PROPOSAL 1
ELECTION OF DIRECTORS
The Board presently consists of seven directors, all of whom have been
nominated by the Board for re-election to serve until the next Annual Meeting of
Shareholders and until their successors have been elected and qualified.
It is expected that the nominees named below will be able to accept
such nominations. If any of the below nominees for any reason is unable or is
unwilling to serve at the time of the Meeting, the Proxy holders will have
discretionary authority to vote the Proxy for a substitute nominee or nominees.
The following sets forth information as to the nominees for election at the
Meeting, including their ages, present principal occupations, other business
experience during the last five years, memberships on committees of the Board
and directorships in other publicly-held companies.
THE BOARD RECOMMENDS THE SHAREHOLDERS VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES LISTED BELOW.
NOMINEES Year First
Elected
Name Age Position Director or Officer
Marshall A. Smith III(3) 53 Chairman of the Board 1989
Thomas R. Kaetzer(3) 42 Chief Executive Officer 1998
President and Director
Jim C. Bigham 65 Executive Vice President, 1991
Secretary and Director
John E. Loehr(1)(2)(3) 55 Director 1992
Anthony P. Towell(1)(2)(3) 69 Director 1997
J. Virgil Waggoner(1)(2)(3) 73 Director 1997
Steven M. Morris(1) 49 Director 2000
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Executive Committee.
2
Marshall A. Smith III has served as an officer and a director of GulfWest
since July 1989. From July 1989 to November 20, 1992, he served as president and
chairman of the Board. On November 20, 1992, he resigned as president but
continued as chief executive officer and chairman of the board. On September 1,
1993, Mr. Smith reassumed the duties of president and resigned as chairman of
the board. On December 21, 1998, he resigned as president but remained chief
executive officer. On March 20, 2001, he resigned as chief executive officer and
was elected chairman of the board.
Thomas R. Kaetzer was appointed senior vice president and chief operating
officer of GulfWest on September 15, 1998 and on December 21, 1998 became
president and a director. On March 20, 2001, he was appointed chief executive
officer. Mr. Kaetzer has 17 years experience in the oil and gas industry,
including 14 years with Texaco Inc., which involved the evaluation, exploitation
and management of oil and gas assets. He has both onshore and offshore
experience in operations and production management, asset acquisition,
development, drilling and workovers in the continental U.S., Gulf of Mexico,
North Sea, Colombia, Saudi Arabia, China and West Africa. Mr. Kaetzer has a
Masters Degree in Petroleum Engineering from Tulane University and a Bachelor of
Science Degree in Civil Engineering from the University of Illinois.
Jim C. Bigham has served as executive vice president of GulfWest since 1996
and as secretary and a director since 1991. Prior to joining GulfWest, he held
management and sales positions in the real estate and printing industries. Mr.
Bigham is also a retired United States Air Force Major. During his military
career, he served in both command and staff officer positions in the
operational, intelligence and planning areas.
John E. Loehr has served as a director of GulfWest since 1992, as chairman
of the board from September 1, 1993 to July 8, 1998 and as chief financial
officer from November 22, 1996 to May 28, 1998. He is also currently president
and sole shareholder of ST Advisory Corporation, an investment company, and
vice-president of Star-Tex Trading Company, also an investment company. He was
formerly president of Star-Tex Asset Management, a commodity-trading advisor,
and a position he held from 1988 until 1992 when he sold his ownership interest.
Mr. Loehr is a CPA and is a member of the American Institute of Certified Public
Accountants and Texas Society of Certified Public Accountants.
Anthony P. Towell has served as a director of GulfWest since November 13,
1997. From July 1998 to March 2001 he served as chairman of the board. Mr.
Towell is a director of a number of public companies, both in the United Kingdom
and the United States, in the safety, environmental and computer network
industries. Mr. Towell has been in the petroleum business since 1957 and has
held executive positions with various public oil and gas companies including the
Royal Dutch Shell group companies and Pacific Resources, Inc.
