UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Schedule
14A
(Rule
14a-101)
Proxy
Statement Pursuant to Section 14(a) Of the Securities Exchange Act of
1934
x
Filed by the
Registrant
o
Filed by a
Party other than the Registrant
Check the
appropriate box:
o
Preliminary Proxy
Statement
o
Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive Proxy
Statement
o
Definitive
Additional Materials
o
Soliciting
Material Pursuant to §240.14a-12
CAPITAL
CITY ENERGY GROUP, 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):
x
No fee
required.
o
Fee computed on
table below per Exchange Act rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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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)
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Proposed
maximum aggregate value of
transaction:
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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.
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(1)
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Amount
Previously Paid
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(2)
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Form,
Schedule or Registration Statement
No.:
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CAPITAL
CITY ENERGY GROUP, INC.
8351 N.
High Street, Suite 101
Columbus,
Ohio 43235
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 23, 2008
TO OUR
STOCKHOLDERS:
You are
invited to be present either in person or by proxy at the Annual Meeting of
Stockholders of Capital City Energy Group, Inc. a Nevada corporation (the
“Company”), to be held at Quest Conference Center, 8405 Pulsar Place, Columbus,
Ohio 43240 on Thursday, October 23, 2008 at 10:00 a.m. local time (the
“Meeting”), to consider and act upon the following:
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1.
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The
election of six (6) Directors to serve until the next meeting or until
their successors are duly elected and
qualified.
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2.
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The
ratification of the appointment of GBH CPAs, PC, as independent auditors
for the next fiscal year.
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3.
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The
transaction of such other business as may properly come before the Meeting
or any adjournments thereof.
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A
luncheon will immediately follow the meeting.
Only
stockholders of Common Stock of record at the close of business on September 19,
2008 will be entitled to notice of and to vote at the Meeting. The
stock transfer books of the Company will remain open
WE INVITE
EACH OF YOU TO ATTEND THE MEETING. IF YOU CANNOT ATTEND, PLEASE MARK,
DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY TO CAPITAL CITY
ENERGY GROUP, INC. 8351 N. HIGH STREET, SUITE 101, COLUMBUS, OHIO 43235 OR IT
CAN BE SENT VIA FACSIMILE TO 614-310-1610.
BY ORDER OF THE BOARD
OF DIRECTORS
Timothy W.
Crawford
Chairman of the
Board
Columbus,
Ohio
October 13,
2008
CAPITAL
CITY ENERGY GROUP, INC.
PROXY
STATEMENT
PROCEDURAL
MATTERS
THIS
PROXY STATEMENT IS FURNISHED TO THE STOCKHOLDERS OF CAPITAL CITY ENERGY GROUP,
INC., A NEVADA CORPORATION (THE “COMPANY”) OR “CETG”), IN CONNECTION WITH THE
SOLICITATION OF PROXIES BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY TO BE VOTED AT THE ANNUAL MEETING OF STOCKHOLDERS (THE “MEETING”) TO BE
HELD AT 10:00 A.M., LOCAL TIME, ON THURSDAY, OCTOBER 23, 2008, OR AT ANY
ADJOURNMENT OR POSTPONEMENT THEREOF.
Stockholders
of record of Common Stock of the Company at the close of business on September
19, 2008, (the “Record Date”), will be entitled to notice of and to vote at the
Meeting. The Meeting will be held at Quest Conference Center, 8405
Pulsar Place, Columbus, Ohio 43240. Proxies received prior to the
Meeting will be voted in accordance with the instructions contained in the proxy
and, if no choice is specified, will be voted in favor of each of management’s
nominees for Director and in favor of each of management’s proposals set forth
in the Notice of Annual Meeting of Stockholders. A stockholder who
signs and returns the enclosed proxy may revoke it at any time before it is
voted by a written revocation delivered to any of the proxy holders named
therein, by submitting another valid proxy bearing a later date or by attending
the Meeting and voting in person. Beneficial owners wishing to vote at the
Meeting who are not stockholders of record on the Company’s books (e.g., persons
holding in street name) must bring to the Meeting a Power of Attorney or proxy
in their favor signed by the holder of record in order to be able to
vote.
