[Letterhead of Concord Energy Incorporated]
October 20, 1997
Dear Stockholders:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders of Concord Energy Incorporated to be held on Friday, November 14,
1997, at 10:00 A.M. at the headquarters of Concord Energy Incorporated located
at 1515 Simmons St., Jourdanton, Texas. We hope that you will be able to attend
the meeting. Matters on which action will be taken at the meeting are explained
in detail in the Notice and Proxy Statement following this letter.
Whether or not you expect to be present and regardless of the number of
shares you own, please mark, sign and mail the enclosed proxy in the envelope
provided.
Sincerely,
/s/ Deral Knight
Deral Knight
Chairman of the Board, President and
Chief Executive Officer
DK/sjb
CONCORD ENERGY INCORPORATED
1515 Simmons St. - P.O. Box 216
Jourdanton, Texas 78026
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 14, 1997
To the Stockholders of
Concord Energy Incorporated
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Concord
Energy Incorporated (the "Company") will be held at the headquarters of Concord
Energy Incorporated at 1515 Simmons St., Jourdanton, Texas 78026, on Friday,
November 14, 1997 at 10:00 A.M., local time, for the following purposes:
(1) To elect four directors;
(2) To approve the appointment of auditors for the 1998 fiscal year; and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
In accordance with the Bylaws of the Company and a resolution of the Board
of Directors, the record date for the meeting has been fixed at October 8, 1997.
Only stockholders of record at the close of business on that date will be
entitled to vote at the meeting or any adjournment thereof.
Stockholders who do not expect to attend the meeting in person are
urged to sign the enclosed proxy and return it promptly to the Company. A return
envelope is enclosed for that purpose.
By Order of the Board of Directors
/s/ Shirley J. Boyle
Shirley J. Boyle
Secretary
DATED: October 20, 1997
CONCORD ENERGY INCORPORATED
1515 Simmons St. - P.O. Box 216
Jourdanton, Texas 78026
PROXY STATEMENT
--------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Concord Energy Incorporated, a Delaware
Corporation (the "Company"), of proxies to be voted at the 1997 Annual Meeting
of Stockholders to be held at the headquarters of Concord Energy Incorporated
located at 1515 Simmons St., Jourdanton, Texas 78026, at 10:00 A.M. on Friday,
November 14, 1997, and at any adjournment or adjournments thereof (the
"Meeting"). This Proxy Statement and the accompanying proxy are being mailed to
stockholders on or about October 20, 1997.
VOTING AND PROXIES
Only holders of record of common stock, par value $.0001 per share
("Common Stock"), of the Company at the close of business on October 8, 1997
shall be entitled to vote at the Meeting. There were 6,045,745 shares of Common
Stock issued and outstanding on the record date. Stockholders are entitled to
one vote for each share of Common Stock held as of the record date. Any
stockholder giving a proxy has the power to revoke the same at any time prior to
its use by giving notice in person or in writing to the Secretary of the
Company.
Votes cast by proxy or in person at the Meeting will be tabulated by the
inspector of election appointed for the meeting by the Board of Directors of the
Company. A quorum for the transaction of business at the Meeting requires
representation, in person or by proxy, of a majority of the issued and
outstanding shares of Common Stock. The inspector of election will treat
abstentions and broker non-votes as shares that are present for purposes of
determining the presence of a quorum.
The four nominees for directors of the Company receiving the highest vote
totals will be elected as directors of the Company. Accordingly, abstentions and
broker non-votes will not be included in the vote totals and will thus not
affect the outcome of the vote. All other matters to be voted on will be decided
by the affirmative vote of the holders of a majority of the shares of Common
Stock voting on the proposal in person or by proxy. Thus, abstentions and broker
non-votes will not be included in the vote totals and will not effect the
outcome of the vote.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Based upon information received from the persons concerned, each person
known to the Company to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock, each director and nominee for director, and
all directors and officers of the Company as a group, owned beneficially as of
October 8, 1997 the number and percentage outstanding shares of Common Stock
indicated in the following table:
Name and Address of Number of
Beneficial Owner Shares Percent of Class
---------------- ------ ----------------
Deral Knight 360,000 5.95%
115 Cynthia Drive
Pleasanton, TX 78064
Barry Laidlaw 0 0
1616 Continental Drive
Pleasanton, TX 78064
Dr. Neal Glass 23,971 0.40%
100 Dawn Lane, Suite #2
Waverly, OH 45690
Gilbert Goldstein 0 0
13161 Burgandy Drive South
Palm Beach, FL 33410-1479
All Directors and Officers as a
Group (5 persons) 383,971 6.35%
To the best of the Company's knowledge, each of the indicated persons or
entities exercises sole voting and investment power with respect to all shares
beneficially owned by him or it.
