SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 13a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-12
GATEWAY ENERGY CORPORATION
(Name of Registrant as Specified In Its Charter)
JOHN J. BUTERIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price of other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PROXY STATEMENT
OF
JOHN BUTERIN
IN OPPOSITION TO THE BOARD OF DIRECTORS
OF
GATEWAY ENERGY CORPORATION
2003 ANNUAL MEETING OF STOCKHOLDERS
INTRODUCTION
This Proxy Statement and the accompanying form of proxy card are being
furnished by John J. Buterin ("Buterin"), to certain owners of shares of Common
Stock, par value $.25 per share (the "Common Stock"), of Gateway Energy
Corporation, a Delaware corporation (the "Company"), in connection with the
solicitation by Buterin of proxies from such stockholders to be voted at the
Company's 2003 Annual Meeting of Stockholders, and at any adjournments,
postponements or reschedulings thereof (the "Annual Meeting"), to be held on
Wednesday, May 21, 2003.
According to the Company's definitive proxy statement filed with the
Securities and Exchange Commission (the "SEC") on April 8, 2003, eight
individuals will be elected at the Annual Meeting to the Board of Directors of
the Company (the "Board").
Buterin is soliciting proxies from the holders of Common Stock to elect
three individuals named below under the heading "ELECTION OF DIRECTORS--Buterin
Nominees" at the Annual Meeting (the "Buterin Nominees"). Buterin intends to
nominate the Buterin Nominees for election at the Annual Meeting and to vote for
such nominees. Thus, if all of the Buterin Nominees are elected at the Annual
Meeting, three of the eight members of the Board will be Buterin Nominees. The
Buterin Nominees include three independent nominees who would be qualified to
serve on the Board's Audit Committee under the applicable securities law
requirements if elected. A disadvantage to electing the Buterin Nominees is that
they will be unable to use their minority position to independently change the
outcome of board voting positions.
This Proxy Statement is first being sent or given to holders of Common
Stock on May 20, 2003. The Company's principal place of business is located at
500 Dallas Street, Suite 2615, Houston, Texas 77002.
The solicitation is being made by John J. Buterin and
not on behalf of the Board.
YOU MAY ALREADY HAVE RECEIVED, OR WILL SOON RECEIVE, A PROXY CARD FROM
THE COMPANY. PLEASE RETURN ONLY BUTERIN'S PROXY CARD AND DO
NOT RETURN ANY COMPANY PROXY CARD UNDER ANY CIRCUMSTANCES.
IF YOU RETURN BOTH PROXY CARDS THERE IS A DANGER THAT YOUR
SHARES WILL NOT BE VOTED AS YOU DESIRE BECAUSE ONLY THE
LATEST DATED PROXY CARD YOU SUBMIT COUNTS.
Information About Buterin
John Buterin has been an investor in the Company for over 12 years,
investing over $4 million during that period. As of the date of this Proxy
Statement, Buterin is the beneficial owner of 615,768 shares of Common Stock,
which constitutes approximately 4% of the outstanding Common Stock based on the
Company's preliminary proxy statement filed with the SEC on April 8, 2003. In
addition to the Common Stock owned by Buterin, Mr. Buterin believes that the
Company owes Buterin approximately $284,126 for reimbursement of interest and
expenses paid on behalf of the Company under debt assumed by Buterin. See
"BACKGROUND OF BUTERIN'S INTEREST IN THE COMPANY AND REASONS FOR THE
SOLICITATION."
As a significant investor in the Company, Buterin has become
dissatisfied with the Company's performance and is concerned about preserving
the value of his significant investment in the Company. He believes that
management has become nonresponsive to the concerns and questions of the
stockholders and have managed the Company for their own personal benefit.
Buterin believes that actions taken by the Board and management are designed to
entrench and enrich management at the expense and to the detriment of all of the
Company's stockholders.