SOLICITATION
OF PROXIES
This
Proxy Statement and the form of proxy are first being mailed to the stockholders
beginning approximately October 13, 2008. All of the costs and expenses in
connection with the solicitation of proxies with respect to the matters
described herein will be borne by the Company. In addition to
solicitation of proxies by mail, the directors, officers and investor relations
staff (who will receive no compensation therefore in addition to their regular
remuneration) of the Company named herein may solicit the return of proxies by
telephone, telegram or personal interview. As of this date, the
Company has retained Broadridge Financial Solutions, Inc. (“Broadridge”), an
outside mailing service, to contact banks, brokerage houses and other
custodians, nominees and fiduciaries with requests to forward copies of the
proxy materials to their respective principals and to request instructions for
voting the proxies. The Company will solicit proxies solely from individual
stockholders of record and to print proxy notices and other related materials.
The services provided by Broadridge to the Company are expected to cost
approximately $3,000. Any expenses of such banks, brokerage houses and other
custodians, nominees and fiduciaries in connection therewith are covered by the
estimated fee to be paid by the Company to Broadridge. Action may be taken on
the business to be transacted at the Meeting on the date specified in the Notice
of Meeting or on any date or dates to which such Meeting may be
adjourned.
VOTING OR
PROXIES
A form of
proxy is enclosed for use at the Meeting if a stockholder is unable to attend in
person. Each proxy may be revoked at any time thereafter by writing
to the Secretary of the Company prior to the Meeting, by execution and delivery
of a subsequent proxy, or by attendance and voting in person at the meeting,
except as to any matter or matters upon which, prior to such revocation, a vote
shall have been cast pursuant to the authority conferred by such proxy. Shares
represented by a valid proxy, which, if received pursuant to this solicitation
and not revoked before it is exercised, will be voted as provided on the proxy
at the Meeting or at any adjournment or adjournments thereof. Management intends
to vote on the 3,350,672 or approximately 12.25% of Common Stock which it
controls in favor of the proposals to (i) elect six Directors to serve until the
next Annual Meeting or until each of their successors is duly elected and
qualified (ii) ratify the appointment of GBH CPSs as independent auditors for
2008, and (iii) transact such other as may properly come before the Meeting or
an adjournment thereof.
VOTING
SECURITIES AND VOTE REQUIRED
Only
holders of 27,347,283 shares of Common Stock, par value of $0.001 per share, of
record outstanding at the close of business on September 19, 2008 (the “Record
Date”), will be entitled to vote at the Meeting. Each holder of shares of Common
Stock is entitled to one vote for each share held by such holder. The presence,
in person or by proxy, of the holders of a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum at the Meeting. Under the rules
of the Securities and Exchange Commission (the “SEC”), boxes and a designated
blank space are provided on the proxy card for shareholders to mark if they wish
to withhold authority to vote for one or more nominees for Director.. Votes
withheld in connection with the ratification of GBH CPAs, PC as our auditing
firm or Proposal 3 will not be counted toward the ratification of any new
business properly brought before the meeting for a vote. If no direction is
indicated, the proxy will be voted for the election of the nominees for
Director, Proposal 2 and such other business as may properly come before the
Meeting or any adjournments thereof. The form of proxy provides for withholding
of votes with respect to the election of Directors and Proposal 2 and a
stockholder present at the Meeting also may abstain with respect to such
election.
ANNUAL
REPORT ON FORM 10-KSB
This
Proxy Statement is accompanied by the Company’s Annual Report on Form 10-KSB,
for the fiscal year ended October 31,2007 and the Form 10-QT for the period
ending December 31, 2007, as amended (together, the “Annual Report”).
Stockholders should refer to the Annual Report and each of its periodic reports
for information concerning the Company’s business and operations, but the Annual
Report and the periodic reports are not part of the proxy soliciting
materials.
PROPOSAL
1: ELECTION OF DIRECTORS
Six
Directors are to be elected at the Meeting. The Directors will be elected at the
Meeting to serve until the next annual meeting of stockholders of the Company or
until each of their successors shall be duly elected and qualified. As noted,
unless otherwise indicated thereon, all proxies received will be voted in favor
of the election of each of the six nominees of the Board named below as
Directors of the Company. Should any of the nominees not remain a candidate for
election at the date of the Meeting (which contingency is not now contemplated
or foreseen by the Company), proxies solicited thereunder will be voted in favor
of those nominees who do remain candidates and may be voted for substitute
nominees elected by the Board. The six nominees receiving the highest number of
affirmative votes of the shares present or represented and entitled to be voted
for them shall be elected as Directors. Votes withheld from any Director are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business, but have no other legal effect under Nevada law. Each
of the nominees is currently serving as a Director of the Company.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE TO ELECT THE DIRECTORS NOMINATED HEREIN TO SERVE
AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A
STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
The
following is a list of the nominees and certain information with regard to each
nominee follows:
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NAME
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AGE
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TITLE
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Timothy
W. Crawford
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52
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Chief
Executive Officer, Director and Chairman of the Board of
Directors
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Daniel
Coffee
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51
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President,
and Director
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Joseph
Smith
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49
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Director
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Lee
Robinson
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44
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Director
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James
Bishop
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57
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Director
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David
Tenwick
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71
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Director
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NOMINEES
FOR ELECTION AS DIRECTORS
Timothy W. Crawford
, age 52,
became the Chief Executive Officer and Chairman of the Board in March, 2008.