PROPOSAL ONE
ELECTION OF DIRECTORS
Four directors, constituting the entire Board of Directors, are to be
elected at the Meeting to hold office for a term until the next annual meeting
of stockholders and until their respective successors have been duly qualified.
Unless a proxy shall specify that it is not to be voted for the directors, it is
intended that the shares represented by each duly executed and returned proxy
will be voted IN FAVOR of the election as directors of the persons named below.
Each of the persons named below is a nominee for the Board of Directors
and, except for Gilbert Goldstein, is also an incumbent director of the Company.
If for any reason any
nominee is not a candidate for election at the Meeting, such proxies will be
voted for a substitute nominee and for the others named below. The Board does
not anticipate that any of the nominees will not be a candidate. There are no
family relationships among any of the directors. Information regarding each
nominee is set forth below under "Management - Director and Officers."
Deral Knight
Barry Laidlaw
Dr. Neal Glass
Gilbert Goldstein
MANAGEMENT - DIRECTORS AND OFFICERS
The following table sets forth the names and ages of all current Directors
and executive officers of the Company and all persons nominated or chosen to
become such, as well as the position(s) in the Company held by, or proposed to
be held by, them.
NAME Age Position Director or
Officer Since
Deral Knight 56 Chairman of the Board, 1996
President, Chief Executive
Officer and Director
Barry Laidlaw 48 Director 1996
President of Concord Operating, Inc.
President of Knight Equipment &
Manufacturing Corp. (KEMCO)
Shirley J. Boyle 51 Corporate Secretary 1997
Scott Kalish 38 Chief Accounting Officer - Treasurer 1993
Neal Glass 50 Director 1993
Gilbert Goldstein 67 Nominee for Director --
Deral Knight - Chairman of the Board, President, Chief Executive Officer and
Director. Mr. Knight is the founder of Knight Equipment and Manufacturing
Corporation ("KEMCO"), a wholly-owned subsidiary of the Company. He has been
involved in the oil and gas industry in various capacities since 1973. He
received a BS in Chemical Engineering from Oklahoma University.
Barry Laidlaw - President of Concord Operating, Inc., a wholly-owned subsidiary
of the Company, and Director of the Company. Prior to the organization of
Concord Operating, Inc., Mr. Laidlaw was President of West Gas, Inc., where he
was involved in all aspects of oil and gas business from negotiating contracts
to field operations.
Shirley J. Boyle - Secretary. Mrs. Boyle has been with KEMCO from its inception
in 1992 and originally began working for Mr. Knight as an administrative
assistant in 1983. Mrs. Boyle's responsibilities have included management,
administration, bookkeeping, employee relations and secretarial. Prior to
joining KEMCO, Mrs. Boyle was a legal secretary. Mrs. Boyle is a graduate of New
London Business College.
Scott Kalish - Chief Accounting Officer/Treasurer. Mr. Kalish has served as the
Company's Chief Accounting Officer since 1991. Previously, he was supervisor of
financial accounting at Elf Acquitaine Offshore ("Elf"). Prior to his
association with Elf, he was an oil and gas accounting supervisor with Cliffs
Drilling Company. Mr. Kalish is a graduate of Roger Williams College.
Dr. Neal Glass - Director. Upon the consummation of the transaction with
Monoclonal International Technology, Inc. ("Monoclonal"), Dr. Neal R. Glass,
M.D., became a director of the Company. Dr. Glass is a general surgeon who
received his undergraduate training at New York University (1964-1968) and his
M.D. degree from the State University of New York (1968-1972), where he also
received his postgraduate surgical training (1972-1978). Dr. Glass has been an
assistant and associate professor of surgery at the University of Wisconsin
(1978-1985), and a professor of surgery at Texas Tech University in Lubbock
(1985-1989), where he initiated and directed an organ procurement and transplant
program. From 1989-1993 he directed organ transplant programs at St. Louis
University and subsequently at Our Lady of Lourdes Medical Center in Camden,
N.J. Dr. Glass is a member of numerous professional organizations, including the
American College of Surgeons and the American Society of Transplant Surgeons.
During his academic career, he published and lectured extensively in
peer-reviewed medical journals and at peer-reviewed national medial meetings.
Since 1993, he has been in private practice in south-central Ohio.
Gilbert Goldstein - Nominee for Director. For more than thirty years Mr.
