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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrantþ | ||||||
Filed by a Party other than the Registranto | ||||||
Check the appropriate box: | ||||||
þ | Preliminary proxy Statement | o | Confidential, for Use of the | |||
Commission Only (as permitted | ||||||
by Rule 14a-6(e)(2)) | ||||||
o | Definitive proxy Statement | |||||
o | Definitive Additional Materials | |||||
o | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
Infinity, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ | No fee required. | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: | |||
(2) | Aggregate number of securities to which transaction applies: | |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
(4) | Proposed maximum aggregate value of transaction: | |||
(5) | Total fee paid: |
o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
(1) | Amount previously paid: | |||
(2) | Form, Schedule or Registration Statement no.: | |||
(3) | Filing Party: | |||
(4) | Date Filed: |
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1. To elect five (5) directors to serve until the 2006 annual meeting of shareholders and until their successors have been duly elected and qualified; | |
2. To approve the reincorporation of Infinity, Inc. in the State of Delaware; | |
3. To approve the establishment of a classified board of directors; | |
4. To approve the 2005 Equity Incentive Plan; | |
5. To ratify the appointment of Ehrhardt Keefe Steiner & Hottman, P.C. as our independent registered public accounting firm for the current fiscal year; and | |
6. To transact such other business as may properly come before the meeting or any adjournment thereof. |
BY ORDER OF THE BOARD OF DIRECTORS | |
STANTON E. ROSS | |
PRESIDENT |
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• | Election of Directors: To elect the nominated directors requires the affirmative vote of the majority of the shares represented at the annual meeting, in person or by proxy. Any shares not voted (whether by withholding the vote, broker non-vote or otherwise) have no impact in the election of directors, except to the extent the failure to vote for an individual results in another candidate receiving a larger number of votes. | |
• | Reincorporation of the Company in Delaware: To be approved, this matter requires the affirmative vote of a majority of the voting power of the issued and outstanding shares entitled to vote. Consequently, broker non-votes and abstentions on this matter have the effect of a vote against the matter. |
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• | Approval of Adoption of a Classified Board: To be approved, this matter requires the affirmative vote of a majority of the voting power of the issued and outstanding shares entitled to vote. Consequently, broker non-votes and abstentions on this matter have the effect of a vote against the matter. | |
• | Approval of the 2005 Equity Incentive Plan: To be approved, this matter must receive more affirmative votes than votes in opposition of the voting power of those shares present in person or by proxy at the meeting and entitled to vote. Broker non-votes and abstentions on this matter have no impact on this matter. |
Amount and Nature of | Percent | |||||||
Name and Address of Beneficial Owner(1) | Beneficial Ownership | of Class | ||||||
Gilder, Gagnon, Howe & Co. LLC(2) | 1,009,548 | 7.6 | % | |||||
Wellington Management Company LLP(3) | 1,212,000 | 9.1 | % | |||||
Elliot M. Kaplan(4) | 25,000 | * | ||||||
Robert O. Lorenz(5) | 40,000 | * | ||||||
Leroy C. Richie(6) | 142,500 | 1.1 | % | |||||
Stanton E. Ross(7) | 1,076,038 | 8.0 | % | |||||
James A. Tuell(8) | 70,000 | * | ||||||
James W. Dean(9) | 45,900 | * | ||||||
Stephen D. Stanfield(10) | 98,500 | * | ||||||
All directors, nominees for director, and executive officers as a group (7 persons)(11) | 1,497,938 | 10.8 | % |
* | The percentage of shares beneficially owned is less than 1%. |
(1) | The address of these persons, unless otherwise noted, is Infinity, Inc., 950 Seventeenth Street, Suite 800, Denver, Colorado 80202. | |
(2) | The address of Gilder, Gagnon, Howe & Co. LLC (“GGH”) is 1775 Broadway, 26th Floor, New York, NY 10019. GGH is a registered broker-dealer and may be deemed to be the beneficial owner of 971,664 of our shares. These shares are held in customer accounts over which partners and/or employees of GGH have discretionary authority to dispose of or direct the disposition of the shares. Partners of GGH |
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hold 13,159 of our shares in accounts owned by them or their families. The profit-sharing plan of GGH holds 24,725 of our shares. |
(3) | The address of Wellington Management Company, LLP (“WMC”) is 75 State St., Boston, MA 02109. WMC is a registered investment advisor and may be deemed to be the beneficial owner of 1,212,000 of our shares. These shares are owned of record by clients of WMC. | |
(4) | Includes 22,000 shares which may be purchased within 60 days under stock options held by Mr. Kaplan. | |
(5) | Includes 35,000 shares which may be purchased within 60 days under stock options held by Mr. Lorenz. | |
(6) | Includes 142,500 shares which may be purchased within 60 days under stock options held by Mr. Richie. | |
(7) | Includes 225,700 shares which may be purchased within 60 days under stock options held by Mr. Ross. Mr. Ross has pledged 675,000 shares of Infinity common stock owned by him to support margin loans from brokerage firms in the current amount of approximately $850,000. This arrangement was in place during all of 2004. Under this arrangement, Infinity common stock owned by Mr. Ross could be sold by the brokers to meet margin calls or under certain other conditions. | |
(8) | Includes 50,000 shares which may be purchased within 60 days under stock options held by Mr. Tuell. | |
