SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
and Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[x] Definitive Information Statement
Gulfport Energy Corporation, Inc.
---------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check Appropriate Box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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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:
GULFPORT ENERGY CORPORATION, INC.
6307 WATERFORD BLVD., SUITE 100
OKLAHOMA CITY, OKLAHOMA 73118
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INFORMATION STATEMENT
This Information Statement is being furnished to the stockholders of
Gulfport Energy Corporation, a Delaware corporation (the "Company"), in
connection with the election of five directors for the coming year.
On November 28, 2001, the Board of Directors nominated five persons to
serve on the Board of Directors of the Company for the coming year.
December 15, 2001 has been fixed as the record date (the "Record Date") for
the determination of the Company stockholders entitled to notice of, and to vote
for the nominated directors. The Company had 10,146,566 shares outstanding as
of the Record Date. Each share of common stock entitles the holder thereof to
one vote on matters submitted to the stockholders.
Under Delaware law, the affirmative vote of the holders of a majority of
the outstanding shares of the Company's Common Stock is required to elect the
nominated directors. On December 15, 2001, in accordance with Delaware law, the
holders of a majority of the outstanding shares of the Company's Common Stock
executed a written consent electing the five directors for the next year.
ACCORDINGLY, WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE NOT REQUESTED TO
SEND US A PROXY.
This Information Statement is being furnished by the Company and was first
mailed on or about December 16, 2001 to the holders of the Company Stock as of
the close of business on the Record Date.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISION HAS PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS INFORMATION STATEMENT. ANY
REPRESENTATIONS TO THE CONTRARY IS UNLAWFUL.
The date of this Information Statement is December 16, 2001.
ELECTION OF DIRECTORS
On November 28, 2001 the Board of Directors nominated five persons to serve
on as the Board of Directors of the Company for the coming year. On December
15, 2001, in accordance with Delaware law, the holders of a majority of the
outstanding shares of the Company's Common Stock executed a written consent
electing the five nominated persons as Directors of the Company. Each director
will serve until the next annual meeting or until he is succeeded by another
qualified director who has been elected.
All five of the persons elected are now members of the Board of Directors.
The following information about the directors was provided by the directors:
NAME AGE POSITION
---- --- --------
Mike Liddell 48 Chairman of the Board, Chief Executive Officer
and Director
Robert E. Brooks 55 Director
David L. Houston 49 Director
Mickey Liddell 40 Director
Dan Noles 54 Director
MIKE LIDDELL, has served as a director of Gulfport since July 11, 1997, as
Chief Executive Officer since April 28, 1998 and as Chairman of the Board since
July 28, 1998 and President since July 15, 2000. In addition, Mr. Liddell served
as Chief Executive Officer of DLB Oil & Gas, Inc. from October 1994 to April 28,
1998, and as a director of DLB from 1991 through April 1998. From 1991 to 1994,
Mr. Liddell was President of DLB. From 1979 to 1991, he was President and Chief
Executive Officer of DLB Energy. He received a B.S. degree in education from
Oklahoma State University. He is the brother of Mickey Liddell and
brother-in-law of Dan Noles.
ROBERT E. BROOKS, has served as a director of Gulfport since July 11, 1997.
Mr. Brooks is currently a partner with Brooks Greenblatt, a commercial finance
company located in Baton Rouge, Louisiana that was formed by Mr. Brooks in July
1997. Mr. Brooks is a Certified Public Accountant and was Senior Vice President
in charge of Asset Finance and Managed Assets for Bank One, Louisiana between
1993 and July 1997. He received his B.S. degree from Purdue University in
mechanical engineering in 1969. He obtained graduate degrees in finance and
accounting from the Graduate School of Business at the University of Chicago in
1974.
DAVID HOUSTON, has served as a director of Gulfport since July 1998. Since
1991, Mr. Houston has been the principal of Houston & Associates, a firm that
offers life and disability insurance, compensation and benefits plans and estate
planning. Prior to 1991, he was President and Chief Executive Officer of Equity
Bank for Savings, F.A. He currently serves on the board of directors and
executive committee of Deaconess Hospital, Oklahoma City, Oklahoma, and is the
former chair of the Oklahoma State Ethics Commission and the Oklahoma League of
Savings Institutions. He received a Bachelor of Science degree in business from
Oklahoma State University and a graduate degree in banking from Louisiana State
University.
MICKEY LIDDELL, has served as a director of Gulfport since January 1999.