J. Virgil Waggoner has served as a director of GulfWest since December 1,
1997. Mr. Waggoner's career in the petrochemical industry began in 1950 and
included senior management positions with Monsanto Company and El Paso Products
Company, the petrochemical and plastics unit of El Paso Company. He served as
president and chief executive officer of Sterling Chemicals, Inc. from the
firm's inception in 1986 until its sale and his retirement in 1996. He is
currently president and chief executive officer of JVW Investments, Ltd., a
private company. He continues to serve as non-executive vice chairman of the
Board of Directors of Sterling Chemicals, Inc. He is also on the Board of
Directors of Kirby Corporation and an advisory board director of First
Commercial Bank of Little Rock, Arkansas.
Steven M. Morris was appointed a director of GulfWest on January 6, 2000.
He was the president of Pozo Resources, Inc., an oil and gas production company,
until its asset were sold to GulfWest on December 31, 1999. Mr. Morris is a
certified public accountant and president of Pentad Enterprises, Inc., a private
investment firm in Houston, Texas. He is currently a director of the Bank of
Tanglewood, Houston, Texas, and Quicksilver Resources, Inc., a publicly traded
oil and gas exploration and production company with offices in Ft. Worth, Texas.
3
BOARD MEETINGS AND COMMITTEES
The Board met four times in 2000. The board has established an audit
committee, a compensation committee and an executive committee. The functions of
these committees, their current members, and the number of meetings held during
2000 are described below.
The function of the audit committee is to assist the board in fulfilling
its oversight responsibilities by reviewing the financial information that will
be provided to the shareholders and others, the systems of internal controls
that management and the board of directors have established, and the audit
process. The committee is comprised of Mr. John E. Loehr (Chairman), Mr. Anthony
P. Towell, Mr. J. Virgil Waggoner and Mr. Steven M. Morris. The committee met
twice in 2000.
The function of the compensation committee is to develop and administer an
executive compensation system, which will enable the Company to attract and
retain qualified executives. The committee is comprised of Mr. J. Virgil
Waggoner (Chairman), Mr. Anthony P. Towell, and Mr. John E. Loehr. The committee
met twice in 2000.
The executive committee was established to make recommendations to the
board of directors in the areas of financial planning, strategies and business
alternatives. The committee is comprised of Mr. Anthony P. Towell (Chairman),
Mr. J. Virgil Waggoner, Mr. Marshall A. Smith III, Mr. John E. Loehr and Mr.
Thomas R. Kaetzer. The committee met twice in 2000.
SHAREHOLDERS' PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder
action at subsequent annual meetings of the Company consistent with Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended. For such
proposals to be considered in the Proxy Statement and Proxy relating to the 2001
Annual Meeting of Shareholders, they must be received by the Company not later
than December 17, 2001. Such proposals should be directed to GulfWest Oil
Company, 397 N. Sam Houston Parkway E., Suite 375, Houston, Texas 77060, Attn:
Secretary.
OTHER BUSINESS
The Board knows of no matter other than those described herein that will be
presented for consideration at the Meeting. However, should any other matters
properly come before the Meeting or any adjournments thereof, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their best judgment in the interest of the Company.
11
MISCELLANEOUS
All costs incurred in the solicitation of Proxies will be borne by the
Company. In addition to solicitation by mail, the officers and employees of the
Company may solicit Proxies by telephone, telegraph or personally, without
additional compensation. The Company may also make arrangements with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of shares of Common Stock held
of record by such persons, and the Company may reimburse such brokerage houses
and other custodians, nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith. The Company has not engaged a proxy solicitor.
The Annual Report to Shareholders of the Company, including financial
statements for the year ended December 31, 2000, accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.
Houston, Texas
April 18, 2001 By Order of the Board of Directors
/s/ Jim C. Bigham
------------------
Jim C. Bigham, Secretary
12
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APPENDIX A
GULFWEST OIL COMPANY
AUDIT COMMITTEE CHARTER
March 22, 2001
The audit committee is a committee of the board of directors. Its primary
function is to assist the board in fulfilling its oversight responsibilities by
reviewing the financial information that will be provided to the shareholders
and others, the systems of internal controls that management and the board of
directors have established, and the audit process.