From 2007 until the present, Mr. Crawford has served as Chief Executive Officer
of Capital City Petroleum, Inc. (“Petroleum”), a diversified oil and natural gas
investing company and the predecessor to the Company. He was responsible for the
design and implementation of the Company’s first energy fund offered to
individual investors. From 2002 to 2007, he served as the Chief Executive
Officer of Capital City Partners, LLC (a stockholder of the Company) a regional
financial services firm located in Columbus, Ohio. From 2000 to 2002 he was
Senior Vice President for McDonald Investments, Inc., a KeyCorp Company working
in their Wealth Management Group. From 1998 until 2000 he was a Registered
Representative for Banc Stock Financial Services, Inc., a wholly owned
subsidiary of The Banc Stock Group currently known as Diamond Hill Capital
Management, Inc. He is a member of The President’s Associate Council at
Cedarville University.
Daniel R. Coffee
, age 51,
became Chief Operating Officer and a Director in March, 2008 and was recently
named President. From 1997 to 2007, he served as Manager of Business Development
and Acquisitions of Superior Well Services, Inc., a multi-million dollar
integrated oil field service company. He also served as Wireline Division
Manager and Corporate Radiation Safety Officer. He started his oilfield career
with Eastern Well Surveys, Inc. and also worked for Schlumberger Well Services,
LTD where he served in various management roles.
Mr.
Coffee is a current Board member of the Ohio Chapter Society of Petroleum
Engineers, Past Chairman of Penn-York, and Past Vice President of the Ohio
Chapter Society of Professional Well Log Analysts.
Joseph A. Smith
, age 49,
became a director in March, 2008. From 2003 to present, he serves as the
Managing Director and Head of Investment Banking of Capital City Partners, LLC
(a stockholder of the Company) and its affiliates, a regional diversified
financial services firm, located in Columbus, Ohio and Miami, Florida. In
addition to his investment banking duties, he became a member of CCSSM Partners
LLC (a stockholder of the company) in 2006 and is the Manager of the SIG Real
Property Fund LLC, a Florida real estate fund, and the Opportunity Fund LLC, a
private equity fund. Prior to Capital City Partners LLC, from 2002 to 2003, Mr.
Smith was Senior Vice President of Investment Banking for vFinance Investments,
Inc. which specialized in financing small-cap/micro-cap public companies. From
2001-2002, Mr. Smith was a Senior Vice President at William R. Hough & Co,
Florida’s oldest municipal bond underwriting firm. From 1990 to 2001, Mr. Smith
served as a principal and Managing Director of First Equity Corporation of
Florida, one of South Florida’s oldest local brokerage firms. From 1987 to 1990,
Mr. Smith served as a Vice President of Lehman Brothers. Mr. Smith began his
career with Merrill Lynch in 1982 and held various positions there until 1987.
At Merrill Lynch, he was responsible for the management of portfolios consisting
of public and private companies with assets in excess of $100
million.
Lee A. Robinson
, age
44, was appointed to the Board of Directors in May 2008. He has diverse and
valuable experience in many facets of the oil and natural gas industry, working
throughout Appalachia, in the Gulf of Mexico and in New Mexico. In 1989, Mr.
Robinson became a field engineer with Dowell Schlumberger providing on-site
supervision of oil field cementing and completion services throughout much of
the Appalachian Basin. In 1989, he joined Columbia Gas Transmission, a
subsidiary of the Columbia Energy Group and one of the largest interstate
natural gas pipeline companies in the United States, where he was responsible
for computer modeling of the pipeline system, operational and strategic
planning, analysis and divestiture of underperforming assets, and often served
as an expert witness for the company. In 2000, Mr. Robinson and others formed an
exploration and production company, Triana Energy. With Mr. Robinson's help and
guidance as Director of Land Operations, this new company quickly acquired
leasehold rights to hundreds of thousands of acres, formed strategic joint
venture partnerships with several other producers. In 2003, the Triana Energy
purchased Columbia Natural Resources, with assets including 8,500 wells, 1.3
Trillion cubic feet of natural gas reserves, 5 Million leasehold acres and
thousands of miles of natural gas pipelines. Triana was sold to Chesapeake
Energy for nearly $3.2 Billion in 2005. Presently, Mr. Robinson provides
consulting services to companies in the energy sector.