Mr. Liddell is currently the President of Entertainment Services, LLC, a motion
picture production company in Los Angeles, California. Prior to 1994, Mr.
Liddell owned and managed wholesale nutrition product stores in Los Angeles.
Mr. Liddell received a Bachelor of Arts from the University of Oklahoma in
Communications in 1984 and a graduate degree from Parson School of Design in New
York, New York in 1987. He is the brother of Mike Liddell and brother-in-law of
Dan Noles.
DAN NOLES, has served as a director of Gulfport since January 2000. Mr.
Noles has served as the president of Atoka Management Company, an oilfield
equipment company since 1993. Mr. Noles received his Bachelor degree in Finance
from the University of Oklahoma in 1970. Mr. Noles is the brother-in-law of
Mike Liddell and Mickey Liddell.
BOARD MEETINGS AND COMMITTEES
Board of Directors. The Board of Directors held four meetings in 2000. No
director missed more than 25% of the meetings held by the Board. In addition to
the four meetings, the Board adopted three resolutions by written consent.
Audit Committee. The Audit Committee recommends to the whole Board of
Directors the selection of independent certified public accountants to audit
annually the books and records of the Company, reviews the activities and report
of the independent certified public accountants, and reports the results of such
review to the whole Board of Directors. The Audit Committee also monitors the
internal controls of the Company. During 2000, the Audit Committee held four
meetings, and was composed of Robert E. Brooks, David Houston and Mickey
Liddell, all of whom are non-employee directors.
Compensation Committee. The Compensation Committee considers executive
employment agreements, adoption of employee benefit plans and other issues
related to compensation and employee benefits. The Compensation Committee is
comprised of Robert Brooks, David Houston and Mickey Liddell, all of whom are
non-employee directors. The Committee held no meetings during 2000.
Other Functions. In 2000, the Board did not delegate its functions to any
other standing committee, and thus did not create executive, nominating or other
similar committees.
DIRECTOR COMPENSATION
The Company pays its non-employee directors a monthly retainer of $1,000
and a per meeting attendance fee of $500 and reimburses all ordinary and
necessary expenses incurred in the conduct of the Company's business.
Liability of Directors and Officers and Indemnification
As permitted by the Delaware General Corporate Law (the "DGCL"), the
Company's Certificate of Incorporation eliminates in certain circumstances the
monetary liability of the directors for a breach of their fiduciary duty. These
provisions do not eliminate liability of the directors for (i) a breach of the
director's duty of loyalty to the Company or its Stockholders, (ii) acts or
omissions by a director not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) liability arising under Section
174 of the DGCL (relating to the declaration of dividends and purchase or
redemption of shares in violation of the DGCL) or (iv) any transaction from
which the director derived an improper personal benefit. In addition, these
provisions do not eliminate the liability of a director for violations of the
Federal securities laws, nor do they limit the rights of the Company or its
Stockholders, in appropriate circumstances, to seek equitable remedies such as
injunctive or other forms of non-monetary relief. Such remedies may not be
effective in all cases.
The Bylaws provide that the Company shall indemnify its directors and
officers to the fullest extent permitted by the DGCL. Under such provisions,
any director or officer, who in his capacity as such, is made or threatened to
be made a party to any suit or proceeding, may be indemnified if the Board of
Directors determines such director or officer acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Company. The Bylaws and the DGCL, further provide that such indemnification
is not exclusive of any other rights to which such individuals may be entitled
under the Certificate of Incorporation, the Bylaws, any agreement, vote of
Stockholders or disinterested directors or otherwise.
OTHER INFORMATION ABOUT DIRECTORS, OFFICERS,
AND CERTAIN STOCKHOLDERS
Beneficial Ownership of Directors, Officers and Certain Stockholders
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of December 31, 2000, by (i) each
director, (ii) each named executive officer in the Summary Compensation Table,
(iii) each person known or believed by the Company to own beneficially five
percent or more of the Common Stock and (iv) all directors and executive
officers as a group.
