Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.1a-11(c) orss.240.1a-12
GULFWEST ENERGY INC.
(Name of Registrant as Specified In Its Charter)
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 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:
GULFWEST ENERGY INC.
480 N. Sam Houston Parkway E.
Suite 300
Houston, Texas 77060
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 12, 2003
This Proxy Statement is being first mailed on May 12, 2003 to shareholders
of GulfWest Energy Inc. (the "Company") by the Board of Directors (the "Board")
to solicit proxies (the "Proxies") for use at the Annual Meeting of Shareholders
(the "Meeting") to be held at the Company's offices at 480 N. Sam Houston
Parkway E., Suite 300, Houston, Texas 77060, (281) 820-1919, on Thursday, June
12, 2003 at 10:30 a.m. local time, or at such other time and place to which the
Meeting may be adjourned.
All shares represented by valid Proxies, unless the shareholder otherwise
specifies, will be voted (i) FOR the election of the persons named herein under
"Election of Directors" as nominees for election as directors of the Company for
the term described therein and (ii) at the discretion of the Proxy holders with
regard to any other matter that may properly come before the Meeting or any
adjournments thereof.
Where a shareholder has appropriately specified how a Proxy is to be voted,
it will be voted accordingly. The Proxy may be revoked at any time by providing
written notice of such revocation to GulfWest Energy Inc., 480 N. Sam Houston
Parkway E., Suite 300, Houston, Texas 77060, Attention: Jim C. Bigham. If notice
of revocation is not received by the Meeting date, a shareholder may
nevertheless revoke a Proxy if the shareholder attends the Meeting and desires
to vote in person.
RECORD DATE AND VOTING SECURITIES
The record date for determining the shareholders entitled to vote at the
Meeting is the close of business on April 30, 2003 (the "Record Date"), at which
time the Company had 18,492,541 shares of Common Stock issued and outstanding.
Common Stock is the only class of outstanding voting securities of the Company.
QUORUM AND VOTING
In order to be validly approved by the shareholders, each proposal
described herein must be approved by the affirmative vote of a majority of the
shares represented and voting at the meeting at which a quorum is present. The
presence at the Annual Meeting, in person or by Proxy, of the holders of a
one-third of the issued and outstanding shares of Common Stock is necessary to
constitute a quorum to transact business. Each share represented at the Annual
Meeting in person or by Proxy will be counted toward a quorum. In deciding all
questions and other matters, a holder of Common Stock on the Record Date shall
be entitled to cast one vote for each share of Common Stock registered in his or
her name.
1
PROPOSAL 1
ELECTION OF DIRECTORS
The Board will consist of five directors, four of whom have been nominated
by the Board for re-election and one newly nominated, 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
---- --- -------- -------------------
J. Virgil Waggoner(1)(2) 75 Chairman of the Board 1997
Thomas R. Kaetzer 44 Chief Executive Officer, 1998
President and Director
John E. Loehr(1)(2) 57 Director 1992
Marshall A. Smith III 54 Director 1989
M. Scott Manolis 49 Nominee for Director - -
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
2
J. Virgil Waggoner has served as a director of GulfWest since December 1,
1997 and was elected Chairman of the Board in May, 2002. 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 chief executive officer of JVW
Investments, Ltd., a private company.
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.
Marshall A. Smith III founded GulfWest and served as an officer in various
capacities, including president, chief executive officer and chairman of the
board, from July 1989 until his resignation in May 2002. He is currently a paid
consultant and remains a director.
John E. Loehr has served as a director of GulfWest since 1992, was chairman
of the board from September 1, 1993 to July 8, 1998 and was 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 a member of the American Institute of Certified Public
Accountants.
M. Scott Manolis is newly nominated to the board. He is the chairman and
chief executive officer of Intermarket Management, LLC and Intermarket
Brokerage, LLC. He has over twenty years experience in commodity risk
management, commodity finance and commodity-based investments. Prior to founding
Intermarket, Mr. Manolis concurrently served as managing director of Commodity
Strategies for Refco Group, LTD. and Managing Director of Global Derivatives
Strategies for Forstmann-Leff International (an asset management firm wholly
owned by Refco Group, LTD), where he directed commodity-based investments. Prior
to that, he served as a vice president and director of the Commodity Portfolio
Management Group at Jefferies and Company. He received a B. S. in Economics from
the University of South Dakota in 1979.
3
BOARD MEETINGS AND COMMITTEES
Our board of directors has established an audit committee and a
compensation committee. The functions of these committees, their members, and
the number of meetings held during 2002 are described below.
The audit committee was established to review and appraise the audit
efforts of our independent auditors, and monitor the company's accounts,
procedures and internal controls. The committee was comprised of Mr. John E.