Accordingly, Buterin is proposing the Buterin Nominees for election to
the Board in partial opposition to the slate proposed by the Board. If all of
the Buterin Nominees are elected at the Annual Meeting, they will not constitute
a majority of the members of the Board. However, Buterin believes that these new
independent directors will be in a position to monitor the proceedings of the
Board with the best interest of the Company and its stockholders in mind. While
Buterin is not presently contemplating obtaining control of the Company, he
intends to monitor the activities of the Board and management of the Company and
may determine in the future that a change of control of the Board would be in
the best interest of the Company and its stockholders. Buterin and the Buterin
Nominees are committed to promoting business objectives, goals and values that
are in the best interest of all of the Company's stockholders. See "BACKGROUND
OF BUTERIN'S INTEREST IN THE COMPANY AND REASONS FOR THE SOLICITATION."
Buterin is not subject to the informational filing requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and therefore
is not required to file periodic reports, proxy statements and other information
with the SEC relating to his business, financial condition and other matters.
The Company is subject to the informational filing requirements of the Exchange
Act and is required to file periodic reports, proxy statements and other
information with the SEC relating to its business, financial condition and other
matters. The Company's reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the SEC at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the SEC's
regional offices located at 233 Broadway, New York, New York 10279, and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
SEC by telephoning 1-800-SEC-0330. The Company's filings are also available to
the public on the SEC's Internet site (http://www.sec.gov). Copies of such
materials may also be obtained by mail from the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
IMPORTANT
BUTERIN STRONGLY RECOMMENDS THAT YOU VOTE FOR THE BUTERIN NOMINEES BY MARKING,
SIGNING, DATING AND MAILING THE ENCLOSED PROXY CARD PROMPTLY IN THE ENVELOPE
PROVIDED.
HOLDERS OF RECORD OF SHARES OF COMMON STOCK AS OF MARCH 31, 2003, THE RECORD
DATE ESTABLISHED BY THE COMPANY FOR VOTING AT THE ANNUAL MEETING, ARE URGED TO
SUBMIT THE ENCLOSED PROXY CARD EVEN IF YOUR SHARES HAVE BEEN SOLD AFTER THE
RECORD DATE.
IF YOU HAVE PURCHASED SHARES OF COMMON STOCK AFTER THE RECORD DATE AND WISH TO
VOTE SUCH SHARES AT THE ANNUAL MEETING, YOU SHOULD SEEK TO OBTAIN A PROXY FROM
THE SELLER OF SUCH SHARES.
IF YOUR SHARES OF COMMON STOCK ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK OR
NOMINEE ON THE RECORD DATE, ONLY IT CAN VOTE YOUR SHARES AND ONLY UPON RECEIPT
OF YOUR SPECIFIC INSTRUCTIONS. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND GIVE INSTRUCTIONS FOR YOUR SHARES TO BE VOTED ON THE ENCLOSED PROXY
CARD.
THIS PROXY STATEMENT MAY BE DELIVERED TO STOCKHOLDERS OF THE COMPANY
ELECTRONICALLY WITH THE CONSENT OF SUCH STOCKHOLDER.
QUESTIONS CONCERNING THIS PROXY STATEMENT OR THE ACCOMPANYING
PROXY CARD SHOULD BE DIRECTED TO:
JOHN BUTERIN
P.O. BOX 375
MISSION, KANSAS 66201
913-642-8523
VOTING
The Board has fixed March 31, 2003 as the record date for the
determination of the holders of capital stock of the Company entitled to notice
of and to vote at the Annual Meeting. As of March 31, 2003, there were
15,426,317 shares of Common Stock outstanding and entitled to vote.
With respect to the election of directors, the affirmative vote of the
holders of shares representing a plurality of the aggregate votes cast at the
Annual Meeting in respect of the election of the directors is required for their
election. Because the election of directors will be determined by votes cast
rather than by a percentage of the shares present, votes to "withhold authority"
and "broker non-votes" will not affect the election of directors. If any other
matter properly comes before the Annual Meeting, its resolution will be
determined by the affirmative vote of the holders of shares of Common Stock
representing a majority of votes cast at the Annual Meeting with respect to such
matter, unless a higher vote is required under applicable state law.
