Wichita River Oil Corporation
3500 N. Causeway Blvd., Suite 410
Metairie, Louisiana 70002
Notice of Annual Meeting of Shareholders
To Be Held
June 11, 1996
To the Shareholders of Wichita River Oil Corporation:
You are cordially invited to attend the Annual Meeting of Shareholders of
Wichita River Oil Corporation (the "Company") to be held at the Company's
office located at 3500 N. Causeway Blvd., Suite 410, Metairie, Louisiana
70002, on Tuesday, June 11, 1996 at 11:00 a.m. CDT. The shareholders
will be asked to vote on the following proposals:
1. The election of two directors to serve until the 1999
Annual Meeting of Shareholders and until each director's
respective successor is elected and qualified.
2. Approval of the appointment of Arthur Andersen LLP,
independent public accountants, as the Company's auditors
for the ensuing year.
Your Board urges you to vote FOR the proposals. The enclosed Proxy Statement
includes information relating to these proposals. Additional purposes of the
meeting are to receive the reports of officers (without taking any action
thereon) and to transact such other business as may properly come before the
meeting.
All shareholders of record as of the close of business on April 19, 1996, are
entitled to notice of and to vote at the meeting. At least one-third of the
outstanding shares of the Company must be present at the meeting or
represented by proxy to constitute a quorum.
The Board of Directors and management sincerely desire your presence at the
meeting. Even if you expect to attend the meeting, you are requested to sign,
date and return the accompanying proxy. If you attend the meeting after having
returned the accompanying proxy, you may revoke your proxy and vote in person.
Thank you for attending to this matter and for your support.
Williain E. Logan
Secretary
April 24, 1996
Wichita River Oil Corporation
3500 N. Causeway Blvd., Suite 410
Metairie, Louisiana 70002
Proxy Statement
Solicitation and Revocability of Proxies
This Proxy Statement is furnished by the Board of Directors of Wichita River
Oil Corporation (the "Company") in connection with the solicitation of proxies
for use at the Annual Meeting of Shareholders to be held on Tuesday, June 11,
1996, at 11:00 a.m. and at any adjournment thereof. The shares represented by
the form of proxy enclosed herewith will be voted in accordance with the
specifications noted thereon. If no choice is specified, said shares will
be voted in favor of the proposals set forth in the notice attached hereto.
The form of proxy also confers discretionary authority with respect to
amendments or variations to matters identified in the notice of meeting and
any other matters which may properly come before the meeting.
A shareholder who has given a proxy may revoke it as to any motion on which
a vote has not already been taken by signing a proxy bearing a later date, or
by a written notice delivered to the Secretary of the Company at the offices
of the Company, 3500 N. Causeway Blvd., Suite 410, Metairie, Louisiana 70002,
at any time up to the meeting or any adjournment thereof, or by attending the
Annual Meeting and by voting in person.
The cost of solicitation of these proxies will be paid by the Company,
including reimbursement paid to brokerage firms and other custodians,
nominees and fiduciaries for reasonable costs incurred in forwarding the
proxy material to and solicitation of proxies from the beneficial owners of
shares held of record by such persons. The Company anticipates that the
costs it will incur in solicitation will be approximately $1,000. It is
anticipated that the solicitation will be primarily by mail commencing on
or about April 24, 1996, but proxies also may be solicited in person or by
telephone by employees of the Company.
Voting Securities
All shareholders of record as of the close of business on April 19, 1996,
are entitled to notice of and to vote at the meeting. Provided that a complete
and executed form of proxy shall have been delivered to the Company prior to
the meeting, any person may attend and vote that number of shares for which
he holds a proxy. On April 15, 1996, the Company had 7,974,000 shares of
common stock, $0.01 par value per share ("Common Stock"), outstanding. The
Common Stock is the only class of voting securities of cumulative voting.
The presence, in person or by proxy of holders of the Common Stock representing
not less than one-third of the outstanding shares of Common Stock on April 19,
1996, the record date, shall constitute a quorum. The affirmative vote of a
majority of the shares of Common Stock present at the meeting, if a quorum
is present, is necessary for the approval of each matter of business properly
brought before the meeting.
However, directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present,
meaning that the nominees with the largest number of votes will be elected
as directors. In certain circumstances, a shareholder will be considered
to be present at the meeting for quorum purposes but will not be deemed to
have cast a vote on a matter. Such circumstances exist when a shareholder
is present but specifically abstains from voting on a matter or when shares
are represented at the meeting by a proxy conferring authority to vote only
on certain matters as in the case of broker non-votes. In conformity with
Delaware law and the Company's By-Laws, shares abstaining from voting or not
voted on certain matters, including broker non-votes, will not be treated as
votes cast with respect to those matters, and therefore will not affect the
outcome of any such matter. Under Delaware law and under the Company's
certificate of incorporation, each share of Common Stock entities a shareholder
to one vote.
1
Certain Beneficial Owners
The following table sets forth certain information as of April 15, 1996,
regarding the beneficial ownership of the Common Stock with respect to
(i) each person known by the company to be the beneficial owner of more than
five percent of the Company's outstanding voting securities, (ii) the four
executive officers of the Company named in the Executive Compensation section
and (iii) the Company's directors and officers as a group.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
Michael L. McDonald 460,000 a 5.4%
3500 N. Causeway Blvd.
Metairie, Louisiana 70002
Donald V. Hebert 70,800 b 0.8%
James P. McGinnis 36,000 c 0.4%
William E. Logan 34,500 d 0.4%
Directors and officers as a group 1,015,738 e 11.9%
<FN>
<F1>
a. Includes 360,000 shares owned by family members, the
beneficial ownership of which is hereby disclaimed.
b. Includes 4,800 shares underlying exercisable stock
options and 66,000 shares underlying Common Stock
purchase warrants exercisable within sixty days.
c. Includes 16,000 shares underlying Common Stock
purchase warrants exercisable within sixty days.
d. Includes 16,000 shares underlying exercisable stock
options and 16,000 shares underlying Common Stock
purchase warrants exercisable within sixty days.
e. Includes 24,000 shares underlying exercisable stock
options and 98,000 shares underlying Common Stock
purchase warrants exercisable within sixty days.
</FN>
Election of Directors
Proposal 1: The board of Directors of the Company urges you to vote FOR the
nominees for the Board of Directors described below. Proxies will be so voted
unless shareholders specify otherwise in their proxies.
The Board of Directors presently consists of six members divided into three
classes. Directors of the Company generally serve for a term of three years
and until their successors are duly elected and qualified, or until their
death, resignation or removal. Although the Board of Directors of the Company
does not contemplate that the nominees will be unable to serve, if such
situation should arise, the appointed proxies will use their discretionary
authority provided in the proxy and vote for a substitute designated by the
Board of Directors in accordance with their best judgement. The Board of
Directors has no reason to believe that any substitute nominees will be
required.
All persons listed below are members of the present Board of Directors and
have consented in writing to be named in this Proxy Statement and to serve
as a director, if elected. The following table sets forth certain additional
information with respect to each of the directors as of April 15, 1996.
2
Position with the Amount and Nature of Percent of Year First Became
Name Age Company Beneficial Ownership Class a Director
Class I.- Nominees for Election to the Board of directors for a Three-Year Term Expiring in 1999
Michael L. McDonald 49 Chairman, President 460,000 a 5.4% 1987
and Director
Hugo A. Ruiz 62 Director 66,738 b 0.8% 1989
Class III.- Member of the Board of directors Continuing in Office Until 1998
James M. Blane 64 Director 23,500 0.3% 1987
George H. Burmann 37 Director 20,500 0.2% 1994
Richard H. Mandel 66 Director 20,500 0.2% 1994
Class II.- Member of the Board of directors Continuing in Office Until 1997
Ronald D. Jeancon 75 Director 283,200 c 3.3% 1989
a. Includes 360,000 shares owned by family members, the beneficial
ownership of which is hereby disclaimed.
b. Includes 6,976 shares Mr. Ruiz holds as custodian for family members.
c. Includes 3,200 shares underlying exercisable stock options
exercisable within sixty days.
Michael L. McDonald has been Chairman of the Board of Directors and President
of the Company since March 1990. From November 1987 until August 1990,
Mr. McDonald also served as Chairman and President of WRO-Virginia Corporation
("WRO-VA"), a predecessor of the Company. Prior to 1987, Mr. McDonald served
as President and Director of Fountain Oil & Gas, Inc., Diablo Oil Company,
KEE Exploration, Inc. and Sierra Exploration Company, all oil and gas companies
which merged with and into WRO-VA in late 1987. Mr. McDonald holds BA and MBA
degrees from the University of Alabama.