(9) | Includes 40,000 shares which may be purchased within 60 days under stock options held by Mr. Dean. |
(10) | Includes 98,500 shares which may be purchased within 60 days under stock options held by Mr. Stanfield. |
(11) | Includes options to purchase 613,700 shares exercisable within 60 days. |
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Infinity, Inc. | |
Attn: Chairman of the Corporate Governance and Nominating Committee | |
c/o Corporate Secretary | |
950 Seventeenth Street, Suite 800 | |
Denver, Colorado 80202 |
• | The name of the nominating shareholders and the address, phone number and e-mail address at which the nominating shareholders can be contacted. | |
• | Evidence of the number of shares of Infinity’s common stock held by the nominating shareholders, a statement of how long the nominating shareholders has held those shares, and a statement that the nominating shareholders will continue to hold those shares at least through our next annual meeting of shareholders. | |
• | The candidate’s full name, together with the address, phone number and e-mail address at which the candidate can be contacted. | |
• | A statement of the candidate’s qualifications and experiences, and any other qualities that the nominating shareholders believe that the candidate would bring to the board. | |
• | A description of any relationship and all arrangements or understandings, if any, between the shareholders and the candidate and any other person or persons with respect to the candidate’s proposed service on the board. | |
• | Information that would bear on the independence of the recommended candidate (such as affiliated transactions or relationships). | |
• | Any proceedings adverse to the Company, including legal proceedings, to which the recommended candidate or an associate is a party. |
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• | Information regarding whether the recommending stockholder or recommended candidate has plans to submit proposals for the Company or seeks to address any personal interest involving the Company. | |
• | The candidate’s resume, which must include at a minimum a detailed description of the candidate’s business, professional or other appropriate experience for at least the last ten (10) years, a list of other boards of directors on which the candidate currently serves or on which he or she served in the last ten (10) years, and undergraduate and post-graduate educational information. | |
• | A written statement, signed by the candidate, agreeing that if he or she is selected by the Committee and the board, he or she will (i) be a nominee for election to the board, (ii) provide all information necessary for us to include in our proxy statement under applicable SEC or Nasdaq rules, and (iii) serve as a director if he or she is elected by shareholders. | |
• | Any additional information that the nominating shareholder believes is relevant to the Committee’s consideration of the candidate. |
Board of Directors | |
Infinity, Inc. | |
950 17th Street, Suite 800 | |
Denver, CO 80202 | |
email: directors@infinity-res.com |
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Long-Term | |||||||||||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||||||||||
Other | Restricted | Securities | |||||||||||||||||||||||||||
Annual | Security | Underlying | All Other | ||||||||||||||||||||||||||
Salary | Bonus | Compensation | Awards | Options | Compensation | ||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($) | ($) | (#) | ($)(1) | ||||||||||||||||||||||
Stanton E. Ross, | 2004 | $ | 162,500 | $ | 25,000 | $ | 2,050 | — | 60,000 | $ | 1,005 | ||||||||||||||||||
President and Chief Executive | 2003 | $ | 110,000 | — | �� | $ | 16,965 | (2) | — | — | $ | 1,005 | |||||||||||||||||
Officer | 2002 | $ | 110,000 | $ | 41,234 | $ | 91,186 | (3) | — | 50,000 | $ | 1,005 | |||||||||||||||||
James A. Tuell | 2004 | $ | 143,308 | $ | 25,000 | — | — | 20,000 | — | ||||||||||||||||||||
Executive Vice President(4) | |||||||||||||||||||||||||||||
Stephen D. Stanfield | 2004 | $ | 96,717 | $ | 20,000 | $ | 1,250 | — | 35,000 | $ | 780 | ||||||||||||||||||
Senior Vice President, Oilfield | 2003 | $ | 81,417 | — | $ | 1,895 | — | — | $ | 780 | |||||||||||||||||||
Services | 2002 | $ | 74,154 | — | $ | 1,787 | — | 13,500 | $ | 780 | |||||||||||||||||||
James W. Dean | 2004 | $ | 79,231 | $ | 25,000 | — | — | 20,000 | — | ||||||||||||||||||||
Vice President — Strategic and | |||||||||||||||||||||||||||||
Corporate Development(5) | |||||||||||||||||||||||||||||
Jon D. Klugh, | 2004 | $ | 104,410 | $ | 10,000 | $ | 9,600 | (7) | — | 35,000 | $ | 915 | |||||||||||||||||
Chief Financial Officer(6) | 2003 | $ | 76,300 | — | $ | 9,600 | (7) | — | — | $ | 915 | ||||||||||||||||||
2002 | $ | 70,123 | $ | 21,000 | $ | 9,962 | (7) | — | 13,500 | $ | 915 |
(1) | Amount shown represents premiums paid on life insurance policies for the benefit of Messrs. Ross, Stanfield and Klugh. |
(2) | Amount shown includes $10,720 for personal use of company aircraft which was reported as taxable income. |
(3) | Amount shown includes $72,662 paid for reimbursement of taxes paid on exercise of non-qualified stock options. |
(4) | Mr. Tuell joined Infinity in February 2004. |
(5) | Mr. Dean joined Infinity in March 2004. |
(6) | Effective December 31, 2004, Mr. Klugh resigned as the Chief Financial Officer of Infinity. |
(7) | Represents an automobile allowance. |
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Individual Grants | Potential Realizable | |||||||||||||||||||||||
Value at Assumed | ||||||||||||||||||||||||
Number of | Percent of | Annual Rates of Share | ||||||||||||||||||||||
Securities | Total Options | Price Appreciation | ||||||||||||||||||||||
Underlying | Granted to | Exercise or | for Option Term | |||||||||||||||||||||
