August ____, 2003
Dear Stockholder:
Enclosed herewith you will find a Notice of a Annual Stockholder Meeting to be
held on Wednesday, September 24th, 2003, at the hour of 2:00 PM Central Daylight
Time at DoubleTree Hotel located at 2001 Post Oak Blvd., Houston, Texas 77056,
together with a Proxy Card, and the 2002 Form 10-KSB. The Notice of the
Stockholder Meeting describes the items of business to be dealt with at the
meeting and provides you with other pertinent information about Pangea Petroleum
Corporation, its directors and executive officers.
If you cannot attend the meeting, it is important that you are represented by
proxy. The form of proxy enables you to signify your voting intentions in
advance, whether or not you plan to attend the meeting. Please complete, date,
sign and return in the envelope provided.
By orders of the Board of Directors,
Charles B. Pollock
Chairman of the Board and
Chief Executive Officer
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
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 [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant Under Rule 14a-12
PANGEA PETROLEUM CORPORATION
____________________________________________________________
(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):
[X] No fee required. [ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
(3) Filing Party:
________________________________________________________________________________
(4) Date Filed:
________________________________________________________________________________
PANGEA PETROLEUM CORPORATION
5850 SAN FELIPE, SUITE 500
HOUSTON, TEXAS 77057
(713) 706-6350
NOTICE OF ANNUAL STOCKHOLDER MEETING
TO BE HELD ON SEPTEMBER 24, 2003
NOTICE IS HEREBY GIVEN that an Annual Stockholder Meeting ("Stockholder
Meeting") of Pangea Petroleum Corporation ("Pangea" or the "Corporation"), a
Colorado Corporation, will be held at the DoubleTree Hotel located at 2001 Post
Oak Blvd., Houston, Texas 77056, on the 24th day of September, 2003 at 2:00PM
(Central Daylight Time), for the following purposes:
1. To elect directors of Pangea Petroleum Corporation to serve for a one
year term or until their successors have been duly elected and
qualified;
2. To ratify the appointment of Ham, Langston & Brezina, L.L.P. as the
independent auditor of the Corporation for the year ending December
31, 2003;
3. To approve an amendment to the Articles of Incorporation to increase
the number of authorized shares of the Corporation's stock from
105,000,000 to 210,000,000;
4. To approve the Equity Compensation Plan;
5. To transact such further and other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on August 11, 2003 will be
entitled to notice of and to vote at the Stockholder Meeting or any adjournment
thereof.
You are cordially invited to attend the Stockholder Meeting and YOUR VOTE IS
VERY IMPORTANT. Whether or not you plan to attend the Stockholder Meeting, it is
important that your shares be represented. Therefore, we urge you to sign, date
and promptly return the enclosed proxy. Your cooperation in signing and
returning the proxy will help avoid further solicitation expense.
Dated in Texas this____ day of August, 2003.
By Order of the Board of Directors
Charles B. Pollock
Chairman of the Board and
Chief Executive Officer
WHETHER OR NOT YOU EXPECT TO ATTEND THIS ANNUAL STOCKHOLDER MEETING, YOU ARE
REQUESTED TO VOTE YOUR SHARES BY SIGNING, DATING AND RETURNING THE ENCLOSED FORM
OF PROXY
================================================================================
PANGEA PETROLEUM CORPORATION
5850 SAN FELIPE, SUITE 500
HOUSTON, TEXAS 77057
(713) 706-6350
____________________
PROXY STATEMENT
FOR ANNUAL STOCKHOLDER MEETING
TO BE HELD ON SEPTEMBER 24, 2003
____________________
INFORMATION CONCERNING SOLICITATION AND VOTING
MANAGEMENT SOLICITATIONS OF PROXIES
This Proxy Statement (the "Proxy Statement") is being furnished to stockholders
(the "stockholders") in connection with the solicitation by the Board of
Directors of Pangea Petroleum Corporation ("Pangea" or the "Corporation"), a
Colorado Corporation, for their use at the Annual Stockholder Meeting (the
"Stockholder Meeting") to be held at DoubleTree Hotel located at 2001 Post Oak
Blvd., Houston, Texas 77056, on September 24th, 2003 at 2:00 PM Central Daylight
Time, or at any adjournment thereof for the purposes of considering and voting
upon the matters set forth in the accompanying Notice of Stockholder Meeting
(the "Notice"). This Proxy Statement and the accompanying form of proxy (the
"Proxy") are first being mailed to Stockholders on or about August 25, 2003.
The cost of solicitation of proxies is being borne by the Corporation.
APPOINTMENT AND REVOCATION OF PROXIES
All shares represented by properly executed proxies, unless such proxies
previously have been revoked, will be voted at the Annual Stockholder Meeting in
accordance with the directions on the proxies. If no direction is indicated, the
shares will be voted (I) FOR THE ELECTION OF THE DIRECTOR NOMINEES NAMED HEREIN
(II) FOR THE RATIFICATION OF HAM, LANGSTON & BREZINA, LLP AS INDEPENDENT
ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2003, (III) FOR INCREASING
THE AUTHORIZED SHARES (IV) FOR THE EQUITY COMPENSATION PLAN. The Board of
Directors is not aware of any other matters to be presented for action at the
Annual Stockholder Meeting. However, if any other matter is properly presented
at the Annual Stockholder Meeting, it is the intention of the persons named in
the enclosed proxy to vote in accordance with their best judgment on such
matters.
The enclosed Proxy, even though executed and returned, may be revoked at any
time prior to the voting of the Proxy (a) by execution and submission of a
revised proxy, (b) by written notice to our Secretary, or (c) by voting in
person at the Annual Stockholder Meeting.
Proxies are only voted when a poll is required. A poll is a vote by written
ballot, which gives one vote for each common share registered in the name of the
member.
ABOUT THE ANNUAL MEETING
This question and answer section answers basic questions about the Stockholder
Meeting. Please read the rest of the proxy statement for full information about
the meeting and the election.
Who is entitled to vote at the meeting?
Only Stockholders of record at the close of business on August 11, 2003 (the
"Record Date"), the record date for the meeting, are entitled to receive notice
of and to participate in the Stockholder Meeting. If you were a stockholder of
record on that date, you will be entitled to vote all of the shares that you
held on that date at the meeting, or any postponements or adjournments of the
meeting. Stockholders present in person or by proxy at the Stockholder Meeting
will be entitled to one vote on each proposal for each share of common stock
held by such stockholder on that date.
Each nominee for Director named in Proposal 1 must receive a plurality of the
votes cast in person or by proxy by Common Stock in order to be elected.
Stockholder may not cumulate their votes for the election of Directors. The
affirmative vote of a majority of the issued and outstanding shares of Common
Stock present or represented by proxy and entitled to vote at the Stockholder
Meeting is required for approval of Proposal 2 and Proposal 4 set forth in the
accompanying notice. The affirmative vote of a majority of the issued and
outstanding shares of Common Stock is required for the ratification of Proposal
3.
What are the shares outstanding on the record date?
We have one class of voting stock outstanding, all of which is designated common
stock, $0.001 par value. As of August 11, 2003, we had 86,043,836 shares of
Common Stock outstanding and 97,202,334 shares of Common Stock issued and no
preferred stock issued and outstanding. Included in common stock issued were
certain shares issued under a Securities Purchase Agreement (the "Securities
Purchase Agreement") whereby the Corporation issued 16,149,998 shares of
restricted common stock to an escrow agent (the "Escrowed Shares") for the
benefit of four investor groups in exchange for $1,300,000 in cash in 2001. The
terms of the Securities Purchase Agreement allowed the escrow agent for the
Escrowed Shares to issue restricted common stock in the amount of 4,991,500
shares to the investor groups and included provisions for the issuance of four
series of warrants, which comprise the remaining 11,158,498 issued shares, with
exercise prices to be set based on a combination of certain future events and
the performance of the Corporation's common stock. To date Pangea has not been
provided notice that any of the warrants are to be exercised. The difference
between the shares issued and the shares outstanding represent the shares
underlying these warrants that have not been exercised.
All Stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Stockholder Meeting.
What if I do not receive notice of the meeting?
The Board of Directors fixed the close of business on August 11, 2003, as the
record date for the purpose of determining stockholders entitled to receive
notice of the meeting, but failure to receive a notice does not deprive a
stockholder of the right to vote those shares at the meeting upon producing
properly endorsed share certificates, or otherwise establishing share ownership,
and demanding the inclusion of his name in the list of stockholders not later
then ten days before the date of the meeting.
Who may attend the meeting?
All Stockholders as of the record date, or their duly appointed proxies, may
attend the meeting. Admission to the meeting will be on a first-come,
first-served basis. Registration will begin at 1:00 PM. If you attend, please
note that you may be asked to present valid picture identification, such as a
driver's license or passport. Cameras, recording devices and other electronic
devices will not be permitted at the meeting. Please also note that, if you hold
your shares in "street name" (that is, through a broker or other nominee), you
will need to bring a copy of a brokerage statement reflecting your stock
ownership as of the record date and check in at the registration desk at the
meeting.
What constitutes a quorum?
The presence, in person or by proxy, of a majority of the outstanding shares of
Common Stock on the record date is necessary to constitute a quorum for the
transaction of business at the Stockholder Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the presence
of a quorum at the Stockholder Meeting. Broker non-votes occur when a broker
holding customer securities in street name has not received voting instructions
from the customer on certain non-routine matters and, therefore, is barred by
the rules of the applicable securities exchange from exercising discretionary
authority to vote those securities.
How do I vote?