Goldstein has been self employed in the field of real estate investment and
development of shopping centers, office buildings, industrial parks, condominium
projects, land development, etc. He is also actively involved in venture capital
and oil and gas investments and numerous other entrepreneurial activities. He
supports and has been involved in numerous charitable activities and
organizations. Mr. Goldstein was an officer in the U.S. Air Force and is a
graduate of Pennsylvania State University. He is presently president of six
privately held corporations and has been a director of four public corporations
and is a consultant to other public corporations.
All directors and/or officers, other than Deral Knight and Shirley J.
Boyle, previously served as members of the Board of Directors of Concord Energy,
Inc., a Nevada Corporation, since the time of the Agreement with Monoclonal in
May, 1993. In December 1995, Barry Laidlaw resigned from the Board of Directors
of the Company, he agreed to rejoin the Board in May 1996. In May of 1996, Bruce
Diechl resigned from the Board of Directors, and as an officer of the Company.
In May 1996, Charles Fallon resigned from the Board of Directors of the Company.
In May 1996, Deral Knight joined the Board of Directors of the Company. On
November 22, 1996, Jerry Swon resigned his position as Director and Chairman of
the Board. On November 22, 1996, Deral Knight became Chairman of the Board. On
February 28, 1997 Todd Hesse resigned as Secretary of the Company. On February
28, 1997 Shirley J. Boyle became Secretary of the Company. In July 1997, Paul
Chernis resigned from the Board of Directors of the Company. Officers are
appointed to serve until the meeting of the Board of Directors following the
next annual meeting of Stockholders and until their successors have been elected
and qualified. The last annual meeting was held on August 9, 1996.
The Company's Board of Directors holds regularly scheduled quarterly
meetings. The Company does not have standing audit, nominating or compensation
committees, or committees performing similar functions.
Based solely upon a review of Forms 3, 4 and 5 furnished to the Company
during its most recent fiscal year and based upon the present knowledge of
management, the Company believes that there were no Section 16(a) reports
untimely filed.
During the fiscal year ended June 30, 1997, the Board of Directors held
seven (7) meetings. All directors attended each of these meetings either in
person or via telephone conference.
EXECUTIVE COMPENSATION
The following table sets forth a summary of compensation for the fiscal
year ended June 30, 1995, 1996 and 1997 paid by the Company and its subsidiaries
to Deral Knight, the Chairman of the Board, President and Chief Executive
Officer of the Company, Jerry Swon, the former Chairman of the Board, President
and Chief Executive Officer of the Company from June 1991 until November, 1996,
and Bruce Diechl, the former Executive Vice President of the Company, from
May, 1991 until May, 1996. The Company did not have any executive officers other
than Messrs. Knight, Swon and Diechl, whose total annual salary and bonus
exceeded $100,000 for the fiscal years ended June 30, 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Name and Principal
Position Year Salary ($)
Deral Knight, Chairman of the Board, President 1997 $133,827
and Chief Executive Officer (*) 1996 $128,706
1995 $ 77,411
Jerry Swon, former Chairman of the Board, 1997 $132,692
President and Chief Executive Officer 1996 $150,000
1995 $150,000
Bruce Diechl (*) 1996 $100,000
former Executive Vice President 1995 $100,000
*NOTE: Salaries for the fiscal years 1996 and 1995 shown above, with the
exception of Deral Knight, have been allocated to listed payees out of funds
paid by the Company to Integrated Energy, Inc. ("Integrated") under the
management agreement (see Certain Transactions below).
The Company did not make any option grants or any awards under a long term
incentive plan to any executive officer during the fiscal year ended June 30,
1997.
No compensation is awarded to the Directors other than the reimbursement
of costs associated with attending the Board of Directors meetings.
On November 9, 1994, KEMCO entered into an employment agreement with its
President, Deral Knight. The agreement provides for him to receive a base salary
of $125,000 per annum plus a bonus consisting of ten percent of KEMCO's pre-tax
net profits from $1,500,000 to $2,000,000 and fifteen percent of pre-tax net
profits which exceed $2,000,000. The agreement also provides for certain fringe
benefits and expires May 7, 2000.
CERTAIN TRANSACTIONS
Jerry Swon, former President and former Chairman of the Board of the
Company owns all of the outstanding stock of Integrated, which was formerly a
shareholder of the Company. Integrated had provided certain services to the
Company pursuant to a management agreement (see below).
