SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the 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 Materials Pursuant to ss. 240.14a-12
AMEN Properties, Inc.
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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 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)(1) 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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AMEN Properties, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on Tuesday, May 18, 2004
To the Stockholders of AMEN Properties, Inc. April 19, 2004
Notice is hereby given that the Annual Meeting of Stockholders of AMEN
Properties, Inc. ("AMEN" or the "Company") will be held at the Corporate Office
of AMEN Properties, Inc., 303 West Wall Street, Suite 1700 , Midland, TX 79701,
in the Conference Room, at 8:30 a.m., local time, on Tuesday, May 18, 2004 for
the following purposes:
1. To consider and vote upon a proposal to elect six members to the Company's
Board of Directors;
2. Consider and vote upon a proposal to amend the Certificate of Incorporation
as to the designation of rights and preferences of the Series A and Series
B Preferred Stock of Amen Properties, Inc.;
3. To consider such other business as may properly come before the Annual
Meeting.
Only stockholders of record as of the close of business on March 15, 2004, are
entitled to receive notice of and to vote at the Annual Meeting. A list of
stockholders entitled to vote at the Annual Meeting will be available for
examination during normal business hours by any of our stockholders, for a
period of ten days prior to the Annual Meeting at our principal executive
offices at the address set forth above.
Your vote is important, as is the vote of every stockholder, and the Board of
Directors of AMEN Properties, Inc. appreciates the cooperation of stockholders
who are unable to attend in person in directing proxies to vote at the meeting.
Therefore, it is important that your shares be represented at the meeting in
person or, should you be unable to attend the meeting, by your signing and
returning the enclosed proxy in the accompanying envelope for receipt prior to
the meeting date.
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
If you have any questions, please contact John M. James, Chief Financial Officer
and Secretary at 432-684-3821.
By order of the Board of Directors,
Eric L. Oliver
Chairman of the Board
AMEN Properties, Inc.
PROXY STATEMENT
AMEN Properties, Inc.
303 West Wall Street, Ste. 1700
Midland, TX 79701
This proxy is furnished to AMEN Properties, Inc. ("AMEN" or the "Company")
stockholders of record as of the close of business on March 15, 2004 (the
"Record Date"), for use at the Annual Meeting of Stockholders to be held at the
corporate office of the Company, located at 303 West Wall Street Suite 1700,
Midland, TX 79701, in the Conference Room, at 8:30 a.m., local time, on Tuesday,
May 18, 2004, and at any adjournment thereof (the "Annual Meeting"). The
enclosed proxy is being solicited by the Board of Directors of AMEN and is
subject to revocation at any time prior to the voting of the proxy. This proxy,
when properly executed, will be voted in the manner directed by you, the
stockholder. If no direction is made, this proxy will be voted FOR or IN FAVOR
of the proposals, in accordance with the instructions on the proxy card. This
Proxy Statement and the enclosed proxy card are being sent to stockholders on or
about April 19, 2004. Only stockholders of record as of the close of business
the Record Date may vote at the Annual Meeting. As used herein, the term
"stockholders" includes the holders of the Common Stock of the Company ("Common
Stock") and the holders of the Series A Preferred Stock and the Series B
Preferred Stock of the Company (collectively the "Preferred Stock"), who are
eligible to vote on all matters presented to the stockholders pursuant to the
terms of such Preferred Stock. The holders of the Common Stock and the Preferred
Stock vote together as a single class of stock.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder of record at
the close of business on the Record Date to vote on matters as described herein
and in the accompanying Notice of Annual Meeting of Stockholders, and on any
other proposal properly brought before the Annual Meeting. The proxy card
provides space for a stockholder to vote in favor of or to withhold voting for
each nominee for the Board of Directors. Votes of stockholders attending the
meeting in person will be taken by written ballots. Stockholder votes will be
tabulated by ADP Investor Communication Services. The election of directors will
be decided by a plurality of the votes cast at the Annual Meeting by the
stockholders. With respect to the proposed amendment to the Company's
Certificate of Incorporation and any other matters properly brought before the
meeting, the affirmative vote of a majority of the votes present or represented
by proxy and entitled to be cast at the Annual Meeting by the stockholders is
required to take stockholder action.
The presence at the Annual Meeting, in person or by proxy, of the holders of a
majority of the votes entitled to be cast by all stockholders will constitute a
quorum for the transaction of business at the Annual Meeting. If a quorum is not
present, in person or by proxy, the Annual Meeting may be adjourned until a
later time when a quorum is obtained. Abstentions and broker non-votes will be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. With respect to all matters other than the election of
directors, an abstention will have the same effect as a vote against any
specified proposal. In the election of directors, an abstention will not have
any effect. A broker non-vote will have no effect on the outcome of any vote of
the stockholders. A broker non-vote occurs if a broker or other nominee does not
have discretionary authority and has not received instructions with respect to a
particular item. Stockholders are urged to sign the accompanying proxy card and
return it promptly.
1
When a signed proxy card is returned with a vote specified, the shares
represented will be voted by the proxies designated on the proxy card in
accordance with the stockholder's instructions. Unless otherwise designated on
the proxy card, the proxies for the stockholders are Eric L. Oliver and Jon M.
Morgan. A stockholder wishing to name another person as his or her proxy may do
so by designating another proxy by inserting the name(s) of such other person(s)
to act as his or her proxy(ies). In that case, it will be necessary for the
stockholder to sign the proxy card and deliver it to the person named as his or
her proxy and for the person so named to be present and vote at the Annual
Meeting. Proxy cards so marked should not be mailed to us at our principal
executive offices.
If a signed proxy card is returned and the stockholder has made no voting
specification, the shares will be voted:
-- for the election of each of the nominees for the Board of Directors
identified herein; and
-- to amend the Certificate of Incorporation effecting the Certificate of
Designation of Series and Determination of Rights and Preferences of
Series "A" and Series "B" Preferred Stock of Amen Properties, Inc.
-- at the discretion of the proxies, on any other matter that may
properly come before the Annual Meeting. Valid proxies will be voted
at the Annual Meeting in the manner specified.
Any stockholder giving a proxy has the unconditional right to revoke it at any
time before it is voted by either:
-- notifying the Secretary of the Company in writing,
-- executing a subsequent proxy, or
-- personally appearing at the Annual Meeting and casting a contrary
vote.
However, no revocation will be effective unless we, at or prior to the Annual
Meeting, have received notice of such revocation.
As of the Record Date, 2,201,356 shares of Common Stock were issued and
outstanding. In addition, 333,333 shares of Common Stock are deemed outstanding
for voting purposes with respect to the 80,000 shares of Series A Preferred
Stock ("Series A") and 233,276 shares of Common Stock are deemed outstanding for
voting purposes with respect to the 80,000 shares of Series B Preferred Stock
("Series B"). Therefore, there are a total of 2,767,965 voting shares as of the
Record Date.
ADDITIONAL INFORMATION
We are subject to the informational requirements of the Securities Exchange Act
of 1934, as amended ("Exchange Act") and are therefore required to file periodic
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission") related to our business, financial statements and
other matters. Such reports, proxy statements and other information are
available for inspection and copying at the Commission's principal office, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, where
copies may be obtained upon payment of the fees prescribed by the Commission
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such documents may also be obtained through the Website
maintained by the Commission at http://www.sec.gov.