Hugo A. Ruiz has been a Director of the Company since its inception in October
1989. For more than five years prior to the merger of Equitable Petroleum
Corporation ("Equitable") with a subsidiary of the Company in March 1990,
Mr. Ruiz served as a Director of Equitable. Mr. Ruiz has held various offices,
including that of President with banks domiciled in Puerto Rico and Spain.
James M. Blane has been a Director of the Company since March 1990. From
November 1987 until August 1990, Mr. Blane served as a Director of WRO-VA,
a predecessor of the Company. From 1983 until December 1987, Mr. Blane also
served as a Director and officer of Fountain Oil & Gas, Inc., a company which
was merged with WRO-VA in late 1987. Mr. Blane is a consultant in oil field
environmental and safety procedures.
George H. Burmann has been a Director of the Company since July 1994. Mr.
Burmann, who has been a stockbroker since 1984, opened his own brokerage
firm during 1992 in Orlando, Florida. Mr. Burmann was a broker at Corporate
Securities Group, Inc., from 1990 until 1992, a member of NASD, SIPC, and
NYSE.
Richard H. Mandel has been a Director of the Company since July 1994. Mr.
Mandel has been an independent operator and consultant in the energy field
since 1984. Prior to 1984, Mr. Mandel served as President of American
Western Energy and Universal Drilling. Mr. Mandel holds a petroleum
engineering degree from the Colorado School of Mines and an MBA from
Columbia University.
Ronald D. Jeancon has been a Director of the Company since its inception in
October 1989. For more than five years prior to the merger of Equitable with
a subsidiary of the Company in March 1990, Mr. Jeancon served as a Director
and Secretary of Equitable. Mr. Jeancon is active as a private investor in
corporate securities, real estate and oil and gas.
3
The Board of Directors and Its Committees
The Board of Directors met three times during 1995, during which each incumbent
director of the Company attended 75% or more of the meetings of the Board of
Directors and of the meetings held by committees of the Board on which he
served.
The Audit Committee is comprised of three directors, Messrs. Blane, Jeancon
and Ruiz. The Audit Committee's functions include recommendations concerning
the engagement of independent public accountants, reviewing with the independent
public accountants the plan and results of the audit engagement, approving
professional services provided by independent public accountants, considering
the range of audit and non-audit fees and reviewing the adequacy of the
Company's internal accounting controls. The Audit Committee met once during
1995. The Board of Directors does not have a Nominating Committee or a
Compensationn Committee.
Compensation of Directors
During 1995 and currently, the Company does not compensate directors.
Directors who are officers do not receive compensation for their services
as a director. In 1994 Messers. Burinann and Mandel each received 20,500
warrants in accordance with the Company's warrant plan. See "Warrant Plan."
Executive Officers
Set forth below are the names, positions and ages of the executive officers
of the Company.
Name Position Age
Michael L. McDonald Chairman, President and Director 49
Donald V. Hebert Vice President, Operations 69
James P. McGinnis Vice President, Controller 54
William E. Logan Secretary and Treasurer 43
Michael L. McDonald is described in the Director's biographical information on
page three of this document.
Donald V. Hebert was Vice President, Operations of Equitable and was President
of one of Equitable's subsidiaries prior to Equitable's merger with a
subsidiary of the Company in March 1990. Mr. Hebert holds a BS degree in
Geology from the University of Southwestern Louisiana.
James P. McGinnis served in various capacities with various predecessor
companies until the mergers in March 1990, at which time he began serving
as Controller of the Company. Mr. McGinnis is a Certified Public Accountant
and holds a BS degree in Accounting from the University of Tennessee.
William E. Logan served in various capacities with Equitable prior to
Equitable's merger with a subsidiary of the Company in March 1990, at which
time he began serving as Treasurer of the Company. Mr. Logan holds a BS
degree in Accounting from Villanova University.
Executive Compensation
The following tables set forth certain information for each of the three years
ended December 3l, 1995, with respect to each of the four most highly
compensated executive officers of the Company whose cash compensation
exceeded $60,000 during such year.