Accordingly, abstentions will have the effect of a negative vote on any such
matter, but "broker non-votes" will not be voted and will have no effect in
determining whether such matter has received sufficient votes for approval.
If the enclosed form of proxy card is executed and returned, it may
nevertheless be revoked by the person giving it any time before the vote at the
Annual Meeting either by filing with the Secretary of the Company a written
notice of revocation or a proxy card bearing a later date than the most recently
submitted proxy card or by attending the Annual Meeting and voting in person.
The execution of the enclosed proxy card will cause the revocation of any
previously executed proxies. The execution of a proxy card will not affect a
stockholder's right to attend the Annual Meeting and vote in person, but
attendance at the Annual Meeting will not, by itself, revoke a proxy.
The enclosed proxy card may only be voted for the Buterin Nominees and does
not confer voting authority with respect to the remaining directorships. You can
only vote for the Company's nominees by signing and returning the proxy card
provided by the Company. You should review the Company's proxy statement for the
names, backgrounds and qualifications of those persons nominated by the Company.
Buterin intends to vote all of the shares received pursuant to this solicitation
for the Buterin Nominees and does not intend to vote any shares in favor of the
Company's nominees to fill the remaining positions in the directorship. Since
votes for only three directorships are solicited under this proxy statement, you
will be disenfranchised with regard to at least five directorships if you elect
to vote for the Buterin Nominees and fail to return the Company's proxy card.
The remaining five directorships are likely to be filled by the Company's
nomineess. If the Buterin Nominees are elected, some or all of the remaining
Company nominees may refuse to serve resulting in vacancies on the board. Under
the Company's bylaws such vacancies shall be filled by a majority vote of the
directors then in office. In addition, if the Company's board undertakes to
expand the number of directors serving on the board, the percentage of the
Company's directorships filled by the Buterin Nominees will be further reduced.
IF YOU, AS A HOLDER OF COMMON STOCK, WISH TO VOTE FOR THE BUTERIN
NOMINEES, YOU MUST SUBMIT THE ENCLOSED PROXY CARD AND SHOULD NOT SUBMIT THE
COMPANY'S PROXY CARD.
Unless contrary instructions are indicated on the enclosed proxy card,
all shares of Common Stock represented by valid proxy cards received pursuant to
this solicitation (which have not been revoked as described above) will be voted
FOR the election of the Buterin Nominees and at the discretion of the proxy
holder(s) on such other business as may properly come before the Annual Meeting.
Such shares will not be voted with respect to the ratification of the
appointment of Deloitte & Touche LLP as independent public accountants.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ENCLOSED ENVELOPE PROMPTLY.
ELECTION OF DIRECTORS
General
The Bylaws of the Company provide that the Board shall consist of not
less than five nor more than eleven directors, with the exact number to be fixed
by resolution of the Board. According to the Company's proxy statement filed
with the SEC on April 8, 2003, eight persons will be elected at the Annual
Meeting to serve as directors on the Board for a term of one year and until
their successors are duly elected and qualified or until their earlier
resignation or removal.
The Bylaws require that any stockholder wishing to nominate persons for
election as directors at an annual meeting of stockholders must give the Company
written notice of such nominations, together with certain information regarding
the nominees and the nominating stockholder. Generally, such notice must be
given not less than 60 days nor more than 90 days prior to the first anniversary
of the preceding year's annual meeting. On February 25, 2003, Buterin delivered
to the Company what it believed to be the notice and information required by the
Bylaws with respect to its nomination of the Buterin Nominees for election at
the Annual Meeting. On March 6, 2003, the Company, through its legal counsel,
confirmed that the notice and information provided by Buterin satisfied the
requirements of the Bylaws and acknowledged that Buterin could nominate the
Buterin Nominees for election to the Board at the Annual Meeting.