If you complete and properly sign the accompanying proxy card and return in the
enclosed envelope, it will be voted as you direct. If you are a registered
stockholder and attend the meeting, you may deliver your completed proxy card in
person. "Street name" Stockholders who wish to vote at the meeting will need to
obtain a proxy from the institution that holds their shares.
Each share of the Corporation's common stock is entitled to one vote on each
matter properly brought before the meeting. Abstentions will be counted toward
the tabulation of votes cast on proposals submitted to stockholders and will
have the same effect as negative votes, while broker non-votes will not be
counted as votes cast for or against any matters. All votes will be tabulated
by the inspector of election appointed for the meeting, who will separately
tabulate affirmative and negative votes, abstentions, and broker non-votes.
What is the effect of the board's RECOMMENDATION?
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the RECOMMENDATION
of the Corporation's Board of Directors with respect to the seats to be filled.
Our Board's RECOMMENDATION is set forth together with the description of the
election of directors in this proxy statement.
PURPOSE OF THE MEETING
The specific proposals to be considered and acted upon by the Corporation's
Stockholders at the Stockholder Meeting are summarized below.
ELECTION OF DIRECTORS - PROPOSAL NUMBER ONE
Our Stockholders will vote to elect three (3) directors of Pangea Petroleum
Corporation to serve for a one year term or until their successors have been
duly elected and qualified.
The persons named in the enclosed Proxy have been selected by the Board of
Directors to serve as proxies (the "Proxies") and will vote the shares
represented by valid proxies at the Annual Stockholder Meeting of Stockholders
and adjournments thereof. They have indicated that, unless otherwise specified
in the Proxy, they intend to elect as Directors the nominees listed below.
Each duly elected Director will hold office until his death, resignation,
retirement, removal, disqualification, or until his successor shall have been
elected and qualified.
The Board has nominated Charles B. Pollock, Mark F. Weller and Edward R. Skaggs
to continue serving as the directors (together, the "Pangea Nominees").
CHARLES B. POLLOCK was appointed the Chief Executive Officer and Chairman of the
Board of Pangea Petroleum Corporation in June 1999. From January 1994 to
September 1995, Mr. Pollock was President of Praxair Indonesia, an industrial
gas Corporation. From October 1995 to August 1996, he was General Manager of
Praxair, Inc. His responsibilities included strategic marketing and competition
analysis. From September 1996 to May 1999, Mr. Pollock was self-employed as a
consultant and managed projects including the acquisition and sale of
businesses, competitive analysis and strategic marketing. Mr. Pollock received
his Bachelor of Science degree from North Carolina State University, his Master
of Science degree in Ceramic Engineering from North Carolina State University
and his PhD in Material Engineering from North Carolina State University.
MARK F. WELLER was appointed President and Director in March 2002. Mr. Weller
brings over thirty years of experience in the energy industry with Getty Oil
Corporation and Texaco, Inc. During the five years preceding his joining
Pangea, Mr. Weller was a General Manager for new project development with
Texaco. His background includes all phases of oil and gas operations and
development, both onshore and offshore on the U.S. gulf and west coasts, as well
as international project development assignments. He holds a BS in mechanical
engineering from the University of California, Davis.
EDWARD R. SKAGGS was appointed to the Board of Directors of the Corporation in
December 2000. Mr. Skaggs has over 10 years of experience in investigations and
security. In addition, he has extensive experience in retail management
specifically dealing in personnel issues and security matters. Mr. Skaggs
started his career as an Assistant District Manager for EZ Mart Store in 1988.
In June 1991, he left EZ Mart to join an investigative consulting firm, Skaggs &
Associates, Inc. where he continues to work. He received a Bachelor of Arts
degree in Political Science from Texas Tech University.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL OF THE DIRECTOR NOMINEES NAMED
IN PROPOSAL 1
Voting Rights with Respect to the Election of Directors
A stockholder may, with respect to the election of directors, (i) vote for the
election of all of the Pangea Nominees, (ii) withhold authority to vote for any
one or more of the Pangea Nominees, or (iii) withhold authority to vote for all
of the Pangea Nominees by so indicating in the appropriate spaces on the
enclosed proxy card. Each nominee for Director named in Proposal Number 1 must
receive a plurality of the votes cast in person or by proxy of our Common Stock
in order to be elected. Stockholders may not cumulate their votes for the
election of Directors.
If any nominee is unable or unwilling to serve as a director at the time of the
Stockholder Meeting, the persons named in the enclosed Proxy will vote for the
election of such other person(s) as may be nominated by the Board of Directors.
We have no reason to believe that any nominee will be unable or unwilling to
serve if elected as a director.
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed Proxy will be voted for the election of the nominees listed below.
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS AND OUR EXECUTIVE OFFICERS
Our Directors are elected annually and hold office until their death,
resignation, retirement, removal, disqualification, or the next annual meeting
of our stockholders or until their successors are elected and qualified.
Officers are elected annually and serve at the discretion of the Board of
Directors. There is no family relationship between or among any of our
Directors and Executive Officers. Our current Board of Directors consists of
three persons.
NAME AGE DIRECTOR SINCE POSITION
Charles B. Pollock 63 June 1999 Chairman of the Board
Mark F. Weller 53 March 2002 President and Director
Edward R. Skaggs 38 December 2000 Nominee for Director
Scott Duncan 37 N/A Chief Financial Officer
SCOTT DUNCAN was appointed Chief Financial Officer in February 2003. Mr. Duncan
has 8 years of experience in financial and cost accounting for manufacturing
companies along with 6 years of experience with computer programming. He is
actively involved with various organizations offering accounting, programming
and consulting services. He received a BBA in accounting from Southwest Texas
State University in 1989 and his CPA license in 1992.
RELATED TRANSACTIONS
Our Board of Directors has adopted a policy that our affairs will be conducted
in all respects by standards applicable to publicly held corporations and that
we will not enter into any future transactions between us and our Officers,
Directors and 5% shareholders unless the terms are no less favorable than could
be obtained from independent, third parties and will be approved by a majority
of our independent and disinterested Directors. In our view, all of the
transactions described below meet this standard.
During the year ended December 31, 2002, we engaged in transactions with related
parties as set forth below.
As of December 31, 2000, Mass Energy had a promissory note receivable due from
Randall Massey in the amount of $150,000. The Corporation recognized
approximately $2,500 in interest income during the three months ended December
31, 2000 from the notes receivable. Under the note, interest accrues on the
unpaid principal at 6.25% per annum. In addition, Mr. Massey is required to
maintain term life insurance payable to the Corporation in an amount sufficient
to pay the principal and accrued interest in full in the event of the subsidiary
former president's death. During 2002 Mr. Massey did not make any payments of
principal or interest on these notes receivable. This note was assigned to the
Corporation following the sale of Mass Energy.
As of December 31, 2001, Mass Energy had a promissory note receivable due from
Sandstone Ventures, Inc., an affiliate of Randy Massey, in the amount of
$40,000. Under the note, interest accrues on the unpaid principal at 7.0% per
annum. This note was assigned to the Corporation following the sale of Mass
Energy.
As of December 31, 2002 the Corporation has notes payable to Mary Pollock, a
former officer and daughter of Charles Pollock, of $89,184 due on demand at the
rate of 5.5%. The Corporation has three notes payable to Charles Pollock
totaling $195,000 of which $10,000 is due on December 31, 2003 with an annual
interest rate of 12%. The Corporation had two notes payable on demand in the
amount of $100,000 and $85,000 bearing interest of zero and 10% respectfully.
Mr. Pollock agreed to consolidate the two notes into a new note for the total
amount of $193,500 (includes accrued interest due) which bear interest
commencing January 1, 2003 at a rate of 12% per annum and is due January 1,
2005. Additionally, the Corporation has notes payable to BTS Group controlled by
Elizabeth Pollock, Mr. Pollock's wife, in the amount of $26,500. This loan
carries an annual interest rate of 10% and is due on demand. The Corporation had
notes payable to Mark Weller in the amount of $20,000 due December 31, 2003 with
an annual interest rate of 12%.
In May 2002, the Corporation entered into a settlement agreement with Jacob
International, Inc. and certain entities and individuals related to Jacob. Under
the Settlement Agreement, which was entered into through arms length
negotiations, the Corporation gave up 100% of the outstanding common stock of a
wholly owned subsidiary, Pangea Services, Inc. in exchange for: (i) the
settlement of certain accounts and notes payable totaling approximately
$300,000; (ii) the return of 5,991,000 shares of its common stock to treasury;
(iii) the receipt of 900,000 shares of Consolidated Medical Management, Inc.;
and (iv) the receipt of $75,000 in cash. The primary assets of Pangea Services,
Inc. that were given up in the settlement were: (i) 475,000 Class A membership
units of Worldlink USA, LLC, (an investment previously written off by the
Corporation); ii) a $125,000 investment in Paradigm Advanced Technologies, Inc.
including 200,000 warrants to purchase shares of Paradigm Advanced Technologies,
Inc. at a price of $1.00 per share; and (iii) certain real estate held for
investment of $46,642. The Corporation recognized no gain or loss on the
transaction but recognized a capital contribution of $352,368.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
We have no audit committee, no compensation committee and no nominating
committee. Decisions concerning Executive Officer Compensation for 2002 were
made by the full Board of Directors. Mr. Pollock and Mr. Weller are Officers
and Directors. The Board of Directors took action at Board meetings five times
during the year ended December 31, 2002. All Directors were present for at
least 100% of the Board meetings or unanimous written consents. There are no
family relationships between or among any of our Directors and Executive
Officers.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors and
Executive Officers, and persons who own beneficially more than ten percent of
our common stock, to file reports of their stock ownership and changes of their
stock ownership with the Securities and Exchange Commission. Based solely on the
reports we have received and on written representations from these reporting
persons, we believe that our Directors, Executive Officers, and our ten percent
shareholders have complied with Section 16(a) of the Securities Exchange Act of
1933.
