Resources, Inc., an affiliate of the Company,
and was the founder of its principal operating subsidiary, LaTex Petroleum
Corporation. Prior to his efforts with LaTex, Mr. Wilson was Director and
Executive Vice President of Vintage Petroleum, Inc. and was employed by Vintage
in various engineering and acquisition assignments from 1983 to 1991. From
August 1980 to May 1983 Mr. Wilson was employed by Netherland, Sewell &
Associates Inc., a petroleum consulting firm. Mr. Wilson began his career in the
oil and gas business in June 1975 with Exxon Company USA in various assignments
in the Louisiana and South Texas areas. Mr. Wilson holds a Bachelor of Science
Degree in Mechanical Engineering from Rose-Hulman Institute of Technology.
Annalee C. Wilson has been a Director of the Company since August 2001. Mrs.
Wilson is the President of HN Corporation, an affiliate of the Company engaged
in the operation of retail franchise outlets in malls selling motivation and
inspiration material developed by Successories, Inc. and others and in the
operation of a Christian restaurant and gift shop. Mrs. Wilson has an Associate
Degree in Nursing from the University of Evansville.
Aaron M. Wilson has been a Director of the Company since August 2001. Mr. Wilson
is a Vice president of HN Corporation and is its Operations Manager. Mr. Wilson
received a dual degree in Business Economics and Political Science from the
University of Kentucky in 2002.
EXECUTIVE COMPENSATION
The table below sets forth, in summary form, (1) compensation paid to Jeffrey T.
Wilson, the Company's Chairman of the Board, President and Chief Executive
Officer and (2) other compensation paid to officers and directors of the
Company. Except as provided in the table below, during the three fiscal years
ended July 31, 2004, 2003 and 2002 (i) no restricted stock awards were granted,
(ii) no stock appreciation or stock options were granted, (iii) no options,
stock appreciation rights or restricted stock awards were exercised, and (iv)
except as provided below, no awards under any long term incentive plan were made
to any officer or director of the Company.
The Company began accruing salary due to Jeffrey T. Wilson in January 1994. Mr.
Wilson agreed to accept 1.0 million warrants exercisable at $0.25 per share in
exchange for the retirement of $808,508 in accrued salaries. Mr. Wilson began
receiving payment of his monthly salary in January 2004. The Company owes Mr.
Wilson $140,750 in accrued salaries at the present time.
SUMMARY COMPENSATION TABLE
Long Term Awards
Annual Compensation Warrants
------------------- --------
Name and Principal
Position Year Salary Bonus # shares
Jeffrey T. Wilson 2004 $ 93,750 ----- -------
2003 $ 109,500 ----- -------
2002 $ 118,500 ----- 200,000
Annalee C. Wilson 2004 ------- ----- -------
2003 ------- ----- -------
2002 ------- ----- -------
Aaron M. Wilson 2004 ------- ----- ------
2003 ------- ----- -------
2002 ------- ----- -------
None of the executive officers listed received prerequisites or other personal
benefits that exceeded the lesser of $50,000 or 10% of the salary and bonus for
such officers. Annalee C. Wilson and Aaron M. Wilson were not directors of the
Company during fiscal 2003, and neither received any compensation from the
Company during that period.
A description of the business experience of each of the executive officers
listed above during the past five years is set forth above under the heading
"Election of Directors."
OPTION GRANTS AND OTHER COMPENSATION
During the year ended July 31, 2004 (I) other than set forth above, no
restricted stock awards were granted, (ii) no stock options or stock
appreciation rights were granted, (iii) no options or stock appreciation rights
were exercised, and (iv) no awards under any long-term incentive plan were made
to any of the Named Officers.
REPORT ON EXECUTIVE COMPENSATION
General . The entire Board of Directors is responsible for oversight and
administration of executive compensation and review of the Company `s overall
compensation program. during the year ended July 31, 2004, the compensation of
Mr. Jeffrey Wilson, as the Company's chief executive officer, was recommended to
and approved by the Board to remain at its previous levels.
Compensation Process and Philosophy . There have been two major components to
the Company's executive officer compensation: (i) base salary and (ii) warrant
grants. Historically, the salary of Mr. Wilson has been significantly less than
the salaries of executive officers of comparable companies. Mr. Wilson has
intentionally taken less than market compensation in order to allow the Company
to achieve its short-term goals and objectives.