Buterin Nominees
At the Annual Meeting, Buterin will nominate the three Buterin Nominees
for election as Directors. The information below concerning age and principal
occupation of the Buterin Nominees has been furnished by the respective
nominees. Except as described in this Proxy Statement, none of the Buterin
Nominees beneficially owns any Common Stock.
Name Age Principal Occupation
---- --- --------------------
John J. Buterin (1) 72 Mr. Buterin is not currently a member of the Board of
Directors of the Company and has not held a position or
office with the Company. Mr. Buterin is a retired
commodities trader and currently manages his investments.
Mr. Buterin owns 615,768 shares of the Company's common
stock.
Thomas G. Stoll (2) 43 Mr. Stoll is not currently a member of the Board of
Directors of the Company and has not held a position or
office with the Company. Mr. Stoll is an attorney who has
been in private practice since 1986. He has been a
shareholder with the Kansas City firm Kurlbaum, Stoll,
Seaman, Mustoe & McCrummen, P.C. since 1993. Mr. Stoll
represents John J. Buterin with respect to his business
matters.
Philip A. Wilson (3) 54 Mr. Wilson is not currently a member of the Board of
Directors of the Company and has not held a position or
office with the Company. Mr. Wilson has served as the
President of Lawyers Assist Corporation since 1972.
Mr. Wilson also acted as Chief Criminal Investigator in the
Office of the Prosecuting Attorney of Clay County, Missouri
from 1996-2002.
- -----------------
(1) Mr. Buterin beneficially owns 615,768 shares of Common Stock, of which
6,107 shares are held jointly with his wife, Melba Buterin.
(2) Mr. Stoll beneficially owns 10,000 shares of Common Stock.
(3) Mr. Wilson beneficially owns 126,309 shares of Common Stock.
Each of the Buterin Nominees has agreed to be named in this Proxy
Statement and to serve as a director of the Company, if elected. Buterin does
not expect that any of the Buterin Nominees will be unable to stand for election
or serve as a director, but if any vacancy in the slate of the Buterin Nominees
occurs for any reason (including if the Company makes or announces any changes
to the Bylaws or takes or announces any other action that has, or if consummated
would have, the effect of disqualifying any or all of the Buterin Nominees or
resulting in a decrease in the number of directors), the shares represented by
the enclosed proxy cards received by Buterin and not properly revoked will be
voted for the substitute candidate nominated by Buterin in compliance with the
rules of the SEC and any other applicable law and, if applicable, and the
Bylaws.
BUTERIN RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK VOTE
IN FAVOR OF THE BUTERIN NOMINEES FOR DIRECTORS AND NOT VOTE
IN FAVOR OF ANY OF THE BOARD'S NOMINEES FOR DIRECTORS.
BACKGROUND OF BUTERIN'S INTEREST IN THE COMPANY
AND REASONS FOR THE SOLICITATION
General
Buterin is the beneficial owner of 615,768 shares of Common Stock, which
constitute approximately 4% of the Company's outstanding Common Stock based on
the Company's preliminary proxy statement filed with the SEC on April 8, 2003.
For a description of recent transactions in Company securities by Buterin,
please refer to the section entitled "INFORMATION CONCERNING PERSONS WHO MAY
SOLICIT PROXIES--Participant Ownership of and Transactions in Company
Securities."
Assumption of Debt Transaction
On March 25, 1997, Buterin agreed to assume $612,250 of the Company's debt.
Buterin assumed such debt based on a presentation by management and certain
directors whereby he was encouraged to assume the debt on behalf of the Company.
