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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Callon Petroleum Company
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
CALLON PETROLEUM COMPANY
200 NORTH CANAL STREET
NATCHEZ, MISSISSIPPI 39120
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD FRIDAY, JANUARY 23, 2004
To the Stockholders of
Callon Petroleum Company:
Notice is hereby given that a Special Meeting of Stockholders (the
"SPECIAL MEETING") of Callon Petroleum Company, a Delaware corporation
("COMPANY"), will be held in Natchez, Mississippi, on Friday, January 23, 2004,
at 9:00 a.m., at the Company's executive offices located at 200 North Canal
Street, Natchez, Mississippi 39120.
The sole purpose of the Special Meeting is to approve an amendment to
Article Four of the Company's Certificate of Incorporation increasing the
Company's number of authorized shares of common stock from 20,000,000 shares to
30,000,000 shares.
Stockholders of record at the close of business on December 22, 2003
will be entitled to notice of, and to vote at, the Special Meeting, or any
adjournment or adjournments thereof. The Special Meeting may be postponed or
adjourned from time to time to obtain a quorum, solicit additional votes in
favor of the proposal or for other purposes.
Stockholders are cordially invited to attend the Special Meeting in
person. Those individuals who will not attend and who wish for their shares to
be voted are requested to sign, date and mail promptly the enclosed proxy card
for which a postage-prepaid return envelope is provided.
By Order of the Board of Directors
/s/ ROBERT A. MAYFIELD
Robert A. Mayfield
Corporate Secretary
Natchez, Mississippi
December 23, 2003
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF YOU
CANNOT ATTEND, PLEASE SIGN AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT
PROMPTLY IN THE RETURN ENVELOPE ENCLOSED FOR YOUR USE. NO POSTAGE IS REQUIRED IF
THE ENVELOPE IS MAILED IN THE UNITED STATES.
PROXY STATEMENT
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CALLON PETROLEUM COMPANY
200 NORTH CANAL STREET
NATCHEZ, MISSISSIPPI 39120
(601) 442-1601
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SPECIAL MEETING OF STOCKHOLDERS
FRIDAY, JANUARY 23, 2004
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SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Callon Petroleum Company, a
Delaware corporation (the "COMPANY"), from holders ("STOCKHOLDERS") of the
common stock, $.01 par value per share ("COMMON STOCK"), of the Company for use
at the Special Meeting of Stockholders of the Company to be held on Friday,
January 23, 2004, at 9:00 a.m., at the Company's executive offices located at
200 North Canal Street, Natchez, Mississippi 39120, and at any adjournment or
adjournments thereof (such meeting or adjournment thereof is referred to herein
as the "SPECIAL MEETING"), for the purpose of considering and voting upon the
matters set forth in the accompanying Notice of Special Meeting of Stockholders
("NOTICE").
A proxy in the form accompanying this Proxy Statement (each a "PROXY"),
when properly executed and returned, will be voted in accordance with the
directions specified on the Proxy, and otherwise in accordance with the judgment
of the persons designated therein as proxies. Any Proxy which does not withhold
authority to vote or on which no other instructions are given will be voted in
favor of the amendment to Article Four of the Company's Certificate of
Incorporation, as amended ("CERTIFICATE"), increasing the Company's number of
authorized shares of Common Stock from 20,000,000 shares to 30,000,000 shares.
Any Proxy may be revoked at any time before it is exercised by delivering, to
the Secretary of the Company, written notice of revocation or a duly executed
Proxy bearing a later date, or by voting in person at the Special Meeting.
This Proxy Statement and the accompanying Notice and form of Proxy are
being mailed to Stockholders on or about December 23, 2003.
Proxies will be solicited primarily by mail, but employees of the
Company may also solicit Proxies in person or by telephone. Arrangements may be
made with brokerage firms or other custodians, nominees, and fiduciaries to send
proxy materials to the beneficial owners of the Common Stock of the Company. All
costs incurred in the solicitation of Proxies will be borne by the Company.