Options | Employees in | Base Price | Expiration | |||||||||||||||||||||
Name | Granted (#) | Fiscal Year | ($/Sh) | Date | 5% ($) | 10% ($) | ||||||||||||||||||
Stanton E. Ross | 60,000 | 15 | % | 4.26 | 6/17/2014 | $ | 160,740 | $ | 407,340 | |||||||||||||||
James A. Tuell | 20,000 | 5 | % | 4.26 | 6/17/2014 | $ | 53,580 | $ | 135,780 | |||||||||||||||
Stephen D. Stanfield | 35,000 | 9 | % | 4.26 | 6/17/2014 | $ | 93,765 | $ | 237,615 | |||||||||||||||
James W. Dean | 20,000 | 5 | % | 4.26 | 6/17/2014 | $ | 53,580 | $ | 135,780 | |||||||||||||||
Jon D. Klugh | 35,000 | 9 | % | 4.26 | 6/17/2014 | $ | 93,765 | $ | 237,615 |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options at | In-the-Money Options at | |||||||||||||||||||||||
Shares | Fiscal Year-End (#) | Fiscal Year-End ($) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise (#) | Realized ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Stanton E. Ross | 40,000 | 132,000 | 250,000 | — | $ | 875,650 | — | |||||||||||||||||
James A. Tuell | — | — | 20,000 | — | $ | 78,000 | — | |||||||||||||||||
Stephen D. Stanfield | — | — | 93,700 | — | $ | 297,344 | — | |||||||||||||||||
James W. Dean | — | — | 20,000 | — | $ | 78,000 | — | |||||||||||||||||
Jon D. Klugh | — | — | 108,500 | — | $ | 384,800 | — |
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Options Outstanding | ||||||||||||
Date of Shareholder | at December 31, | Exercise Price | ||||||||||
Name of Plan | Approval | 2004 | ($/Share) | |||||||||
1992 Stock Option Plan(1) | March 1992 | 2,000 | $3.00 | |||||||||
2000 Stock Option Plan | July 2000 | 111,000 | $1.50 | |||||||||
2001 Stock Option Plan | July 2001 | 187,000 | $3.815 to $5.00 | |||||||||
2002 Stock Option Plan | June 2002 | 264,000 | $5.00 | |||||||||
2003 Stock Option Plan | June 2003 | 237,500 | $8.70 | |||||||||
2004 Stock Option Plan | June 2004 | 363,750 | $4.26 |
(1) | The 1992 Stock Option Plan has expired and no additional options may be issued under this plan. |
Name | Age | Positions and Offices Held | ||||
Stanton E. Ross | 43 | President, Treasurer and Director of Infinity, Inc. | ||||
James A. Tuell | 45 | Executive Vice President and Director of Infinity, Inc. | ||||
President of Infinity Oil and Gas of Texas, Inc. | ||||||
President of Infinity Oil & Gas of Wyoming, Inc. | ||||||
Stephen D. Stanfield | 49 | Senior Vice President, Oilfield Services of Infinity, Inc. | ||||
President of Consolidated Oil Well Services, Inc. | ||||||
James W. Dean | 38 | Vice President, Strategic and Corporate Development of Infinity, Inc. |
Stanton E. Ross. Mr. Ross has been President, Treasurer and a director of Infinity since March 1992, and serves as an officer and director of each of Infinity’s subsidiaries. For a detailed description of Mr. Ross’ business experience, see “Proposal No. 3 — Election of Directors.” | |
James A. Tuell. Mr. Tuell has been the Executive Vice President of Infinity, Inc. since March 2005 and a director since April 2005. For a detailed description of Mr. Tuell’s business experience, see “Proposal No. 3 — Election of Directors.” | |
Stephen D. Stanfield. Mr. Stanfield has been Senior Vice President, Oil Field Services of Infinity, Inc. since June 2004. He has also served as the Chief Operating Officer of Consolidated Oil Well Services, Inc., a wholly-owned subsidiary of Infinity, Inc., since October 2000 and in March 2004 was promoted to President of Consolidated Oil Well Services, Inc. Prior to joining Infinity, Mr. Stanfield was an Assistant Manager with Crude Marketing Inc. from February 2000 to October 2000. Crude Marketing Inc. buys, transports and sells crude oil in eastern Kansas and northeastern Oklahoma. From 1990 to February 2000, Mr. Stanfield was employed with EOTT Energy, which was based in Houston, Texas. |
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Mr. Stanfield served as Operations Coordinator for the Mid-Continent Region and was responsible for coordinating crude oil transportation in a nine state area. Mr. Stanfield began his career in the oil and gas industry in 1981 with American Fracmaster Inc., which was headquartered in Oklahoma City, Oklahoma. He served as a Service Supervisor, Operations Manager, and Sales Representative at the company’s Chanute, Kansas and Bartlesville, Oklahoma facilities. He was employed with them until they sold the eastern Kansas operation to Eastern Frac Inc. and remained with that company until 1988. Mr. Stanfield served with the United States Air Force from 1976 to 1980. | |
James W. Dean. Mr. Dean has been Infinity’s Vice President, Strategic and Corporate Development since March 2004. Prior to joining Infinity, Mr. Dean was an investment banker with First Albany Capital, Inc. from September 2000 to March 2004, with clients and transactional experience focused in the energy industry, primarily related to oil and gas exploration and production. From January 2000 to September 2000, Mr. Dean worked as an independent consultant in the high-tech industry. From 1996 to January 2000, Mr. Dean worked for Key Energy Services, Inc., a publicly-traded oilfield service firm, most recently as Vice President of Financial Planning and Analysis and, prior to that, Manager of Financial Planning and Analysis. From 1991 to 1996, Mr. Dean worked in energy corporate finance for Rauscher Pierce Refsnes, Inc., now RBC Capital Markets, and worked for Petrie Parkman & Co. in its mergers and acquisitions group in 1996. Mr. Dean began his career in 1990 at Price Waterhouse, LLP, now PricewaterhouseCoopers, in its tax department. Mr. Dean received a B.A. in economics and managerial studies from Rice University. |
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Base Salary. Executive salaries were established initially at levels consistent with the salaries of industry peers of similar size and with similar growth prospects. The Committee considered the factors listed above, as well as increases in the cost of living as reported in various indices, in setting the level of base salary in 2004. | |