Loehr (Chairman), Mr. J. Virgil Waggoner, Mr. John P. Boylan and Mr. Steven M.
Morris. The committee met twice in 2002.
The function of the compensation committee is to fix the annual salaries
and other compensation for the officers and key employees of the Company. The
committee was comprised of Mr. J. Virgil Waggoner (Chairman), Mr. John E. Loehr
and Mr. Steven M. Morris. The committee met twice in 2002.
COMPENSATION OF DIRECTORS
The shareholders approved an amended and restated Employee Stock Option
Plan on May 28, 1998, which included a provision for the payment of reasonable
fees in cash or stock to directors. No fees were paid to directors in 2002 or
2001.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information regarding compensation paid to
the Company's executive officers whose total annual compensation is $100,000 or
more during each of the last three years.
Long Term
Compensation
Annual Compensation Awards
--------------------------------- --------------------------------
Other All
Annual Restricted Other
Year Compen- Stock Compen-
Name and Principal Position End Salary($) Bonus($) sation($) Awards($) Options(#) sation($)
--------------------------- --- --------- ------- --------- -------- ---------- ---------
Marshall A. Smith III (1) 2002 150,000 - 12,500 - - -
2001 150,000 - - - - -
2000 125,000 - - - - -
Thomas R. Kaetzer (2) 2002 175,000 - 25,000 - 100,000 -
President and 2001 168,750 - - - 135,000 -
Chief Executive Officer 2000 125,000 - - - - -
(1) Mr. Smith served as chief executive officer until March 20, 2001 and as
chairman of the board until his resignation on May 11, 2002. As chairman of
the board, Mr. Smith devoted full time to the business of the Company.
Effective June 1,2002, he became a paid consultant at an annual salary of
$150,000 plus a $25,000 annual contribution to a life insurance savings
account to be paid monthly.
(2) Mr. Kaetzer joined the Company as chief operating officer in September,
1998, was elected president in December, 1998 and chief executive officer
on March 20, 2001. His base annual salary was increased to $175,000,
effective October 1, 2001.
4
Option Grants During 2002
Mr. Kaetzer was granted warrants to purchase 100,000 shares of common stock
at an exercise price of $.75 per share on April 30, 2002.
Option Exercises During 2002 and
Year End Option Values (1)
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at FY-End (#) at FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
---------------------- ------------------------------ ---------------------
Marshall A. Smith III 20,000 -0-
-0- -0-
Thomas R. Kaetzer 335,000 -0-
-0- -0-
(1) No shares were acquired or value realized upon the exercise of options
since no options were exercised by Mr. Smith or Mr. Kaetzer.
Employment Agreements
Effective October 1, 2001, the Company entered into an Employment Agreement
with Mr. Thomas R. Kaetzer, president and chief executive officer for a period
of three years. Under the Employment Agreement, Mr. Kaetzer receives a base
annual salary of $150,000, plus a $25,000 annual contribution to a life
insurance savings account to be paid monthly. Mr. Kaetzer will also be awarded
5-year warrants to purchase 300,000 shares of common stock issued 100,000 each
year over the three year period.
In the event of a change of control, Mr. Kaetzer will have the option to
continue as an employee of the Company under the terms of the Employment
Agreements or receive a lump-sum cash severance payment equal to 200% of his
annual base salary for the year following the change of control.
5
Report of the Compensation Committee
of the Board on Executive Compensation
On April 16, 1993, the Board established the Compensation Committee and
authorized it to develop and administer an executive compensation system, which
will enable the Company to attract and retain qualified executives. Compensation
for the chairman of the board, the president and chief executive officer, and
other executive officers is determined by the Compensation Committee which
functions under the philosophy that compensation of executive officers,
specifically including that of the president and chief executive officer, should
be directly and materially linked to the Company's performance.
On March 20, 2001, the Compensation Committee recommended and the Board
approved an annual salary of $150,000 for Mr. Smith as Chairman of the Board.
Mr. Smith founded the Company and served as president and chief executive
officer from 1989 until December 1998, when he resigned as president. He
continued as chief executive officer until March 20, 2001, when he was elected
chairman of the board, a position he held until May 11, 2002. As chairman of the
board, Mr. Smith devoted full time to the business of the Company. Effective
June 1, 2002, the Compensation Committee recommended and the Board approved
entering into a 3-year consulting agreement with Mr. Smith whereby he would
receive an annual salary of $150,000, plus a $25,000 annual contribution to a
life insurance savings account to be paid monthly.