Beneficial Ownership
-------------------------
Name and Address of Beneficial Owner (1) Shares Percentage (2)
- ---------------------------------------------- ------ --------------
Mike Liddell (3)
6307 Waterford Blvd., Suite 100
Oklahoma City, OK 73118 917,179 9.04%
Charles E. Davidson (4)(5)
411 West Putnam Avenue
Greenwich, CT 06830 6,154,855 60.66%
Peter M. Faulkner (6)
767 Third Avenue, Fifth Floor
New York, NY 10017 777,384 7.66%
Lisa Holbrook
6307 Waterford Blvd., Suite 100
Oklahoma City, OK 73118 * *
Michael G. Moore
6307 Waterford Blvd., Suite 100
Oklahoma City, OK 73118 * *
Robert Brooks
343 3rd Street, Suite 205
Baton Rouge, LA 70801 * *
David Houston
1120 NW 63rd, Suite 360
Oklahoma City, OK 73116 * *
Mickey Liddell
8265 Sunset Blvd., Suite 200
Los Angeles, CA 90046 * *
All directors and executive officers as a group
(10 individuals) 1,143,052 9.04%
* Less than one percent
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(1) Unless otherwise indicated, each person or group has sole voting power
with respect to all listed shares.
(2) Each listed person's percentage ownership is determined by assuming that
options, warrants and other convertible securities that are held by such
person and that are exercisable or convertible within sixty (60)
days have been exercised.
(3) Includes shares of Common Stock held of record by Liddell Investments,
L.L.C. Mr. Liddell is the sole member of Liddell Investments, L.L.C.
(4) Includes 3,574,722 shares of Common Stock held by CD Holding, L.L.C. and
784,273 shares of Common Stock held in an IRA for Mr. Davidson. Mr.
Davidson is the sole member of CD Holding, L.L.C. Mr. Davidson is
the Chairman and controlling member of Wexford Management, L.L.C.
Mr. Davidson disclaims beneficial ownership of the 1,795,860 shares
owned by the Wexford Entities (as defined below). However, Mr. Davidson
controls 61% of the issued stock of Gulfport. As a result, Mr. Davidson
is able to influence significantly and possibly control matters
requiring approval of the shareholders including the election of
directors.
(5) Includes 1,795,860 shares of Common Stock owned by the following
investment funds (the "Wexford Entities") that are affiliated with
Wexford Management: Wexford Special Situations 1996, L.P.; Wexford
Special Situations 1996 Institutional, L.P.; Wexford Special Situations
1996, Limited; Wexford-Euris Special Situations 1996, L.P.; Wexford
Spectrum Investors, L.L.C.; Wexford Capital Partners II, L.P.;
Wexford Overseas Partners I, L.P.
(6) Includes shares of Common Stock owned by the following investment funds:
PMF Partners, L.L.C., Rumpere Capital, L.P., and Rumpere Capital Fund,
Ltd.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or accrued to the
Chief Executive Officer and any other executive officer whose annual
compensation exceeded $100,000 (the "named executives") through the three years
ended December 31, 2000, in all capacities in which they served during that
period.
Long Term
Name and Principal Compensation All Other
Position Year Annual Compensation (1) Awards Awards (2)
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Salary Bonus
------ -----
Mike Liddell 2000 $200,000 $16,667 (4) ---
Chief Executive 1999 200,000 4,166 (3) ---
Officer (5) 1998 133,333 --- --- ---
Mark Liddell 2000 $ --- $ --- --- ---
President (6) 1999 200,000 4,166 (3) ---
1998 133,333 --- --- ---
Raymond P. Landry 2000 $ --- $ --- --- ---
Executive Vice- 1999 --- --- --- ---
President (7) 1998 156,000 --- --- ---
Ronald Youtsey 2000 $ --- $ --- --- ---
Chief Financial 1999 --- --- --- ---
Officer (8) 1998 104,166 --- --- ---
(1) Amounts shown include cash and non-cash compensation earned and
received by the named executives as well as amounts earned but deferred
at their election.
(2) The Company provides various perquisites to certain employees, including
the named executives. In each case, the aggregate value of the
perquisite provided to the named executives did not exceed 10% of such
named executive's annual salary and bonus.
(3) Mike Liddell and Mark Liddell each received stock options exercisable at
$2.00 per share for 253,635 shares. These options had no readily
determinable market value at the date of issuance. Mark Liddell's
options were surrendered to Gulfport upon his death at December 24,
1999.
(4) Mike Liddell received stock options exercisable at $2.00 per share for
203,635 shares. These options had no readily determinable market value
at the date of issue.
(5) Mr. Mike Liddell became the Chief Executive Officer of the Company on
April 28, 1998. Mr. Liddell's salary was not paid directly by Gulfport
until after June 1, 1999. Through June 1, 1999, his services were
provided pursuant to an Administrative Services Agreement and the
compensation amount reflects the portion of his compensation from DLB
Equities, L.L.C. that was allocated to the Company under such agreement.