STATEMENT OF EXECUTIVE COMPENSATION
The following table reflects all forms of compensation for services to us for
the years ended December 31, 2002, 2001 and 2000 of certain of our Executive
Officers. No other Executive Officer of the Corporation has received
compensation that exceeded $100,000 during the year ended December 31, 2002.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
-------------------------------------------------- -------------------------------------------------
PAYOUTS
----------
NAME AND YEAR SALARY BONUS OTHER ANNUAL RESTRICTED SECURITIES LTIP ALL OTHER
PRINCIPAL POSITION ($) ($) COMPENSATION STOCK UNDERLYING PAYOUTS COMPENSATION
AWARD(S) OPTIONS / ($) ($)
SARS
(#)
- ------------------ -------- ---------- ------------- ------------- ------------ ---------- ------------ ---------
CHARLES B.
POLLOCK 2000 16,000 -0- -0- -0- 450,000 -0- -0-
CEO AND 2001 0 -0- 3,000 1,000,000(4) 300,000 -0- -0-
CHAIRMAN OF 2002 120,000(1) -0- -0- 600,000(5) -0- -0- -0-
THE BOARD OF
DIRECTORS
- ------------------ -------- ---------- ------------- ------------- ------------ ---------- ------------ ---------
MARK F. WELLER
PRESIDENT AND 2000 N/A N/A N/A N/A N/A N/A N/A
DIRECTOR 2001 N/A N/A N/A N/A N/A N/A N/A
2002 60,000(2) -0- 200,000(3) 500,000(5) -0- -0- -0-
(1) Salary taken 60% in stock and 40% deferred
(2) Salary taken in stock
(3) Received 200,000 shares of common stock upon joining the Corporation
(4) Restricted share bonus
(5) Restricted shares pursuant to employment contract
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END OPTION/SARE VALUES
- -----------------------------------------------------------------------------------
NAME NUMBER OF PERCENT OF EXERCISE EXPIRATION GRANT DATE PRESENT
SECURITIES TOTAL OF BASE DATE VALUE ($)
UNDERLYING OPTIONS / PRICE
OPTIONS/ SARS ($/SH)
SARS GRANTED TO
GRANTED EMPLOYEES
(#) IN FISCAL
YEAR
- ---------- ----------- ---------- --------- ---------- ----------- ----------
CHARLES B.
POLLOCK -0- -0- -0- N/A N/A -0-
- ---------- ----------- ---------- --------- ---------- ----------- ----------
MARK F.
WELLER -0- -0- -0- N/A N/A -0-
- ---------- ----------- ---------- --------- ---------- ----------- ----------
- -------------- ---------------- ----------------- ---------------- ---------------
NAME SHARES VALUE REALIZED NUMBER OF VALUE OF
ACQUIRED ON ($) SECURITIES UNEXERCISED IN-
EXERCISE (#) UNDERLYING THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS / SARS AT FISCAL YEAR-
AT FISCAL YEAR- END ($)
END (#) EXERCISABLE /
EXERCISABLE / UNEXERCISABLE
UNEXERCISABLE
- -------------- ---------------- ----------------- ---------------- ---------------
CHARLES B.
POLLOCK -0- -0- -0- -0-
- -------------- ---------------- ----------------- ---------------- ---------------
MARK F.
WELLER -0- -0- -0- -0-
- -------------- ---------------- ----------------- ---------------- ---------------
COMPENSATION OF DIRECTORS
During the fiscal year ended December 31, 2002, none of the directors of the
Corporation received any fees or retainers for acting as directors or as members
of committees of the board of directors.
EMPLOYEE STOCK OPTION PLANS
While we have been successful in attracting and retaining qualified employees,
we believe that our future success will depend in part on our continued ability
to attract and retain highly qualified personnel. Our Executive Officers
currently defer their salaries until certain revenue benchmarks are met. We
believe that equity ownership is an important factor in our ability to attract
and retain qualified employees. In 2003, we adopted the Equity Compensation
Plan (the "Plan") for employees, consultants and Directors. The purpose of the
Plan is to further the interests of the Corporation and the stockholders by
providing incentives in the form of stock to key employees, consultants and
Directors who contribute materially to our success and profitability. The
grants recognize and reward outstanding individual performances and
contributions and will give such a person a proprietary interest in us, thus
enhancing their personal interest in our continued success and progress. The
Plan also compensates consultants for their work for the Corporation. The Plan
is administered by the Board of Directors. The Board of Directors has exclusive
power to select the participants in the Plan, to establish the terms of the
stock granted to each participant, and to make all determinations necessary or
advisable under the Plan. The maximum number of shares of common stock that may
be granted or optioned and sold under the Plan is 10,000,000 per year. As of
August 11, 2003, 2,871,104 shares of common stock have been granted pursuant to
the 2003 Plan. No stock options are authorized under this plan. Our
shareholders are being asked to approve the Plan in Proposal 3.
REPORT ON EXECUTIVE COMPENSATION
The Corporation's primary concern in compensating executive officers is to
provide a lower level of fixed cash compensation, but to provide through,
restricted stock grants, bonuses, and incentives, sufficient payment to ensure
their continuing commitment to the Corporation, its overall performance, and
stock performance for the Corporation's stockholders.
EMPLOYMENT AGREEMENT
We have entered into employment agreement with Mr. Charles Pollock, Mr. Mark
Weller and Mr. Scott Duncan. The following sets forth the terms of the
employment agreement:
Charles B. Pollock On January 1, 2002, we entered into an employment agreement
- -------------------
with Mr. Pollock that ends on the date which the period of employment is
terminated, to act as our Chairman of the Board of Directors and Chief Executive
Officer. Pursuant to the employment agreement, Mr. Pollock is paid a salary of
$10,000 per month and has an option to convert any or all salary with accrued
interest to Pangea Petroleum restricted stock under Rule 144 at a conversion
rate thirty percent off the average closing bid during the month prior to the
month being compensated. In addition, he shall also receive 50,000 restricted
shares a month as part of his base salary and an annual bonus in the minimum
amount of 200,000 shares of restricted stock. During 2002, Mr. Pollock chose to
take 60% of his monthly salary in stock and defer 40% of his cash salary as well
as deferring 100% of his annual bonus.
Mark F. Weller On March 1, 2002, we entered into an employment agreement with
- ----------------
Mr. Weller that ends on the date which the period of employment is terminated,
to act as our President and Director. Pursuant to the employment agreement, Mr.
Weller is paid a salary of $6,000 per month and has an option to convert any or
all salary with accrued interest to Pangea Petroleum restricted stock under Rule
144 at a conversion rate thirty percent off the average closing bid during the
month prior to the month being compensated. In addition, he shall also receive
50,000 restricted shares a month as part of his base salary and an annual bonus
in the minimum amount of 200,000 shares of restricted stock.
Scott Duncan On February 13, 2003 we retained Mr. Duncan as Chief Financial
- -------------
Officer to provide advice and services on financial matters pertaining to the
Corporation's business including but not limited to SEC reports. The term of the
engagement is for three months and the fee for the first month will be 65,000
restricted Rule 144 shares and for the second and third month 40,000 restricted
Rule 144 shares. His agreement was renewed on May 12, 2003 for one year and the
fee is 40,000 restricted Rule 144 shares per month.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information at August 11, 2003, with
respect to the beneficial ownership of shares of common stock by (i) each person
known to us who owns beneficially more than 5% of the issued and outstanding
shares of common stock, (ii) each of our Directors, (iii) each of our Executive
Officers and (iv) all of our Executive Officers and Directors as a group.
Unless otherwise indicated, each stockholder has sole voting and investment
power with respect to the shares shown.
- ----------------------------------------------------------------------------------
NAME AND NUMBER OF SHARES OF PERCENTAGE OF
ADDRESS OF OWNER COMMON STOCK BENEFICIAL OWNERSHIP (2)
BENEFICIALLY OWNED (1)
- -------------------------------- ---------------------- ------------------------
Charles B. Pollock
5850 San Felipe, Suite 500 21,641,589 (3) 25%
Houston, Texas 77057
- -------------------------------- ---------------------- ------------------------
Mark Weller
5850 San Felipe, Suite 500 13,378,288 16%
Houston, Texas 77057
- -------------------------------- ---------------------- ------------------------
Edward Skaggs
5850 San Felipe, Suite 500 270,000 *
Houston, Texas 77057
- -------------------------------- ---------------------- ------------------------
Scott Duncan
5850 San Felipe, Suite 500 305,000 *
Houston, Texas 77057
- -------------------------------- ---------------------- ------------------------
All Executive Officers and
Directors as a group (3 persons) 35,594,877 41 %
- ----------------------------------------------------------------------------------
* Less than one percent
(1) Unless otherwise indicated, all shares are held directly with sole voting
and investment power
(2) Based on 86,043,836 shares of Common Stock outstanding.