Mr.
Robinson holds a Bachelor of Science degree in Petroleum Engineering from
Marietta College. He is a member of the Society of Petroleum Engineers, the
American Association of Professional Landmen and the Independent Oil and Gas
Association of New York. He has also served on the Industry Advisory Committee
for the Department of Petroleum Engineering and Geology at Marietta College and
on the Producer Advocacy Group for the Petroleum Technology Transfer Council.
Mr. Robinson resides near Cambridge, Ohio with his wife and son.
James Bishop, Age 57,
was
appointed to the Board of Directors in May, 2008. He is a founder of
WhiteStar Advisors, LLC, an SEC registered investment advisory firm with offices
in Boca Raton, Florida, New York, New York and San Francisco, California
specializing in discretionary investments on behalf of Taft-Hartley pension
funds. Additionally, WhiteStar Advisors, LLC provides consulting services to
Taft-Hartley pension funds related to pension funds fiduciaries.
An
experienced investment banker, venture capital investor, real estate developer,
and business executive, prior to the founding of WhiteStar, Mr. Bishop served
for five years as the President of Janus Hotels and Resorts, Inc. a publicly
traded hotel owner/operator with business operations in the United States,
Canada, Mexico and the Caribbean. Mr. Bishop earlier served as the President and
CEO of a California based oil well services company and its subsidiaries with
business focused primarily in the Elk Hills of California’s San Joaquin Valley
and western Canada, the decommissioning of off-shore oil wells, and the
servicing of coal bed methane wells in the Black Warrior basin and the western
United States. Mr. Bishop also financed the first commercially viable ethanol
fuel plant in Alamosa, Colorado. Prior to that, he was an officer and senior
investment banker at E.F. Hutton, Co., Inc. in New York, and later, of WestPac
Banking Corp. of Sidney, Australia, during which time he specialized in energy
(oil, gas, pipelines, port facilities, nuclear, and alternative), infrastructure
financing and development, transportation, real estate, and project
finance.
A native
of Georgia, Mr. Bishop received a bachelor’s degree in finance from Georgia
State University in Atlanta, and a J.D. from Concord Law School, Los
Angeles. He serves on the advisory board of Paradise Bank and serves
or has served on the boards of public companies including Janus Hotels and
Resorts, Inc., Gunther International, Ltd, and Caribbean Clubs International,
Inc. Additionally, he is a member of the American Real Estate and Urban
Economics Association, the International Real Estate Trade Organization (and
member of the legal advisory council), the Pension Real Estate Association, and
the National Council of Real Estate Investment Fiduciaries. Mr. Bishop served
four years on active duty with the United States Air Force, as an advisor to
President Ronald Reagan’s transition team, and, for four years, as Mayor of
Montclair, New Jersey.
David Tenwick, Age 71,
is the
founder/chairman of the board of directors at Adcare Health Systems, Inc a
company which develops, manages and acquires nursing homes, assisted living
facilities, independent living facilities, dementia/Alzheimer’s units, sub-acute
units, retirement communities and more, located in Springfield, Ohio. Mr.
Tenwick has served as Chairman and Director since the organization began in
August, 1991. Prior to founding Adcare, Mr. Tenwick was an independent business
consultant from 1982 to 1990. Through this capacity, he has served as a director
and an officer of several businesses, including Douglass Financial Corporation,
a surety company, and AmeriCare Health & Retirement, Inc., a long-term care
management company. From 1967 until 1982, Mr. Tenwick was a co-founder, director
and an officer of Nucorp Energy, Inc., a public company which invested in oil
and gas properties and commercial and residential real estate. Prior to
co-founding Nucorp, he was an enforcement attorney for the United States
Securities and Exchange Commission. Mr. Tenwick is a member of the Ohio State
Bar Association and was a founding member of the Ohio Assisted Living
Association, an association that promotes high quality assisted living
throughout the State of Ohio. Mr. Tenwick earned a degree in Bachelor of
Business Administration (BBA) and J.D. from the University of Cincinnati in 1960
and 1962, respectively.