Stock Option Awards. Infinity has several stock options plans under which executive officers may be granted options to purchase Infinity’s common shares. In determining the specific grants for 2004, the board of directors issued a stock option grants consistent with our compensation philosophy of aligning the interests of executives with those of our shareholders and encouraging share ownership by executives as well as Infinity’s need to attract and retain key officers. | |
Discretionary Bonus Awards. In determining discretionary bonus awards relating to 2004 performance, the Compensation Committee considered the factors listed above as well as the overall financial condition of Infinity. Discretionary bonuses aggregating $105,000, or approximately 18% of total executive salaries, were awarded. | |
Chief Executive Officer’s 2004 Compensation. Mr. Ross’ base salary for 2004 was $162,500, a 46% increase from 2003. In establishing Mr. Ross’ salary for 2004, the Committee considered the factors listed above, as well as Mr. Ross’ significant contributions to Infinity’s fundraising efforts. |
Submitted by the Compensation Committee: | |
Elliot M. Kaplan | |
Leroy C. Richie | |
Robert O. Lorenz |
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Submitted by the members of the Audit Committee: | |
Robert O. Lorenz | |
Leroy C. Richie | |
Elliot M. Kaplan |
Number of Securities | ||||||||||||
Number of Securities | Remaining Available for | |||||||||||
to be Issued Upon | Weighted-Average | Future Issuance Under | ||||||||||
Exercise of | Exercise Price of | Equity Compensation Plans | ||||||||||
Outstanding Options, | Outstanding Options, | (Excluding Securities | ||||||||||
Warrants and Rights | Warrants and Rights | Reflected in Column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | 1,165,250 | $ | 5.00 | 195,881 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 1,165,250 | $ | 5.00 | 195,881 | ||||||||
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Name | Age | Positions and Offices Held and Term as a Director | ||||
Stanton E. Ross | 43 | President, Treasurer and Director since March 1992 | ||||
James A. Tuell(1) | 45 | Executive Vice President and Director since April 2005 | ||||
Elliot M. Kaplan | 54 | Director since July 2004 | ||||
Robert O. Lorenz | 58 | Director since January 2004 | ||||
Leroy C. Richie | 63 | Director since June 1999 |
(1) | Effective April 1, 2005, Mr. O. Lee Tawes resigned as a director of Infinity, Inc. The board of directors selected James A. Tuell to fill the vacancy on the board of directors until the next annual meeting of shareholders. |
Stanton E. Ross. Mr. Ross has been President, Treasurer and a director of Infinity since March 1992, and serves as an officer and director of each of Infinity’s subsidiaries. From 1991 until March 1992, he founded and served as President of Midwest Financial, a financial services corporation involved in mergers, acquisitions and financing for corporations in the Midwest. From 1990 to 1991, Mr. Ross was employed by Duggan Securities, Inc., an investment banking firm in Overland Park, Kansas, where he primarily worked in corporate finance. From 1989 to 1990, he was employed by Stifel, Nicolaus & Co., a member of the New York Stock Exchange, where he was an investment executive. From 1987 to 1989, Mr. Ross was self-employed as a business consultant. From 1985 to 1987, Mr. Ross was President and founder of Kansas Microwave, Inc. which developed a radar detector product. From 1981 to 1985, he was employed by Birdview Satellite Communications, Inc., which manufactured and marketed home satellite television systems, initially as a salesman and later as National Sales Manager. | |
James A. Tuell. Mr. Tuell has been Executive Vice President of Infinity since March 2005 and a director of Infinity since April 2005. Since February 2004 and June 2004, Mr. Tuell has also served as President of Infinity Oil & Gas of Wyoming, Inc., and Infinity Oil and Gas of Texas, Inc., wholly-owned subsidiaries of Infinity, Inc. Prior to joining Infinity, Mr. Tuell owned and operated an accounting and finance consultancy which served Infinity and numerous other independent energy companies from July 2001 to February 2004. From 1996 through July 2001, Mr. Tuell served as Controller and Chief Accounting Officer of Basin Exploration, Inc. From 1994 through 1996, he served as Vice President and |
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Controller of Gerrity Oil & Gas Corporation. Mr. Tuell was employed by the independent accounting firm of Price Waterhouse from 1981 through 1994, most recently as a Senior Audit Manager. He earned a B.S. in accounting from the University of Denver and is a certified public accountant. | |
Elliot M. Kaplan. Mr. Kaplan has served as a director of Infinity since July 2004. Mr. Kaplan has been a practicing attorney with Daniels & Kaplan, P.C., Attorneys at Law since 1994, specializing in corporate strategizing. From 1991 to 1993, Mr. Kaplan practiced law with the firm of Berman, DeLeve, Kuchan & Champan, with DeWitt, Zeldin & Bigus from 1990 to 1991 and with Husch, Eppenberger, Donahue, Cornfield & Jenkins from 1985 to 1990. From 1983 to 1985, Mr. Kaplan served as Vice President, Assistant General Counsel and Assistant Secretary of Air One, Inc. Mr. Kaplan received his Bachelor of Arts from Antioch University in 1978 and his Juris Doctor and Master of Business Administration degrees from Whittier College in 1982. | |
Robert O. Lorenz. Mr. Lorenz has been a director of Infinity since January 1, 2004. Mr. Lorenz is a former partner of Arthur Andersen LLP. He served as the managing partner of the Arthur Andersen Oklahoma City office beginning in 1994 and as the managing partner of the Oklahoma practice beginning in 2000. He retired from Arthur Andersen in 2002. He currently serves as a director of Panhandle Royalty Company. Mr. Lorenz is a certified public accountant and holds a bachelor’s degree in business administration. | |