2
PROPOSAL ONE--ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS
The Board of Directors of AMEN has set the number of directors constituting the
Board at six. The following six persons, all of whom currently serve as
directors, have been designated by the Board of Directors as nominees for
election as director:
Eric L. Oliver was appointed as a director of AMEN in July 2001, and was
appointed Chairman of the Board and Chief Executive Officer on September 19,
2002. Since 1997, he has been President of SoftSearch Investment, Inc., an
investment firm in Abilene, Texas. Since 1998, he has also served as President
of Midland Map Company LLC, a company that creates hand drafted ownership maps
throughout the Permian Basin. He is on the Board of Directors of the First
National Bank of Midland, and of Love and Care Ministries, an inner city
homeless initiative.
Jon M. Morgan was appointed as a director of AMEN in October 2000, and was
appointed President and Chief Operating Officer on September 19, 2002. Mr.
Morgan has more than 17 years experience in launching and managing successful
businesses in both investment management services and in the energy field. He is
founder of several businesses including Morgan Capital Group, Inc., the Packard
Fund, and is President of J.M. Mineral & Land Co.
Bruce E. Edgington has been director of AMEN since November 1995. From 1979
through 1988, Mr. Edgington was a registered representative with Johnston Lemon
& Co., a securities broker-dealer, where his responsibilities included the
management of retail securities accounts and administration. In 1988 he founded
and continues to be an officer, director and stockholder of DiBiasio &
Edgington, a firm engaged in providing software to investment firms and money
managers.
Earl E. Gjelde has served as an AMEN director since April 1997. From 1989
through 1993, he was Vice President of Chemical Waste Management, Inc. and from
1991 to 1993 was Vice President of Waste Management Inc. (currently WMX
Technologies, Inc.). Since 1991, Mr. Gjelde has been Managing Director, Summit
Group International, Ltd., an energy and natural resource consulting firm with
Internet based security controlled document systems and Managing Director,
Summit Energy Group, Ltd., an energy development company and since 1996, a
partner in Pipeline Power Partners, LP, a natural gas services company. From
1980 through 1989, Mr. Gjelde held various federal government positions
including Under Secretary and Chief Operating Officer of the U.S. Department of
Interior from 1985 through 1989 and Special Assistant to the Secretary, Chief
Operating Officer, U.S. Department of Energy from 1982 through 1985. He is a
member of the Board of Directors of The United States Energy Association, The
World Energy Congress, the National Wilderness Institute, Allied Technologies
Group, Inc., and publicly held Electrosource, Inc.
3
Donald M. Blake, Jr. was appointed to the Board of Directors on February 26,
2003. He is Executive Vice President and Principal of Joseph J. Blake and
Associates, Inc. ("Blake and Associates"), an international commercial real
estate due diligence firm. The company founded by his grandfather specializes in
the valuation of debt and equity and assessment reports for engineering and
environmental issues concerning real property. Over the past 57 years, the firm
has served the nation's leading investors, lenders and owners of real estate.
Blake and Associates maintains operations throughout the United States, Latin
America and Japan. Mr. Blake is a Member of the Appraisal Institute and is
active with a variety of real estate organizations such as the Mortgage Bankers
Association, Pension Real Estate Association, The Commercial Mortgage
Securitization Association and the Urban Land Institute. Former Governor Mario
Cuomo of New York appointed Mr. Blake to the charter advisory board of the New
York State Appraisal Certification Board. The board developed the standards and
ethical standards for all licensing and certification for appraisers in
accordance with state legislation. He was also appointed to the real estate
advisory board of the business school of Babson College, Wellesley,
Massachusetts. Mr. Blake received a BA from Hobart College, Geneva, New York in
1979 and a MSM with a concentration in commercial real estate finance from
Florida International University, Miami, Florida in 1981.
G. Randy Nicholson was appointed to the Board of Directors on February 26, 2003.
He graduated from Abilene Christian College in 1959. From 1959 to 1971, Mr.
Nicholson was self-employed in Abilene as a CPA. In 1971, he established E-Z
Serve, Inc., a gasoline marketing company. Mr. Nicholson has served as Chairman
of the Board of Auto-Gas Systems, Inc. since 1987. AutoGas developed the
pay-at-the pump technology processing paperless credit and debit card
transactions at the fuel island. Headquartered in Abilene, Texas, AutoGas
continues to introduce innovative technological advancements in the automated
fueling industry, most recently with loyalty products such as DIGITAL REWARDS(R)
and Quantum 360sm. He joined the Board of Trustees of Abilene Christian
University in 1981. Mr. Nicholson is a member of the Texas Society of Certified
Public Accountants and was recently named an honorary member of the American
Institute of Certified Public Accountants (AICPA) having been member for 40
years. He is presently serving as Chairman of the Technology Committee for the
City of Abilene.
If elected, each director will hold office until the annual meeting of
stockholders in 2005 or until his successor is duly elected and qualified. The
election of directors will be decided by a plurality of the votes cast at the
meeting by the holders of the Common Stock, and accordingly, abstentions and
"broker non-votes" will have no effect on the election of directors.
Stockholders may not cumulate their votes in the election of directors. All
nominees have consented to serve if elected, but if any nominee becomes unable
to serve, the persons named as proxies may exercise their discretion to vote for
a substitute nominee. Management has no reason to believe that any of the
nominees will be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
4
PROPOSAL TWO--AMENDMENT TO THE CERTIFICATE OF INCORPORATION EFFECTING THE
CERTIFICATE OF DESIGNATION OF SERIES AND DETERMINATION OF RIGHTS AND PREFERENCES
OF SERIES A AND SERIES B PREFERRED STOCK OF AMEN PROPERTIES, INC.
On May 30, 2003 the Company entered into separate agreements with the holders of
the Series A and Series B Preferred Stock as to the suspension of dividends on
the Preferred Stock from and after April 1, 2003 until the earlier of (a)
subsequent written agreement of all of the parties or (b) the filing of an
Amendment to the Certificate of Incorporation with the State of Delaware (the
"Amendment"). The Company agreed to submit the Amendment for approval by the
stockholders no later than this Annual Meeting. Upon the filing of the
Amendment, the terms of the Amendment shall control and govern the payment of
dividends with respect to the Series A and Series B.
The Amendment generally required that the accrued dividends on the Preferred
Stock through March 31, 2003 be paid and provides that no further dividends will
accrue on the Preferred Stock except for dividends declared on the Common Stock.