The Board of Directors has fixed the close of business on December 22,
2003 as the record date (the "RECORD DATE") for the determination of
Stockholders entitled to notice of, and to vote at, the Special Meeting. A
complete list of all Stockholders entitled to vote at the Special Meeting will
be open for examination by any Stockholder during normal business hours for a
period of ten days prior to the Special Meeting at the offices of the Company,
200 North Canal Street, Natchez, Mississippi 39120. Such list will also be
available at the Special Meeting and may be inspected by any Stockholder who is
present. On the Record Date, the Company's outstanding voting securities
consisted of 13,929,544 shares of Common Stock. Holders of Common Stock will be
entitled to one vote per share of Common Stock held of record on the Record Date
for the proposal to be presented at the Special Meeting.
No business other than the consideration of the amendment to the
Certificate will be considered or acted upon at the Special Meeting.
No Stockholder of the Company, whether voting for, against or
abstaining with respect to the amendment to the Company's Certificate, will be
entitled to appraisal rights or the right to receive cash for shares under the
Delaware General Corporation Law or the Company's Certificate or Bylaws.
PROPOSAL
AMENDMENT TO ARTICLE FOUR OF THE COMPANY'S CERTIFICATE
TO INCREASE THE COMPANY'S NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK FROM 20,000,000 SHARES TO 30,000,000 SHARES
GENERAL INFORMATION
The Company's Board of Directors has unanimously adopted a resolution
approving, and recommending to our Stockholders for their approval, a proposal
to amend Article Four of the Company's Certificate to increase the Company's
number of authorized shares of Common Stock from 20,000,000 shares to 30,000,000
shares. The form of the proposed amendment is follows:
The Certificate is hereby amended by amending and restating the first
sentence of Article Four to be and read as follows:
"The Corporation shall have authority to issue two classes of
stock, and the total number authorized shall be 30,000,000 shares of
Common Stock, par value $.01 per share, and 2,500,000 shares of
Preferred Stock, par value $.01 per share."
REASONS FOR INCREASING THE AUTHORIZED SHARES OF COMMON STOCK
Currently, the Company's outstanding capital stock consists of
20,000,000 shares of Common Stock and 2,500,000 shares of preferred stock. As of
the Record Date, there were 13,929,544 shares of Common Stock issued and
outstanding, 1,365,593 shares of Common Stock issuable upon conversion of
outstanding Preferred Stock, 1,924,210 shares of Common Stock issuable upon
exercise of outstanding warrants, 2,450,867 shares of Common Stock issuable upon
exercise of outstanding options, 197,158 shares of Common Stock authorized for
issuance, but not yet subject to grants, pursuant to the Company's stock
incentive plans and 93,784 shares of Common Stock authorized for issuance
pursuant to the Company's Employee Stock Purchase Plan. In addition, the Company
is required to contribute approximately 15,000 shares of Common Stock to the
Company's Employee Savings and Protection (401K) Plan in January 2004 to satisfy
its employer contribution and matching obligations. Consequently, the Company
has approximately 23,844 shares of Common Stock available for general corporate
purposes.
As a general matter, the Board of Directors does not believe the
Company has an adequate number of shares available for issuance in connection
with possible future equity and equity-based financings, future acquisitions and
other corporate purposes. The Board of Directors has proposed the increase in
authorized shares of Common Stock as a means of providing it with the
flexibility to act with respect to the issuance of Common Stock or securities
exercisable for, or convertible into, Common Stock in circumstances which it
believes will advance the interests of the Company and its Stockholders without
the delay of seeking an amendment to the Company's Certificate at that time such
securities are to be issued.
The Board of Directors has no current specific plans to authorize the
issuance of additional shares of Common Stock. As previously discussed in the
Company's 2002 Annual Report, the Company has a financing plan which
contemplates the possibility of various financing alternatives, including
potential capital market transactions. In connection with the Company's overall
financing plan, from time to time, the Board of Directors has considered the
issuance of Common Stock or securities convertible into Common Stock. If
Stockholders approve the amendment to the Certificate, then the Board of
Directors would have more flexibility to pursue opportunities to engage in
possible future capital markets transactions involving Common Stock or
securities convertible into Common Stock. However, at this time, no decision to
proceed with any such transaction has been made and no determination as to the
type or amount of securities that might be offered has been made, should a
possible future transaction be pursued.
ABILITY OF BOARD TO ISSUES SHARES; CERTAIN ISSUANCES REQUIRING STOCKHOLDER
APPROVAL
If the amendment is approved by Stockholders, the additional shares of
Common Stock authorized by the amendment may be issued from time to time upon
authorization by the Board of Directors, without further approval by
Stockholders unless required by applicable law or the rules of the New York
Stock Exchange. Shares of Common Stock may be issued for such consideration as
the Board of Directors may determine and as may be permitted by applicable law.