Leroy C. Richie. Mr. Richie has been a director of Infinity since June 1, 1999. Since September 2000, he has been Chairman and Chief Executive Officer of Q Standards World Wide, Inc. From April 1999 to August 2000, he was President of Capitol Coating Technologies, Inc. From September 1998 to April 1999 he was President of Intrepid World Communications. From January 1998 to September 1998, Mr. Richie reviewed business opportunities and served as Chairman of H.P. Devco and Vice Chairman of Detroit Economic Growth Corp. and Detroit Medical Center. Mr. Richie was formerly Vice President of Chrysler Corporation and General Counsel for automotive legal affairs, where he directed all legal affairs for that company’s automotive operations from 1986 to 1997. Before joining Chrysler, he served as director of the New York office of the Federal Trade Commission. He has been a member of the board of directors of KerrMcGee Corporation since 1998 and has served as the chairman of the audit committee of the board of directors of that company since January 1, 2003. He has also been a member of the board of directors of J.W. Seligman & Co. since 2000. Mr. Richie received a B.A. from City College of New York and a J.D. from the New York University School of Law. |
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Infinity | Infinity-Delaware | |||
Authorized Shares | Under the Colorado Articles of Incorporation, the Company is authorized to issue a total of 300,000,000 shares of common stock, par value $.0001 per share, and 5,000,000 shares of preferred stock, no par value. | Under the Delaware Certificate of Incorporation, Infinity-Delaware is authorized to issue 75,000,000 shares of common stock, par value $.0001 per share, and 10,000,000 shares of preferred stock, par value $.0001 per share. | ||
Classification of Directors | The Colorado Articles of Incorporation do not provide for a classified board of directors. Accordingly, under the CBCA, all directors of the Company are elected annually. | As permitted under the DGCL, the Delaware Certificate of Incorporation provides for a classified board of directors. If the Classified Board Proposal is not approved, however, the Alternative Provisions will apply and all directors of Infinity-Delaware will be elected annually. As described below under “— Establishment of a Classified Board of Directors,” the existence of a classified board may make a hostile takeover of a corporation more difficult to complete. |
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Infinity | Infinity-Delaware | |||
Removal of Directors | Because the Colorado Articles of Incorporation do not contain any limitation on the removal of directors, shareholders may, under the CBCA, remove directors of the company with or without cause. | Under the DGCL, directors may generally be removed by shareholders with or without cause, except that members of a classified board of directors may be removed only for cause (subject to any contrary provision in the certificate of incorporation). If the Classified Board Proposal is approved, directors of Infinity-Delaware will be subject to removal only for cause. If the Classified Board Proposal is not approved, the Alternative Provisions will apply and directors of Infinity-Delaware will be subject to removal without cause, but only by the affirmative vote of the holders of at least two-thirds of the outstanding shares of capital stock entitled to vote in an election of directors. | ||
Vacancies on the Board of Directors | Under the CBCA, because the Colorado Articles of Incorporation do not provide otherwise, any vacancies on the Board of Directors may be filled either by the remaining directors or the shareholders. | Under the DGCL and the Delaware Certificate of Incorporation, vacancies on the board of directors of Infinity- Delaware will be filled by the remaining directors. | ||
Number of Directors | Under the CBCA, the number of directors must be specified in a corporation’s bylaws. The Colorado Bylaws state that the Board of Directors is to have between three and five members. The CBCA, like the DGCL, provides that shareholders may amend a corporation’s bylaws without the approval of the board of directors. Accordingly, under the CBCA, shareholders of the Company have the ability to determine the size of the Board of Directors. | The DGCL permits a corporation’s certificate of incorporation to specify the number of directors. Under the Delaware Certificate of Incorporation, the board of directors of Infinity- Delaware is to have between three and seven members. Because, under the DGCL, the Delaware Certificate of Incorporation cannot be amended unless the board of directors of Infinity-Delaware recommends the amendment (see “— Amendment to the Articles (Certificate) of Incorporation”), shareholders will not have the ability to increase the size of the board of directors of Infinity-Delaware to more than seven without the approval of the board. |
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Infinity | Infinity-Delaware | |||
Shareholders’ Power to Call Special Meetings | In accordance with the CBCA, the Colorado Bylaws provide that a special meeting of shareholders must be called by the President at the request of holders of not less than 10% of the outstanding shares of the Company. | Under the DGCL, special shareholder meetings may be called by shareholders to the extent authorized by the company’s certificate of incorporation or bylaws. The Delaware Bylaws provide that a special meeting of shareholders must be called by the president of Infinity-Delaware at the request of holders of not less than 25% of the outstanding shares of Infinity-Delaware. Because the Delaware Certificate of Incorporation provides that the board of directors of Infinity- Delaware has the right to amend or remove the Delaware Bylaws, that provision may be changed or removed by the board in the future. | ||