BOARD AND
COMMITTEE MEETINGS
During
2008, the Company’s Board of Directors has held six regular meetings (the
meetings consisted of two quarterly meetings and four monthly meetings). Each
director attended at least 75% of all meetings of our board of directors and
committees on which he served that were held during 2008
.
Stockholders of the Company
may send communications to the Board of Directors via the Company’s Public
Relations Department, which makes such communications available to the Directors
as appropriate, to CAPITAL CITY ENERGY GROUP, INC., Attention: Public Relations
Department, 8351 N. HIGH STREET, SUITE 101, COLUMBUS, OHIO 43235; Telephone
(614) 310-1614, Facsimile (614) 310-1610. The Public Relations department can be
reached via email at: pr@capcityenergy.com.
The Board
of Directors does not have a standing audit committee, nominating committee,
compensation committee or any committees performing similar functions. As there
are only six Directors serving on the Board, it is the view of the Board that
all Directors should participate in the process for reviews of all areas of the
business as well as the interview process for potential Director candidates,
financial statements and for the review of the Company’s executive pay
practices. Accordingly, it is also the view of the Board that the participation
of all Directors in the duties of nominating and compensation committees ensures
not only as comprehensive as possible a review of Director candidates and
executive compensation, but also that the views of independent, employee, and
stockholder Directors are considered.
The Board
does not have any formal policy regarding the consideration of Director
candidates recommended by stockholders. Any recommendation would be considered
on an individual basis. The Board believes this is appropriate due to the lack
of such recommendations made in the past, and its ability to consider the
establishment of such a policy in the event of an increase of such
recommendations. The Board welcomes properly submitted recommendations from
stockholders and would evaluate stockholder nominees in the same manner that it
evaluates a candidate recommended by other means. Stockholders may submit
candidate recommendations by mail to CAPITAL CITY ENERGY GROUP, INC., Attention:
Chairman of the Board of Directors, 8351 N. HIGH STREET, SUITE 101, COLUMBUS,
OHIO 43235. With respect to the evaluation of director nominee candidates, the
Board has no formal requirements or minimum standards for the individuals that
it nominates. Rather, the Board considers each candidate on his or her own
merits. However, in evaluating candidates, there are a number of factors that
the Board generally views as relevant and is likely to consider, including the
candidate’s professional experience, his or her understanding of the business
issues affecting the Company, his or her experience in facing issues generally
of the level of sophistication that the Company faces, and his or her integrity
and reputation. With respect to the identification of nominee candidates, the
Board has not developed a formalized process. Instead, its members and the
Company’s senior management have recommended candidates whom they are aware of
personally or by reputation.
CODE OF
ETHICS
The Board
expects the Directors, as well as officers and employees, to act ethically at
all times and to acknowledge their adherence to the policies comprising the
Company’s code of ethics, which were adopted earlier this year and are posted on
the Company’s website (www.capcityenergy.com). The Company will not make any
personal loans or extensions of credit to Directors or executive officers. No
non-employee Director may provide personal services for compensation to the
Company, other than in connection with serving as a CETG Director. The Board
will not permit any waiver of any ethics policy for any Director or executive
officer. If an actual or potential conflict of interest arises for a Director,
the Director shall promptly inform the Chief Executive Officer and the presiding
Chairman of the Board of Directors. If a significant conflict exists and cannot
be resolved, the Director will be asked to resign. All Directors will recuse
themselves from any discussion or decision affecting their personal, business or
professional interests. The Board of Directors shall resolve any conflict of
interest question involving the Chief Executive Officer and other, and the Chief
Executive Officer shall resolve any conflict of interest issue involving any
other officer of the company.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
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Name
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Year
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|
Salary
|
|
Bonus
|
|
Stock
Awards
|
|
All
Other Compensation
|
|
Timothy
W. Crawford Chief Executive Officer &
Director
|
|
2007
|
|
0
|
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0
|
|
|
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$14,347
1
|
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Daniel
Coffee, Chief Operating Officer,
President
& Director
|
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2007
|
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$15,000
|
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0
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|
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$1,200
2
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Keith
Kauffman, Former President &
Former
Director
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2007
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$156,980
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0
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$14,005
3
|
NOTES TO SUMMARY
COMPENSATION TABLE
|
(1)
|
|
This amount
includes monthly auto lease payment and monthly health insurance
premium. Mr. Crawford does not take a salary from the Company
at this time.