The rules of the New York Stock Exchange generally require the approval
of shares representing a majority of the votes cast for the issuance of shares
of Common Stock, or securities convertible into or exercisable for Common Stock,
prior to the issuance of such Common Stock. Issuances of Common Stock,
2
or securities convertible into or exercisable for Common Stock, that require
Stockholder approval under the New York Stock Exchange's rules include the
following:
o issuances in connection with a transaction that will result in
a change of control of the Company;
o issuances of shares representing more than one percent of the
voting power or number of shares of Common Stock outstanding
before such issuance to an officer, director or certain
substantial Stockholders;
o issuances of shares pursuant to most equity-compensation
plans; and
o issuances of shares representing 20 percent or more of the
voting power or number of shares of Common Stock outstanding
before such issuance.
Stockholder approval is not required under the New York Stock
Exchange's rules for an issuance representing 20 percent or more of the voting
power or outstanding shares of the Company if such issuances involves a public
offering for cash or a bona fide private financing for cash at a price at least
as great as each of the book and market value of the Common Stock.
CERTAIN EFFECTS OF THE AMENDMENT
The increase in authorized shares of Common Stock is not being proposed
as a means of preventing or dissuading a change in control or takeover of the
Company. However, use of these shares of Common Stock for such a purpose is
possible. Shares of authorized but unissued or unreserved Common Stock and
preferred stock, for example, could be issued in an effort to dilute the stock
ownership and voting power of persons seeking to obtain control of the Company
or could be issued to purchasers who would support the Board of Directors in
opposing a takeover proposal. In addition, the increase in authorized shares of
Common Stock, if approved, may have the effect of discouraging a challenge for
control or make it less likely that such a challenge, if attempted, would be
successful. The Board of Directors and executive officers of the Company have no
knowledge of any current effort to obtain control of the Company or to
accumulate large amounts of Common Stock.
The holders of Common Stock are not entitled to preemptive rights with
respect to the issuance of additional shares of Common Stock or securities
convertible into or exercisable for Common Stock. Accordingly, the issuance of
additional shares of Common Stock or such other securities might dilute the
ownership and voting rights of Stockholders.
The proposed amendment to the Certificate does not change the terms of
the Common Stock. The additional shares of Common Stock for which authorization
is sought will have the same voting rights, the same rights to dividends and
distributions and will be identical in all other respects to the shares of
Common Stock now authorized.
If approved by Stockholders, it is anticipated that the amendment to
the Certificate will become effective as soon as practicable after the Special
Meeting.
RECOMMENDATION
The Board of Directors unanimously recommends a vote "FOR" the
amendment to the Certificate to increase Company's number of authorized shares
of Common Stock from 20,000,000 shares to 30,000,000 shares.
3
BENEFICIAL OWNERSHIP OF SECURITIES
MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the Record Date, certain
information with respect to the ownership of shares of Common Stock and the
Company's $2.125 Convertible Exchangeable Preferred Stock ("PREFERRED STOCK") as
to (i) each director, (ii) the "named executive officers" consisting of the
Company's chief executive officer and four most highly compensated executive
officers, (iii) all executive officers and directors of the Company as a group,
and (iv) all persons known by the Company to be the beneficial owners of 5% or
more of the outstanding Common Stock. Information set forth in the table with
respect to beneficial ownership of Common Stock and Preferred Stock has been
obtained from filings made by the named beneficial owners with the Securities
and Exchange Commission ("COMMISSION") as of the Record Date or, in the case of
executive officers and directors of the Company, has been provided to the
Company by such individuals. Holders of Preferred Stock are not entitled to vote
at the Special Meeting.