Notice of Shareholder Nominations for Directors and Business to be Brought Before Meetings | The Colorado Articles of Incorporation and Colorado Bylaws do not contain any provisions regarding advance notice of shareholder nominations of directors or notice of business to be brought before meetings of shareholders. | The Delaware Bylaws provide that no business may be brought before any meeting of shareholders, including the nomination or election of persons to the board of directors, by a shareholder unless the shareholder satisfies certain advance notice requirements. Advance notice of any such business must generally be provided not less than ninety days nor more than one hundred twenty days prior to the date of the meeting, unless public disclosure of the date of the meeting is first made less than one hundred days prior to the date of the meeting, in which case notice by the shareholder must be provided not later than the tenth day following the date on which such public disclosure of the date of the meeting was made. A notice must include specified information concerning the business proposed to be conducted, the shareholder making the proposal and, if applicable, the persons nominated to be elected as directors. Any late or deficient nominations or proposals may be rejected by Infinity-Delaware. See “Corporate Governance-Process for Selecting Nominees for the Board of Directors.” |
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Infinity | Infinity-Delaware | |||
Indemnification | Under the Colorado Articles of Incorporation and the CBCA, the Company may, but is generally not required to, indemnify former and current directors, officers, employees, fiduciaries and agents of the Company against expenses incurred in any action brought against those persons as a result of their role with the Company if certain conditions are satisfied. Similarly, the Company may, in some circumstances, advance to a person potentially eligible for indemnification the expenses incurred in defending such an action. The Colorado Articles of Incorporation generally require a person seeking indemnification to have acted in a manner he or she reasonably believed to have been in the best interests of the Company. | The Delaware Certificate of Incorporation provides for mandatory, rather than permissive, indemnification of former or current officers and directors of Infinity-Delaware (or, if the reincorporation merger is completed, the Company) with respect to expenses incurred in any action brought against those persons as a result of their role with Infinity- Delaware (or the Company) if certain conditions are satisfied. Subject to certain conditions, the Delaware Certificate of Incorporation also provides for mandatory advancement of expenses incurred by those persons in defending such an action. Under the DGCL, a person seeking indemnification is generally required to have acted in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation. The Delaware Certificate of Incorporation sets forth procedures for determining the outcome of a claim for indemnification that would generally be expected to be more favorable to the claimant than those contemplated by the Colorado Articles of Incorporation. |
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Infinity | Infinity-Delaware | |||
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Amendment to the Articles (Certificate) of Incorporation | Pursuant to the CBCA, amendments to the Colorado Articles of Incorporation must be submitted to a shareholder vote if proposed either by the Board of Directors or by the holders of shares representing at least 10% of all of the votes entitled to be cast on the amendment. The Board of Directors need not recommend the amendment to the shareholders if the amendment is proposed by the shareholders or if the Board of Directors determines that because of a conflict of interest or other special circumstances it should make no recommendation with respect to the amendment. Among other consequences, this aspect of the CBCA may limit the effectiveness of any anti-takeover provisions contained in a corporation’s articles of incorporation. The Colorado Articles of Incorporation do not impose any supermajority voting requirements upon proposed amendments to the articles. | Under the DGCL, a proposed amendment to a corporation’s certificate of incorporation may not be submitted to a vote of shareholders without the approval of the board of directors. To the extent the Delaware Certificate of Incorporation includes provisions that would make a hostile takeover of Infinity-Delaware more difficult (including, if the Classified Board Proposal is approved, provisions creating a classified board and preventing the removal of directors without cause), this aspect of the DGCL would prevent those provisions from being amended or removed without the consent of the board of directors of Infinity-Delaware, and may therefore have anti-takeover effects. In addition, the Delaware Certificate of Incorporation provides that certain provisions of the certificate (including those relating to the structure of the board of directors of Infinity-Delaware, the removal of directors from the board and the indemnification of directors and officers) may be amended only with the approval of two-thirds of the shares of stock of Infinity-Delaware entitled to vote in an election of directors. | ||