Specifically, the Amendment states the following:
I. Section 2 of the Certificate of Designation of Series and Determination of
Rights and Preferences of Series A Preferred Stock of Crosswalk.com, Inc. (now
Amen Properties, Inc), as amended by the certain Amendment to Certificate of
Designation of Series and Determination of Rights and Preferences of Series A
Preferred Stock of Crosswalk.com, Inc. (now Amen Properties, Inc), is amended in
its entirety as follows:
SECTION 2. DIVIDENDS
From the date of issuance of shares of Series A Preferred Stock through
March 31, 2003, the holders of outstanding shares of Series A Preferred Stock
shall be entitled to receive a dividend of six percent (6%) per annum, payable,
at the election of the Board, out of funds legally available for such purpose or
in shares of Common Stock, in preference and priority to any payment of any
dividend on Common Stock. If the dividend is to be paid in Common Stock, the
number of shares shall be determined by dividing the dividend payable by the
average closing price of the Common Stock for the sixty (60) trading days prior
to the dividend declaration or redemption of the Series A Preferred Stock. Such
dividend shall be payable only when, as and if declared by the Board, and such
dividends shall accrue and be cumulative; provided, that all accrued and unpaid
dividends shall be so declared and paid within ninety (90) days of March 31,
2003. From and after April 1, 2003 no dividends shall accrue or be payable in
respect to the Series "A" Preferred Stock, except that the holders of the Series
A Preferred Stock shall be entitled to receive any dividend declared in respect
of the Common Stock based upon the number of shares of Common Stock into which
the outstanding shares of Series A Preferred Stock are convertible at the time
the dividend is declared as if such shares of Common Stock issuable upon
conversion of the Series A Preferred Stock were outstanding for purposes of the
Common Stock dividend.
5
II. Section 2 of the Certificate of Designation of Series B and Determination of
Rights and Preferences of Series B Convertible Preferred Stock of Crosswalk.com,
Inc. (now Amen Properties, Inc.), is amended in its entirety to read as follows:
SECTION 2. DIVIDENDS
From the date of issuance of shares of Series B Preferred Stock through
March 31, 2003, the holders of outstanding shares of Series B Preferred Stock
shall be entitled to receive a dividend of six percent (6%) per annum, payable,
at the election of the Board, out of funds legally available for such purpose or
in shares of Common Stock, in preference and priority to any payment of any
dividend on Common Stock. If the dividend is to be paid in Common Stock, the
number of shares shall be determined by dividing the dividend payable by the
average closing price of the Common Stock for the sixty (60) trading days prior
to the dividend declaration or redemption of the Series B Preferred Stock. Such
dividend shall be payable only when, as and if declared by the Board, and such
dividends shall accrue and be cumulative; provided, that all accrued and unpaid
dividends shall be so declared and paid within ninety (90) days of March 31,
2003. From and after April 1, 2003 no dividends shall accrue or be payable in
respect to the Series B Preferred Stock, except that the holders of the Series B
Preferred Stock shall be entitled to receive any dividend declared in respect of
the Common Stock based upon the number of shares of Common Stock into which the
outstanding shares of Series B Preferred Stock are convertible at the time the
dividend is declared as if such shares of Common Stock issuable upon conversion
of the Series B Preferred Stock were outstanding for purposes of the Common
Stock dividend.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION EFFECTING THE
CERTIFICATE OF DESIGNATION OF SERIES AND DETERMINATION OF RIGHTS AND PREFERENCES
OF SERIES A AND SERIES B PREFERRED STOCK OF AMEN PROPERITES, INC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
General. The Company's voting securities include both the Common Stock and the
Preferred Stock. The holders of the Preferred Stock are entitled to vote
together with the holders of the Common Stock as a single class on the basis of
a number of votes equal to a number of shares of Common Stock determined in
accordance with the Certificates of Designation for the Preferred Stock. Because
the Preferred Stock and the Common Stock vote together as a single class and
because the Preferred Stock is convertible into Common Stock, the beneficial
ownership of the voting securities of the Company is set forth in the following
tables reflecting beneficial ownership of Common Stock, and no separate
Preferred Stock ownership tables are provided. Please note that that number of
votes held by the holders of Series B is the same as the number of shares into
which the Series B is convertible, but that the number of votes held by the
holders of the Series A is approximately one-half of the number of shares of
Common Stock into which the Series A is convertible. Therefore, in the footnotes
to the following ownership tables, the number of votes attributable to the
ownership of Series A is set forth in parenthesis following the number of shares
into which such Series A is convertible.
6
Unless otherwise noted, all persons named in the following ownership tables have
sole voting and sole investment power with respect to all shares of voting stock
beneficially owned by them, and no persons named in the table or acting as
nominees for any persons or otherwise under the control of any person or group
of persons. As used herein, the term "beneficial ownership" with respect to a
security means the sole or shared voting power (including the power to vote and
direct the vote) or sole or shared investment power (including the power to
dispose or direct the disposition) with respect to the security, including a
right to acquire any such power during a period of sixty (60) days from the
Record Date. Percentage of beneficial ownership is based upon 2,201,356 shares
of Common Stock outstanding as of March 15, 2004 and for the purpose of
computing the percentage ownership of certain persons or groups, the shares of
Common Stock that the person has the right to acquire within sixty (60) days of
March 15, 2004 (whether upon conversion of the Preferred Stock, exercise of
vested stock options or otherwise), are deemed to be outstanding as of that
date. Such shares deemed to be outstanding as to one person are not deemed
outstanding for purposes of computing the percentage ownership of any other
person.
Security Ownership of Certain Beneficial Owners. The following table and
accompanying notes contain information about any person (including any "group")
who is known by us to be the beneficial owner of more than 5% of AMEN's Common
Stock as of March 15, 2004, based upon copies of Schedule 13Ds and Schedule 13Gs
received by the Company.
------------------------------------------------ ---------------------------------------------- --------------------------------
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent Beneficially Owned
------------------------------------------------ ---------------------------------------------- --------------------------------
Dodge Jones Foundation 226,358(1) 9.5%
P.O. Box 176 226,3581 9.5% Abilene, TX 79604
------------------------------------------------ ---------------------------------------------- --------------------------------
Steve Wike 120,970 5.5%
8701 Interlachen Circle
Wilmington, NC 28411
------------------------------------------------ ---------------------------------------------- --------------------------------
(1) Includes 107,878 shares upon conversion of Series A (representing 58,333
voting shares) and 77,056 shares upon conversion of Series B, owned by
Dodge Jones Foundation.
Security Ownership of Management. The following table and accompanying notes
contain information about the beneficial ownership of Common Stock as of March
15, 2004 by each of AMEN's (a) directors and director nominees, and (b)
executive officers as defined in Item 402(a)(2) of Regulation S-B, and (c) all
of AMEN's executive officers, directors and director nominees as a group.
7
Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership Beneficially Owned
Eric Oliver (Current Chairman, CEO)
400 Pine Street
Abilene, TX 79601 238,023 (1) 10.4%
Jon Morgan (Current Pres., COO, Director)
303 W. Wall St., Ste. 1700
Midland, TX 79701 207,470 (2) 8.7%
Bruce Edgington (Current Director)
7857 Heritage Drive
Annandale, VA 22003 184,926 (3) 8.1%
Earl E. Gjelde (Current Director)
42 Bristlecone Crt.
Keystone, CO 80435 53,027 (4) 2.3%
John M. James (Current CFO)
303 W. Wall St., Ste. 1700 Ave.
Midland, TX 79701 0 0%
Donald M. Blake, Jr. (Current Director)
298 Fifth Ave., 7th Floor
New York, NY 10001 15,281 (5) .69%
G. Randy Nicholson (Current Director)
1202 Estates Drive, Ste. D
Abilene, TX 79602 3,281 (6) .15%
All Current Directors and Officers as a Group 702,008 30.34%
(1) Includes 76,813 shares beneficially owned by Softvest L.P. Mr. Oliver is
General Partner and lead investment officer of Softvest L.P. Also includes
77,056 shares issuable upon conversion of Series A (representing 41,667 voting
shares) and 38,528 shares issuable upon conversion of Series B, all beneficially
owned by SoftOP, L.P. Mr. Oliver is General Partner of SoftOP, L.P. Also
includes 10,273 shares issuable upon conversion of Series A (representing 5,556
voting shares) owned by Lighthouse Partners, L.P. Mr. Oliver is a Limited
Partner of Lighthouse Partners, L.P. Also includes 5,193 shares issuable upon
exercise of currently exercisable stock options.