(3) Including shares held by wife Elizabeth Pollock
The information as to the shares beneficially owned or controlled, not being
within the knowledge of the Corporation, has been furnished by the respective
nominees individually
RATIFICATION OF APPOINTMENT OF AUDITORS - PROPOSAL NUMBER TWO
Our Stockholders will vote to ratify the appointment of the Board of Director's
selection of Ham, Langston & Brezina to serve as the Corporation's independent
public accountants for the fiscal year ending December 31, 2003 and for
subsequent financial statements until their successors have been duly qualified.
Ham, Langston & Brezina were appointed as the Corporation's independent
accountants on March 15, 2002 to examine the Corporation's financial statements
for the year ended December 31, 2002.
RECOMMENDATION AND REQUIRED VOTE
IF YOU ARE IN FAVOR OF RATIFYING THE APPOINTMENT OF HAM, LANGSTON & BREZINA,
P.C. AS OUR INDEPENDENT ACCOUNTANTS, YOU ARE URGED TO VOTE "FOR" PROPOSAL 2 AND
YOUR PROXY WILL BE SO VOTED ULESS YOU SPECIFY OTHERWISE.
Voting Rights with Respect to the Ratification of the Appointment of Independent
Accountants. Stockholder ratification of the selection of Ham, Langston &
Brezina, P.C. ("Ham, Langston & Brezina") as the Corporation's independent
public accountants is not required by the Corporation's Bylaws or other
applicable legal requirement. However, the Board is submitting the selection of
Ham, Langston & Brezina to the Stockholders for ratification as a matter of good
corporate governance. The Board of Directors wishes to obtain from the
Stockholders a ratification of their action in appointing their existing
certified public accountant, Ham, Langston & Brezina, LLP independent auditor
for the Corporation for the year ending December 31, 2003.
If the Stockholders fail to ratify the selection, the Board will reconsider
whether or not to retain that firm. Even if the selection is ratified, the Board
at its discretion may direct the appointment of a different independent
accounting firm at any time during the year if it determines that such a change
would be in the Corporation's and the Corporation's Stockholders' best
interests. A representative of Ham, Langston & Brezina, LLP is expected to be
present at the Stockholder Meeting with the opportunity to make a statement if
he so desires and to respond to appropriate questions.
The affirmative vote of the holders of a majority of the issued and outstanding
shares of Common Stock present or represented by proxy and entitled to vote at
the Stockholder Meeting will be required to ratify the selection of Ham,
Langston & Brezina as the Corporation's independent public accountants for the
fiscal year ending December 31, 2003 and for subsequent financial statements
until their successors have been duly qualified. Accordingly, broker non-votes
and abstentions on Proposal 2 will have the same effect as a vote against
ratifying the appointment of the independent accountants.
AUDIT FEES
Ham, Langston & Brezina, LLP billed us in the aggregate amount of $22,800 for
professional services rendered for their audit of our annual financial
statements and their reviews of the financial statements included in our Forms
10-QSB for the year ended December 31, 2002.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
In the year ended December 31, 2002, Ham, Langston & Brezina, LLP did not bill
us for, nor perform, any financial information systems design or implementation.
In the year ended December 31, 2002, we were not billed for professional
services from any other accounting firm for information systems design or
implementation.
ALL OTHER FEES
We paid no other fees for professional accounting services.
AUDITOR INDEPENDENCE
Our Board of Directors considers that the work done for us in the year ended
December 31, 2002 by Ham, Langston & Brezina, LLP is compatible with maintaining
Ham, Langston & Brezina, LLP's independence.
AUDITOR'S TIME ON TASK
All of the work expended by Ham, Langston & Brezina, LLP on our December 31,
2002 audit was attributed to work performed by Ham, Langston & Brezina, LLP's
full-time, permanent employees.
INCREASE IN AUTHORIZED SHARES - PROPOSAL NUMBER THREE
Our Stockholders will vote on an amendment to the Corporation's Articles of
Incorporation to increase the number of authorized shares of the Corporation's
stock from 105,000,000 to 210,000,000.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS PLACE A VOTE
"FOR" PROPOSAL "3", AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY
OTHERWISE.
Voting Rights with Respect to the Increase in Authorized Shares
The Board is of the opinion that the amendment to the Articles of Incorporation
to Increase the Authorized Shares of Common Stock is advisable and in the
Corporation's best interests and recommends a vote "FOR" the approval this
proposal. The form of Certificate of Amendment to the Articles of Incorporation
is attached hereto as Attachment "A". The affirmative vote of a majority of the
issued and outstanding shares of Common Stock is required for the approval of
the amendment to the Articles of Incorporation to increase the authorized shares
of Common Stock. For purposes of the vote to amend the Articles of
Incorporation to increase the authorized shares of Common Stock, as amended,
abstentions and broker non-votes will have the same effect as a vote against
this proposal. All proxies will be voted to approve the amendment to the
Articles of Incorporation unless a contrary vote is indicated on the enclosed
proxy card.
INTRODUCTION
The Board has approved, subject to stockholder approval, an amendment to its
Articles of Incorporation, as amended, which will increase the aggregate number
of shares of common stock authorized for issuance from 105,000,000 shares to
210,000,000 shares.
The Board believes the Corporation is competing in a dynamic and rapidly
evolving energy marketplace. The competition for development opportunities are
very high and companies with good access to capital and the ability to move
quickly to acquire energy prospects or synergistic businesses have greater
opportunities for corporate growth. The proposed increase in the authorized
Common Stock has been recommended by the Board to assure that an adequate supply
of authorized unissued shares is available for use primarily in connection with
corporate acquisitions, raising additional capital for operations, and the
issuance of shares under the Corporation's Equity Compensation Plan. The shares
may also be used for general corporate needs, such as future stock dividends or
stock splits. There currently are no plans or arrangements relating to the
issuance of any of the additional shares of Common Stock proposed to be
authorized.
Our Certificate of Incorporation presently authorizes 100,000,000 shares of
common stock and 5,000,000 shares of preferred stock. At August 11, 2003, we
had 86,043,836 shares of Common Stock outstanding and 97,202,334 shares of
Common Stock issued and no preferred stock issued and outstanding. Included in
common stock issued were certain shares issued under a Securities Purchase
Agreement (the "Securities Purchase Agreement") whereby the Corporation issued
16,149,998 shares of restricted common stock to an escrow agent (the "Escrowed
Shares") for the benefit of four investor groups in exchange for $1,300,000 in
cash in 2001. The terms of the Securities Purchase Agreement allowed the escrow
agent for the Escrowed Shares to issue restricted common stock in the amount of
4,991,500 shares to the investor groups and included provisions for the issuance
of four series of warrants, which comprise the remaining 11,158,498 issued
shares, with exercise prices to be set based on a combination of certain future
events and the performance of the Corporation's common stock. To date Pangea
has not been provided notice that any of the warrants are to be exercised. The
difference between the shares issued and the shares outstanding represent the
shares underlying these warrants that have not been exercised. At August 11,
2003, there were also 2,797,666 authorized shares of Common Stock unissued.
If the Proposal is adopted, the first full paragraph of Article III of the
Corporation's Articles of Incorporation, as amended, will read as follows:
"ARTICLE III"
The total number of shares of stock that the Corporation shall have authority to
issue is Two Hundred Ten Million (210,000,000) consisting of Two Hundred Million
(200,000,000) shares of Common Stock, par value $0.001 per share ("Common
Stock"), and Ten Million (10,000,000) shares of Preferred Stock, par value
$0.001 per share ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to time in
one or more series, each of which shall have such distinctive designation or
title as shall be determined by the Board of Directors of the Corporation
("Board of Directors") prior to the issuance of any shares thereof. Preferred
Stock shall have such voting powers, full or limited, or no voting powers, and
such preferences and relative, participating, optional or other special rights
and such qualifications, limitations or restrictions thereof, as shall be stated
in such resolution or resolutions providing for the issue of such class or
series of Preferred Stock as maybe adopted from time to time by the Board of
Directors prior to the issuance of any shares thereof. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of all the then outstanding shares of
the capital stock of the corporation entitled to vote generally in the election
of the Directors (the "Voting Stock"), voting together as a single class,
without a separate vote of the holders of the Preferred Stock, or any series
thereof, unless a vote of any such holders is required pursuant to any Preferred
Stock Designation."
CERTAIN EFFECTS OF THE PROPOSED AMENDMENT
The Board believes that approval of this Proposal is essential for the growth
and development of the Corporation. However, the following should be considered
by a stockholder in deciding how to vote upon this Proposal.
The additional shares that the Board would be authorized to issue upon approval
of the Proposal, if so issued, would have a dilutive effect upon the percentage
of the Corporation's equity owned by present stockholders. The issuance of the
additional shares might be disadvantageous to current stockholders in that any
additional issuances would potentially reduce per share dividends, if any.
Stockholders should consider, however, that the possible impact upon dividends
is likely to be minimal in view of the fact that the Corporation has never paid
dividends on shares of the Corporation's Common Stock and do not have any
current plans to pay a cash dividend in the foreseeable future, except to the
extent we would be required to satisfy any obligations with respect to any
Preferred Stock we may issue in the future. The Corporation presently intends to
retain earnings, for investment and use in business operations.
EFFECTIVENESS OF THE AUTHORIZED INCREASE
If the Authorized Share Increase Amendment is approved by the requisite vote of
the Corporation's stockholders, the Authorized Share Increase will be effective
upon the close of business on the date of filing of the Authorized Share
Increase Amendment with the Colorado Secretary of State, which filing is
expected to take place shortly after the Stockholder Meeting. If this Proposal
is not approved by the stockholders, then the Authorized Share Increase
Amendment will not be filed.
