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AMERICAN INTERNATIONAL PETROLEUM CORPORATION
444 Madison Avenue, 32 Floor
New York, New York 10022
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of american International Petroleum Corporation:
Notice is hereby given that the Annual Meeting of Shareholders of American International Petroleum Corporation, a Nevada corporation (the "Company"), will be held on June 29, 1998, at The University Club, One West 54th Street, New York, New York 10022, at 10:00 a.m. Eastern Daylight Time, to consi 'der and act upon the following proposals:
I . To elect four (4) Directors to serve for a ten-n of one year and until their successors are duly elected and qualified;
2. To ratify the appointment of Hein + Associates LLP as independent public accountants of the
Company for 1998;
3. To ratify the adoption of the Company's 1998 Stock Option Plan;
4. To ratify the adoption of the Company's 1998 Stock Award Plan;
5. To ratify the issuance of 25,000 shares of Common Stock to each of four officers of the Company in
1997
6. To transact such other business as may properly come before the meeting and any adjoumment(s) thereof.
Shareholders of record at the close of business on May 5, 1998 will be entitled to vote at the meeting or any adjournment thereof.
By order of the Board of Directors,
George N. Faris, Chairman of the Board
Dated: May 15, 1998
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE. THE PROXY MAY BE REVOKED IN WRITING PRIOR TO THE MEETING, OR IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY AND VOTE YOUR SHARES IN PERSON.
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the solicitation by the Board of Directors of American International Petroleum Corporation, a Nevada corporation. (the, "Company"), of proxies for the Annual Meeting of Shareholders to be held at 10:00 a.m. Eastern Daylight T ime, on June 29, 1998, and any adjournment or adjournments thereof (the "Meeting"'). The Meeting will b e held at The University Club, One West 54th Street, New York, New York 10022. The purposes for which the Meeting is to be held are set forth in the Notice of Meeting on the preceding page. All expenses of this solicitation will be paid for by the' Company, which solicitation will be made by use of the mails and by personal contacts by the officers of the -Company. The approximate date of mailing of this Proxy Statement and the accompanying form of proxy to shareholders is May 15, 1998.
Shareholders of record at the close of business on May 5, 1998 (the "Record Date") are entitled to notice of and to vote at the Meeting. Any shareholder present at the Meeting may revoke his or her proxy by informing the Secretary of such revocation and vote in person on each matter brought before the Meeting. The accompanying proxy is also subject to revocation at any time before it is exercised by filing with the Secretary of the Company an instrument revoking the proxy or a duly executed proxy bearing a later date. All shares represented by each properly signed and returned proxy in the accompanying form, unless revoked, will be voted at the Meeting, or at any adjournment thereof, in accordance with the instructions thereon. If no instructions are specified, the shares will be voted in favor of the election of the nominees for Directors and in favor of the ratification of the auditors. If any other matters are properly presented at the Meeting, or any adjournment thereof, the persons voting the proxies will vote them in accordance with their best judgment.
As of May 5, 1998, 51,573,761 shares of the common stock of the Company, par value $.08 ("Common Stock"), were outstanding. Each share of Common Stock is entitled to one vote. The affirmative vote of the plurality of the votes cast 'in person or by proxy at the Meeting and entitled to 'II deten-nine the election of Directors. The affirmative vote of the majority of the voting power vote wi
present in person or by proxy at the Meeting and entitled to vote is required to ratify the selection of the auditors.
Votes cast by proxy or in person at the Meeting will be counted by the persons appointed by the Company to act as election inspectors for the Meeting. The election inspectors will treat shares represented by proxies that reflect abstentions as shares that are present and entitled to vote, for purposes of determining the presence of a quorum. Abstentions, however, do not constitute a vote "for" or itagainst" any matter and thus will be disregarded in the calculation of votes cast. In addition, where brokers are prohibited from exercising discretionary authority for beneficial owners who have not provided voting instructions (commonly referred to as t'broker non-votes"), those shares will not be included in the vote totals.
A list of the shareholders entitled to vote at the Meeting will be available at the Company's offices at 444 Madison Avenue, 32nd Floor, New York, New York 10022 for a period of 10 days prior to the Meeting for examination by any shareholder.