COMMON STOCK
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NAME AND ADDRESS OF BENEFICIAL OWNERSHIP
BENEFICIAL OWNER (a) PERCENT
------------------- -------------------- --------------
Directors:
John S. Callon ................................... 250,850(b) 1.78%
Fred L. Callon ................................... 791,081(c) 5.55%
200 North Canal Street
Natchez, Mississippi 39120
Dennis W. Christian .............................. 366,821(d) 2.58%
Leif Dons ........................................ 50,250(e) *
Robert A. Stanger ................................ 102,856(f) *
John C. Wallace .................................. 1,979,167(g) 14.12%
72 Chelsea Gate Apartments
93 Ebury Bridge Road
London, SW1W 8RB, United Kingdom
B. F. Weatherly .................................. 101,288(h) *
Richard O. Wilson ................................ 150,146(i) 1.07%
Named Executive Officers:
John S. Weatherly ................................ 330,985(j) 2.33%
Stephen F. Woodcock .............................. 135,127(k) *
Kathy G. Tilley .................................. 247,481(l) 1.75%
Directors and Executive Officers:
as a Group (15 persons) .......................... 4,831,454(m) 30.31%
Certain Beneficial Owners:
Ganger Rolf ASA .................................. 1,839,386(n) 13.20%
Fred. Olsensgate 2
0152 Oslo, Norway
Bonheur ASA ...................................... 1,839,386(n) 13.20%
Fred. Olsensgate 2
0152 Oslo, Norway
State Street Research & Management Company ....... 894,400(o) 6.42%
One Financial Center, Thirtieth Floor
Boston, Massachusetts 02111-2690
Dimensional Fund Advisors Inc. ................... 946,700(p) 6.80%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Robert L. Gipson ................................. 765,910(q) 5.40%
C/O Ingalls & Snyder LLC
61 Broadway
New York, NY 10006
Franklin Resources, Inc. ......................... 1,500,000(r) 9.72%
1 Franklin Parkway,
San Mateo, CA 94403
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* Less than 1%
4
(a) Unless otherwise indicated, each of the persons listed in the following
table may be deemed to have sole voting and dispositive power with
respect to such shares.
(b) Of the 250,850 shares beneficially owned by John S. Callon, 104,437 are
owned directly by him; 10,000 shares are owned in joint tenancy with
his wife; 11,413 shares are owned within the Company's Employee Savings
and Protection Plan; 90,000 shares are subject to options under the
Company's 1994 Stock Incentive Plan ("1994 PLAN") exercisable within 60
days; 30,000 shares are subject to options under the Company's 1996
Stock Incentive Plan ("1996 PLAN") exercisable within 60 days; and
5,000 shares are subject to options under the Company's 2002 Stock
Incentive Plan ("2002 PLAN") exercisable within 60 days. Shares
indicated as owned by John S. Callon do not include 43,501 shares of
Common Stock owned by his wife over which he disclaims beneficial
ownership.
(c) Of the 791,081 shares beneficially owned by Fred L. Callon, 261,799
shares are owned directly by him; 184,378 shares are held by him as
custodian for certain minor Callon family members; 9,446 shares are
owned within the Company's Employee Savings and Protection Plan; 80,000
shares are subject to options under the 1994 Plan exercisable within 60
days; and 255,458 shares are subject to options under the 1996 Plan
exercisable within 60 days. Shares indicated as owned by Fred L. Callon
do not include 24,939 shares of Common Stock owned by his wife over
which he disclaims beneficial ownership.
(d) Of the 366,821 shares beneficially owned by Dennis W. Christian, 63,486
are owned directly by him; 8,718 shares are owned within the Company's
Employee Savings and Protection Plan; 60,000 shares are subject to
options under the 1994 Plan exercisable within 60 days; and 234,617
shares are subject to options under the 1996 Plan exercisable within 60
days.
(e) Of the 50,250 shares beneficially owned by Leif Dons, 5,250 are owned
directly by him; 5,000 shares are subject to options under the 1994
Plan exercisable within 60 days; 35,000 shares are subject to options
under the 1996 Plan exercisable within 60 days; and 5,000 shares are
subject to options under the 2002 Plan exercisable within 60 days.
(f) Of the 102,856 shares beneficially owned by Robert A. Stanger, 12,856
are owned directly by him; 25,000 shares are subject to options under
the 1994 Plan exercisable within 60 days; 60,000 shares are subject to
options under the 1996 Plan exercisable within 60 days; and 5,000
shares are subject to options under the 2002 Plan exercisable within 60
days.
(g) Of the 1,979,167 shares beneficially owned by John C. Wallace, 49,781
shares are owned directly by him; 25,000 shares are subject to options
under the 1994 Plan exercisable within 60 days; 60,000 shares are
subject to options under the 1996 Plan exercisable within 60 days;
5,000 shares are subject to options under the 2002 Plan exercisable
within 60 days; and 1,839,386 shares are owned by Ganger Rolf ASA
("GANGER ROLF") and Bonheur ASA ("BONHEUR"). See note (n).