|
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(2)
|
|
This amount
includes monthly auto lease payment.
|
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(3)
|
|
This amount
includes monthly auto lease payment and monthly health insurance
premium.
|
Outstanding
Equity Awards At Fiscal Year-End
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares or Units of
Stock That Have Not Vested
|
|
Market Value of Shares or Units
of
Stock That Have Not
Vested
|
|
Timothy
Crawford
|
|
n/a
|
|
n/a
|
|
Daniel
Coffee
|
|
n/a
|
|
n/a
|
|
Keith
Kauffman
|
|
n/a
|
|
n/a
|
The terms
of the stock awards are described below under Employee, Consultants and Service
Providers Benefit Plan.
Director
Compensation
|
NAME
|
|
COMPENSATION FOR 2007
|
|
|
COMPENSATION FOR 2006
|
|
|
Timothy
Crawford
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
Daniel
Coffee
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
Lee
Robinson
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
Joseph
Smith
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
James
Bishop
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
David
Tenwick
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
During
2007, each outside (employee and non-employee) director was not compensated for
attendance at the monthly meetings or each quarterly meeting. For 2008, the
Company has elected to compensate each of the Directors $1,500 and $5,000 for
each monthly and quarterly meeting attended. The Company may pay these fees with
cash or stock valued at the average between the bid and the ask of the stock on
the last trade of the date of the meeting.
EMPLOYMENT
CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Timothy
Crawford has an employment agreement (the “Employment Agreement”) with the
Company pursuant to which he serves as Chief Executive Officer. Pursuant to the
Employment Agreement, Mr. Crawford is entitled to an annual base salary and an
annual bonus subject to such incentive bonus targets and plans which the Company
may adopt from time to time. The Company has not currently set any such targets
in advance or adopted any such plans. In lieu thereof, the Board of Directors
determines Mr. Crawford’s salary and bonus on an annual basis concurrently with
determining amounts for other executive officers. As of this time, Mr. Crawford
has elected to not take compensation of any type from the Company for the year
2008.
Mr.
Daniel Coffee has an employment agreement (the “Employment Agreement”) with the
Company pursuant to which he serves as Chief Operating Officer of the Company as
well as CEO of our wholly owned subsidiary, Eastern Well Services. Mr. Coffee is
entitled to an annual base salary and an annual bonus subject to such incentive
bonus targets and plans which the Company may adopt from time to time. The
Company has not currently set any such targets in advance or adopted any such
plans. In lieu thereof, the Board of Directors determines Mr. Coffee’s salary
and bonus on an annual basis concurrently with determining amounts for other
executive officers.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information known to the Company regarding
the beneficial ownership of the Company’s Common Stock as of June 30, 2008, by
(a) each shareholder known by the Company to be the beneficial owner of
more than five percent of the Company’s Common Stock, (b) each of the
Company’s directors, (c) each of the Company’s executive officers named in
the Summary Compensation Table above and (d) all executive officers and
directors of the Company as a group. The shareholders listed below have sole
voting and investment power except as noted.
|
Name and address
of Beneficial Owner
1
|
|
Common
Stock
Beneficial
Ownership
2
|
|
Percent
|
|
|
Timothy W. Crawford
3
|
|
3,027,306
|
|
9.1
|
%
|
|
Keith J. Kauffman
4
|
|
282,860
|
|
*
|
|
|
Daniel R. Coffee
5
|
|
258,333
|
|
*
|
|
|
Todd E. Crawford
6
|
|
3,018,713
|
|
9.0
|
%
|
|
Joseph A. Smith
7
|
|
1,724,335
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
All
Officers and Directors as a Group (5 persons)
|
|
8,311,547
|
|
24.9
|
%
|
|
|
|
|
|
|
|
|
Other
5% owners
|
|
|
|
|
|
|
Michael J. McKenzie
8
|
|
3,032,525
|
|
9.1
|
%
|
|
Gary T. Sturtz
9
|
|
3,017,512
|
|
9.0
|
%
|
|
1.
|
Unless
otherwise indicated, the business address for each of the individuals is
8351 North High Street, Suite 101, Columbus, Ohio
43235.
|
|
2.
|
May
include shares of Common Stock, shares of our Series A Preferred Stock
(which is currently convertible on a 1:1 basis into Common Stock) and
warrants that are currently exercisable into Common
Stock.
|
|
3.
|
Mr.