In meeting its responsibilities, the audit committee is expected to:
1. Provide an open avenue of communication between the independent
accountants and the board of directors.
2. Review and update the committee's charter annually.
3. Recommend to the board of directors the independent accountants to be
nominated, approve the compensation of the independent accountant, and
review and approve the discharge of the independent accountants.
4. Confirm and assure the independence of the independent accountants,
including a review of management consulting services and related fees
provided by the independent accountants, if applicable.
5. Inquire of management and the independent accountants about significant
risks or exposures and assess the steps management has taken to
minimize such risk to the Company.
6. Consider the audit scope and plan with the independent accountants.
7. Consider with management the rationale for employing audit firms other than
the independent accountants.
8. Review with the independent accountants the coordination of audit
effort to assure completeness of coverage, reduction of redundant
efforts, and the effective use of audit resources.
9. Consider and review with the independent accountants:
a. The adequacy of the Company's internal controls, including
computerized information systems controls and security.
b. Any related significant findings and recommendations of the
independent accountants, together with management's response
thereto.
A-1
10. Review with management and the independent accountants at the completion
of the annual examination:
a. The Company's annual financial statements and related notes.
b. The independent accountant's audit of the financial statements and
report thereon.
c. Any significant changes required in the independent accountant's
audit plan.
d. Any serious difficulties or disputes with management encountered
during the course of the audit.
e. Other matters related to the conduct of the audit, which are to be
communicated to the committee under generally accepted auditing
standards.
11. Consider and review with management:
a. Significant findings during the year and management's responses
thereto.
b. Any difficulties encountered in the course of their audits,
including any restrictions on the scope of their work or access
to required information.
c. Any changes required in the planned scope of their audit plan.
12. Review SEC filings and other published documents containing the
Company's financial statements and consider whether the information
contained in these documents is consistent with the information
contained in the financial statements.
13. Review the interim financial report (before it is filed with the
SEC or other regulators) with management and the independent
accountants.
14. Review policies and procedures with respect to officers' expense
accounts and perquisites, including their use of corporate assets, and
consider the results of any review of these areas by the independent
accountants.
15. Review with the independent accountant the results of their review of the
Company's monitoring compliance with the Company's code of conduct.
16. Review legal and regulatory matters that may have a material impact on
the financial statements, related Company compliance policies, and
programs and reports received from regulators.
17. Meet with the independent accountant and management in separate
executive sessions to discuss any matters that the committee or these
groups believe should be discussed privately with the audit committee.
18. Report committee actions to the board of directors with such recommendations
as the committee may deem appropriate.
19. Prepare a letter for inclusion in the annual report that describes the
committee's composition and responsibilities, and how they were discharged.
20. The audit committee shall have the power to conduct or authorize
investigations into any matters within the committee's scope of
responsibilities. The committee shall be empowered to retain
independent counsel, accountants, or others to assist it in the conduct
of any investigation.
A-2
21. The committee shall meet at frequently as circumstances require. The
committee may ask members of management or others to attend the meetings
and provide pertinent information as necessary.
22. The committee will perform such other functions as assigned by law,
the Company's articles or bylaws, or the board of directors.
The membership of the audit committee shall consist of at least three
independent members of the board of directors who shall serve at the
pleasure of the board of directors. Audit committee members and the
committee chairman shall be nominated and designated by the full board of
directors.
The duties and responsibilities of a member of the audit committee are in
addition to those duties set out for a member of the board of directors.
A-3
EXHIBIT I
Page 1
GULFWEST OIL COMPANY
1994 STOCK OPTION AND COMPENSATION PLAN
(Amended and Restated as of April 1, 2001)
ARTICLE I
GENERAL
1.1 Name. This plan will be known as the "GulfWest Oil Company 1994 Stock
Option and Compensation Plan." Capitalized terms used herein are defined in
Article V hereof.