The Company and Integrated, entered into an agreement in June, 1991 that
required Integrated to provide certain management, administrative and accounting
services to the Company and its subsidiaries, Concord and COI, for $116,000 per
month through June 30, 1996. While the agreement was in effect, the Company was
also entitled to a percentage of all the syndicated retail partnership gross
sales made by Integrated. As additional consideration for the agreement,
Integrated assigned to the Company, effective June 1, 1991 through March 31,
1994, its revenue sharing interest in all program syndication's. In fiscal 1996,
the Company recorded $140,000 in syndication income. The services provided by
Integrated Energy, Inc. included the receipt of cash for oil and gas sales and
the payment of operating and capital expenditures on behalf of the Company. As
of July 1, 1996, the management agreement was terminated.
In conjunction with the above referenced agreement, the Company and
Integrated entered into an agreement by which the associated receivables and
payables may be netted. At June 30, 1997, the Company has a net payable due to
Integrated of $6,943. At June 30, 1996, the Company had a net receivable due
from Integrated of $236,415.
As part of its ongoing operations, the Company conducts business with
Atascosa Electric Services ("AES"), an entity which is owned by a relative of
Deral Knight, who is also a stockholder of the Company.
On December 5, 1996, KEMCO entered into a lease agreement with Deral
Knight, CEO, Chairman of the Board of Directors, and a stockholder of the
Company. The lease is for 2.42 acres of land located adjacent to property which
KEMCO owns and includes a 3,200 square ft. shop building and office trailer. The
lease is for five years at a cost of $975 per month.
Under the provisions of the agreement whereby the Company acquired Deral
Knight's stock in KEMCO, Deral Knight has agreed to return to the Company,
Concord common stock valued at $6.25 per share to the extent that Deral Knight
owed money to the Company at June 30, 1996. Accordingly, in liquidation of the
receivable balance, 17,130 shares of Company common stock are reflected as
having been returned to the Company.
In August, 1995, the Company's board of directors considered the
acquisition of a 63% interest in IPS. At that time, the acquisition involved a
cash investment of $1.4 million. The Company's board declined to make the
acquisition at that time because the Company needed to conserve its available
cash following the recent acquisition of KEMCO. The board was also concerned
because IPS had just completed its development stage, had no written orders and
was just starting to market its products. After the board passed on the IPS
transaction, former Company president Jerry Swon disclosed to the board that he
wished to pursue the IPS venture through a company controlled by him.
Thereafter, on August 22, 1995, IPS entered into an agreement with Tucker
Financial, Inc. ("Tucker"), a company controlled by former Company President
Jerry Swon, whereby Tucker provided funding to IPS in the amount of $300,000, as
part of an agreement that gave Tucker the right to acquire up to 63% of IPS by
furnishing a total of $1.4 million in working capital to IPS.
On October 18, 1995 Tucker arranged with an entity known as the SMR Group
to provide net equity capital to IPS in the amount of $1.4 million for a 25%
interest in IPS. That arrangement contemplated combining IPS with a public
company in which Tucker would have held a 28% interest. The sum of $300,000 was
to be repaid by IPS to Tucker. No such repayment actually took place because the
deal between IPS and SMR Group was never finalized.
On December 12, 1995, Mr. Swon, recommended that the Company's board of
directors reconsider the acquisition of IPS based on the progress made by that
company during the second half of 1995, and the immediate outlook for IPS and
its principal products. Mr. Swon advised the board that he felt confident that
the acquisition could be made for stock at this time and that IPS's agreement
with the SMR Group could be terminated. The board authorized him to negotiate
with IPS and report back at a subsequent meeting.
On December 26, 1995, Mr. Swon advised the Company's board of directors
that 100% of IPS could be purchased for 600,000 shares of the Company's common
stock. He also indicated that an additional 100,000 shares could eliminate
$400,000 of indebtedness including $300,000 in debt that IPS had incurred in
connection with the financing arranged by Tucker. Mr. Swon advised the board
that IPS would require up to an estimated $700,000 in working capital during the
next 12 months, and the Company would assist IPS in raising or obtaining these
funds. The board unanimously resolved to purchase IPS on the proposed terms.
As part of the acquisition, Tucker relinquished its right to purchase IPS
shares as described above. The individuals acquiring Company shares included ten
persons who received 45% of the Concord stock issued as consideration for IPS.
The Company is currently investigating whether these individuals were entitled
to receive the shares issued to them.
At the time of the IPS acquisition there existed a royalty agreement with
its president for any related oil and gas industry applications developed from
the original idea of developing a set of proprietary software programs.
Royalties under this agreement are calculated as
follows: 1% of the first $1,500,000 of gross revenue, and 5% of gross revenue
thereafter. The agreement expires December 31, 2015.