See "Certain Transactions".
(6) Mr. Mark Liddell was named President of the Company on April 28, 1998.
Mr. Liddell's salary was not directly paid by Gulfport until after
June 1, 1999. Through June 1, 1999, his services were provided pursuant
to an Administrative Services Agreement and the compensation amount
reflects the portion of his compensation from DLB Equities, L.L.C. that
was allocated to the Company under such agreement. Mr. Liddell
passed away on December 24, 1999.
(7) Mr. Landry received a $25,000 sign-on bonus per the terms of his
employment contract, payment of which was deferred to 1996. Mr. Landry
received $78,000 in compensation during 1997 as a participant of the
employee stay bonus program. Mr. Landry ceased to be an Executive
Vice President on May 5, 1998, but continued to serve as an employee
of the Company until July 11, 1999.
(8) Mr. Ronald Youtsey served as the Company's Chief Financial Officer from
July 1997 until October 1998. During the period from January 1, 1998
until April 28, 1998, Mr. Youtsey's compensation was paid by DLB Oil &
Gas, Inc. under the First Administrative Service Agreement. From April
28, 1998 until October 1998, DLB Equities, LLC pursuant to the Amended
Administrative Service Agreement, paid Mr. Youtsey's compensation.
The compensation amount reflects the portion of his compensation
allocated to the Company in 1998.
Stock Options Granted
On June 1, 1999, Mike Liddell, Chief Executive Officer and Chairman of the
Board, received a grant of options for 2.5% of the issued shares of Common Stock
at an exercise price of $2.00 per share. The options are exercisable and vest as
to 35% of the shares on June 1, 2000, an additional 35% of the shares will
become exercisable and vest on June 1, 2001, and the remaining shares will
become exercisable and vest on June 1, 2002. On January 17, 2000, Mr. Liddell
was granted an additional 203,635 giving him a total of 457,270 options at the
date of this filing.
On June 1, 1999, Mark Liddell, President, received a grant of options for
2.5% of the outstanding shares of Common Stock at an exercise price of $2.00 per
share. The options were scheduled to be exercisable and vest as to 35% of the
shares on June 1, 2000, an additional 35% of the shares were to become
exercisable and vest on June 1, 2001, and the remaining shares were to become
exercisable and vest on June 1, 2002. On December 24, 1999, Mr. Liddell died.
Pursuant to the terms of Mr. Liddell's Stock Option Agreement, all of his
options were surrendered to Gulfport.
On January 17, 2000 and July 15, 2000, respectively, Lisa Holbrook and Mike
Moore each received 10,000 options. The options vest in three equal installments
and are exercisable at $2.00 per share.
The Option Agreements for Mike Liddell, Lisa Holbrook, and Mike Moore
provide that if the Company at any time increases the number of outstanding
shares of the Company or alters the capitalization of the Company in any other
way, the stock options shall be adjusted to reflect such changes.
The following table sets forth information concerning the grant of stock options
during 2000 to the named executives.
Securities
Underlying Options Exercise Price at Appreciation for Option
Granted Price Date Expiration Term(1)
Name 2000 ($/SH) Of Grant Date 5% ($) 10% ($)
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Mike Liddell 203,635 77% $ 2.00 $0.000 01/17/10 $296,379 $751,083
Lisa Holbrook 10,000 04% 2.00 2.375 01/17/10 12,578 31,875
Mike Moore 10,000 04% 2.00 4.250 07/15/10 12,578 31,875
1) The assumed annual rates of increase are based on an annually compounded
increase of the exercise price through a presumed ten-year option
term.
No options were granted to the named executives or directors in 1998.
Stock Option Holdings
The following table sets forth the number of unexercised options held by
named executives as of December 31, 2000. No options were exercised in 1999 or
1998 and no options were in the money as of December 31, 2000.