1.2 Purpose. The purpose of the Plan is to promote the growth and general
prosperity of the Company by permitting the Company to grant to its key
employees, directors, and Advisors Options to purchase Common Stock of the
Company and to pay its directors fees for their services as such. The Plan is
designed to help the Company attract and retain superior personnel for positions
of substantial responsibility and to provide employees, directors, and Advisors
with an additional incentive to contribute to the success of the Company.
1.3 Effective Date. The Amended and Restated Plan will be effective as of
April 1, 2001.
1.4 Eligibility to Participate. Any of the Company's key employees
(including officers), directors, or Advisors will be eligible to participate in
the Plan.
1.5 Maximum Number of Shares of Common Stock Subject to Options and
Director Fees. The shares of Common Stock subject to Options granted and
director fees paid pursuant to the Plan may be either authorized and unissued
shares or shares issued and thereafter acquired by the Company. Subject to
adjustment pursuant to the provisions of Section 4.2, and subject to any
additional restrictions elsewhere in the Plan, the maximum aggregate number of
shares of Common Stock that may be issued from time to time pursuant to the
exercise of Options or the payment of director fees shall be two million
(2,000,000). The maximum number of shares of Common Stock with respect to which
Options may be granted and director fees may be paid to any participant in the
Plan during the term of the Plan is 500,000. Plan Shares with respect to which
an Option has been exercised or a director fee paid will not again be available
for grant hereunder. If Options terminate for any reason without being wholly
exercised, new Options may be granted hereunder covering the number of Plan
Shares to which such Option termination relates.
1.6 Administration. The Plan will be administered by the Board or by a
committee of directors (the "Stock Option Committee") appointed by the Board. As
used herein, unless otherwise indicated, "Committee" shall mean the Board or the
duly appointed Stock Option Committee, as applicable. Subject to the provisions
of the Plan, the Committee will have the sole discretion and authority to
determine from time to time the employees, directors and Advisors to whom
Options will be granted and the number of Plan Shares subject to each Option, to
interpret the Plan, to prescribe, amend and rescind any rules and regulations
necessary or appropriate for the administration of the Plan, to determine and
interpret the details and provisions of each Option Agreement, to modify or
amend any Option Agreement or waive any conditions or restrictions applicable to
any Option or the exercise thereof, and to make all other determinations
necessary or advisable for the administration of the Plan. Except when the
Committee consists of the entire Board, the Committee shall consist solely of
two or more persons who are both "nonemployee directors" within the meaning of
Rule 16b-3 under the Exchange Act and "outside directors" within the meaning of
Section 162(m) of the Code and the regulations promulgated thereunder.
EXHIBIT I
Page 2
A majority of the members of the Committee will constitute a quorum, and
any action taken by a majority present at a meeting at which a quorum is present
or any action taken without a meeting evidenced by a writing executed by all
members of the Committee will constitute the action of the Committee.
1.7 Conditions Precedent. The Company will not issue or deliver any Option
Agreement or any certificate for Plan Shares pursuant to the Plan prior to
fulfillment of all of the following conditions:
(a) The admission of the Plan Shares to listing on all stock exchanges on
which the Common Stock is then listed, unless the Committee determines in its
sole discretion that such listing is neither necessary nor advisable;
(b) The completion of any registration or other qualification of the sale
of the Plan Shares under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body that the Committee in its sole discretion deems necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any federal or
state governmental agency that the Committee in its sole discretion determines
to be necessary or advisable.
1.8 Reservation of Shares of Common Stock. During the term of the Plan, the
Company will at all times reserve and keep available such number of shares of
Common Stock as may be necessary to satisfy the requirements of the Plan as to
the number of Plan Shares. In addition, the Company will from time to time, as
is necessary to accomplish the purposes of the Plan, use its best efforts to
obtain from any regulatory agency having jurisdiction any requisite authority
necessary to issue Plan Shares hereunder. The inability of the Company to obtain
from any regulatory agency having jurisdiction the authority deemed by the
Company's counsel to be necessary for the lawful issuance of any Plan Shares
will relieve the Company of any liability in respect of the nonissuance of Plan
Shares as to which the requisite authority has not been obtained.