Crawford is our Chief Executive Officer and Chairman of the
Board. Includes (a) 516,667 shares of common stock held by The
Energy Acquisition Group, LLC, which shares represent Mr. Crawford’s
pecuniary ownership in such entity, (b) 1,646,530 shares of common stock
held by CCSSM Partners, LLC, which shares represent Mr. Crawford’s
pecuniary ownership in such entity, (c) 128,434 shares of common stock
held by The Opportunity Fund, LLC, which shares represent Mr. Crawford’s
pecuniary ownership in such entity, (d) 212,148 shares of common stock
issuable upon exercise of warrants held by The Opportunity Fund, LLC,
which shares represent Mr. Crawford’s pecuniary ownership in such entity,
(e) 4,860 shares of common stock owned by Mr. Crawford’s spouse,
and (f) 4,934 shares of Series A Preferred Stock owned by Mr.
Crawford’s spouse.
|
|
4.
|
Mr.
Kauffman was our President and Secretary and a
director. Includes 258,333 shares of common stock held by The
Energy Acquisition Group, LLC, which shares represent Mr. Kauffman’s
pecuniary ownership in such entity.
|
|
5.
|
Mr.
Coffee is our Chief Operating Officer and a director. Includes
258,333 shares of common stock held by The Energy Acquisition Group, LLC,
which shares represent Mr. Coffee’s pecuniary ownership in such
entity.
|
|
6.
|
Mr.
Crawford is a director. Includes (a) 516,667 shares of common
stock held by The Energy Acquisition Group, LLC, which shares represent
Mr. Crawford’s pecuniary ownership in such entity, (b) shares
of common stock held by CCSSM Partners, LLC, which shares represent Mr.
Crawford’s pecuniary ownership in such entity, (c) 642,168 shares of
common stock held by The Opportunity Fund, LLC, which shares represent Mr.
Crawford’s pecuniary ownership in such entity, (d) 212,148 shares of
common stock issuable upon exercise of warrants held by The Opportunity
Fund, LLC, which shares represent Mr. Crawford’s pecuniary ownership in
such entity, and (e) 174 shares of Series A Preferred Stock owned by Mr.
Crawford. Mr. Crawford’s business address is 1335 Dublin Road,
Suite 122D, Columbus, Ohio 43235.
|
|
7.
|
Mr.
Smith is a director. Includes (a) 516,667 shares of common
stock held by The Energy Acquisition Group, LLC, which shares represent
Mr. Smith’s pecuniary ownership in such entity, (b) 789,182 shares of
common stock held by CCSSM Partners, LLC, which shares represent Mr.
Smith’s pecuniary ownership in such entity, (c) 307,791 shares of common
stock held by The Opportunity Fund, LLC, which shares represent Mr.
Smith’s pecuniary ownership in such entity, (d) 101,682 shares of common
stock issuable upon exercise of warrants held by The Opportunity Fund,
LLC, which shares represent Mr. Smith’s pecuniary ownership in such
entity, and (e) 2,189 shares of Series A Preferred Stock owned by Mr.
Smith. Mr. Smith’s business address is One Datran Center, 9100
South Dadeland Boulevard, Penthouse 2 - Suite 1800, Miami, Florida
33156.
|
|
8.
|
Includes
(a) 516,667 shares of common stock held by The Energy Acquisition Group,
LLC, which shares represent Mr. McKenzie’s pecuniary ownership in such
entity, (b) 1,646,530 shares of common stock held by CCSSM Partners, LLC,
which shares represent Mr. McKenzie’s pecuniary ownership in such entity,
(c) 128,434 shares of common stock held by The Opportunity Fund, LLC,
which shares represent Mr. McKenzie’s pecuniary ownership in such entity,
(d) 212,148 shares of common stock issuable upon exercise of warrants held
by The Opportunity Fund, LLC, which shares represent Mr. McKenzie’s
pecuniary ownership in such entity, (e) 7,450 shares of common stock owned
by Mr. McKenzie’s spouse, and (f) 7,563 shares of Series A
Preferred Stock owned by Mr. McKenzie’s spouse. Mr. McKenzie’s
business address is 1335 Dublin Road, Suite 122D, Columbus, Ohio
43235.
|
|
9.