APPROVAL OF EQUITY COMPENSATION PLAN - PROPOSAL NUMBER FOUR
Our Stockholders will vote to approve the Equity Compensation Plan.
RECOMMENDATION AND REQUIRED VOTE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS PLACE A VOTE
"FOR" PROPOSAL 4, AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
Voting Rights with Respect to Approval of Equity Compensation Plan
The affirmative vote of a majority of issued and outstanding shares of common
stock present in person or represented by proxy and entitled to vote at the
Stockholder Meeting is required for the approval of the adoption of the Equity
Compensation Plan. A copy of the Equity Compensation Plan is attached hereto as
Attachment "B". For purposes of the vote to adopt the Equity Compensation Plan,
abstentions will have the same effect as a vote against approval of the adoption
of the Equity Compensation Plan. Broker non-votes are counted towards a quorum,
but are not counted for any purpose in determining whether this matter has been
approved.
The Board is of the opinion that the adoption of the Equity Cnmpensation Plan is
advisable and in the Corporation's best interests and recommends a vote "FOR"
the approval of the Equity Compensation Plan. All proxies will be voted to
approve the Equity Compensation Plan unless a contrary vote is indicated on the
enclosed proxy card.
INTRODUCTION
The Equity Compensation Plan provides for the issuance of restricted stock and
stock grants to selected officers, directors, employees and consultants of the
Corporation or its potential parent or subsidiary companies. The following
sections summarize the principal features of the Equity Compensation Plan,
PURPOSE
The Plan is intended to aid the Corporation in maintaining and developing a
management team, attracting qualified officers and employees capable of
assisting in the future success of the Corporation, and rewarding those
individuals who have contributed to the success of the Corporation. It is
designed to aid the Corporation in retaining the services of executives and
employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain employees of
the Corporation, to use their best efforts to promote the success of the
Corporation's business, and to provide them with an opportunity to obtain or
increase a proprietary interest in the Corporation. It is also designed to
permit the Corporation to reward those individuals who are not employees of the
Corporation but who are perceived by management as having contributed to the
success of the Corporation or who are important to the continued business and
operations of the Corporation. The above aims will be effectuated through the
granting awards, subject to the terms and conditions of this Plan. Pangea
believes that stock grants will serve to align compensation with business
objectives and help the Corporation achieve the basic goal of enhancing
shareholder value.
ADMINISTRATION
The Equity Compensation Plan is administered by the Corporation's Board of
Directors or a duly appointed Committee, which will be referred to throughout
this Proxy Statement as the Plan Administrator. The Plan Administrator has the
power to construe and interpret the Equity Compensation Plan promulgate, amend
and rescind rules and regulations relating to the administration of the Equity
Compensation Plan, to authorize any person to execute, on behalf of the
Corporation, any instrument required to carry out the purposes of the Equity
Compensation Plan, to determine when rights will be granted under the Equity
Compensation Plan, to, subject to the provisions of the Equity Compensation
Plan, determine the persons to whom stock will be granted, to make any and all
other determinations which it determines to be necessary or advisable for
administration of the Equity Compensation Plan.
EQUITY COMPENSATION PLAN
The purpose of the Equity Compensation Plan is to further the interests of the
Corporation and the stockholders by providing incentives in the form of stock
grants to key employees and Directors who contribute materially to our success
and profitability. The grants recognize and reward outstanding individual
performances and contributions and will give such persons a proprietary interest
in us, thus enhancing their personal interest in our continued success and
progress. The Plan also assists us and our subsidiaries in attracting and
retaining key employees and Directors.
The Plan Administrator has the exclusive power to select the participants in the
Plan, to establish the terms of the Award to each participant. The maximum
aggregate number of shares of common stock that may be granted each year under
the Plan is 10,000,000. As of August 11, 2003, 2,871,104 shares of common stock
have been granted pursuant to the Plan to non-employee consultants. The
effective date of the Plan is January 1, 2003. Stock may be granted under the
Plan only within 10 years from the effective date of the Plan. The Plan
Administrator votes on any matters affecting the administration of the Plan or
the grant of any Stock. The Plan Administrator may:
(a) to select the participants in this plan;
(b) establish the terms of the Stock granted to each participants which
may not be the same in each case;
(c) determine the total number of shares of Stock to grant to a grantee,
which may not be the same amount to each Eligible Person in each case;
(d) make all other determinations necessary or advisable under the Plan.
(e) The Plan Administrator has the sole and absolute discretion to
determine whether the performance of an Eligible Person warrants an
award under this Plan, and to determine the amount of the award.
The Plan Administrator has full and exclusive power to construe and interpret
this Plan, to prescribe and rescind rules and regulations relating to this Plan,
and take all actions necessary or advisable for the Plan's administration. Any
such determination made by the Plan Administrator will be final and binding on
all persons. (d) A member of the Plan Administrator will not be liable for
performing any act or making any determination in good faith
The Board of Directors of the Corporation may amend, terminate or suspend this
Plan at any time, in its sole and absolute discretion; provided, however, that
to the extent required to qualify this Plan under Rule 16b-3 promulgated under
Section 16 of the Exchange Act, no amendment that would (a) materially increase
the number of shares of Stock that may be issued under this Plan, (b) materially
modify the requirements as to eligibility for participation in this Plan, or (c)
otherwise materially increase the benefits accruing to participants under this
Plan, shall be made without the approval of the Corporation's shareholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it as in the opinion of counsel for the Corporation may be
necessary or appropriate from time to time.
With respect to administration of this Plan, the Corporation shall indemnify
each present and future member of the Committee and the Board of Directors
against, and each member of the Committee and the Board of Directors shall be
entitled without further act on his part to indemnity from the Corporation for,
all expenses (including attorney's fees, the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Corporation itself) reasonably
incurred by him in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his being or having been a
member of the Committee and/or the Board of Directors, whether or not he
continues to be a member of the Committee and/or the Board of Directors at the
time of incurring the expenses, including, without limitation, matters as to
which he shall be finally adjudged in any action, suit or proceeding to have
been found to have been negligent in the performance of his duty as a member of
the Committee or the Board of Directors. However, this indemnity shall not
include any expenses incurred by any member of the Committee and/or the Board of
Directors in respect of matters as to which he shall be finally adjudged in any
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as a member of the Committee and the
Board of Directors. In addition, no right of indemnification under this Plan
shall be available to or enforceable by any member of the Committee and the
Board of Directors unless, within 60 days after institution of any action, suit
or proceeding, he shall have offered the Corporation the opportunity to handle
and defend same at its own expense. The failure to notify the Corporation within
60 days shall only affect a Director or committee member's right to
indemnification if said failure to notify results in an impairment of the
Corporation's rights or is detrimental to the Corporation. This right of
indemnification shall inure to the benefit of the heirs, executors or
administrators of each member of the Committee and the Board of Directors and
shall be in addition to all other rights to which a member of the Committee and
the Board of Directors may be entitled as a matter of law, contract, or
otherwise.
The provisions of the Plan shall be construed, administered, governed under the
laws of the State of Colorado.
If our shareholders do not approve the Plan, then it will remain in force as a
non-tax-qualified plan. All of the shares were registered on Form S-8 in 2003
or were restricted under Rule 144.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
AS OF DECEMBER 31, 2002
- ---------------------------------------------------------------------------------------------------------------
Number of Securities Weighted-average price of Number of Securities
to be issued upon outstanding options, remaining available for
exercise of outstanding warrants and rights future issuance under equity
options, warrants and compensation plans
rights (excluding securities
reflected in column (a))
- ------------------------- ------------------------ --------------------------- -----------------------------
(a) (b) (c)
- ------------------------- ------------------------ --------------------------- -----------------------------
Equity compensation plans 0 0
approved by security
holders
- ------------------------- ------------------------ --------------------------- -----------------------------
Equity compensation plans 4,500,000 $ 2.39 500,000
not approved by security
holders
- ------------------------- ------------------------ --------------------------- -----------------------------
TOTAL 4,500,000 $ 2.39 500,000
- ------------------------- ------------------------ --------------------------- -----------------------------
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented for
action at the Annual Stockholder Meeting. However, if any other matter is
properly presented at the Annual Stockholder Meeting, it is the intention of the
persons named in the enclosed proxy to vote in accordance with their best
judgment on such matters.
STOCKHOLDERS PROPOSALS FOR 2004 ANNUAL MEETING
The deadline for stockholders to submit proposals to be considered for inclusion
in the Proxy Statement for the 2004 Annual Stockholder Meeting is March 1, 2004.
Dated this ___ day of August, 2003.
By order of the Board of Directors
Charles B. Pollock
Chairman of the Board and
Chief Executive Officer
Attachment "A"
Form of Certificate of Amendment
To the Articles of Incorporation
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
PANGEA PETROLEUM CORP.
We, the undersigned hereby certify that:
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopted the following Articles of Amendment to its
Articles of Incorporation.
Article III of the Articles of Incorporation is amended to read:
The total number of shares of stock that the Corporation shall have authority to
issue is Two Hundred Ten Million (210,000,000) consisting of Two Hundred Million
(200,000,000) shares of Common Stock, par value $0.001 per share ("Common
Stock"), and Ten Million (10,000,000) shares of Preferred Stock, par value
$0.001 per share ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to time in
one or more series, each of which shall have such distinctive designation or
title as shall be determined by the Board of Directors of the Corporation
("Board of Directors") prior to the issuance of any shares thereof. Preferred
Stock shall have such voting powers, full or limited, or no voting powers, and
such preferences and relative, participating, optional or other special rights
and such qualifications, limitations or restrictions thereof, as shall be stated
in such resolution or resolutions providing for the issue of such class or
series of Preferred Stock as maybe adopted from time to time by the Board of
Directors prior to the issuance of any shares thereof. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of all the then outstanding shares of
the capital stock of the corporation entitled to vote generally in the election
of the Directors (the "Voting Stock"), voting together as a single class,
without a separate vote of the holders of the Preferred Stock, or any series
thereof, unless a vote of any such holders is required pursuant to any Preferred
Stock Designation."