(2) Includes 61,645 shares issuable upon conversion of the Series A
(representing 33,333 voting shares), beneficially owned by the Jon M. Morgan
Pension Plan. Mr. Morgan is trustee of the Jon M. Morgan Pension Plan. Also
includes 61,645 shares issuable upon conversion of the Series A (representing
33,333 voting shares), beneficially owned by J.M. Mineral and Land Co., Inc. Mr.
Morgan is President of J.M. Mineral and Land Co, Inc. Also includes 38,528
shares issuable upon conversion of the Series B, and 9,493 shares issuable upon
exercise of currently exercisable stock options.
(3) Includes 50,000 issuable upon conversion of the Series B and 45,665 shares
issuable upon exercise of currently exercisable stock options.
(4) Includes 29,206 shares issuable upon conversion of the Series B, and 18,836
shares issuable upon exercise of currently exercisable stock options.
(5) Includes 2,000 shares held in a grantor trust of which Mr. Blake is the
trustee, and 3,281 shares issuable upon exercise of a currently exercisable
stock option.
(6) Represents shares issuable upon exercise of a currently exercisable stock
option.
8
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires that our executive officers and
directors and persons who own more than ten percent of a registered class of
AMEN's equity securities (collectively, the "Reporting Persons") to file reports
of ownership and changes in ownership with the Commission and to furnish the
Company with copies of these reports. The Company believes that all filings
required to be made by the Reporting Persons during the fiscal year ended
December 31, 2003 were made on a timely basis.
MANAGEMENT
The following table sets forth the names, ages and positions of the executive
officers, directors and director nominees of the Company as of the date of the
Annual Meeting. The respective backgrounds of the directors are set forth above
under "Proposal One", and Mr. James' background is set forth following the
table:
Name Age Title
Eric L. Oliver (1)(2) 45 Chairman of the Board of Directors & Chief Executive Officer
Jon M. Morgan (3) 45 President, Chief Operating Officer & Director
John M. James 39 Chief Financial Officer and Secretary
Bruce E. Edgington (1)(2)(3) 46 Director
Earl E. Gjelde (1)(2)(3) 59 Director
Donald M. Blake 48 Director
G. Randy Nicholson 66 Director
-------------------------------------
(1) Members of Compensation Committee
(2) Members of Audit Committee
(3) Members of Nominating Committee
John M. James was appointed Chief Financial Officer of the Company in September
2003. He graduated from University of the Permian Basin in Odessa, TX with a
degree in accounting and information systems in 1995. He spent eight years with
Johnson, Miller & Co. where he focused on tax and the design and implementation
of accounting systems. Prior to attending college he was honorably discharged
from the United States Army after serving nearly eight years on active duty.
The Board has determined that Messrs. Edgington, Gjelde, Blake and Nicholson, in
excess of a majority of the Board, are independent directors under the
guidelines established by the Commission and the Nasdaq Stock Market ("Nasdaq").
It is anticipated that such independent directors will have meetings at which
only independent directors are present as required by the Nasdaq rules. Each
director serves until the next annual meeting of stockholders and the election
and qualification of their successors.
9
Executive officers are appointed by the Board of Directors annually and serve at
the discretion of the Board. There are currently no employment agreements
between the Company and any of its officers. While the officers of the Company
devote such time as they determine to be necessary to the management of the
Company, they and their affiliates are also engaged in other business
activities, including those which are the same as or similar to the business of
the Company. The officers receive compensation from such other activities which
is not borne directly or indirectly by the Company and which is not related to
any services provided to the Company. The Company does not currently pay any
salaries to its officers, except for Mr. James. See "Executive Compensation and
Other Information".
MEETING ATTENDANCE AND COMMITTEES OF THE BOARD
AMEN's business is managed under the direction of the Board of Directors. The
Board meets during our fiscal year to review significant developments and to act
on matters requiring Board approval. The Board of Directors held two formal
meetings and acted by unanimous written consent and through teleconference
meetings two times during the fiscal year ended December 31, 2003. No director
attended fewer than 75% of the aggregate of the total number of meetings of the
Board of Directors and their respective committee meetings held subsequent to
their election to the Board in 2003.
The Board of Directors has established an Audit Committee, a Compensation
Committee, and a Nominating Committee to devote attention to specific subjects
and to assist the Board in the discharge of its responsibilities. During 2003,
at least a majority of each of the Board committees was comprised of independent
directors in accordance with the Nasdaq rules for small business filers in
effect at that time. The Commission and Nasdaq have adopted new rules which now
require that all of the members of these committees be independent directors,
except in certain limited circumstances. For continuity in the performance of
the functions of these committees related to the fiscal year ended December 31,
2003 and the Annual Meeting, the composition of the committees has remained
constant through the first quarter of 2004. However, in light of the new
regulatory requirements, the Board has revised the committee charters and
intends to review potential changes to the composition of each of the
committees. The functions of these committees and their members as of the date
of the Annual Meeting are described below.
Audit Committee
The Audit Committee is comprised of Messrs. Edgington (Chair), Gjelde, and
Oliver. The Audit Committee held four meetings during 2003. The Audit Committee,
among other things, oversees the accounting and financial reporting practices of
the Company and reviews the annual audit with the Company's independent
accountants. In addition, the Audit Committee has the sole authority and
responsibility to select, evaluate, and where appropriate, replace the
independent auditors. The general responsibilities of the Audit Committee are
set forth in the Audit Committee Charter, a copy of which is attached to this
Proxy Statement as Appendix I. The Board has determined that no member of the
Committee meets all of the criteria needed to qualify as an "audit committee
financial expert" as defined by the Securities Exchange Commission regulations.
The Board believes that each of the current members of the Committee has
sufficient knowledge and experience in financial matters to perform his duties
on the Committee.
10
AUDIT COMMITTEE REPORT. The Audit Committee oversees our financial reporting,
internal controls and audit functions on behalf of the Board of Directors. In
fulfilling its oversight responsibilities, the Committee has reviewed the
audited consolidated financial statements in the Annual Report on Form 10-KSB
with management including discussions of accounting principles, reasonableness
of judgments, and the clarity of financial disclosures. The Committee also
reviewed with the independent auditors their assessment of financial statements
and of management's judgments in deriving the financial statements. In addition,
the Committee has discussed with the independent auditors the matters required
by SAS 61 and the matters in the written disclosures required by the
Independence Standards Board and discussed with the independent accountant the
independent accountant's independence. The Committee also met with the
independent auditors, with and without management present, to discuss their
examinations, evaluations of our internal controls and the overall quality of
our financial reporting. The Committee held four meetings in 2003.