The primary objective of the Company's compensation program is to enhance the
profitability of the Company, and thus shareholder value, and to attract,
motivate, reward and retain employees, including executive personnel, who
contribute to the long-term success of the Company. In furtherance of the above
goals, the Company's compensation program for its executive personnel currently
consists of appropriate salaries, discretionary annual bonuses and discretionary
stock option warrants
Following the appointment of the Compensation Committee, the Committee will
review periodically the base salaries of the Company's executive management
personnel and recommend any adjustments it may deem appropriate, for approval by
the Board of Directors. In its review, the Committee will take into account
individual factors such as: experience; performance, both during the preceding
12 months and future potential; retention considerations; and other issues
particular to the executive and the Company. Additionally, the Committee
considers the growth and performance of the Company as it assesses the market
for executive salaries.
EMPLOYMENT AGREEMENTS
The Company has no employment agreements with any of its officers or employees.
Mr. Jeffrey T. Wilson's annual salary is $125,000.
BOARD OF DIRECTORS INTERLOCKS AND INSIDER
PARTICIPATION IN COMPENSATION DECISIONS
All of the members of the Board of Directors were responsible for compensation
decisions during the prior fiscal year. Mr. Jeffrey T. Wilson and Mr. Aaron M.
Wilson are each Vice President's of HN Corporation, a private entity, owned and
controlled by the Wilson family. Annalee C. Wilson is the President of HN
Corporation. HN Corporation has, from time-to-time made cash loans to the
Company in its recent past and is a stock holder of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Jeffrey T. Wilson, Chairman, President and Chief Executive Officer of the
Company has made unsecured loans to the Company which total $559,083 in
principal as of July 31, 2004.
HN Corporation, a private retail company owned by Mr. Wilson and his wife, has
made unsecured loans to the Company from time-to-time which total $0 in
principal as of July 31, 2004. Annalee Wilson serves as the President of HN
Corporation and owns 66.7% of its common stock, Jeffrey T. Wilson serves as the
Vice President and Secretary of HN Corporation and owns 33.3% of its stock and
Aaron M. Wilson serves as a Vice President of HN Corporation. HN Corporation
owns approximately 3.89% of the Company's issued and outstanding common stock.
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership on Form 3 and reports of changes in ownership on Forms 4 and 5 with
the Securities and Exchange Commission (the 'SEC") and the National Association
of Securities Dealers ("NASD"). Such persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based upon a review of Form 3, 4 and 5 filings made by the Company's current
officers and directors during the fiscal year ended July 31, 2004 under Section
16(a) of the Exchange Act, the Company believes that all requisite filings under
Section 16(a) of the `34 Act have been filed timely.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Weaver & Tidwell LLP, ("Weaver") served as the Company's independent
auditors during 2004. Briscoe Burke & Grigsby ("Briscoe") served as the
Company's independent auditors from 1993 until 2004. Weaver resigned effective
August 15, 2005 and the Board of Directors and the Audit Committee selected
Briscoe as the independent auditors of the Company for the fiscal year ending
July 31, 2005. The Audit Committee has adopted a policy that requires advance
approval of all audit, audit-related, tax services and other services performed
by the independent auditor. Representatives of Weaver and Briscoe are expected
to be present by telephone at the Annual Meeting.
Fees and Independence
Audit Fees . Weaver billed the Company an aggregate of $30,000 for professional
services rendered for the audit of the Company's financial statements for the
year ended July 31, 2004 and review of the Company's quarterly reports for the
periods ended October 31, 2004; January 31, 2005 and April 30, 2005. Briscoe
billed the Company a total of $10,000 for professional services rendered in
connection with its audit of the Company's financial statements for the fiscal
year ended July 31, 2003.
Audit Related Fees . In 2004, Briscoe was paid $1,400 for its services in
connection with the review of the Company's Form 8-K (which was filed with the
SEC in 2004), and which are not included in the audit fees identified above).
Tax Fees . No tax fees were paid to either Weaver or Briscoe in each of the last
two fiscal years.
All Other Fees . No other fees were billed by Weaver or Briscoe to the Company
during 2004 or 2003.