1.9 Tax Withholding.
(a) Condition Precedent. The issuance, delivery or exercise of any Options
or Plan Shares under the Plan is subject to the condition that if at any time
the Committee determines, in its discretion, that the satisfaction of
withholding tax or other withholding liabilities under any federal, state or
local law is necessary or desirable as a condition of, or in connection with,
the issuance, delivery or exercise of the Options or Plan Shares, then the
issuance, delivery or exercise thereof will not be effective unless the
withholding has been effected or obtained in a manner acceptable to the
Committee.
(b) Manner of Satisfying Withholding Obligation. When a person is required
to pay to the Company an amount required to be withheld under applicable income
tax laws in connection with the exercise of an Option or the payment of a
director fee, such payment may be made (i) in cash, (ii) by check, (iii) through
the withholding by the Company ("Company Withholding") of a portion of the Plan
Shares acquired upon the exercise of the Option having a Fair Market Value on
the date the amount of tax to be withheld is to be determined equal to the
amount required to be withheld or (iv) in any other form of valid consideration,
as permitted by the Committee in its discretion; provided
EXHIBIT I
Page 3
that a person who is required to file reports under Section 16 of the
Exchange Act shall not be permitted to elect to satisfy his withholding
obligation through Company Withholding; provided further, however, that the
Committee, in its sole discretion, may require that such person's withholding
obligation be satisfied through Company Withholding.
1.10 Exercise of Options.
(a) Method of Exercise. Each Option will be exercisable in accordance with
the terms of the Option Agreement pursuant to which the Option was granted. Any
Option will be deemed to be exercised for purposes of the Plan when written
notice of exercise has been received by the Company at its principal office from
the person entitled to exercise the Option and payment for the Plan Shares with
respect to which the Option is exercised has been received by the Company in
accordance with paragraph (b) below. No Option may be exercised for a fraction
of a Plan Share.
(b) Payment of Purchase Price. The purchase price of any Plan Shares
purchased will be paid at the time of exercise of the Option either (i) in cash,
(ii) by certified or cashier's check, (iii) by cash or certified or cashier's
check for the par value of the Plan Shares plus a promissory note for the
balance of the purchase price, which note will contain such terms and provisions
as the Committee may permit, including without limitation the right to repay the
note partially or wholly with Common Stock, (iv) by delivery of a copy of
irrevocable instructions from the Optionee to a broker or dealer, reasonably
acceptable to the Company, to sell certain of the Plan Shares purchased upon
exercise of the Option or to pledge them as collateral for a loan and promptly
deliver to the Company the amount of sale or loan proceeds necessary to pay such
purchase price or (v) in any other form of valid consideration, as permitted by
the Committee. If any portion of the purchase price or a note given at the time
of exercise is paid in shares of Common Stock, those shares will be valued at
the then Fair Market Value.
1.11 Acceleration of Right of Exercise of Options. In the case of an Option
not otherwise exercisable in full, the Committee may accelerate the
exercisability of such Option in whole or in part at any time. Notwithstanding
the provisions of any Option Agreement regarding the time for exercise of an
Option, the following provisions will apply:
(a) Mergers and Reorganizations. If the Company or its shareholders enter
into an agreement to dispose of all or substantially all of the assets of the
Company by means of a sale, merger or other reorganization, liquidation or
otherwise in a transaction in which the Company is not the surviving
corporation, any Option will become immediately exercisable with respect to the
full number of shares subject to that Option during the period commencing as of
the date of the agreement to dispose of all or substantially all of the assets
of the Company and ending when the disposition of assets contemplated by that
agreement is consummated or the Option is otherwise terminated in accordance
with its provisions or the provisions of the Article pursuant to which it was
granted, whichever occurs first; provided that no Option will be immediately
exercisable under this section on account of any agreement of merger or other
reorganization when the shareholders of the Company immediately before the
consummation of the transaction will own at least fifty percent of the total
combined voting power of all classes of stock entitled to vote of the surviving
entity immediately after the consummation of the transaction. The Option will
not become immediately exercisable if the transaction contemplated in the
agreement is a merger or reorganization in which the Company will survive.