Based on the review and discussions referred to above, the Committee recommended
to the Board of Directors that the audited consolidated financial statements be
included in AMEN's Annual Report on Form 10-KSB for filing with the Securities
and Exchange Commission.
Bruce Edgington, Audit Committee chair
Earl E. Gjelde, Audit Committee member
Eric L. Oliver, Audit Committee member
Nominating Committee
The Nominating Committee is comprised of Jon Morgan (chair), Bruce Edgington and
Earl Gjelde. The Nominating Committee met one time during 2003. The Nominating
Committee operates pursuant to a Nominating Committee Charter which is attached
to this Proxy Statement as Appendix II.
The Nominating Committee identifies nominees by first evaluating the current
members of the Nominating Committee willing to continue in service. If any Board
member does not wish to continue in service, if the Nominating Committee decides
not to nominate a member for re-election or if the Board desires to increase the
size of the Board by adding new director positions, then the Nominating
Committee establishes a pool of potential director candidates from
recommendation from the Board, senior management and stockholders, who are then
evaluated through the review process outlined below.
The Nominating Committee reviews the credentials of potential director
candidates (including potential candidates recommended by stockholders),
conducts interviews and makes formal nominations for the election of directors.
In making its nominations, the Nominating Committee considers a variety of
factors, including the following factors: integrity, high level of education,
skills, background, independence, financial expertise, experience or knowledge
with businesses relevant to the Company's current and future business plans,
experience with business of similar size, all other relevant experience,
understanding of the Company's business and industry diversity, compatibility
with existing Board members, and such other factors as the Nominating Committee
deems appropriate in the best interests of the Company and its stockholders.
Proposed nominees are not evaluated differently depending upon who has made the
proposal. The Company has not to date paid any third party fee to assist in this
process.
The Company will consider proposed nominees whose names are submitted to the
Nominating Committee, by stockholders. Proposals made by stockholders for
nominees to be considered at an annual stockholders meeting must be received by
the Company prior to the end of the fiscal year preceding such annual meeting.
The Company does not have a formal policy with regard to the consideration of
any director candidate recommended by stockholders.
11
Compensation Committee
The Compensation Committee is comprised of Earl E. Gjelde (Chair), Bruce E.
Edgington and Eric Oliver, and met one time during 2003. The Compensation
Committee was established to advise the Board and consult with management
concerning the salaries, incentives and other forms of compensation for the
officers and other employees of the Company. The committee also administers the
Company's stock option plans. Currently, none of the officers of the Company are
paid any compensation, except for Mr. James, the Chief Financial Officer and
Secretary.
STOCKHOLDER COMMUNICATION
Stockholders may send other communications to the Board of Directors, a
committee thereof or an individual Director. Any such communication should be
sent in writing addressed to the Board of Directors, the specific committee or
individual Director in care of the Company's Secretary at the address on the
front of this Proxy Statement. The Company's Secretary is responsible for
determining, in consultation with other officers of the Company, counsel and
other advisers, as appropriate, which stockholder-communications will be relayed
to the Board, committee or individual Director. The Secretary may determine not
to forward any letter to the Board, committee or individual Director that does
not relate to the business of the Company.
ANNUAL SHAREHOLDER MEETING
The Corporation expects all Board members to attend the annual meeting of
shareholders, but from time to time, other commitments may prevent all directors
from attending each meeting. All directors attended the most recent annual
meeting of shareholders, which was held on May 7, 2003.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table sets forth all compensation paid in
2000, 2001 and 2002 to the Company's Chief Executive Officer in office at the
end of 2003. The Company did not have any officers during 2003 whose total
annual salary and bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------
Long-Term Compensation
-----------------------------------
Annual Compensation Awards Payouts
---------------------------------------------------------------------
Other Annual Securities
Name and Principal Compensation $ Restricted Underlying LTIP All other
Position Year Salary $ Bonus $ (2) Stock Options/ SARS Payouts Compensation
-----------------------------------------------------------------------------------------------------------
Eric L. Oliver 2001 - - - - 1,671 - -
(1) Chairman of ----------------------------------------------------------------------------------------
the Board of 2002 - - - - 3,522 - -
Directors & Chief ----------------------------------------------------------------------------------------
Executive Officer 2003 - - - - - - -
-----------------------------------------------------------------------------------------------------------
(1) Mr. Oliver became the Company's Chief Executive Officer on September 19,
2002. He did not receive any salary or bonus during 2002 and 2003, and is not
currently paid a salary.
12
Mr. Morgan became the Company`s Chief Executive Officer on September 19, 2002.
He did not receive any salary or bonus during 2002 and 2003, and is not
currently paid a salary. Mr. James became the Company's Chief Financial Officer
on September 1, 2003 and was paid $19,667 in salary and bonuses in 2003.
The following table sets forth information with respect to stock options held by
the executive officer named in the "Summary Compensation Table", and the
potential realizable value at assumed annual rates of stock price appreciation
as indicated, over the option term.
AGGREGATED OPTION EXCERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES(1)
-----------------------------------------------------------------------------------------------------------
Number Number of Unexercised Value of Unexercised
Shares Securities Underlying In-The-Money Options
Acquired on Value Options at 12/31/03 at 12/31/03
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
----------------------------------------------------------------------------------------------------------
Eric L. Oliver -- -- 5,193/0 $0/$0
----------------------------------------------------------------------------------------------------------
(1) The option values above are based on the difference between the option
exercise price and the market price for the Common Stock quoted on the Nasdaq
SmallCap Market on December 31, 2003.
DIRECTOR COMPENSATION
We do not provide directors who are also officers of AMEN additional
compensation for their service as directors. All non-employee directors receive
reimbursement of reasonable expenses incurred in attending Board and Committee
meetings.
The Board compensation for the year 2003 consisted of the following:
-- Each director was granted 3,500 ten-year options to purchase shares of
AMEN common stock at the market price of $1.98 per share.
-- Out of these 3,500 options, 2,625 vested immediately, and 875 options
vested upon attendance at an aggregate total of eight Board and
committee meetings throughout 2003. Nonvested options were cancelled
at the end of 2003.
-- Each Committee Chairman received an additional 450 ten year vested
options exercisable at $1.98 per share.
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 2002, the Company completed the purchase of approximately 64.9% of
the limited partnership shares of TCTB Partners, Ltd. ("TCTB") Eric Oliver,
Chairman and Chief Executive Officer of the Company, and Jon Morgan, President
and Chief Operating Officer of the Company, either directly or beneficially
owned interests in TCTB. Mr. Morgan is also President of TCTB Company, Inc., the
general partner of TCTB that controls its daily operations. Mr. Oliver sold all
his LP Interest in TCTB totaling 7.94% (which he owned beneficially through a
limited partnership), and Mr. Morgan sold all his LP Interest in TCTB totaling
10.54%. The Company did not acquire any interest in TCTB Company, Inc., which is
primarily owned by the original limited partners of TCTB, but has the authority
to change the general partner of TCTB due to its ownership of approximately
71.385% of the LP Interests of TCTB. Both Mr. Oliver and Mr. Morgan retained
their proportionate share of their interest in TCTB Company, Inc. Assuming the
conversion of their Preferred Stock, Mr. Oliver and Mr. Morgan beneficially own
10.4% and 8.7%, respectively, of the outstanding shares of the Company. Other
preferred and common shareholders of the Company also sold their 21.14% total LP
Interest in TCTB to the Company.