The Audit Committee of the Board of Directors has determined that the provision
of services by Briscoe described above is compatible with maintaining Briscoe's
independence as the Company's principal accountant.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for Stockholder action
at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Exchange Act. For such proposals to be considered for
inclusion in the Proxy Statement and Proxy relating to the 2006 Annual Meeting
of Stockholders, such proposals must be received by the Company not later than
October 24, 2006. Such proposals should be directed to Imperial Petroleum, Inc.,
329 Main Street, Suite 801, Evansville, Indiana 47708. Attention: President.
OTHER BUSINESS
The Board of Directors knows of no matter other than those described herein that
will be presented for consideration at the Meeting. However, should any other
matters properly come before the Meeting or any adjournment thereof, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their best judgment in the interest of the Company.
MISCELLANEOUS
All costs incurred in the solicitation of Proxies will be borne by the Company.
In addition to the solicitation by mail, officers and employees of the Company
may solicit Proxies by telephone, telegraph or personally, without additional
compensation. The Company may also make arrangements with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
materials to the beneficial owners of shares of Common Stock held of record by
such persons, and the Company may reimburse such brokerage houses and other
custodians, nominees and fiduciaries for their out-of-pocket expenses incurred
in connection therewith.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report to Stockholders for the fiscal year ended July 31,
2004, which includes audited financial statements (the "Annual Report'),
accompanies this Proxy Statement. Also included is the Company's most recent
Form 10-Q for the period ended April 30, 2005 which includes unaudited
compilations of the Company's financial statements. The Annual Report and Form
10-Q are not to be considered part of this Proxy Statement.
By Order of the Board of Directors
Annalee C. Wilson
Secretary
Evansville, Indiana
September 19, 2005
Appendix A
IMPERIAL PETROLEUM, INC.
AUDIT COMMITTEE CHARTER
Organization
This charter governs the operations of the audit committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
board of directors. The committee shall be members of, and appointed by, the
board of directors and shall comprise at least two directors, each of whom is
independent of management and the Company. Members of the committee shall be
considered independent as long as they do not accept any consulting, advisory or
other compensatory fee (exclusive of director fees) from the Company and are not
an affiliated person of the Company or its subsidiaries, and meet the
independence requirements of Rule 10A-3 under the Securities Exchange Act of
1934. All committee members shall be financially literate and, preferably, at
least one member will be a financial expert.
Purpose
The audit committee shall provide assistance to the board of directors in
fulfilling its oversight responsibility to the shareholders, potential
shareholders, the investment community and others relating to: the integrity of
the Company's financial statements; the financial reporting process; the systems
of internal accounting and financial controls; the performance of Company's
independent auditors; the independent auditor's qualifications and independence;
and the Company's compliance with ethics policies and legal and regulatory
requirements. In so doing, it is the responsibility of the committee to maintain
free and open communication between the committee, independent auditors and
management of the Company.
In discharging its oversight role, the committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the authority to engage independent
counsel and other advisers as it determines necessary to carry out its duties.
Duties and Responsibilities
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of its
activities to the board. While the audit committee has the responsibilities and
powers set forth in this Charter, it is not the duty of the audit committee to
plan or conduct audits or to determine that the Company's financial statements
are complete and accurate and are in accordance with generally accepted
accounting principles. Management is responsible for the preparation,
presentation and integrity of the Company's financial statements and for the
appropriateness of the accounting principles and reporting policies that are
used by the Company. The independent auditors are responsible for auditing the
Company's financial statements and for reviewing the Company's unaudited interim
financial statements.
The committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and circumstances. The committee should take appropriate actions to set the
overall corporate "tone" for quality financial reporting, sound business risk
practices and ethical behavior. The following shall be the principal duties and
responsibilities of the audit committee. These are set forth as a guide with the
understanding that the committee may supplement them as appropriate.
The committee shall be directly responsible for the appointment and termination,
compensation and oversight of the work of the independent auditors, including
resolution of disagreements between management and the auditor regarding
financial reporting. The committee shall pre-approve all audit and non-audit
services provided by the independent auditors and shall not engage the
independent auditors to perform the specific non-audit services proscribed by
law or regulation. The committee may delegate pre-approval authority to a member
of the audit committee. The decisions of any audit committee member to whom
pre-approval authority is delegated must be presented to the full audit
committee at its next scheduled meeting.
At least annually, the committee shall obtain and review a report by the
independent auditors describing:
* The auditors' internal quality control procedures.
* Any material issues raised by the most recent internal quality control review,
or peer review, of the auditors or by any inquiry or investigation by
governmental or professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the auditors, and any
steps taken to deal with any such issues.
* All relationships between the auditors and the Company (to assess the
auditor's independence).
In addition, the committee shall set clear hiring policies for employees or
former employees of the independent auditors that meet the SEC regulations.