EXHIBIT I
Page 4
(b) Change in Control. In the event of a change in control or threatened
change in control of the Company, all Options granted prior to the change in
control or threatened change in control will become immediately exercisable. The
term "change in control" for purposes of this section refers to the acquisition
of 25% or more of the voting securities of the Company by any person or by
persons acting as a group within the meaning of Section 13(d)(3) of the Exchange
Act (other than an acquisition by a person or group meeting the requirements of
clauses (i) and (ii) of Rule 13d-1(b)(1) promulgated under the Exchange Act);
provided that no change in control or threatened change in control will be
deemed to have occurred if prior to the acquisition of, or offer to acquire, ten
percent or more of the voting securities of the Company, the full Board has
adopted by not less than two-thirds vote a resolution specifically approving
such acquisition or offer. The term "person" for purposes of this section refers
to an individual or a corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated organization or
any other form of entity not specifically listed herein. Whether a change in
control is threatened will be determined solely by the Committee.
1.12 Compliance with Securities Laws. Plan Shares will not be issued with
respect to any Option or director fee unless the exercise of the Option (if
applicable) and the issuance and delivery of the Plan Shares complies with all
relevant provisions of federal and state law, including without limitation the
Securities Act, the rules and regulations promulgated thereunder and the
requirements of any stock exchange upon which the Plan Shares may then be
listed, and will be further subject to the approval of counsel for the Company
with respect to such compliance. The Committee may also require an Optionee or
director fee recipient to furnish evidence satisfactory to the Company,
including without limitation a written and signed representation letter and
consent to be bound by any transfer restrictions imposed by law, legend,
condition or otherwise, that the Plan Shares are being acquired only for
investment and without any present intention to sell or distribute the shares in
violation of any federal or state law, rule or regulation. Further, each
Optionee or director fee recipient will consent to the imposition of a legend on
the certificate representing the Plan Shares issued upon the exercise of the
Option or the payment of a director fee, restricting their transferability as
required by law or by this section.
1.13 Employment of Optionee. Nothing in the Plan or in any Option granted
hereunder will confer upon any Optionee any right to continued employment by the
Company or any of its subsidiaries or limit in any way the right of the Company
or any subsidiary at any time to terminate or alter the terms of that
employment.
1.14 Transferability of Options. The Committee may, in its discretion,
provide in any Option Agreement that Options granted hereunder may be
transferred by the holder thereof upon five days prior written notice to the
Company, subject to compliance with applicable securities laws; provided,
however, that an Incentive Option shall not be transferable other than by will
or the laws of descent and distribution.
1.15 Information to Optionees. The Company will furnish to each Optionee
copies of annual reports, proxy statements and all other reports sent to the
Company's shareholders. Upon written request, the Company will furnish to each
Optionee a copy of its most recent Annual Report on Form 10-K and each quarterly
report to shareholders issued since the end of the Company's most recent fiscal
year.
1.16 Plan Binding on Successors. The Plan will be binding upon the
successors and assigns of the Company and any of its subsidiaries that adopt the
Plan.
EXHIBIT I
Page 5
ARTICLE II
TERMS OF OPTIONS
2.1 Nature of Options. Options may be either Incentive Options or
Nonqualified Options; provided, however, that Incentive Options may be issued
only to persons who are employees of the Company or a parent or subsidiary of
the Company.
2.2 Duration of Options. Each Option granted under this Article and all
rights thereunder will expire on the date determined by the Committee, but in no
event will any Option granted under this Article expire later than ten years
after the date on which the Option is granted, and in no event will any
Incentive Option granted to a Ten-Percent Shareholder expire later than five
years after the date on which the Incentive Option is granted. In addition, each
Option will be subject to early termination as provided elsewhere in the Plan.
2.3 Rights Upon Termination of Employment or Service as a Director or
Advisor. The Committee shall have discretion to include in each Option Agreement
such provisions regarding exercisability of Options following the termination of
an Optionee's employment or service as a director or Advisor as the Committee,
in its sole discretion, deems to be appropriate.