Number of Unexercised
Options at Fiscal Year End
--------------------------
Name Exercisable Unexercisable
- -------------------------------------------------------------------------------
Mike Liddell (1) 88,772 368,498
Lisa Holbrook (1) --- 10,000
Mike Moore (1) --- 10,000
(1) These options were exercisable at $2.00 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company is comprised of all non-employee
directors of Gulfport, which include Robert Brooks, David Houston and Mickey
Liddell. Mickey Liddell is the President of Entertainment Services, LLC. Mike
Liddell is a member of Entertainment Services, LLC and assists in making
compensation decisions for Mickey Liddell. Other than herein disclosed, no
member of the Committee is a former or current officer or employee of the
Company and no employee of the Company serves or has served on the compensation
committee (or board of directors of a corporation lacking a compensation
committee) of a corporation employing a member of this Committee.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons beneficially owning more that 10% of the
Company's stock to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission and with the Company.
Based solely on a review of the reports sent to the Company and written
responses from the executive officers and directors, the Company believes that
each of its directors and executive officers met his Section 16(a) filing
obligations.
CERTAIN TRANSACTIONS
Line of Credit
On June 28, 2000, the Company repaid in full its credit facility at ING
with cash and proceeds from a new credit facility established at Bank of
Oklahoma (BOK) in the amount of $1,600,000. The BOK credit facility calls for
interest to be paid monthly in addition to twelve monthly principal reductions
of $100,000 each with the remaining balance due August 31, 2001. On March 1,
2001, Gulfport refinanced the outstanding balance due under this facility.
Under the terms of the new agreement, monthly principal payments of $110,000 are
to be made beginning July 1, 2001, with the remaining outstanding principal due
October 1, 2002. The refinance note bears interest at Chase Manhattan Prime
rate plus 1%.
PERFORMANCE GRAPH
The following graph compares the market values of the Company's Common
Stock to the Nasdaq Market Index and a group of companies selected by the
Company and with whom the Company competes (the "Peer Group"). The graph
assumes an investment of $100 on July 11, 1997 (the Plan Confirmation Date), and
that all dividends were reinvested and are weighted on a market capitalization
basis. Following confirmation of the Company's Plan on July 11, 1997, through
December 31, 1997, the Company's Common Stock traded sporadically in the
over-the-counter market. During the period, no bid/ask prices were posted. For
purposes of this graph, the Company has used the price of $3.50 per share as the
initial per share price on July 11, 1997. The $3.50 per share price was used
for the settlement of claims in the Company's Plan. The closing trade price in
December 1997 occurred on December 22, 1997, and was $3.50 per share. The 1999
price reflects the closing price of the stock on last trading day in 1999. The
2000 price reflects the closing price of stock on the last trading day in 2000.
The stock is currently trading in the over-the-counter market. Given the
sporadic trading and the lack of significant trading volume, the results shown
on the graph may not necessarily be indicative of long-term results.
(Graphic Omitted)
The Peer Group is composed of Kelley Oil & Gas, Inc., PetroCorp
Incorporated, St. Mary Land & Exploration Company, Stone Energy Corporation and
Texas Meridian Resources Corporation. Pursuant to SEC rules, this section of the
Proxy Statement is not deemed "Filed" with the SEC and is not incorporated by
reference into the Company's Annual Report on Form 10-K.
INDEPENDENT ACCOUNTANTS
The firm of Hogan & Slovacek PC served as the Company's independent
auditors for 2000. This firm has advised the Company that it has no direct or
indirect financial interest in the Company. The Board has not asked the
Stockholders to ratify its selection of auditors, believing that stockholder
ratification is anachronous and unnecessary.
Auditors' Fees
Audit Fees. For professional services rendered by them for the audit of
our annual financial statements for 2000, and reviews of the financial
statements included in our Quarterly Reports on Form 10-Q for 2000, Hogan &
Slovacek PC billed us fees in the aggregate amount of $44,000.
Financial Information Systems Design and Implementation Fees. Hogan &
Slovacek PC billed us no fees for professional services rendered by them for
2000 in connection with financial information systems design and implementation.
All Other Fees. For professional services other than those described above
rendered by them for 2000, Hogan & Slovacek billed us fees in the aggregate
amount of $700.
ADDITIONAL INFORMATION
The Company's Annual report on Form 10-K, including the financial
statements and schedule thereto, for the year ended December 31, 2000, as filed
with the Securities and Exchange Commission, will be furnished without charge to
any stockholder upon written request addressed to Ms. Lisa Holbrook, General
Counsel, Gulfport Energy Corporation, 6307 Waterford Blvd., Suite 100, Oklahoma
City, OK 73118. Stockholders requesting exhibits to the form 10-K will be
provided the same upon payment of reproduction expenses.
By the Order of the Board of Directors
Mike Moore
Chief Financial Officer
December 16, 2001