Buterin pledged 244,900 shares of his personal stock in the Company as
collateral for the debt. Thereafter, Buterin made payments totaling $211,001 for
interest and other expenses related to the assumed debt. In addition, Buterin
liquidated or repurchased 80,978 of the collateral shares reducing the total
collateral shares to 163,922. On September 12, 2002, Buterin wrote a letter to
Michael T. Fadden, President of the Company, indicating his belief that the
presentation encouraging assumption of Company debts was misleading and that
reliance on the statements included therein had caused him major financial
losses. In this letter, Buterin alleged that the Company made material
mistatements of fact to him in connection with the transaction. Buterin believes
that a series of forward looking statements made by the Company regarding its
projected asset growth and future share price were not prepared in good faith or
with a reasonable basis for such projections. The letter also provided what
Buterin believed was a fair settlement regarding the transaction. His proposal
settlement involved having the Company pay the remaining creditors all past due
interest and issuing a new three-year note to those creditors at the original
interest rate for the loans. Buterin also asked that the 80,798 shares he lost
after pledging them as collateral be restored and that he be paid $284,126 to
account for expenses paid plus 9% interest. The Company did not agree with
Buterin's allegations and did not accept Buterin's settlement offer.
Management Employment Agreements
In 2001, the Company entered into employment agreements (the "Agreements")
with Michael T. Fadden, Chairman, Chief Executive Officer and President, and
Scott D. Heflin, Chief Financial Officer, Treasurer and Secretary (collectively,
the "Executives"). The terms of the Agreements are through October 31, 2004,
renewable for successive one-year terms at the option of the Company. Under the
Agreements, Mr. Fadden's base salary is $175,000 per year and Mr. Heflin's base
salary is $120,000 per year. The Agreements provide for severance benefits in
the event that the Company terminates the Executives' employment other than for
cause, or if the Executives resign following certain adverse changes in the
terms of their compensation or job responsibilities for a period of three years
following a change in control of the Company.
In the case of termination other than for cause where there is no change in
control, these benefits would be calculated based on (1) one years base salary,
or (2) the base salary attributable to the remaining term of the Agreements,
whichever is greater, plus any unpaid bonus attributable to the previous year of
employment. If the termination occurs during a one-year renewal period of the
Agreements, benefits would be calculated based on the base salary attributable
to the remaining months of the one-year term, plus a pro rata share of any cash
bonus paid for the year of termination attributable to that portion of the year
during which the Executive was employed.
In the case of a change in control of the Company, these benefits would be
calculated based on an amount equal to twice the sum of the Executives' then
annual base salary plus their average annual incentive bonus for the two years
preceding such termination. The Company will continue to provide, at its
expense, certain Executive health and welfare benefits for a period of up to
four (4) years, reduced by any such benefits obtained from subsequent employers.
The Agreements contain a non-competition provision under which the
Executives are required not to engage in certain activities on behalf of
competitors of the Company while employed by the Company and for a period of six
months following termination. Further, Mr. Fadden's Agreement requires that he
not engage, directly or indirectly, in any manner with any business or company
engaged in removal of nitrogen from natural gas streams while he is employed by
the Company and for a period of two years following his termination of
employment.
The Agreements provide that a change of control includes a change in the
Board in which either (1) the Current Directors (as defined below) cease for any
reason to constitute at least a majority of the Board; or (2) at any meeting of
the stockholders of the company called for the purpose of electing directors, a
majority of the persons nominated by the Board for election as directors fail to
be elected. "Current Directors" means any member of the Board as of July 1,
2001, and any successor of a Current Director whose election or nomination for
election by the company's stockholders was approved by at least a majority of
the current Directors then on the Board. The election of the Buterin Nominees
will not result in a change of control under the Agreements, because Buterin
Nominees would not constitute a majority of the Board.
Buterin believes that the Agreements significantly reduced the Board's
flexibility with respect to management changes and therefore he believes they
are inappropriate for the Company.
Intentions of Buterin
If all of the Buterin Nominees for election to the Board are elected at the
Annual Meeting; they will not constitute a majority of the members of the Board.