The Board of Directors recommended and consented to this amendment on August 11,
2003. A majority of the shareholders of the corporation voted at a meeting of
shareholders to amend the Articles of Incorporation. A total of _________
shares of common stock voted in favor of the amendment to the Articles of
Incorporation, which constituted the vote of a majority of the shares entitled
to vote on this amendment. There are no other classes of stock outstanding.
(signed) ________________________
by /s/ Charles B. Pollock, CEO
(signed) ________________________
by /s/ Mark F. Weller, President
STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared Charles B.
Pollock, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this _____ day of September, 2003.
(signed) ____________________________
[Notary Seal] /s/ Charles B. Pollock
NOTARY PUBLIC IN AND FOR THE
STATE OF TEXAS
My commission expires _______________________
STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME, the undersigned authority, on this day personally appeared Mark F.
Weller, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this _____ day of September, 2003.
(signed) ____________________________
[Notary Seal] /s/ Mark F. Weller
NOTARY PUBLIC IN AND FOR THE
STATE OF TEXAS
My commission expires _______________________
Attachment "B"
PANGEA PETROLEUM CORPORATION
EQUITY COMPENSATION PLAN
Pangea Petroleum Corporation, a Colorado corporation, (the "Corporation"),
hereby adopts this Equity Compensation Plan (the "Plan"), under which Stock
Awards, and Common Stock in Lieu of Cash Compensation Awards ("Awards") of the
Corporation may be granted from time to time to employees, directors and
consultants of the Corporation or its subsidiaries, if any.
SECTION 1.
GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The Plan is intended to aid the Corporation in maintaining and developing a
management team, attracting qualified officers and employees capable of
assisting in the future success of the Corporation, and rewarding those
individuals who have contributed to the success of the Corporation. It is
designed to aid the Corporation in retaining the services of executives and
employees and in attracting new personnel when needed for future operations and
growth and to provide such personnel with an incentive to remain employees of
the Corporation, to use their best efforts to promote the success of the
Corporation's business, and to provide them with an opportunity to obtain or
increase a proprietary interest in the Corporation. It is also designed to
permit the Corporation to reward those individuals who are not employees of the
Corporation but who are perceived by management as having contributed to the
success of the Corporation or who are important to the continued business and
operations of the Corporation. The above aims will be effectuated through the
granting awards, subject to the terms and conditions of this Plan.
Stock granted pursuant to this Plan, may be registered on Form S-8 or other
appropriate form of registration statement.
RULE 16B-3 PLAN. The Corporation is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and therefore
the Plan is intended to comply with all applicable conditions of Rule 16b-3 (and
all subsequent revisions thereof) promulgated under the Exchange Act. To the
extent any provision of the Plan or action by the Committee or the Board of
Directors or Committee fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee. In addition,
the Committee or the Board of Directors may amend the Plan from time to time as
it deems necessary in order to meet the requirements of any amendments to Rule
16b-3 without the consent of the shareholders of the Corporation.
EFFECTIVE DATE OF PLAN. The effective date of this Plan shall be January 1, 2003
(the "Effective Date"). The Board of Directors shall, within one year of the
Effective Date, submit the Plan for approval to the shareholders of the
Corporation. The plan shall be approved by at least a majority of shareholders
voting in person or by proxy at a duly held shareholders' meeting, or if the
provisions of the corporate charter, by-laws or applicable state law prescribes
a greater degree of shareholder approval for this action, the approval by the
holders of that percentage, at a duly held meeting of shareholders.
2. DEFINITIONS. The following definitions shall apply to this Plan
"Act" means the Securities Exchange Act of 1934, as amended from time to time.
"Administrator" is defined in Section 2(a).
"Affiliate" means any parent corporation and any subsidiary corporation. The
term "parent corporation" means any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation if, at the time of
the action or transaction, each of the corporations other than the Corporation
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation if, at the time
of the action or transaction, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in the chain.
"Agreement" means, individually or collectively, any agreement entered into
pursuant to the Plan pursuant to which Stock are granted to a participant.
"Award" or "Awards," except where referring to a particular category of grant
under the Plan, shall include Stock, Restricted Stock, and Common Stock in Lieu
of Cash Compensation Awards.
"Board" means the Board of Directors of the Corporation as constituted from time
to time.
"Cause" shall mean, for purposes of whether and when a participant has incurred
a Termination of Employment for Cause: (i) any act or omission which permits the
Corporation to terminate the written agreement or arrangement between the
participant and the Corporation or a Subsidiary or Parent for Cause as defined
in such agreement or arrangement; or
(ii) in the event there is no such agreement or arrangement or the agreement or
arrangement does not define the term "cause," then Cause shall mean an act or
acts of dishonesty by the participant resulting or intending to result directly
or indirectly in gain to or personal enrichment of the participant at the
Corporation's expense and/or gross negligence or willful misconduct on the part
of the participant.
"Change in Control" means, for purposes of this Plans
1. there shall be consummated (i) any consolidation or merger of the
Corporation in which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of the Corporation's common stock
would be converted into cash, securities or other property, other than a
merger of the Corporation in which the holders of the Corporation's common
stock immediately prior to the merger have substantially the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Corporation; or
2. the shareholders of the Corporation shall approve any plan or proposal for
the liquidation or dissolution of the Corporation
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and any successor Code, and related rules, regulations and interpretations.
"Common Stock" or "Stock" means the Common Stock, par value per share of the
Corporation whether presently or hereafter issued, or such other class of shares
or securities as to which the Plan may be applicable subject to adjustments
pursuant to Section 3.
"Common Stock in Lieu of Cash Compensation Award" means Awards granted pursuant
to Section 6.
"Corporation" means Pangea Petroleum Corporation, a Colorado Corporation, and
any successor or assignee company corporations into which the Corporation may be
merged, changed or consolidated; any company for whose securities the
securities of the Corporation shall be exchanged; and any assignee of or
successor to substantially all of the assets of the Corporation
"Director" means any member of the Board of Directors of the Corporation or any
Parent or subsidiary of the Corporation that now exists or hereafter is
organized or acquired by or acquires the Corporation.
"Effective Date" means the date on which the Plan is initially approved by the
Board of Directors as set forth in Section 13.
"Eligible Persons" shall mean, with respect to the Plan, those persons who, at
the time that an Award is granted, are (i) officers, directors or employees of
the Corporation or Affiliate or (ii) attorneys, consultants or subcontractors of
the Corporation or affiliate.
"Employee" means any person employed on an hourly or salaried basis by the
Corporation or any Parent or Subsidiary of the Corporation that now exists or
hereafter is organized or acquired by or acquires the Corporation.
"Fair Market Value" means (i) if the Common Stock is not listed or admitted to
trade on a national securities exchange and if bid and ask prices for the Common
Stock are not furnished through NASDAQ or a similar organization, the value
established by the Committee, in its sole discretion, for purposes of the Plan;
(ii) if the Common Stock is listed or admitted to trade on a national securities
exchange or a national market system, the closing price of the Common Stock, as
published in the Wall Street Journal, so listed or admitted to trade on such
date or, if there is no trading of the Common Stock on such date, then the
closing price of the Common Stock on the next preceding day on which there was
trading in such shares; or (iii) if the Common Stock is not listed or admitted
to trade on a national securities exchange or a national market system, the mean
between the bid and ask price for the Common Stock on such date, as furnished by
the National Association of Securities Dealers, Inc. through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information. If trading in
the stock or a price quotation does not occur on the Date of Grant, the next
preceding date on which the stock was traded or a price was quoted will
determine the fair market value.
"Non-Employee Director" means a member of the Board who is not also an employee
of the Corporation or any Subsidiary as that term is defined in Rule 16b-3 under
the Exchange Act.
"Plan" means this Equity Compensation Plan as may be amended from time to time.
"Stock Award" means Awards granted pursuant to Section 5.
"Subsidiary" means any corporation or other entity (other than the Corporation)
in any unbroken chain of corporations or other entities beginning with the
Corporation if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
"Ten Percent Shareholder" means an individual who, at the time of the award,
owns Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or of any Affiliate. An individual shall be
considered as owning the Stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its shareholders, partners, or beneficiaries.
"Termination" or "Termination of Employment" means the occurrence of any act or
event whether pursuant to an employment agreement or otherwise that actually or
effectively causes or results in the person's ceasing, for whatever reason, to
be an officer or employee of the Corporation or of any Subsidiary or Parent
including, without limitation, death, disability, dismissal, severance at the
election of the participant, retirement, or severance as a result of the
discontinuance, liquidation, sale or transfer by the Corporation or its
Subsidiaries or Parent of all businesses owned or operated by the
Corporation or its Subsidiaries. A Termination of Employment shall occur to an
employee who is employed by an Subsidiary if the Subsidiary shall cease to be a
Subsidiary and the participant shall not immediately thereafter become an
employee of the Corporation or a Subsidiary.
"Subsidiary" means any corporation 50% or more of the voting securities of which
are owned directly or indirectly by the Corporation at any time during the
existence of this Plan.