The TCTB acquisition was funded with $1,945,874 in cash and the creation of
$2,789,087 in Promissory Notes between AMEN and the selling partners ("the TCTB
Notes"). The TCTB Notes totaling $2,789,087 stipulate a floating interest rate
of 15 basis points above the prime lending rate, beginning at 4.9% and never to
exceed 6%. The interest rate is adjusted every October 1. The TCTB Notes are
payable in consecutive annual installments, the first of which is due and
payable on or before April 1, 2005, and one of which becomes due and payable on
or before the same day of each succeeding year until the entire unpaid principal
balance and all accrued and unpaid interest is fully paid. The amount of each
annual payment is based upon the Net Operating Loss Benefit we realize, defined
as the dollar value of the federal income tax benefit to the Company in
utilizing the Company's net operating loss carryforward as defined in the
Internal Revenue Service Code. Therefore, when we make the first payment on
April 1, 2005, it will be related to the 2004 fiscal year Net Operating Loss
Benefit. If the TCTB Notes are not paid prior to May 31, 2009 they become fully
due and payable.
Additionally, during 2002 and 2003, certain parties related to the officers and
directors of the Company were tenants in a building owned by TCTB in Midland,
TX. TCTB received rental income from these related parties of approximately
$273,000 in 2002 and $260,000 in 2003.
We may in the future enter into other transactions and agreements incident to
our business with directors, officers, principal stockholders and other
affiliates. We intend for all such transactions and agreements to be on terms no
less favorable than those obtainable from unaffiliated third parties on an
arm's-length basis. In addition, the approval of a majority of the AMEN
directors will be required for any such transactions or agreements.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors of AMEN. We
will pay the cost of soliciting proxies in the accompanying form. We may solicit
proxies by email, mail, telephone and delivery service by officers, directors
and our employees. We may also request banking institutions, brokerage firms,
custodians, and trustees, or their nominees and fiduciaries to forward
solicitation material to the beneficial owners of the common stock that those
companies or persons hold of record. We will pay for reasonable costs of the
solicitation and will reimburse forwarding expenses.
14
FINANCIAL INFORMATION
We have provided a copy of our annual report on Form 10-KSB together with this
proxy Statement, additional copies of which are available, without charge, by
contacting us at the address provided herein.
EXTERNAL AUDITOR INFORMATION
Effective September 30, 2002, Johnson, Miller & Co. was engaged as the
independent accountant for the Company, replacing the Company's previous
accountant, Ernst & Young, LLP (E & Y), and Johnson, Miller & Co. has been
selected as the Company's principal accountants for 2004. The decision to engage
Johnson, Miller & Co. was approved by the Audit Committee of the Board of
Directors. During the interim period preceding termination of E&Y, there were no
disagreements between the Company and E&Y on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreement(s), if not resolved to the satisfaction of E&Y would have
caused it to make reference to the subject matter of the disagreement(s) in
connection with its report.
Audit Fees: The aggregate fees paid to E & Y for professional services rendered
for audit of the financial statements and for reviews of reports on Forms 10-Q
was $71,871 during 2002. The aggregate fees paid to Johnson Miller & Co. for the
review of the report on 10-Q for the third quarter during 2002 was $3,877. The
aggregate fees paid to Johnson Miller & Co. for the audit of the financial
statements and for reviews of the report on 10-Q during 2003 was $71,219.
Audit Related Fees: None.
Tax Fees: The Company did not pay its principal accountant any fees for tax
related matters. The Company retained a separate firm for tax matters.
All Other Fees: The aggregate other fees paid to Johnson Miller & Co. during
2002 and 2003 were $22,950 and $8,069, respectively. The 2002 fees were paid in
connection with preparation of audited financial statements included in the
August 2002 proxy statement in connection with the stockholder vote on the
Company's new business plan and the 2003 fees mainly represent due diligence
efforts on various acquisitions opportunities the Company pursued.
The Company expects that representatives of Johnson Miller & Co. will be present
at the Annual Meeting to respond to appropriate questions and to make a
statement if they desire to do so.
15
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for action at
the meeting other than the matters set forth herein. Should any other matter
requiring a vote of stockholders arise, the proxies in the enclosed form confer
upon the person or persons entitled to vote the shares represented by such
proxies discretionary authority to vote the same in accordance with their best
judgment in the interest of AMEN.
All stockholder proposals submitted for inclusion in the Company's proxy
statement and form of proxy for the Annual Meeting of Stockholder of the Company
to be held in 2005 must be received at the Company's principal executive
offices, 303 West Wall Street, Suite 1700, Midland, Texas 79705, Attention: John
M. James, by December 19, 2004. Such proposals must also comply with the
applicable regulations of the Securities and Exchange Commission. Notice to the
Company of all other stockholder proposals (not submitted for inclusion in the
Company's proxy statement and form of proxy) for the 2005 Annual Meeting will
not be considered timely unless received at the Company's principal executive
offices as set forth above on or before March 5, 2005.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING IN PERSON, YOU ARE URGED TO COMPLETE, SIGN AND RETURN THE
PROXY IN THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ John M. James
-----------------
JOHN M. JAMES
CHIEF FINANCIAL OFFICER AND SECRETARY
16
AMEN PROPERTIES, INC.
303 WEST WALL STREET, STE. 1700
MIDLAND, TX 79701
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMEN PROPERTIES INC. FOR
THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 18, 2004
The undersigned hereby constitutes and appoints Eric L. Oliver and Jon M.
Morgan, and each of them, his true and lawful agents and proxies with full power
of substitution in each, to represent the undersigned at the Annual Meeting of
Stockholders to be held at the Corporate Office, located at 303 West Wall Street
Suite 1700, Midland, TX 79701, in the Conference Room, at 8:30 a.m., local time,
on Tuesday, May 18, 2004, and at any adjournments thereof, on all matters coming
before said meeting.
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE: /X/
1. ELECTION OF, ERIC L. OLIVER, JON M. MORGAN, BRUCE E. EDGINGTON, EARL
E. GJELDE, DON BLAKE AND G. RANDY NICHOLSON TO THE AMEN PROPERTIES, INC.BOARD OF
DIRECTORS.
IN FAVOR OF ALL NOMINEES [ ]
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES [ ]
WITHHOLD THE FOLLOWING:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided above.)
2. AMENDMENT TO THE CERTIFICATE OF INCORPORTION EFFECTING THE
CERTIFICATE OF DESIGNATION OF SERIES AND DETERMINATION OF RIGHT AND PREFERENCES
OF SERRIES A AND SERIES B PREFERRED STOCK OF AMEN PROPERTIES, INC.
[ ] FOR
[ ] AGAINST
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted IN FAVOR of the election of the directors named in this proxy card and FOR
of the Amendment to the Company's Certificate of Incorporation.
17
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE ACCOMPANYING NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS AND PROXY STATEMENT FOR THE MAY 18, 2004 ANNUAL MEETING
OF STOCKHOLDERS AND THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB
Stockholder Signature(s): _______________________ _________________________
Date: _____________________________
Stockholder Printed Name(s): ____________________ _________________________
Please sign your name exactly as it appears hereon. Joint owners must each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give your full title as it appears thereon. If a corporation, please sign in
full corporate name as President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
18
Appendix I
AMEN PROPERTIES, INC.