ACTIONS TO BE TAKEN AT THE ANNUAL MEETING
Proposal 1. Election of Four (4) Nominees As Directors
At the Meeting, 4 Directors are to be elected for the ensuing year and until their successors are duly elected and qualified. If, at the time of election, any of the nominees should be unavailable for election, a circumstance which is not expected by the Company, it is intended that the proxies will be voted for such substitute nominee as may be selected by the Company. The number of Directors authorized in the Articles of Incorporation is a number, not less than 3 nor more than 10, as determined by the Board, but the Board has determined to leave a vacancy on the Board, and until such time as qualified additional persons are chosen to serve. The proxies cannot be voted for more than 4 Directors at the Meeting. Proxies not marked to the contrary will be voted for the election of the following 4 persons, all of whom are standing for re-election.
Year First
ame A@e Became a Director
George N. Faris 57 Chairman of the Board and 1981
Chief Executive Officer
William R. Smart 77 Director 1987
Daniel Y. Kim 73 Director 1987
Donald G. Rynne 75 Director 1992
BIOGR,4PHICAL INFORMATION
Dr. George N. Faris has been Chairman of the Board of Directors and Chief Executive Officer of the Company since 1981. Dr. Faris was the founder of ICAT, an international engineering and construction company, and served as its President from ICAT's inception in 1972 until October 1985. Prior to 1972, Dr. Faris was the President and Chairman of the Board of Directors of Donbar Development Corporation, a company engaged in the patent development of rotary heat exchangers, devices which exchange heat from medium to medium and on which Dr. Faris was granted a number of patents. Dr. Faris received a Ph.D. in Mechanical Engineering from Purdue University in 1968.
Dr. Daniel Y. Kim has served as a member of the Company's Board of Directors since July 1987. Dr. Kim is a Registered Professional Geophysicist in California and Colorado. From 1981 until 1984, Dr. Kim was President and Chief Executive Officer of Kim Tech, Inc., a research and development company. In 1984, Kim Tech, Inc. was merged into Bolt Industries, a public company engaged in the manufacture of air guns and auxiliary equipment used to generate shock waves in seismic exploration for 'I, gas and minerals. Dr. Kim has been a director of Bolt Industries since 1984. From 1977 to 1980, Dr. ol
Kim was Chief Consulting Geophysicist for Standard Oil Company of Indiana. Dr. Kim received a B.S. degree in Geophysics and a Ph.D. degree in Geophysics from the University of Utah in 1951 and 1955, respectively.
Mr. Donald G. Rynne has served as a member of the Company's Board of Directors since September 1992. Mr. Rynne has been Chain-nan of the Board of Directors of Donald G. Rynne & Co., Inc., a privately owned company engaged in international consulting and trading, since founding that company in 1956. Mr. Rynne is involved in international maritime trading and consulting, dealing primarily in the Middle East in hydrocarbon products and capital equipment. Mr. Rynne received a B.A. degree from Columbia University in 1949.
Mr. William R. Smart has served as a member of the Company's Board of Directors since June 1987. Since November 1, 1983, Mr. Smart has been Senior Vice President of Cambridge Strategic Management Group, a management consulting firm. Mr. Smart was Chairman of the Board of Directors of Electronic Associates, Inc., a manufacturer of electronic equipment, from May 1984 until May 1992. He has served on the Board of Directors of Apollo Computer Company and Executone Information Systems, Inc. Mr. Smart is presently a director of National Datacomputer Company and Hollingsworth and Voss Company. Mr. Smart received a B.S. degree in Electrical Engineering from Princeton University in 1941.
The business background of each executive officer of the Company, to the extent not set forth above, is described below.
Mr. Denis J. Fitzpatrick, 53, Joined the Company in August 1994 as Vice President, Secretary and Chief Financial Officer. During the previous five years, Mr. Fitzpatrick was the Chief Financial Officer of Nahama & Weagant Energy Company, a publicly traded independent exploration and production company. Mr. Fitzpatrick has held various accounting and financial management positions during his 24 years in the oil and gas industry. He has also served as a Director or Officer of the Council of Petroleum Accountants Society; served on the Tax Committee of the American Petroleum Institute and as a member of the American Management Association. Mr. Fitzpatrick received a B.S. degree in Accounting from the University of Southern California in 1974.