In addition, certain other terms used in this Plan shall have the definitions
given to them in the first place in which they are used.
SECTION 2.
ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS
1. ADMINISTRATION
(a) The Plan shall be administered by either the entire Board of Directors
or a committee of not fewer than two (2) Independent Directors (in
either case, the "Administrator"). Each member of the Committee shall
be a "non-employee director" within the meaning of Rule 16b-3(b)(3)(i)
promulgated under the Act, or any successor definition under said
rule.
(b) If this Plan is administered by the Committee, then a majority of the
full Committee constitutes a quorum for purposes of administering the
Plan, and all determinations of the Committee shall be made by a
majority of the members present at a meeting at which a quorum is
present or by the unanimous written consent of the Committee.
(c) If no Committee has been appointed, members of the Board may vote on
any matters affecting the administration of the Plan or the grant of
any Stock pursuant to the Plan, except that no such member shall act
on the granting of Stock to himself, but such member may be counted in
determining the existence of a quorum at any meeting of the Board
during which action is taken with respect to the granting of Stock to
him.
(d) The interpretation and construction of the terms of the Plan by the
Board or a duly authorized committee shall be final and binding on all
participants in the Plan absent a showing of demonstrable error. No
member of the Plan Administrator shall be liable for any action taken
or determination made in good faith with respect to the Plan.
2. POWERS OF ADMINISTRATOR. The Administrator shall have the sole and exclusive
power and authority to grant Awards consistent with the terms of the Plan,
including the power and authority:
(f) to select the participants in this plan;
(g) establish the terms of the Stock granted to each participants which
may not be the same in each case;
(h) determine the total number of shares of Stock to grant to a grantee,
which may not be the same amount to each Eligible Person in each case;
(i) make all other determinations necessary or advisable under the Plan.
(j) The Plan Administrator has the sole and absolute discretion to
determine whether the performance of an Eligible Person warrants an
award under this Plan, and to determine the amount of the award.
The Plan Administrator has full and exclusive power to construe and interpret
this Plan, to prescribe and rescind rules and regulations relating to this Plan,
and take all actions necessary or advisable for the Plan's administration. Any
such
determination made by the Plan Administrator will be final and binding on all
persons. (d) A member of the Plan Administrator will not be liable for
performing any act or making any determination in good faith
All decisions and interpretations of the Administrator shall be made in the
Administrator's sole and absolute discretion and shall be final and binding on
all persons, including the Corporation and Plan participants.
SECTION 3.
STOCK ISSUABLE UNDER THE PLAN; TERM OF PLAN;
RECAPITALIZATIONS; MERGERS; SUBSTITUTE AWARDS
(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and available
for issuance under the Plan initially shall be 10,000,000 shares of Stock per
year. In addition if any portion of an Award is forfeited, cancelled, or
reacquired by the Corporation, satisfied without the issuance of Stock or
otherwise terminated, the shares of Stock underlying such portion of the Award
shall be added back to the shares of Stock available for issuance under the
Plan. Subject to such overall limitation, shares of Stock may be issued up to
such maximum number pursuant to any type or types of Award. The shares available
for issuance under the Plan may be authorized but unissued shares of Stock or
shares of Stock reacquired by the Corporation.
(b) TERM OF PLAN. No Awards shall be made after January 1, 2013.
(c) RECAPITALIZATIONS. Subject to the provisions of Section 12, if, through or
as a result of any merger, consolidation, sale of all or substantially all of
the assets of the Corporation, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, the outstanding shares of Stock are increased or decreased
or are exchanged for a different number or kind of shares or other securities of
the Corporation, or additional shares or new or different shares or other
securities of the Corporation or other non-cash assets are distributed with
respect to such shares of Stock or other securities, the Administrator may make
an appropriate or proportionate adjustment in (i) the maximum number of shares
reserved for issuance under the Plan, (ii) the number and kind of shares or
other securities subject to any then outstanding Awards under the Plan, The
adjustment by the Administrator shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Administrator in its discretion may make a cash payment
in lieu of fractional shares.
SECTION 4.
ELIGIBILITY
Awards under the Plan may be granted to employees, including officers, and
directors of the Corporation or its subsidiaries, as may be existing from time
to time, and to other individuals who are not employees of the Corporation, but
performed bona fide services to the Corporation, as may be deemed in the best
interest of the Corporation by the Board or the duly authorized Committee. These
individuals may be referred to as consultants or key persons. Such services to
the Corporation or a subsidiary shall not be in connection with the offer or
sale of securities in a capital-raising transaction. Such Awards shall be in the
amounts, and shall have the rights and be subject to the restrictions, as may be
determined by the Board or a duly authorized Committee, all as may be within the
general provisions of this Plan.
Every Eligible Person, as the Plan Administrator of the Corporation or any
subsidiary or Parent shall only be eligible to receive an Award if and as
permitted by applicable law and regulations. The Plan Administrator's Award to a
participant in any year does not require the Plan Administrator to make an Award
to that participant in any other year. Furthermore, the Plan Administrator make
different Awards to different participants. The Plan Administrator may consider
such factors as it deems pertinent in selecting participants and in determining
the amount of their Stock, including, without limitation;
(i) the financial condition of the Corporation or its Subsidiaries;
(ii) expected profits for the current or future years;
(iii) the contributions of a prospective participant to the profitability or
success of the Corporation or its Subsidiaries; and
(iv) the adequacy of the prospective participant's other compensation.
Participants may include persons to whom stock, or other benefits previously
were granted under this or another plan of the Corporation or any Subsidiary.
(b) No Right of Employment. A Grantee's right, if any, to continue to serve the
Corporation and its Subsidiaries as an Employee will not be enlarged or
otherwise affected by his designation as a participant under this Plan, and such
designation will not in any way restrict the right of the Corporation or any
Subsidiary, as the case may be, to terminate at any time the employment of any
SECTION 5.
RESTRICTED STOCK AWARDS
(a) NATURE OF STOCK AWARDS. A Restricted Stock Award is an Award entitling the
recipient to acquire, at par value or such other higher purchase price
determined by the Administrator, shares of Stock, restricted under Rule 144,
subject to such restrictions and conditions as the Administrator may determine
at the time of grant. Conditions may be based on continuing employment (or other
business relationship) and/or achievement of pre-established performance goals
and objectives. The terms and conditions of each Stock Award shall be determined
by the Administrator, and such terms and conditions may differ among individual
Awards and participants.
(b) RIGHTS AS A STOCKHOLDER. Upon execution of the grant of a Restricted Stock
Award and paying any applicable purchase price, a participant shall have the
rights of a stockholder with respect to the voting of the Stock, subject to such
terms and conditions as may be imposed by the Administrator.
SECTION 6.
COMMON STOCK IN LIEU OF CASH COMPENSATION AWARDS
(a) GRANTS OF COMMON STOCK PAYABLE IN LIEU OF CASH. The Administrator may grant
shares of Stock available for issuance under the Plan to an eligible participant
in lieu of cash compensation earned by the participant with the consent of the
participant, or under a short- or long-term incentive plan of the Corporation
(an "Other Incentive Plan), PROVIDED, however, that the award made under the
Other Incentive Plan allows for satisfaction of such award by payment of Stock
in lieu of cash compensation. Additionally, shares of Stock may be granted if
specified performance goals established by the Administrator are met, provided
that the performance goals so established meet the requirements of Section
162(m) of the Code and that the Administrator certifies that the performance
goals have been met. In the event of a grant of shares of Stock in lieu of cash
compensation, such grant shall be conditioned upon the participant's irrevocable
election to waive receipt of all or a portion of the cash compensation otherwise
payable, which waiver shall constitute payment in full by such participant for
the shares of Stock granted in lieu of such cash compensation.
(b) DATE OF GRANT. Stock granted in lieu of cash compensation shall be granted
to each participant on the date the waived cash compensation would otherwise by
paid, provided, however, that with respect to a participant who is subject to
Section 16 of the Act, if such grant date is not at least six months and one day
from the date of the election, the grant shall be delayed until the date which
is six months and one day from the date of the election (or the next following
business day, if such date is not a business day) to the extent necessary to
conform to the requirements for exempt purchases under Rule 16b-3 of the Act.
(c) NUMBER OF SHARES. The number of shares of Stock granted in lieu of cash
compensation shall be determined by dividing the amount of the waived cash
compensation by the Fair Market Value of the Stock on the date the Stock is
granted. Such Stock shall be granted for the whole number of shares so
determined; the value of any fractional share shall be paid in cash.
SECTION 7.
TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received there
under first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Corporation, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Corporation and its Subsidiaries shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant. The Corporation's obligation to deliver stock
certificates to any participant is subject to and conditioned on tax obligations
being satisfied by the participant.
(b) PAYMENT IN STOCK. Subject to approval by the Administrator, a participant
may elect to have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Corporation to withhold from shares of Stock to be
issued pursuant to any Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due, or (ii) transferring to the Corporation shares of Stock
owned by the participant with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due.
(c) LIABILITY OF THE COMPANY. The Corporation that is in existence or hereafter
comes into existence shall not be liable to any person for any tax consequences
expected but not realized by any person due to the grant of Stock.
SECTION 8.
TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a termination
of employment:
(a) a transfer to the employment of the Corporation from a Subsidiary or from
the Corporation to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for any
other purpose approved by the Corporation, if the employee's right to re-
employment is guaranteed either by a statute or by contract or under the written
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
SECTION 9.