On September 26, 2001, the Compensation Committee recommended and the Board
approved entering into an Employment Agreement with Mr. Thomas R. Kaetzer,
president and chief executive officer effective October 1, 2001, for a period of
three years. Under the Employment Agreement, Mr. Kaetzer receives a base annual
salary of $150,000, plus a $25,000 annual contribution to a life insurance
savings account to be paid monthly, and 5-year warrants to purchase 300,000
shares of common stock issued 100,000 each year over the three-year period.
Effective October 1, 2002, the Compensation Committee recommended and the Board
approved increasing his annual salary to $175,000.
This report is submitted by the members of the Compensation Committee:
Compensation Committee:
----------------------
J. Virgil Waggoner, Chairman John E. Loehr Steven M. Morris
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2002, Messrs. Waggoner, Loehr and Morris served on the
Company's Compensation Committee. No interlocking relationship exists between
any member of the Company's Board of Directors or Compensation Committee and any
member of the Board of Directors or Compensation Committee of any other company,
nor has any such interlocking relationship existed in the past.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 26, 2001, the Company obtained a line of credit of up to
$2,500,000 from a bank for which two directors, Mr. J. Virgil Waggoner and Mr.
Marshall A. Smith, were guarantors. On April 3, 2002, the balance of the line of
credit was retired and a new line of credit of up to $3,000,000 was obtained
from the bank for which Mr. Waggoner and Mr. Smith were guarantors.
6
AUDIT COMMITTEE REPORT
The Board of Directors of the Company adopted a written Audit Committee
Charter on March 22, 2001. All members of the Audit Committee are independent
directors as defined in Rule 4200(a)(14) of the National Association of
Securities Dealer Inc.'s listing standards.
The Audit Committee has reviewed and discussed with the Company's
management, and the Company's independent auditors, the audited financial
statements of the Company contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 2002.
The Audit Committee has received and reviewed the written disclosures and
the letter from the Company's independent auditors required by Independence
Standards Board Standard No. 1 (titled, "Independence Discussions with Audit
Committees"). The Company's independent auditors do not perform non-audit
services for the Company.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002, filed with the SEC.
Audit Committee:
----------------
John E. Loehr, Chairman J. Virgil Waggoner Steven M. Morris John P. Boylan
7
Stock Performance Chart
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's common stock during the five years
ended December 31, 2002 with the cumulative total return on The Nasdaq Stock
Market Index and The Nasdaq Non-Financial Stock Index. The comparison assumes
$100 was invested on December 31, 1997 in the Company's common stock and in each
of the foregoing indices and assumes reinvestment of dividends. The Company paid
no dividends during such five-year period.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG COMPANY, NASDAQ INDEX AND NASDAQ NON-FINANCIAL STOCK INDEX
12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 12/31/2002
GULFWEST $100.00 $ 20.00 $ 35.20 $ 48.00 $ 26.80 $ 17.60
NASDAQ $100.00 $140.99 $261.48 $157.77 $125.16 $ 86.53
NASDAQ NON-
FINANCIAL $100.00 $ 97.55 $ 96.50 $104.23 $114.52 $117.85
8
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of April 30, 2003 regarding
the beneficial ownership of common stock by each person known by the Company to
own beneficially 5% or more of the outstanding common stock, each director of
the Company, certain named executive officers, and the directors and executive
officers of the Company as a group. The persons named in the table have sole
voting and investment power with respect to all shares of common stock owned by
them, unless otherwise noted.
Beneficial ownership is determined in accordance with the rules of the SEC.
For the purpose of calculating the number of shares beneficially owned by a
shareholder and the percentage ownership of that shareholder, shares of Common
Stock subject to options that are currently exercisable or exercisable within 60
days of the Record Date by that shareholder are deemed outstanding.
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent
---------------- -------------------- -------
J. Virgil Waggoner 10,053,929 1,2 54.3%
Thomas R. Kaetzer 533,852 2,3 2.8%
Jim C. Bigham 245,985 2,4 1.3%
Richard L. Creel 100,000 2,5 .5%
William T. Winston 170,000 2,6 .9%
John E. Loehr 417,491 2,7 2.2%
John P. Boylan - -
Marshall A. Smith III 1,055,759 2,8 5.6%
All current directors and
officers as a group (8 persons) 12,577,016 9 65.6%
1 Includes 20,000 shares subject to currently exercisable options.
2 Shareholder's address is 480 N. Sam Houston Parkway East, Suite 300,
Houston, Texas 77060.
3 Includes 196,226 shares owned directly, 2,626 shares owned by his wife and
335,000 shares subject to currently exercisable warrants and options.
4 Includes 195,000 shares subject to currently exercisable warrants and
options.
5 Includes 80,000 subject to currently exercisable options.
6 Includes 150,000 shares subject to currently exercisable warrants and
options.