AUDIT COMMITTEE CHARTER
(As of December 31, 2003)
Purpose
-------
The purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") with its oversight responsibilities regarding
the Company's accounting and system of internal controls, the quality and
integrity of the Company's financial reports, the Company's compliance with
legal and regulatory requirements, the independence of the Company's outside
auditor and the performance of the Company's outside auditor and internal audit
function. In so doing the Committee should endeavor to maintain free and open
means of communication between the members of the Committee, the other members
of the Board, the outside auditor, the internal auditor and the management of
the Company.
Limitation of Audit Committee's Role
------------------------------------
The Audit Committee shall provide assistance to the Board in fulfilling
the Board's responsibility to the stockholders relating to corporate accounting
and financial reporting practices. The Audit Committee shall provide an open
avenue of communication between the independent outside auditor, management and
the Board. While the Audit Committee has the responsibilities and powers set
forth in the Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Company's financial statements and
disclosures are complete and accurate and are in accordance with generally
accepted accounting principles and applicable rules and regulations. These are
the responsibilities of management and the independent auditor.
Membership
----------
Beginning on or about the date of the Company's 2004 Annual Meeting,
the Committee shall be composed of no fewer than three members of the Board, all
of whom must meet the "independence" requirements of the Nasdaq Stock Market
("Nasdaq"), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the
"Exchange Act"), and the rules and regulations of the Securities and Exchange
Commission (the "Commission") (except under those circumstances when a
non-independent director may serve on the Committee in accordance with such
requirements and rules). As a result, the Committee members are independent of
the management of the corporation and are free of any relationship that, in the
opinion of the Board, would interfere with their exercise of independent
judgment as a committee member. The members shall be appointed by action of the
Board, and shall serve at the discretion of the Board. Either (i) at least one
member of the Committee shall satisfy the "audit committee financial expert"
requirements of the Commission, as determined by the Board in its business
judgment, or (ii) the Company shall disclose (to the extent required) in its
periodic reports filed pursuant to the Exchange Act the reasons why at least one
member of the Committee is not an "audit committee financial expert."
1
Appendix I
AMEN PROPERTIES, INC.
AUDIT COMMITTEE CHARTER
(As of December 31, 2003)
Committee Organization and Procedures
-------------------------------------
1. The members of the Committee shall appoint a Chair of the Committee by
majority vote. The Chair (or in his or her absence, a member designated by
the Chair) shall preside at all meetings of the Committee. The Committee
may also create subcommittees, as it deems appropriate, consisting of one
or more members who shall report on their activities at the next meeting of
the Committee.
2. The Committee shall have the authority to establish its own rules and
procedures consistent with the bylaws of the Company for notice and conduct
of its meetings, should the Committee, in its discretion, deem it desirable
to do so.
3. The Committee shall meet as often as may be deemed necessary or
appropriate.
4. The Committee may, in its discretion, include in its meetings members of
the Company's financial management, representatives of the outside auditor,
the senior internal auditor and other financial personnel employed or
retained by the Company.
5. The Committee may, periodically, meet with the outside auditor in executive
session to discuss any matters that the Committee believes should be
addressed privately, without management's presence. The Committee may
likewise meet privately with management, as it deems appropriate.
6. The Committee may, in its discretion, use the services of the Company's
regular corporate legal counsel with respect to legal matters or, at its
discretion, retain outside legal counsel if it determines that such counsel
is necessary or appropriate under the circumstances. The Committee may
also, in its discretion, retain the services of any other experts,
accountants, and other advisors that it deems necessary or appropriate to
assist the Committee in the performance of its function. The Company shall
provide for appropriate funding, as determined by the Committee, for
payment of compensation to any advisor retained by the Committee.
Oversight Responsibilities
--------------------------
Outside Auditor
---------------
1. The Committee shall be directly responsible for the appointment,
compensation, retention and oversight of the work of the outside auditor in
connection with the audit of the Company's annual financial statements and
related services. In this regard, the Committee shall have the sole
authority to appoint and retain the outside auditor and shall periodically,
but at least annually, evaluate the performance of the outside auditor and,
if necessary, replace the outside auditor. As appropriate, the Committee
may, but is not required to submit the appointment of the outside auditor
for stockholder approval at any meeting of stockholders. The outside
auditor shall report directly to the Committee.
2
Appendix I
AMEN PROPERTIES, INC.
AUDIT COMMITTEE CHARTER
(As of December 31, 2003)
2. The Committee shall approve in advance all audit engagement fees and terms
of engagement and shall approve in advance all audit and non-audit services
to be provided by the outside auditor. The Company shall provide for
appropriate funding, as determined by the Committee, for payment of
compensation to the outside auditor. By approving the audit engagement,
audit services within the scope of the engagement shall be deemed to have
been approved in advance. The Committee may delegate authority to one or
more members to grant pre-approvals of audit and permitted non-audit
services, provided that decisions to grant pre-approvals shall be presented
to the full Committee at its next scheduled meeting. Such pre-approvals
shall not apply to those matters excluded from the approval requirements by
rules of the Commission or NASDAQ.
3. The Committee shall receive from the outside auditor, at least annually, a
written statement delineating all relationships between the outside auditor
and the Company, consistent with Independence Standards Board Standard 1.
The Committee shall actively engage in a dialogue with the outside auditor
with respect to any disclosed relationships or services that, in the view
of the Committee, may affect the objectivity and independence of the
outside auditor. If the Committee determines that further inquiry is
advisable, the Committee shall take, or recommend that the Board take, any
appropriate action in response to the outside auditor's independence.
4. The Committee shall receive from the outside auditor, at least annually, a
written report describing the outside auditor's internal quality-control
procedures, any issues raised by the most recent internal quality-control
review, or peer review, of the outside auditor, or by any inquiry or
investigation by governmental or professional authorities, within the
preceding five years, respecting one or more independent audits carried out
by the outside auditor, and any steps taken to deal with any such issues.
5. The Committee shall confirm with the outside auditor that the outside
auditor is in compliance with the partner rotation requirements established
by the Commission.
Annual Audit
------------
1. The Committee shall meet with the outside auditor and management in
connection with each annual audit to discuss the scope of the audit and the
procedures to be followed.
2. The Committee shall evaluate and discuss the audited financial statements
with the management of the Company and the outside auditor, including (i)
major issues regarding accounting and financial statement presentation,
including any significant changes in the Company's selection or application
of accounting principles; (ii) any significant reporting issues and
3
Appendix I
AMEN PROPERTIES, INC.
AUDIT COMMITTEE CHARTER
(As of December 31, 2003)
judgments made in connection with the preparation of the Company's
financial statements, including the effects of alternative GAAP methods on
the Company's financial statements; (iii) the effect of regulatory and
accounting initiatives, as well as off-balance structures, on the Company's
financial statements; and (iv) the Company's disclosures under
"Management's Discussion and Analysis of Financial Conditions and Results
of Operations."