Business Combination Statute | The CBCA does not contain any business combination provisions. | Section 203 of the DGCL provides for a three-year moratorium on certain business combination transactions with “interested stockholders” (generally, persons who beneficially own 15% or more of the corporation’s outstanding voting stock). Infinity-Delaware has not opted out of Section 203 of the DGCL in the Delaware Certificate of Incorporation. | ||
Franchise Tax | There is no franchise tax in Colorado. | The DGCL requires corporations to pay franchise tax annually (the current maximum is $165,000 a year). |
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2004 | 2003 | ||||||||
Audit fees(1) | $ | 110,495 | $ | 102,367 | |||||
Audit-related fees(2) | 26,950 | 4,282 | |||||||
Tax fees(3) | 9,500 | 9,100 | |||||||
All other fees(4) | 7,515 | 36,460 | |||||||
Total fees | $ | 154,460 | $ | 152,209 | |||||
(1) | Audit fees include fees for services rendered for the audit of our annual consolidated financial statements and reviews of quarterly consolidated financial statements. This category includes fees for all services rendered in performance of the annual audit for the period indicated, including services performed after the fiscal year end. |
(2) | Audit-related fees include reviews of earnings releases and services performed during the period indicated in connection with the filing of various registration statements with the Securities and Exchange Commission. |
(3) | Tax fees include fees for services rendered during the period indicated in connection with the preparation of our tax returns in the United States. |
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(4) | All other fees include services rendered in consultation on general corporate matters. For 2003, this category also includes consultations performed in connection with certain proposed transactions and Infinity’s financial restructuring. |
STANTON E. ROSS | |
PRESIDENT |
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(a) Each share of Infinity Common Stock issued and outstanding immediately prior to the Effective Time shall be converted (without the surrender of stock certificates or any other action) into one fully paid and non-assessable share of common stock, par value $0.0001, of Infinity Delaware (“Infinity Delaware Common Stock”) and all shares of Infinity Common Stock shall be cancelled and retired and shall cease to exist. | |
(b) Each option, warrant, purchase right or other security of the Company issued and outstanding immediately prior to the Effective Time, if any, shall be converted into and shall be an identical security of Infinity Delaware. The same number of shares of Infinity Delaware Common Stock shall be reserved for purposes of the exercise of such options, warrants, purchase rights, units or other securities as is equal to the number of shares of the Infinity Common Stock so reserved as of the Effective Time. | |
(c) Each share of Infinity Delaware Common Stock owned by the Company shall no longer be outstanding and shall be cancelled and retired and shall cease to exist. |
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INFINITY, INC. | |
a Colorado corporation |
By: | /s/ James A. Tuell |
Name: James A. Tuell |
Title: | Executive Vice President |
INFINITY ENERGY RESOURCES, INC., | |
a Delaware corporation |
By: | /s/ James A. Tuell |
Name: James A. Tuell |
Title: | Executive Vice President |
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(1) The designation of the series and the number of shares to constitute the series. | |
(2) The dividend rate of the series, the conditions and dates upon which such dividends shall be payable, the relation which such dividends shall bear to the dividends payable on any other class or classes of stock, and whether such dividends shall be cumulative or noncumulative. | |
(3) Whether the shares of the series shall be subject to redemption by the corporation and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption. | |
(4) The terms and amount of any sinking fund provided for the purchase or redemption of the shares of the series. | |
(5) Whether or not the shares of the series shall be convertible into or exchangeable for shares of any other class or classes or of any other series of any class or classes of stock of the corporation, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments and other terms and conditions of such conversion or exchange. | |
(6) The extent, if any, to which the holders of the shares of the series shall be entitled to vote with respect to the election of directors or otherwise. | |
(7) The restrictions, if any, on the issue or reissue of any additional preferred stock. | |
(8) The rights of the holders of the shares of the series upon the dissolution, liquidation, or winding up of the corporation. |
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(a) “Disinterested Director” means a director of the Company who is not and was not a party to the matter in respect of which indemnification is sought by the claimant. | |
(b) “Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner that is experienced in matters of corporation law and shall include any such person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Company or the claimant in an action to determine the claimant’s rights under this Article 10. Independent Counsel shall be selected by the Board of Directors. |
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Katelin R. Oakley | |
Incorporator |
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(a) “Board” shall mean the Board of Directors of the Company; | |
(b) “Code” shall mean the Internal Revenue Code of 1986, as amended; | |
(c) “Consultant” shall mean a person who provides services to the Company as an independent contractor; | |
(d) “Company” means Infinity, Inc. and each and all of any present and future subsidiaries; | |
(e) “Date of Grant” shall mean, for each participant in the Plan, the date on which the Board approves the specific grant to that participant under the plan; | |