However, Buterin believes that these new independent directors will be in a
position to monitor the proceedings of the Board with the best interest of the
Company and its stockholders in mind. While Buterin is not presently
contemplating obtaining control of the Company, he intends to monitor the
activities of the Board and management of the Company and may determine in the
future that a change of control of the Board would be in the interest of the
Company and its stockholders. Buterin and the Buterin Nominees are committed to
promoting the business objectives, goals and values that are in the best
interest of all the Company's stockholders.
INFORMATION CONCERNING PERSONS WHO MAY SOLICIT PROXIES
Information Concerning Participants
Under the applicable regulations of the SEC, Buterin and each of the
Buterin Nominees is deemed to be a "participant" in Buterin's solicitation of
proxies. The following table sets forth the name, business address and principal
occupation of Buterin and the other Buterin Nominees ("Buterin Participants").
No other person will solicit proxies from stockholders of the Company on behalf
of Buterin.
John J. Buterin
Retired Commodities Trader and Individual Investor
P.O. Box 375
Mission, Kansas 66201
Thomas G. Stoll
Attorney at Law
Kurlbaum, Stoll, Seaman, Mustoe & McCrummen, P.C.
1100 Main Street, Suite 2001
Kansas City, Missouri 64105
Philip A. Wilson
President
Lawyers Assist Corporation
17 West Kansas
Liberty, Missouri 64068
Buterin has not engaged a financial advisor or proxy solicitor in
connection with the election of the Buterin Nominees at the Annual Meeting.
Participant Ownership of and Transactions in Company Securities
Other than as disclosed in this Proxy Statement, neither Buterin nor, to
the knowledge of Buterin, any of the Participants nor, with respect to clause
(3), any of their respective associates: (1) owns beneficially, directly or
indirectly, or of record but not beneficially, any securities of the Company;
(2) owns beneficially, directly or indirectly, or of record but not
beneficially, any securities of any parent or subsidiary of the Company; or (3)
is, or was since January 1, 2002, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company,
including, but not limited to, joint ventures, loan or option arrangements, puts
or calls, guarantees against loss or guarantees of profit, division of losses or
profits, or the giving or withholding of proxies. The Buterin Participants
(other than Buterin) disclaim beneficial ownership of any securities of the
Company owned by Buterin, and this Proxy Statement shall not be deemed an
admission that any Buterin Participant is the beneficial owner of such
securities for any purpose.
To the knowledge of Buterin, none of the other Participants has purchased
or sold any Company securities within the past two years, except as noted
herein: Mr. Stoll purchased 10,000 shares of common stock on June 11, 2002 for a
purchase price of $2,000, or $.40 per share; Mr. Wilson purchased 5,000 shares
of common stock on January 27, 2003 for a purchase price of $2,000, or $0.40 per
share and purchased 5,000 shares of common stock on January 29, 2003 for a
purchase price of $2,000, or $0.40 per share; and Buterin's purchases and sales
are summarized in the following table:
Date Purchased/Sold Shares and Price
06-13-01 Purchased 2,500 at 68.4(cent) per share
06-13-01 Purchased 2,500 at 70(cent) per share
06-19-01 Purchased 2,500 at 69.5(cent) per share
06-19-01 Purchased 2,500 at 72(cent) per share
07-19-01 Purchased 2,500 at 68(cent) per share
07-19-01 Purchased 2,500 at 69(cent) per share
10-24-01 Sold 5,000 at 45(cent) per share
11-30-01 Purchased 10,000 at 30(cent) per share
12-28-01 Purchased 10,000 at 38(cent) per share
12-28-01 Purchased 5,000 at 44(cent) per share
04-10-02 Sold 10,000 at 31(cent) per share
05-09-02 Sold 5,000 at 40(cent) per share