2.4 Purchase Price. The purchase price for Plan Shares acquired pursuant to
the exercise, in whole or in part, of any Option may not be less than the Fair
Market Value of the Plan Shares at the time of the grant of the Option;
provided, that the purchase price for Plan Shares acquired pursuant to the
exercise, in whole or in part, of an Incentive Option granted to a Ten-Percent
Shareholder may not be less than 110 percent of the Fair Market Value of the
Plan Shares at the time of the grant of the Incentive Option.
2.5 Individual Option Agreements. Each Optionee will be required to enter
into a written Option Agreement with the Company. In such Option Agreement, the
Employee will agree to be bound by the terms and conditions of the Plan and such
other matters as the Committee deems appropriate.
2.6 Maximum Amount of Incentive Options First Exercisable in a Year. The
aggregate Fair Market Value of Plan Shares (determined at the time an Incentive
Option is granted) with respect to which Incentive Options are exercisable for
the first time by a person during any calendar year under all incentive stock
option plans of the Company and its subsidiaries and affiliates shall not exceed
$100,000. Any portion of an Incentive Option that exceeds this limitation shall
be considered to be a Nonqualified Option.
2.7 One-Time Grant to Directors. The Committee shall issue a Nonqualified
Option to each person who is a member of the Board on April 15, 1998. Each such
Nonqualified Option shall be for the purchase of 20,000 shares of Common Stock
at an exercise price per share equal to the Fair Market Value of a share of
Common Stock on April 15, 1998; shall be immediately exercisable; and shall
expire on April 1, 2008, subject to earlier termination as provided elsewhere in
the Plan.
EXHIBIT I
Page 6
ARTICLE III
DIRECTOR FEES
3.1 Provision for Payment. The Committee shall have the authority to
provide for the payment of reasonable fees to directors for their attendance at
meetings of the Board. Subject to Section 3.2, the amount of any such fees, the
time when they become payable, and all other terms pertaining to such fees shall
be determined by the Committee in its sole discretion.
3.2 Form of Payment. Upon the Committee's providing for the payment of
director fees pursuant to Section 3.1, the fees shall be payable in cash, in
Common Stock, or in Options, as elected by each director to whom the fees are
payable.
ARTICLE IV
AMENDMENT, TERMINATION AND ADJUSTMENT
4.1 Amendment and Termination. The Plan will terminate on February 11,
2004. No Options will be granted under the Plan after that date of termination.
The Committee may at any time amend or revise the terms of the Plan, including
the form and substance of the Option Agreements to be used in connection
herewith. No amendment, suspension, or termination of the Plan may, without the
consent of the Optionee who has received an Option hereunder, alter or impair
any of that Optionee's rights or obligations under any Option granted under the
Plan prior to that amendment, suspension, or termination.
4.2 Adjustment. If the outstanding Common Stock is increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
through merger, consolidation, combination, exchange of shares, other
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment will be made
in the maximum number and kind of Plan Shares as to which Options may be granted
and director fees paid under the Plan. A corresponding adjustment will be made
in the number or kind of shares allocated to and purchasable under unexercised
Options or portions thereof granted prior to any such change. Any such
adjustment in outstanding Options will be made without change in the aggregate
purchase price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share purchasable under the
Option. The foregoing adjustments and the manner of application of the foregoing
provisions will be determined solely by the Committee, and any such adjustment
may provide for the elimination of fractional share interests.
ARTICLE V
DEFINITIONS
As used herein with initial capital letters, the following terms have the
meanings hereinafter set forth unless the context clearly indicates to the
contrary:
5.1 "Advisor" means any person performing advisory or consulting services
for the Company, with or without compensation, to whom the Company chooses to
grant Options in accordance with the Plan, provide that bona fide services must
be rendered by such person and such services shall not be rendered in connection
with the offer or sale of securities in a capital raising transaction.
EXHIBIT I
Page 7
5.2 "Board" means the Board of Directors of the Company.