(f) “Employee” shall be an employee of the Company or any subsidiary of the Company; | |
(g) “Grantee” shall mean the recipient of an Incentive Stock Option, a Non-statutory Option or a Restricted Share Award under the Plan; | |
(h) “Incentive Stock Option” shall refer to a stock option which qualifies under Section 422 of the Code; | |
(i) “Non-statutory Option” shall mean an option which is not an Incentive Stock Option; | |
(j) “Restricted Share Award” shall mean a right any right to acquire restricted shares under the Plan; | |
(k) “Shares” shall mean the Company’s common stock, $.0001 par value; | |
(l) “Shareholders” shall mean owners of record of any Shares. |
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(i) A merger or acquisition in which the Company is not the surviving entity; | |
(ii) The sale, transfer or other disposition of all or substantially all of the assets of the Company; or | |
(iii) Any merger in which the Company is the surviving entity but in which fifty percent (50%) or more of the Company’s outstanding voting stock is issued to holders different from those who held the stock immediately prior to such merger. |
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(1) Fraud or criminal misconduct; | |
(2) Gross negligence; | |
(3) Willful or continuing disregard for the safety or soundness of the Company; | |
(4) Willful or continuing violation of the published rules of the Company. |
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(a) Consideration. A restricted share award may be awarded in consideration for past services actually rendered, or for future services to be rendered, to the Company or an affiliate of the Company for its benefit. | |
(b) Vesting. Common Stock awarded under the restricted share award agreement may (A) be subject to a vesting schedule to be determined by the Board, or (B) be fully vested at the time of grant. | |
(c) Termination of Grantee’s Service. Unless otherwise provided in the restricted share award agreement, in the event a Grantee’s service terminates prior to a vesting date set forth in the restricted share award agreement, any unvested restricted share award shall be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company, and neither the Grantee nor his or her heirs, executors, administrators or successors shall have any right or interest in the restricted share award. Notwithstanding the foregoing, unless otherwise provided in the restricted share award agreement, in the event a Grantee’s service terminates as a result of (A) being terminated by the Company for reasons other than for cause, (B) death, (C) Disability, (D) Retirement, or (E) a Change of Control (subject to the provisions of Section 11(c) hereof), then any unvested restricted share award shall vest immediately upon such date. | |
(d) Transferability. Rights to acquire Common Stock under the restricted share award agreement shall be transferable by the Grantee only upon such terms and conditions as are set forth in the restricted share award agreement, as the Board shall determine in its discretion, so long as Ordinary Shares awarded under the restricted share award agreement remain subject to the terms of the restricted share award agreement. |
(a) materially increases the benefits accruing to participants under the Plan; | |
(b) increases the cumulative number of shares that may be delivered upon the exercise of options granted under the Plan or the aggregate fair market value of options which a participant may exercise in any calendar year; |
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(c) materially modifies the eligibility requirements for participation in the Plan; or | |
(d) amends the requirements of paragraphs (a)-(c) of this Section 10. |
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INFINITY, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Stanton E. Ross and James A. Tuell with the power to appoint a substitute, and hereby authorizes either of them to represent and to vote as designated below, all the shares of common stock of Infinity, Inc. held of record by the undersigned at the close of business on April 29, 2005, at the annual meeting of shareholders to be held on June 16, 2005, or any adjournment thereof, hereby revoking all former proxies.
1. | Election of directors: |
o | FOR all nominees listed below (except as marked to the contrary) | |||
o | WITHHOLD authority to vote for all the nominees listed below: |
Stanton E. Ross | James A. Tuell | |||||
Elliot M. Kaplan | Robert O. Lorenz | |||||
Leroy C. Richie |
INSTRUCTION: To withhold authority to vote for any individual nominee, cross out that nominee’s name above.
2. | Approval of reincorporation of Infinity, Inc. in Delaware. |
o FOR | o AGAINST | o ABSTAIN |
3. | Approval of the establishment of a classified board of directors. |
o FOR | o AGAINST | o ABSTAIN |
4. | Approval of the 2005 Equity Incentive Plan. |
o FOR | o AGAINST | o ABSTAIN |
5. | The ratification of the appointment of Ehrhardt Keefe Steiner & Hottman, P.C., as Infinity’s independent registered public accounting firm. |
o FOR | o AGAINST | o ABSTAIN |
6. | To transact such other business as may properly come before the meeting. |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 5.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH THE SHAREHOLDER’S SPECIFICATIONS ABOVE. THIS PROXY CONFERS DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
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The undersigned hereby acknowledges receipt of the notice of annual meeting of shareholders, proxy statement and annual report.
Dated: , 2005.
Signature(s) of Shareholder(s) |
Please sign exactly as your name appears on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INFINITY, INC.
PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IF YOU ATTEND THE MEETING.