(h) Of the 101,288 shares beneficially owned by B. F. Weatherly, 11,288
shares are owned directly by him; 25,000 shares are subject to options
under the 1994 Plan exercisable within 60 days; 60,000 shares are
subject to options under the 1996 Plan exercisable within 60 days; and
5,000 shares are subject to options under the 2002 Plan exercisable
within 60 days.
(i) Of the 150,146 shares beneficially owned by Richard O. Wilson, 25,000
shares are subject to options under the 1994 Plan exercisable within 60
days; 60,000 shares are subject to options under the 1996 Plan
exercisable within 60 days; 5,000 shares are subject to options under
the 2002 Plan exercisable within 60 days; 49,464 shares are held in a
family limited partnership; and 10,682 shares are issuable upon
conversion of 4,700 shares of Preferred Stock held in the family
limited partnership.
(j) Of the 330,985 shares beneficially owned by John S. Weatherly, 55,605
are owned directly by him; 109 shares are held as custodian for his
minor children; 7,938 shares are owned within the Company's Employee
Savings and Protection Plan; 60,000 shares are subject to options under
the 1994 Plan exercisable within 60 days; and 207,333 shares are
subject to options under the 1996 Plan exercisable within 60 days.
(k) Of the 135,127 shares beneficially owned by Stephen F. Woodcock, 18,194
are owned directly by him; 5,683 shares are owned within the Company's
Employee Savings and Protection Plan;
5
104,000 shares are subject to options under the 1996 Plan exercisable
within 60 days; and 7,250 shares are subject to options under the 2002
Plan exercisable within 60 days.
(l) Of the 247,481 shares beneficially owned by Kathy G. Tilley, 45,676 are
owned directly by her; 6,305 shares are owned within the Company's
Employee Savings and Protection Plan; 30,000 shares are subject to
options under the 1994 Plan exercisable within 60 days; 158,000 shares
are subject to options under the 1996 Plan exercisable within 60 days;
and 7,500 shares are subject to options under the 2002 Plan exercisable
within 60 days.
(m) Includes 489,000 shares subject to options under the 1994 Plan
exercisable within 60 days; 1,453,833 shares subject to options under
the 1996 Plan exercisable within 60 days; 55,449 shares are subject to
options under the 2002 Plan exercisable within 60 days and 10,682
shares issuable upon conversion of 4,700 shares of Preferred Stock.
(n) As disclosed on a Schedule 13D/A, filed with the Commission on March 6,
2002, by Ganger Rolf, Bonheur, AS Quatro ("QUATRO"), and Invento AS
("INVENTO"). On August 28, 2000, Ganger Rolf and Bonheur jointly
purchased from Fred. Olsen Energy ASA ("F.O. ENERGY") an aggregate of
1,839,386 shares of Common Stock. Ganger Rolf and Bonheur are currently
registered as the joint record owner of, and both possess shared voting
and dispositive power with respect to, all of the 1,839,386 shares of
Common Stock formerly owned by F.O. Energy. F.O. Energy no longer owns
any Common Stock. Quatro is the owner of 21.3% of the outstanding
capital stock of Bonheur, and Invento is the owner of 20.8% of the
outstanding capital stock of Bonheur. Quatro and Invento disclaim
beneficial ownership of the shares of Common Stock owned by Ganger Rolf
and Bonheur. John C. Wallace, one of our directors, is a director of
Ganger Rolf and Bonheur, as well as other companies associated with
Ganger Rolf and Bonheur, and as a result, may be deemed to share the
power to vote and dispose of, and, therefore, be a beneficial owner of,
the shares of Common Stock owned by Ganger Rolf and Bonheur. The
principal business address and principal executive offices of Quatro
and Invento are located at Fred. Olsensgate 2, 0152 Oslo, Norway.
(o) Information is based upon a Schedule 13G provided to the Company dated
February 14, 2003, by State Street Research & Management Company
("STATE STREET"). In this Schedule 13G, State Street represents that it
has sole voting power with respect to 859,400 shares of Common Stock
and sole dispositive power with respect to 894,400 shares of Common
Stock.
(p) Information is based upon a Schedule 13G/A, filed with the Commission
on February 13, 2003, by Dimensional Fund Advisors Inc.