4
Summary Compensation Table
Long-Term Compensation
Annual Stock All Other
Name and Position Year Salary Warrants Compensation(*)
Michael L. McDonald 1995 $360,000 -- --
President 1994 $360,000 -- --
1993 $360,000 21,000 $11,813
Donald V. Hebert 1995 $108,000 -- --
Vice President 1994 $108,000 -- --
1993 $108,000 1,000 $563
James P. McGinnis 1995 $102,000 -- --
Vice President - 1994 $102,000 -- --
Controller 1993 $102,000 -- --
William E. Logan 1995 $96,000 -- --
Secretary and 1994 $96,000 -- --
Treasurer 1993 $96,000 1,000 $563
(*) Represents the difference between exercise price of warrants issued and the
market price of common stock on date of grant.
Warrant Plan
By resolution of the Board of Directors at a meeting held on November 13, 1991,
the Company adopted an unwritten plan (as amendedby resolution of the Board of
Directors on February 16,1993 andaugust 24,1994, the "Plan") providing for the
grant and issuance of up to 300,000 warrants ("Warrants") each for the purchase
of one share of Common Stock.
All Warrants granted and issued under the Plan are exercisable at $1.25 per
share on the terms provided in an agreement and certificate evidencing such
Warrants; provided that no Warrants shall be exercisable after 5:00 p.m.,
Eastern time, on November 14, 1996. All Directors, officers and employees
are eligible to receive grants under the Plan. Under the Plan, directors,
non-director officers and employees are categorized into tier levels based
on a number of factors, including title, compensation level and length of
service.
Option Plan
In December of 1988, Equitable's Board of Directors authorized options (the
"Options") to purchase 59,500 shares of Equitable common stock under an
option plan (the "Option Plan") under which certain of Equitable's key
employees were granted options to buy Equitable common stock.
In March of 1990, when Equitable was merged into the Company (the "Merger"),
the Options were converted on the basis of 1.6 shares of Company common stock
for each share of Equitable common stock. After adjustment due to the Merger,
the Option Plan provides that the options are exercisable at $1.5625 per share,
have a ten-year term and expire upon an employee leaving the Company's
employment.
Under the Option Plan, Messers. Hebert and Logan were granted 4,800 and 16,000
(after adjustment for the Merger) Options, respectively, on December 30, 1988.
5
The following table provides information with respect to the named executive
officers concerning the number of unexercised Warrants and Options held as
of December 31, 1995.
Year-End 1995 Warrants / Options Values
No. Shares - - Unexercised Warrants/Options At Year-End - -
Common Stock Number of Shares Value of Warrants/Options
Acquired Underlying Warrants/Options at Fiscal Year End
Name on Exercise Exercisable Unexercisable Exercisable Unexercisable
Donald V. Hebert Warrants -- 66,000 -0- $ -0- $ -0-
Options -- 4,800 -0- $ -0- $ -0-
James P. McGinnis Warrants -- 16,000 -0- $ -0- $ -0-
William E. Logan Warrants -- 16,000 -0- $ -0- $ -0-
Options -- 16,000 -0- $ -0- $ -0-
Appointment of Auditors
Proposal 2: The board of Directors has unanimously approved and urges you to
vote FOR the approval of the appointment of Arthur Andersen LLP as the
Company's independent public accountants to serve untfl the next Annual
Meeting of Shareholders.
The Board of Directors recommends the appointment of Arthur Andersen LLP as
independent public accountants and auditors for the Company for the year
ending December 31, 1996. Arthur Andersen LLP has served in such capacity
since 1988 and is familiar with the Company's affairs and financial
procedures.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting and will have an opportunity to make statements, if they
desire to do so, and to respond to appropriate questions from those
shareholders attending the meeting.
Shareholder Proposals
Shareholder proposals to be presented at the next Annual Meeting of
Shareholders must be in writing and received at the Company's principal
executive offices by the Secretary of the Company no later than December 16,
1996 in order to be included in the next year's Proxy Statement.
Annual Report
The annual report to stockholders, including consolidated financial statements,
accompanies this Proxy Statement.
Section 16 Filings Disclosure
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent
of a registered class of the Company's equity securities to file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock of the Company.
Officers, directors and greater than ten percent beneficial owners are
required by Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the Company's copies of
such reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 3l,
1995 all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with.
6
Other Business
The Board of Directors of the Company knows of no matters expected to be
presented at the Annual Meeting other than those described above; however,
if other matters are properly presented to the meeting for action, it is
intended that the persons named in the accompanying form of proxy, and
acting thereunder, will vote in accordance with their best judgement on
such matters.
By Order of the Board of Directors
William E. Logan
Secretary
April 24, 1996