Mr. William L. Tracy, 50, has been employed by the Company since February 1992 and has been Treasurer and Controller of the Company since August 1993. From May 1989 until February 1992, Mr. Tracy was self-employed as an energy consultant with the Commonwealth of Kentucky. From June 1985 until May 1989, Mr. Tracy served as President of City Gas and Transmission Corp., a public oil and gas production and refining company. He received his BBA from Bellarmine College in Louisville, Kentucky in 1974.
The Company's executive officers are appointed annually by the Board to serve until their successors are duly elected and qualified.
CER TAIN INFORMA TION CONCERNING THE BOARD OF DIRECTORS
The Company has three standing committees, the Executive Committee, to oversee the day to day operations of the Company; the Compensation Committee, to review and set the compensation to be received by various officers and other employees and consultants of the Company; and the Audit Committee, to review the financial reporting and internal controls of the Company. The Executive Committee is composed of Messrs. Smart (Chairman), Rynne and Faris, the Compensation Committee is composed of Messrs. Kim (Chain-nan), Smart and Rynne, and the Audit Committee is composed of Messrs. Smart (Chain-nan) Rynne and Kim.
The Board of Directors held 12 meetings during the year ended December 31, 1997. The Compensation Committee held 1 meeting and the Audit Committee held I meeting during 1997. Each incumbent Director attended at least 75% of such Board meetings and of the meetings of Committees on which such Director served.
During 1997, the Company reimbursed outside Directors for their actual Company-related expenses, including the costs of attending Directors' meetings. The Company accrued, for each outside Director, $500 per month for serving in such capacity; $500 for participation in each Committee meeting, if such Director served on a Standing Committee of the Board of Directors; and $500 for each Board meeting attended in person.
SECUR-ITIES OWNERSHIP OF MANAGEMENTAND PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of the Record Date, regarding the beneficial ownership of Common Stock of (i) each person known by the Company to be the beneficial owner of more than 5% of the Common Stock; (ii) each Director; (iii) each executive officer named in the Summary Compensation Table below; and (lv) all Directors and executive officers as a group.
Name and Address Amount and Nature of Percent
Beneficial Ownershi af Cl-ass
George N. Faris 3,370,000(2) 6.3%
Daniel Y. Kim 163,500(3)
Donald G. Rynne 666,862(4) 1.3%
William R. Smart 282,608(5)
Denis J. Fitzpatrick 202,500(6)
William L. Tracy 121,240(7)
All officers and Directors
as a group (consisting of
6 persons) 4,806,710(8) 8.9%
* Less than 1% of class
(1) All officers and Directors have an address c/o the Company, 444 Madison Avenue, Suite 3203, New York, NY 10022.
(2) includes 1,764,500 shares of common stock issuable upon the exercise of stock options owned by Dr. Faris. Excludes 187,500 unexercisable options.
(3) includes 155,500 shares of common stock issuable upon the exercise of stock options owned by Dr. Kim. Excludes 50,000 unexercisable options.
(4) includes 160,000 shares of common stock issuable upon the exercise of stock options owned by Mr. Rynne. Excludes 50,000 unexercisable options.
(5) Includes 192,000 shares of common stock issuable upon the exercise of stock options owned by Mr. Smart. Excludes 50,000 unexercisable options.
(6) Includes 202,500 shares of common stock issuable upon the exercise of stock options owned by Mr. Fitzpatrick. Excludes 42,500 unexercisable options.
(7) Includes 121,240 shares of common stock issuable upon the exercise of stock options owned by Mr. Tracy. Excludes 25,000 unexercisable options.
(8) includes all of the shares of common stock issuable upon the exercise of options and warrants described in Notes (2) through (7) above.
4 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and Directors, and persons who own more than 10 percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such reporting persons are required by regulation to furnish the Company with copies of all Section 16(a) reports that they file.
Based solely on its review of the copies of such reports received by it, or written representations from certain reporting persons that Form 5's were filed for those persons, the Company believes that, during the period from January 1, 1997 through December 31, 1997, all filing requirements applicable to its officers, Directors and greater than 10 percent beneficial owners were complied. |