The committee shall discuss with the independent auditors the overall scope and
plans for its audit, including the adequacy of staffing and compensation. Also,
the committee shall discuss with management and the independent auditors the
adequacy and effectiveness of the accounting and financial controls, including
the Company's policies and procedures to assess, monitor and manage business
risks, and legal and ethical compliance programs. The committee shall meet
separately periodically with management and the independent auditors to discuss
issues and concerns warranting committee attention. The committee shall provide
sufficient opportunity for the independent auditors to meet privately with the
members of the committee. The committee shall review with the independent
auditor any audit problems or difficulties and management's response.
The committee shall receive regular reports from the independent auditor on the
critical policies and practices of the Company, and all alternative treatments
of financial information within generally accepted accounting principles that
have been discussed with management.
The committee shall review management's assertion on its assessment of the
effectiveness of internal controls as of the end of the most recent fiscal year
and the independent auditors' report on management assertion.
The committee shall review and discuss earnings press releases, as well as
financial information and earnings guidance provided to analysts and rating
agencies.
The committee shall review the interim financial statements and disclosures
under Management's Discussion and Analysis of Financial Condition and Results of
Operations with management and the independent auditors prior to the filing of
the Company's Quarterly Reports on Form 10-QSB. Also, the committee shall
discuss the results of the quarterly review and any other matters required to be
communicated to the committee by the independent auditors under generally
accepted auditing standards. The chair of the committee may represent the entire
committee for the purposes of this review.
The committee shall review with management and the independent auditors the
financial statements and disclosures under Management's Discussion and Analysis
of Financial Condition and Results of Operations to be included in the Company's
Annual Report on Form 10-KSB (or the annual report to shareholders if
distributed prior to the filing of Form 10-KSB), including its judgment about
the quality, not just the acceptability, of accounting principles, the
reasonableness of significant judgments and the clarity of the disclosures in
the financial statements. Also the committee shall discuss the results of the
annual audit and any other matters required to be communicated by the committee
by the independent auditors under generally accepted auditing standards.
The committee shall establish procedures for the receipt, retention and
treatment of complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential, anonymous
submission by employees of the Company of concerns regarding questionable
accounting or auditing matters.
The committee shall receive reports of evidence of a material violation of
securities laws or breaches of fiduciary duty.
The committee also prepares its report to be included in the Company's annual
proxy statement, as required by SEC regulations.
The committee shall perform an evaluation of its performance at least annually
to determine whether it is functioning effectively.
IMPERIAL PETROLEUM, INC.
329 MAIN STREET, SUITE 801
EVANSVILLE, IN 47708
PROXY
This Proxy is Solicited on behalf of the Board of Directors. The undersigned
hereby appoints Jeffrey T. Wilson as Proxy with the power to appoint his
substitute and hereby authorizes him to represent and to vote, as described
below, all of the shares of common stock of Imperial Petroleum, Inc. held on
record by the undersigned on August 25, 2005 at the Annual Meeting of
shareholders to be held on October 21, 2005 or any adjournment thereof.
I: ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(Except as marked to the contrary below) to vote for all
nominees listed below
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below) Jeffrey T. Wilson; Annalee C
Wilson; Aaron M. Wilson; Malcolm W. Henley; James M. Clements
II: TO APPROVE THE APPOINTMENT OF BRISCOE, BURKE & GRIGSBY AS INDEPENDENT
AUDITORS FOR FISCAL 2005.
FOR AGAINST ABSTAIN
III: TO APPROVE A ONE FOR TEN REVERSE SPLIT OF THE COMPANY'S COMMON STOCK.
FOR AGAINST ABSTAIN
IV: TO APPROVE THE AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO
INCREASE THE AUTHORIZED CAPITAL OF THE COMPANY TO 150,000,000 SHARES OF COMMON
STOCK AND 5,000,000 SHARES OF PREFERRED STOCK.
FOR AGAINST ABSTAIN
V. In their discretion the Proxy (s) are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR Proposal I,II,II AND IV.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership please sign in partnership name by authorized person.
The undersigned hereby acknowledge(s) receipt of the Notice of the aforesaid
Annual Meeting and the Proxy Statement accompanying the same, both dated
September 28, 2005.
Dated ___________ 2005
___________________________________
Signature
_____________________________
Please mark, sign, date and
Return the Proxy promptly
___________________________________
Using the enclosed envelope. Signature when held Jointly