7 Includes 62,653 shares held directly; and 64,838 shares held by ST Advisory
Corporation and 290,000 shares subject to currently exercisable warrants
and options. Mr. Loehr is president and sole shareholder of ST Advisory
Corporation.
8 Includes 596,046 shares owned directly, 2,959 shares owned by his wife and
456,754 shares subject to currently exercisable warrants and options.
9 Includes 1,386,754 shares subject to currently exercisable warrants and
options.
9
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (the "SEC"). Such persons are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it with
respect to 2002, or written representations from certain reporting persons, the
Company believes that its officers, directors and persons who own more than 10%
of a registered class of the Company's equity securities have complied with all
applicable filing requirements.
INDEPENDENT AUDITORS
The Board has engaged Weaver & Tidwell, L.L.P., Dallas, Texas, as
independent auditors to examine the Company's accounts. Representatives of
Weaver & Tidwell, L.L.P. are not expected to be present at the Meeting.
Audit Fees
The aggregate fees billed by Weaver & Tidwell for professional services
rendered for the audit of the Company's annual financial statements and reviews
of the financial statements included in the Company's quarterly reports on Form
10-Q for the year 2002 were $54,538.
Non-audit Services
Weaver & Tidwell provided no non-audit services to the Company in the
year 2002.
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 2004
Annual Meeting of Shareholders they must be received by the Company not later
than January 5, 2004. Such proposals should be directed to GulfWest Energy Inc.,
480 N. Sam Houston Parkway E., Suite 300, 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.
10
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, 2002, accompanies this Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.
Houston, Texas
May 12, 2003 By Order of the Board of Directors
/s/ Jim C. Bigham
Jim C. Bigham, Secretary
11
GULFWEST ENERGY INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 12, 2003
The undersigned hereby appoints Jim C. Bigham proxy of the undersigned,
with power of substitution, to vote all shares of Common Stock of the Company
held by the undersigned which are entitled to be voted at the Annual Meeting of
Shareholders to be held June 12, 2003, and any adjournment(s) thereof as
effectively as the undersigned could do if personally present.
(1) To elect the following persons as directors, each to serve until the
next Annual Meeting of Shareholders, and until his successor is duly elected and
qualified:
J. Virgil Waggoner Thomas R. Kaetzer M. Scott Manolis
John E. Loehr Marshall A. Smith III
FOR all persons listed (except as marked to the contrary below.)
----
Withhold authority to vote for all nominees
----
Withhold authority to vote for nominee(s), named below:
----
(2) In the discretion of the Proxy holder, on any other matter that may
properly come before the meeting or any adjournments thereof.
The shares represented by this Proxy will be voted as directed. WHERE NO
DIRECTION IS GIVEN, THE SHARES WILL BE VOTED FOR MATTER (1) above.
The undersigned hereby revokes any proxy or proxies heretofore given to
vote or act with respect to the Common Stock of the Company and hereby ratifies
and confirms all that the Proxy, or his substitutes, or any of them, may
lawfully do by virtue hereof.
Please sign below, date, detach and return this page promptly in the
enclosed envelope.
Dated:
--------------------------- -----------------------------------------
IMPORTANT: Please date this Proxy and sign your name exactly
as it appears to the left. When signing on behalf of a
corporation, partnership, estate, trust or in other
representative capacity, please sign name and title. Where
there is more than one owner, each owner must sign.
GULFWEST ENERGY INC.
480 N. Sam Houston Parkway E.
Suite 300
Houston, Texas 77060
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 12, 2003
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
GulfWest Energy Inc. (the "Company") will be held at the Company's offices at
480 N. Sam Houston Parkway E., Suite 300, Houston, Texas 77060, (281) 820-1919,
on Thursday, June 12, 2003 at 10:30 a.m. local time, for the following purposes:
(1) To elect five members of the Board of Directors, which will consist of
five directors, for the term of one year or until the next Annual Meeting
of Shareholders.
(2) To transact such other business as may properly come before the Meeting
or any adjournments thereof.
The close of business on April 30, 2003 has been fixed as the record date
for determining shareholders entitled to notice of and to vote at the Annual
Meeting of Shareholders or any adjournments thereof. For a period of at least 10
days prior to the Annual Meeting, a complete list of shareholders entitled to
vote at the Annual Meeting will be open to the examination of any shareholder
during ordinary business hours at the offices of the Company at 480 N. Sam
Houston Parkway E., Suite 300, Houston, Texas 77060
Information concerning the matters to be acted upon at the Annual Meeting
is set forth in the accompanying Proxy Statement.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON ARE
URGED TO COMPLETE, DATE, SIGN, DETACH AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
/s/ Jim C. Bigham
Jim C. Bigham
Secretary
Houston, Texas
May 12, 2003