06-03-02 Sold 5,000 at 39(cent) per share
06-14-02 Sold 5,000 at 40(cent) per share
06-18-02 Sold 5,000 at 35(cent) per share
06-26-02 Sold 5,000 at 35(cent) per share
07-02-02 Sold 5,000 at 26(cent) per share
07-02-02 Sold 10,000 at 25(cent) per share
07-22-02 Sold 5,000 at 19(cent) per share
07-22-02 Sold 5,000 at 19(cent) per share
08-12-02 Sold 5,000 at 23.5(cent) per share
09-04-02 Sold 10,000 at 20(cent) per share
09-16-02 Sold 5,000 at 20(cent) per share
09-27-02 Sold 15,000 at 30(cent) per share
10-11-02 Sold 5,000 at 34(cent) per share
10-22-02 Sold 5,000 at 31(cent) per share
11-08-02 Sold 12,178 at 45(cent) per share
01-06-03 Sold 10,000 at 32(cent) per share
01-27-03 Sold 10,000 at 35(cent) per share
02-04-03 Sold 5,000 at 30(cent) per share
02-12-03 Sold 5,000 at 38(cent) per share
03-10-03 Sold 5,000 at 29(cent) per share
03-11-03 Sold 10,000 at 32(cent) per share
03-24-03 Sold 5,000 at 31(cent) per share
04-11-03 Sold 10,000 at 27(cent) per share
04-22-03 Sold 5,000 at 22(cent) per share
05-01-03 Sold 5,000 at 30(cent) per share
Information Regarding the Relationship between the Participants and Buterin
Mr. Stoll is a partner with the law firm Kurlbaum, Stoll, Seaman, Mustoe &
McCrummen, P.C. and represents Buterin with respect to his business
matters.
Buterin does not have any arrangements with the other Buterin Participants
that will result in any additional compensation if the Buterin Nominees are
elected as directors to the Board at the Annual Meeting or relating to any
future transactions between Buterin and the Company.
Set forth below are the number of shares of Common Stock of Buterin
beneficially owned by the Buterin Participants within the meaning of SEC Rule
13d-3:
Name of Beneficial Owner (1) Total Beneficial Ownership
John J. Buterin (1) 615,768
Thomas G. Stoll 10,000
Philip A. Wilson (2) 126,309
(1) Includes 6,107 shares of Common Stock held jointly with Buterin's wife,
Melba Buterin.
(2) Includes 126,309 shares of Common Stock held individually by Mr. Wilson's
wife and by Lawyers Assist Corporation profit sharing plan.
COST AND METHOD OF SOLICITATION
Buterin will bear the all of the cost of this solicitation and may seek
reimbursement for such costs from the Company if successful. While no precise
estimate of this cost can be made at the present time, Buterin currently
estimates that he will spend a total of approximately $10,000 for its
solicitation of proxies, including expenditures for attorneys, advertising,
printing, transportation and related expenses.
Buterin will also reimburse brokers, fiduciaries, custodians and other
nominees, as well as persons holding stock for others who have the right to give
voting instructions, for out-of-pocket expenses incurred in forwarding this
Proxy Statement and related materials to, and obtaining instructions or
authorizations relating to such materials from, beneficial owners of Common
Stock. Buterin will pay for the cost of these solicitations, but these
individuals will receive no additional compensation for these solicitation
services.
APPOINTMENT OF INDEPENDENT AUDITORS FOR 2002
According to the Company's preliminary proxy statement filed with the SEC
on April 8, 2003, the Board has appointed Deloitte & Touche LLP, independent
public accountants, to audit the financial statements of the Company for the
year ending December 31, 2003, and to perform tax and other services as may be
authorized from time to time by the Audit Committee of the Board. The Board has
directed that the appointment of Deloitte & Touche LLP be submitted to the
stockholders for approval. The affirmative vote of a majority of the shares of
Common Stock present or represented and entitled to vote on the proposal at the
Annual Meeting is required for approval. Buterin is not soliciting proxies with
respect to the approval of the appointment of Deloitte & Touche LLP.