3. The committee shall discuss with the outside auditor the matters required
to be discussed by Statement on Auditing Standards No. 61 as then in effect
including, among others, (i) the methods used to account for any
significant unusual transactions reflected in the audited financial
statements; (ii) the effect of significant accounting policies in any
controversial or emerging areas for which there is a lack of authoritative
guidance or a consensus to be followed by the outside auditor; (iii) the
process used by management in formulating particularly sensitive accounting
estimates and the basis for the auditor's conclusions regarding the
reasonableness of those estimates; and (iv) any disagreements with
management over the application of accounting principles, the basis for
management's accounting estimates or the disclosures in the financial
statements.
4. The Committee shall, based on the review and discussion in paragraph 1
above, and based on the disclosures received from the outside auditor
regarding its independence and discussions with the auditor regarding such
independence, conclude whether the audited financial statements should be
included in the Company's Annual Report on Form 10-KSB for the fiscal year
subject to the audit.
5. The Committee shall review and discuss with the Company's CEO and CFO the
basis for the certifications required by the rules and regulations of the
Securities and Exchange Commission to be provided in the Company's Form
10-KSB filing.
Quarterly Review
----------------
1. The Committee shall evaluate and discuss the quarterly financial statements
with the management of the Company, including the Company's disclosures
under "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
2. The outside auditor is required to review the interim financial statements
to be included in any Form 10-QSB of the Company using professional
standards and procedures for conducting such reviews, as established by
generally accepted auditing standards as modified or supplemented by the
Securities and Exchange Commission, prior to the filing of the Form 10-QSB.
The Committee shall discuss with management and the outside auditor in
person, at a meeting, management judgments, accounting estimates,
significant new accounting policies and disagreements with management.
4
Appendix I
AMEN PROPERTIES, INC.
AUDIT COMMITTEE CHARTER
(As of December 31, 2003)
3. The Committee shall review and discuss with management corporate policies
and procedures as to earnings press releases and financial information and
earnings guidance provided to analysts and rating agencies, including the
use of "non-GAAP financial measures." The primary purpose of these
discussions is to provide guidelines for the types of information to be
disclosed and the type of presentation to be made. The Committee may, but
is not required, to discuss in advance of publication each earnings release
or each instance in which the Company provides earnings guidance. The Chair
(or in his or her absence, a member designated by the Chair) may represent
the entire Committee for purposes of this discussion.
Internal Controls
-----------------
1. The Committee shall meet as often as deemed necessary or appropriate, but
not less than annually, to discuss with the outside auditor and the Chief
Financial Officer the adequacy and effectiveness of the accounting and
financial controls of the Company and the Company's disclosure controls and
procedures, and consider any recommendations for improvement of any such
control procedures.
2. The Committee shall discuss with the outside auditor and with management
any letter of recommendation provided by the outside auditor and any other
significant matters brought to the attention of the Committee by the
outside auditor as a result of its annual audit. The Committee should allow
management adequate time to consider any such matters raised by the outside
auditor. The Committee shall also review with the outside auditor any
difficulties encountered by the auditor in the course of its audit work and
shall discuss all such issues with management.
Internal Audit
--------------
Currently the Company does not incorporate the use of an internal
auditor. However, the Committee may, at its discretion, determine that an
internal audit function is necessary in order for the Committee to fulfill its
obligations as stated in the Committee's Charter. At which time the Company
shall provide for the appropriate funding, as determined by the Committee, for
payment of compensation to any internal auditor as employed or retained by the
Committee.
Other Responsibilities
----------------------
1. The Committee shall conduct an annual performance evaluation and shall
similarly review and reassess the Committee's Charter at least annually.
The Committee shall submit any recommended changes to the Board for its
consideration.
2. The Committee shall provide the report for inclusion in the Company's
Annual Proxy Statement required by Item 306 of Regulation S-B.
5
Appendix I
AMEN PROPERTIES, INC.
AUDIT COMMITTEE CHARTER
(As of December 31, 2003)
3. The Committee, through its Chair, shall report periodically, as deemed
necessary or desirable by the Committee, but at least annually, to the full
Board regarding the Committee's actions and recommendations, if any.
4. The Committee shall establish clear policies for the Company hiring any
employees and partners, and former employees and partners, of the Company's
outside auditor.
Compliance Oversight Responsibilities
-------------------------------------
1. Review the Company's policies relating to the avoidance of conflicts of
interest and review related party transactions as well as policies and
procedures with respect to Executive Officer's expense accounts and
perquisites, including the use of corporate assets. The Committee shall
consider the results of any review of these policies and procedures by
the Company's independent auditors.
2. Ensure that responsibility for dissemination and monitoring of
adherence to the Company's Code of Business Conduct and Ethics is
assigned.
3. Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or audit-related matters.
4. Management shall promptly advise the Committee of any material reports
or inquiries received from regulators or governmental agencies that may
have a material impact on the financial statements or the Company's
compliance policies and practices.
6
Appendix II
AMEN PROPERTIES, INC.
NOMINATING COMMITTEE CHARTER
(As of December 31, 2003)
Purpose:
--------
The purpose of the Nominating Committee (the "Committee") shall be to
identify individuals qualified to become members of the Board of Directors (the
"Board"); recommend to the Board the slate of director nominees to be elected by
shareholders; and recommend directors to be elected by the Board to fill any
vacancies.
Committee Membership
--------------------
Beginning on or about the date of the Company's 2004 Annual Meeting,
the Committee shall consist of no fewer than three directors, all of whom shall
be independent directors as determined in accordance with rules adopted by the
Securities and Exchange Commission and the NASDAQ Stock Market (except under
those circumstances when a non-independent director may serve on the Committee
in accordance with such rules). The Board shall have full authority as to the
appointment and replacement of the Committee members.
Committee Authority and Responsibilities
----------------------------------------
1. The Committee shall have the sole authority to retain and terminate any
search firm to be used to identify director candidates and shall have sole
authority to approve the search firm's fees and other retention terms. The
Committee shall also have authority to obtain advice and assistance from
internal and external legal, accounting or other advisors.
2. The Committee shall actively seek individuals qualified to become board
members for recommendation to the Board.
3. The Committee may adopt a policy for consideration of director nominee
candidates recommended by stockholders of the Company, and adopt procedures
for stockholders to follow in submitting such recommendations to the
Committee.
4. The Committee may form and delegate authority to subcommittees when
appropriate.
5. The Committee shall review and reassess the adequacy of this Charter
annually and recommend any proposed changes to the Board for approval.
6. The Committee shall conduct a review of proposed nominees (whether proposed
by the Board, management, a stockholder, a search firm or other source)
based upon such criteria as the Committee shall from time to time
determine, and conduct such interviews and take other actions as the
Committee determines to be appropriate in the selection of nominees.
Appendix II
AMEN PROPERTIES, INC.
NOMINATING COMMITTEE CHARTER
(As of December 31, 2003)
7. To the extent the Company is legally required by contract or otherwise
(including pursuant to the terms of preferred stock issued by the Company)
to provide third parties with the ability to nominate board members, the
selection and nomination of such members need not be subject to the
Committee's nominating process.
Meetings and Reports
--------------------
The Committee shall meet as often as may be deemed necessary or
appropriate in its judgment, generally at least once a year. Meetings may be
held in person or telephonically, and at such times and places as the Committee
shall determine. The Committee shall make regular reports to the Board on its
activities. These reports will generally occur after each Committee meeting or
at such other times as the Committee deems appropriate.