5.3 "Code" means the Internal Revenue Code of 1986, as from time to time
amended.
5.4 "Committee" shall have the meaning set forth in Section 1.6.
5.5 "Common Stock" means the Class A Common Stock, par value $0.001 per
share, of the Company or, in the event that the outstanding shares of such
Common Stock are hereafter changed into or exchanged for shares of a different
stock or security of the Company or some other corporation, such other stock or
security.
5.6 "Company" means Gulfwest Oil Company, a Texas corporation.
5.7 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
5.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
5.9 "Fair Market Value" means such value as will be determined by the
Committee on the basis of such factors as it deems appropriate; provided that if
the Common Stock is traded on a national securities exchange or transactions in
the Common Stock are quoted on the NASDAQ National Market System, such value
will be determined by the Committee on the basis of the last reported sale price
for the Common Stock on the date for which such determination is relevant, as
reported on the national securities exchange or the NASDAQ National Market
System, as the case may be. If the Common Stock is not listed and traded upon a
recognized securities exchange or on the NASDAQ National Market System, the
Committee will make a determination of Fair Market Value on the basis of the
closing bid and asked quotations for such stock on the date for which such
determination is relevant (as reported by a recognized stock quotation service)
or, in the event that there will be no bid or asked quotations on the date for
which such determination is relevant, then on the basis of the mean between the
closing bid and asked quotations on the date nearest preceding the date for
which such determination is relevant for which such bid and asked quotations
were available.
5.10 "Incentive Option" means an Option that qualifies as an incentive
stock option under Section 422 of the Code.
5.11 "Nonqualified Option" means an Option that is not an Incentive Option.
5.12 "Option" means a stock option granted under the Plan.
5.13 "Optionee" means an employee, director or Advisor to whom an Option
has been granted hereunder.
5.14 "Option Agreement" means an agreement between the Company and an
Optionee with respect to one or more Options.
5.15 "Plan" means the GulfWest Oil Company 1994 Stock Option and
Compensation Plan, as amended from time to time.
EXHIBIT I
Page 8
5.16 "Plan Shares" means shares of Common Stock issuable pursuant to the
Plan.
5.17 "Securities Act" means the Securities Act of 1933, as amended.
5.18 "Ten-Percent Shareholder" means a person who, at the time an Option is
granted, owns shares of stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or any subsidiary
or affiliate of the Company within the meaning of Section 422 of the Code.
EXHIBIT II
FORM OF
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
GULFWEST OIL COMPANY, a corporation organized and existing under an by
virtue of the laws of the State of Texas (the "Corporation"), does hereby
certify that:
1. The name of the corporation is GulfWest Oil Company.
2. The Board of Directors of the Corporation at a Meeting of the Board of
Directors held in accordance with the provisions of Article 2.37 of the Texas
Business Corporation Act of the State of Texas adopted a resolution proposing
and declaring advisable the following amendment to the Articles of Incorporation
of the Corporation:
a. The first paragraph of Article One of the Articles of Incorporation of
the Corporation is hereby amended to read in its entirety as follows:
The name of the corporation is GulfWest Energy, Inc.
3. An Annual Meeting of the Stockholders of the Corporation was held on May
18, 2001, in accordance with the provisions of Article 2.24 of the Texas
Business Corporation Act of the State of Texas, at which meeting the holders of
more than a majority of the Corporation's outstanding shares of Common Stock
approved the foregoing amendment to the Corporation's Articles of Incorporation.
4. The foregoing amendment to the Corporation's Articles of Incorporation
was duly adopted in accordance with the applicable provisions of the Texas
Business Corporation Act of the State of Texas.
5. The number of shares outstanding and entitled to vote on the amendment
was 18,445,041.
6. The number of shares voted for the amendment was ________________ and
the number voted against (or abstaining) was _____________shares.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Thomas R. Kaetzer, its President, this 18th day of May, 2001.
GULFWEST ENERGY, INC.
By: /s/ Thomas R. Kaetzer
-------------------------------
Thomas R. Kaetzer
President
|
GULFWEST OIL COMPANY
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