AMENDMENTS AND TERMINATION
The Board of Directors of the Corporation may amend, terminate or suspend this
Plan at any time, in its sole and absolute discretion; provided, however, that
to the extent required to qualify this Plan under Rule 16b-3 promulgated under
Section 16 of the Exchange Act, no amendment that would (a) materially increase
the number of shares of Stock that may be issued under this Plan, (b) materially
modify the requirements as to eligibility for participation in this Plan, or (c)
otherwise materially increase the benefits accruing to participants under this
Plan, shall be made without the approval of the Corporation's shareholders.
Subject to the preceding sentence, the Board of Directors shall have the power
to make any changes in the Plan and in the regulations and administrative
provisions under it as in the opinion of counsel for the Corporation may be
necessary or appropriate from time to time.
SECTION 10.
STATUS OF PLAN
Unless the Administrator shall otherwise expressly determine in writing, with
respect to the portion of any Award which has not been exercised and any
payments in cash, Stock or other consideration not received by a participant, a
participant shall have no rights greater than those of a general creditor of the
Corporation. In its sole discretion, the Administrator may authorize the
creation of trusts or other arrangements to meet the Corporation's obligations
to deliver Stock or make payments with respect to Awards hereunder, provided
that the existence of such trusts or other arrangements is consistent with the
foregoing sentence.
SECTION 11.
CHANGE OF CONTROL AND MERGER PROVISIONS
(a) In contemplation of and subject to the consummation of a consolidation or
merger or sale of all or substantially all of the assets of the Corporation in
which outstanding shares of Stock are exchanged for securities, cash or other
property of an unrelated corporation or business entity or in the event of a
liquidation or dissolution of the Corporation or in the event of a corporate
reorganization of the Corporation (in each case, a "Transaction"), the Board, or
the board of directors of any corporation or other entity assuming the
obligations of the Corporation, may, in its discretion, take any one or more of
the following actions, as to outstanding Awards: (i) provide that such Awards
shall be assumed or equivalent awards shall be substituted, by the acquiring or
succeeding corporation or other entity (or an affiliate thereof), and/or (ii)
upon written notice to the participants, provide that all Awards will terminate
immediately prior to the consummation of the Transaction. In the event that,
pursuant to clause (ii) above, Awards will terminate immediately prior to the
consummation of the Transaction, all vested Awards shall be fully settled in
cash or in kind at such appropriate consideration as determined by the
Administrator in its sole discretion after taking into account any and all
consideration payable per share of Stock pursuant to the Transaction (the
"Transaction Price").
(b) "Change of Control" shall be defined as an event subsequent to the adoption
of this Plan, by any "person," as such term is used in Sections 13(d) and 14(d)
of the Act (other than the Corporation, any of its Subsidiaries, any "affiliate"
or "associate" (as such terms are defined in Rule 12b-2 under the Act) of the
foregoing persons, or any trustee, fiduciary or other person or entity holding
securities under any employee benefit plan or trust of the Corporation or any of
its Subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, who shall become
the "beneficial owner" (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Corporation representing 25% or
more of the combined voting power of the Corporation's then outstanding
securities having the right to vote in an election of the Corporation's Board of
Directors ("Voting Securities") (other than as a result of an acquisition of
securities directly from the Corporation).
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an
acquisition of securities by the Corporation which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person (as defined in the
foregoing clause (i)) to 25% or more of the combined voting power of all then
outstanding Voting Securities; PROVIDED, however, that if such person shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Corporation), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause.
SECTION 12.
GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Administrator may
require each person acquiring Stock pursuant to an Award to represent to and
agree with the Corporation in writing that such person is acquiring the shares
without a view to distribution thereof. No shares of Stock shall be issued
pursuant to an Award until all applicable securities law and other legal and
stock exchange or similar requirements have been satisfied. The Administrator
may require the placing of such stop orders and restrictive legends on
certificates for Stock and Awards, as it deems appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Stock certificates to be delivered to
participants under this Plan shall be deemed delivered for all purposes when the
Corporation or a stock transfer agent of the Corporation shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Corporation.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing contained in
this Plan shall prevent the Board from adopting other or additional compensation
arrangements, including trusts, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of this Plan and
the grant of Awards shall not confer upon any employee any right to continued
employment with the Corporation or any Subsidiary and shall not interfere in any
way with the right of the Corporation or any Subsidiary to terminate the
employment of any of its employees at any time.
(d) TRADING POLICY RESTRICTIONS. Sale of Stock acquired pursuant to an Award
under the Plan shall be subject to such Corporation's
insider-trading-policy-related restrictions as established by the Corporation
from time, terms and conditions as may be established by the Administrator from
time to time, or in accordance with policies set by the Administrator, from time
to time.
(e) INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS. With respect to
administration of this Plan, the Corporation shall indemnify each present and
future member of the Committee and the Board of Directors against, and each
member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Corporation for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Corporation itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the expenses,
including, without limitation, matters as to which he shall be finally adjudged
in any action, suit or proceeding to have been found to have been negligent in
the performance of his duty as a member of the Committee or the Board of
Directors. However, this indemnity shall not include any expenses incurred by
any member of the Committee and/or the Board of Directors in respect of matters
as to which he shall be finally adjudged in any action, suit or proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee and the Board of Directors. In addition,
no right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action, suit or proceeding, he shall have offered the
Corporation the opportunity to handle and defend same at its own expense. The
failure to notify the Corporation within 60 days shall only affect a Director or
committee member's right to indemnification if said failure to notify results in
an impairment of the Corporation's rights or is detrimental to the Corporation.
This right of indemnification shall inure to the benefit of the heirs, executors
or administrators of each member of the Committee and the Board of Directors and
shall be in addition to all other rights to which a member of the Committee and
the Board of Directors may be entitled as a matter of law, contract, or
otherwise.
(f) GENDER. If the context requires, words of one gender when used in this Plan
shall include the others and words used in the singular or plural shall include
the other.
(g) HEADINGS. Headings of Articles and Sections are included for convenience of
reference only and do not constitute part of the Plan and shall not be used in
construing the terms of the Plan.
(h) OTHER COMPENSATION PLANS. The adoption of this Plan shall not affect any
other compensation or benefit plans in effect for the Corporation or any
Affiliate, nor shall the Plan preclude the Corporation from establishing any
other forms of compensation, including a stock option plan, for employees of the
Corporation or any Affiliate.
(i) OTHER AWARDS. The grant of Stock or Awards shall not confer upon the
Eligible Person the right to receive any future or other Stock or Awards under
this Plan, whether or not Stock or Awards may be granted to similarly situated
Eligible Persons, or the right to receive future Stock or Awards upon the same
terms or conditions as previously granted.
SECTION 13.
EFFECTIVE DATE OF PLAN
The Plan shall become effective immediately on adoption by the board of
directors of the Corporation (the "Board")
SECTION 14.
GOVERNING LAW
This Plan and all Awards and actions taken there under shall be governed by, and
construed in accordance with, the laws of the State of Colorado, applied without
regard to conflict of law principles.
PROXY
PANGEA PETROLEUM CORPORATION.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
STOCKHOLDER MEETING TO BE HELD ON SEPTEMBER 24, 2003
The undersigned hereby appoints Charles B. Pollock and Mark Weller as the true
and lawful attorney, agent and proxy of the undersigned, with full power of
substitution, to represent and to vote all shares of Common Stock of Pangea
Petroleum Corporation held of record by the undersigned on August 11, 2003, at
the Annual Stockholders Meeting to be held at DoubleTree Hotel located at 2001
Post Oak Blvd., Houston, Texas 77056, on September 24, 2003 at 2:00 p. m. (CDT),
and at any adjournments thereof. Any and all proxies heretofore given are hereby
revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED (I) FOR THE
ELECTION OF THE NOMINEES NAMED IN NUMBER 1, (II) FOR THE RATIFICATION OF HAM,
LANGSTON & BREZINA, L.L.P. AS THE COMPANY'S INDEPENDENT AUDITOR FOR THE YEAR
ENDING DECEMBER 31, 2003 (III) FOR THE AMENDMENT TO THE ARTICLES OF
INCORPORATION IN NUMBER 3, AND (III) FOR THE EQUITY COMPENSATION PLAN IN NUMBER
4.
1. THE ELECTION OF DIRECTORS OF THE COMPANY. (INSTRUCTION: TO WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH, OR
OTHERWISE STRIKE, THAT NOMINEE'S NAME IN THE LIST BELOW.)
[ ] FOR ALL NOMINEES LISTED [ ] WITHHOLD AUTHORITY TO
BELOW EXCEPT AS MARKED VOTE FOR ALL NOMINEES BELOW.
TO THE CONTRARY.
CHARLES B. POLLOCK
MARK WELLER
EDWARD SKAGGS
2. THE PROPOSAL TO RATIFY THE SELECTION OF HAM, LANGSTON & BREZINA, L.L.P. AS
THE COMPANY'S INDEPENDENT AUDITOR FOR THE YEAR ENDING DECEMBER 31, 2003.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. THE PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED COMMON STOCK OF THE COMPANY TO 210,000,000 SHARES OF COMMON
STOCK.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. THE PROPOSAL TO APPROVE THE EQUITY COMPENSATION PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 the 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.
- ----------------- ----------------------------------
NUMBER OF SIGNATURE
SHARES OWNED
----------------------------------
(TYPED OR PRINTED NAME)
----------------------------------
SIGNATURE IF HELD JOINTLY
----------------------------------
(TYPED OR PRINTED NAME)
DATED: ____________________
THIS PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED AT THE MEETING. PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.