ADDITIONAL INFORMATION
Certain information regarding beneficial ownership of shares of Common
Stock held by the Company's directors, nominees, management and 5% stockholders
is contained in the Company's proxy statement furnished to stockholders in
connection with the Annual Meeting under the heading "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT", and is incorporated herein by
reference. Information concerning the date by which proposals of stockholders
intended to be presented at the 2004 annual meeting of stockholders of the
Company must be received by the Company for inclusion in the Company's proxy
statement and form of proxy for that meeting is also contained in the Company's
proxy statement furnished to stockholders in connection with the Annual Meeting
under the heading "STOCKHOLDER PROPOSALS FOR 2004," and is incorporated herein
by reference.
Certain of the information contained in this Proxy Statement is based on,
or incorporated by reference to, publicly available information filed by the
Company with the SEC. Although Buterin does not have any information that would
indicate that any information contained in this Proxy Statement that has been
taken from such documents is inaccurate or incomplete, Buterin does not take any
responsibility for the accuracy or completeness of such information.
Buterin is not aware of any other substantive matters to be considered at
the Annual Meeting, however, if any other matter should properly come before the
Annual Meeting, Buterin will vote all proxies held by it in accordance with its
best judgment and consistent with the federal proxy rules.
JOHN J. BUTERIN
Mission, Kansas
May 20, 2003
IMPORTANT
1. Your proxy is important no matter how many shares of Common Stock you own. Be
sure to vote on the enclosed proxy card. Buterin urges you NOT to sign any proxy
card which is sent to you by the Company.
2. If you have already submitted a proxy card to the Company for the Annual
Meeting, you may change your vote to a vote "FOR" the election of the Buterin
Nominees by signing, dating and returning the enclosed proxy card, which must be
dated after any proxy card you may previously have submitted to the Company.
Only your last dated proxy card for the Annual Meeting will count at the Annual
Meeting.
3. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the person responsible for your account and direct him
or her to vote on the enclosed proxy card "FOR" election of Buterin's Common
Stock Nominees.
4. If you hold your shares in more than one type of account or your shares are
registered differently, you may receive more than one proxy card. We encourage
you to vote each enclosed proxy card that you receive.
5. If you have any questions or need assistance in voting your shares, please
contact John J. Buterin, at the number set forth below:
JOHN J. BUTERIN
P.O. BOX 375
MISSION, KANSAS 66201
913-642-8523
GATEWAY ENERGY CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
JOHN J. BUTERIN
The undersigned hereby appoints John J. Buterin, Thomas G. Stoll, Philip A.
Wilson and Mont Hoyt, and each of them, proxies for the undersigned with full
power of substitution to vote all shares of common stock of Gateway Energy
Corporation, a Delaware corporation (the "Company"), which the undersigned is
entitled to vote at the Company's 2003 Annual Meeting of Stockholders, and any
postponements or adjournments thereof (the "Meeting"), hereby revoking all prior
proxies, on the matters set forth below as follows:
1. Election of Directors Nominees: John J. Buterin, Thomas G. Stoll and
Philip A. Wilson
FOR all the nominees listed above WITHHOLD AUTHORITY to vote for all
the nominees listed above
|_| |_|
INSTRUCTION: To withhold authority to vote for any individual nominee or
nominees, write that nominee's name in the space provided below:
2. In the discretion of the proxy holders, on any other matters that may
properly come before the Meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED.
IF A CHOICE IS NOT SPECIFIED, THE PROXY WILL BE VOTED
"FOR" THE NOMINEES LISTED ABOVE.
Please sign exactly as your name appears hereon. When shares are held by two or
more persons, all of them 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 an authorized officer. If a
partnership, please sign in partnership name by the authorized person.
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(SIGNATURE)
Print Name:
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(SIGNATURE IF HELD JOINTLY)
Print Name:
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Dated:_________________________, 2003
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE ENCLOSED ENVELOPE.