("DIMENSIONAL"). In this Schedule 13G, Dimensional represents that it
has sole voting power and sole dispositive power with respect to
946,700 shares of Common Stock.
(q) Information is based upon a Schedule 13G, filed with the Commission on
November 7, 2003, by Robert L. Gipson ("GIPSON"). In this Schedule 13G,
Gipson represents that he has shared voting power with respect to
265,210 shares of Common Stock issuable upon exercise of warrants
exercisable within 60 days and shared dispositive power with respect to
765,910 shares of Common Stock.
(r) Consists of warrants to purchase an aggregate of 1,500,000 shares of
Common Stock that are beneficially owned by Franklin Custodian
Funds-Income Series, FTVIPT-Income Securities Fund, and FTIF Income
Fund, which are advised by direct and indirect investment advisory
subsidiaries of Franklin Resources, Inc.
6
QUORUM AND OTHER MATTERS
The holders of a majority of the total shares of Common Stock issued
and outstanding on the Record Date, whether present in person or represented by
Proxy, will constitute a quorum for the transaction of business at the Special
Meeting. The affirmative vote of a majority of the outstanding Common Stock is
necessary to approve the amendment to the Certificate increasing the number of
authorized shares of Common Stock to 30,000,000 shares.
Holders of Common Stock may mark "abstain" on their proxy card for the
matter being submitted to a vote at the Special Meeting. For purposes of
determining whether a quorum is present under Delaware law, abstentions count
towards the establishment of a quorum. Abstentions will be the equivalent of a
"no" vote because approval of such proposal is based on the total number of
shares outstanding.
Many of the Company's shares of Common Stock are held in "street name"
which means that a depository, broker-dealer or other institution holds shares
in its name which are beneficially owned by another person. Generally, a street
name holder must receive the direction from the beneficial owner of the shares
to vote on issues other than routine stockholder matters such as the election of
directors and ratification of auditors. A "broker non-vote" refers to a proxy
which votes on one matter, but indicates that the holder does not have the
authority to vote on other matters. For purposes of determining whether a quorum
is present under Delaware law, a broker non-vote counts towards the
establishment of a quorum. Broker non-votes have the effect of a "no" vote with
respect to the amendment to the Company's Certificate increasing the number of
authorized shares of Common Stock to 30,000,000 shares because the approval of
such proposal is based on the total number of shares outstanding.
STOCKHOLDERS' PROPOSALS
FOR 2004 ANNUAL MEETING
Stockholders who desire to present proposals at the 2004 Annual Meeting
of Stockholders and to have proposals included in the Company's proxy materials
must have submitted their proposals to the Company at its principal executive
offices not later than December 16, 2003. If the date of the 2004 Annual Meeting
of Stockholders is changed by more than 30 days from the date of the 2003 Annual
Meeting of Stockholders, which was held on May 2, 2003, the deadline for
submitting proposals is a reasonable time before the Company begins to print and
mail its proxy materials for its 2004 Annual Meeting of Stockholders.
The persons named in the Company's form of proxy for the 2004 Annual
Meeting will have discretionary authority to vote any proxies they hold at such
meeting on any matter for which the Company does not receive notice by February
29, 2004, unless the Company changes the date of its 2004 Annual Meeting of
Stockholders by more than 30 days from the date of the 2003 Annual Meeting of
Stockholders, in which case such persons will be able to exercise discretionary
authority if notice of the matter has not been received in a reasonable time
before the Company mails its proxy materials for the 2004 Annual Meeting of
Stockholders.
If the date of the 2004 Annual Meeting of Stockholders is advanced or
delayed by more than 30 calendar days from the date of the 2003 Annual Meeting
of Stockholders, the Company shall, in a timely manner, inform Stockholders of
such change, by including a notice, under Item 5, in its earliest possible
quarterly report on Form 10-Q. The notice will include the new deadline for
submitting proposals to be included in the Company's proxy statement and the new
date for determining whether the Company may exercise discretionary voting
authority because it has not received timely notice of a matter.
In order to avoid controversy as to the date on which the Company
receives any such proposal, it is suggested that Stockholders submit their
proposals by certified mail, return receipt requested, or other means that
permit them to prove the date of delivery.
By order of the Board of Directors
/s/ FRED L. CALLON
Fred L. Callon
President and Chief Executive Officer
Natchez, Mississippi
December 23, 2003
7