In March 1996, the Company finalized a sale of gas processing and related
equipment to Integrated for $550,000. The Company's profit on the sale of these
items was approximately $200,000. On November 22, 1996, the Company repurchased
from Integrated the gas processing and related equipment for $361,415. The
purchase price was netted against the net receivable due from Integrated at June
30, 1996 of $236,415 which resulted in a net payment to Integrated of $125,000.
In June 1996, Mr. Swon returned 124,500 shares of the Company's common
stock from Integrated, at a value of $3.00 per share as partial payment of
Integrated intercompany debt.
In June of 1996, the Company accepted $150,000 of expenses charged by
Integrated. These expenses represented costs incurred by Integrated outside of
the scope of the management contract.
On November 22, 1996, Jerry Swon resigned as chairman and board member of
the Company's board of directors. In conjunction with his resignation, the board
of directors approved a severance payment of six months of his then current
salary totaling $75,000.
PROPOSAL TWO
APPOINTMENT OF AUDITORS
The Board of Directors has appointed the firm of Hill, Kotara & Ford to
examine the financial statements of the Company for the 1998 fiscal year.
Approval of the appointment of auditors is not a matter which is required
to be submitted to a vote of stockholders, but the Board of Directors considers
it appropriate for the stockholders to express or withhold their approval of the
appointment. If stockholder approval should be withheld, the Board of Directors
would consider an alternative appointment for the succeeding fiscal year. The
Board of Directors recommends that the stockholders approve the appointment of
Hill, Kotara & Ford.
STOCKHOLDER PROPOSALS
To be included in the Company's proxy statement and proxy relating to the
Company's next Annual Meeting of Stockholders, stockholder proposals should be
received by the Company on or before June 23, 1998.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the fiscal year ended June
30, 1997 has been included in the mailing of this Proxy Statement. Additional
copies of the Annual Report on Form 10-KSB may be obtained by contacting the
Company's offices at P.O. Box 216, Jourdanton, TX 78026 or by faxing your
request to 830-769-2261.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not
aware of any other matters to be presented for action at the Meeting. However,
if any other matters are properly brought before the Meeting, it is intended
that the persons voting the accompanying proxy will vote the shares represented
thereby in accordance with their best judgment.
MANNER AND EXPENSES OF SOLICITATION
The solicitation of proxies in the accompanying form is made by the Board
of Directors and all costs thereof will be borne by the Company. In addition to
the solicitation of proxies by the use of the mails, some of the officers,
directors and other employees of the Company may also solicit proxies personally
or by mail, telephone, or telegraph but they will not receive additional
compensation for such services. Brokerage firms, custodians, banks, trustees,
nominees or other fiduciaries holding shares of the Common Stock in their names
will be requested by the Company to forward proxy material to their principals
and will be reimbursed for their reasonable out-of-pocket expenses incurred in
respect thereto.
By Order of the Board of Directors
/s/ Deral Knight
Deral Knight, Chairman of the Board,
President and Chief Executive Officer,
Concord Energy Incorporated
PROXY
CONCORD ENERGY INCORPORATED
1515 Simmons St. - P.O. Box 157
Jourdanton, Texas 78026
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned shareholder of Concord Energy Incorporated, a Delaware
corporation (the "Company"), hereby appoints Deral Knight, as Proxy, with the
power to appoint his substitute, and hereby authorizes him to represent and to
vote, as designated below, all the shares of common stock of the Company which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders to
be held on November 14, 1997, and any adjournment thereof, with all powers which
the undersigned would possess if personally present.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement of the Company dated October 20, 1997.
(Continued and to be signed on the reverse side)
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" THE ELECTION OF DIRECTORS AND "FOR" THE APPROVAL OF PROPOSALS 2
AND 3.
1. ELECTION OF DIRECTORS
FOR all nominees listed below (except WITHHOLD AUTHORITY to vote
as market to the contrary below) [_} 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.)
Deral Knight, Barry Laidlaw, Neal Glass, Gilbert Goldstein
2. PROPOSAL TO APPROVE THE APPOINTMENT OF HILL, KOTARA & FORD AS AUDITORS OF
THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In his discretion, the Proxy is authorized to vote upon such other business
as may be properly come before the meeting.
CHECK HERE FOR ADDRESS CHANGE [_] NEW ADDRESS:______________________________
______________________________
______________________________
______________________________
Please sign exactly as your
name appears below. When
shares are held by joint
tenants, both should sign.
When signing as attorney, as
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.
Dated: ________________ , 1997
______________________________
Signature
______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.