|
Includes
(a) 516,667 shares of common stock held by The Energy Acquisition Group,
LLC, which shares represent Mr. Sturtz’s pecuniary ownership in such
entity, (b) 1,646,530 shares of common stock held by CCSSM Partners, LLC,
which shares represent Mr. Sturtz’s pecuniary ownership in such entity,
(c) 128,434 shares of common stock held by The Opportunity Fund, LLC,
which shares represent Mr. Sturtz’s pecuniary ownership in such entity,
and (d) 212,148 shares of common stock issuable upon exercise of warrants
held by The Opportunity Fund, LLC, which shares represent Mr. Sturtz’s
pecuniary ownership in such entity. Mr. Sturtz’s business
address is 1335 Dublin Road, Suite 122D, Columbus, Ohio
43235.
|
Other
than the shareholders listed above, we know of no other person who is the
beneficial owner of more than five percent (5%) of the Common Stock (computed on
a fully diluted basis).
PROPOSAL
2: RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board
has designated the firm of GBH CPAs, PC (“GBH”), as independent auditors of the
Company for the next fiscal year. The Company has been advised by GBH that
neither it nor any member or associate of such firm has any relationship with
the Company or with any of its affiliates other than as independent accountants
and auditors.
During
the two most recent fiscal years, there have been no disagreements with GBH on
matters of accounting principles or practices, financial statement disclosure,
auditing scope or procedure, or any reportable event.
Representatives
of GBH are not expected to be present at the Meeting.
In the
event that ratification of the appointment of GBH as the independent public
accountants for the Company is not obtained at the Meeting, the Board of
Directors will reconsider its appointment.
AUDIT
FEES
In 2007,
GBH billed the Company approximately $0.00 for professional services rendered
for the audit of the Company’s annual financial statements and review of
financial statements included in the Company’s Forms 10-QSB or services that are
normally provided in connection with statutory and regulatory filings or
engagements in 2008. However, GBH has billed the Company $61,000 for the review
of financial statements included in the Company’s Forms 10-Q for the quarter
ended June 30, 2008. Prior to this, the Company engaged Moore &
Associates to audit its annual financial statements and review its quarterly
financial statements.
No
professional services were rendered by GBH to the Company regarding tax advice,
tax compliance and tax planning during 2007.
ALL OTHER
FEES
No other
fees were billed to the Company by GBH in 2007 other than those described in
this report. No hours expended by GBH in its engagement to audit the Company’s
financial statements for the most recent fiscal year were attributable to work
performed by persons other than GBH’s full-time permanent employees. The Company
has approved 100% of all services performed by GBH and disclosed
above.
REQUIRED
VOTE
An
affirmative vote of the holders of a majority of the shares of Common Stock
issued and outstanding is required for ratification of the appointment of
GBH. Abstentions and broker non-votes are considered shares of
stock present in person or represented by proxy at the Meeting and entitled to
vote and are counted in determining the number of votes necessary for a
majority. An abstention will therefore have the practical effect of voting
against ratification of the appointment because it represents one fewer vote for
ratification of the appointment.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE TO APPROVE THE RATIFICATION OF THE APPOINTMENT OF
GBH CPAs, PC AS THE INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR (ENDING
DECEMBER 31, 2008), AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR
THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
OTHER
MATTERS
The Board
of Directors knows of no other business to come before the meeting. If, however,
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares represented thereby in
accordance with their best judgment.
STOCKHOLDER
PROPOSALS
Any
proposal that a stockholder may desire to present to the Company’s 2009 Annual
Meeting of Stockholders must be received in writing by Daniel Coffee, the
Secretary of the Company, on or before June 30, 2009, in order to be
considered for possible inclusion in the Company’s proxy materials relating to
such meeting.
UNTIMELY
SHAREHOLDER PROPOSALS
Any
stockholder proposals received by the Company after June 30, 2009 shall be
considered an untimely proposal. The Company, in its sole discretion, may
consider untimely proposals for possible inclusion in its 2009 Annual Meeting
proxy materials if such untimely proposals are received on or before July 31,
2009. Any untimely stockholder proposals received after July 31, 2009 shall not
be considered for possible inclusion in the Company’s 2009 Annual Meeting proxy
materials.
|
|
BY
ORDER OF THE BOARD OF DIRECTORS
Timothy
W. Crawford
Chairman
of the Board
October
13, 2008
|
CAPITAL
CITY ENERGY GROUP, INC. PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AT QUEST CONFERENCE CENTER, 8405
PULSAR PLACE, COLUMBUS, OHIO 43240 ON THURSDAY LOCAL
TIME.
The
undersigned hereby appoints Timothy W. Crawford or Tim Lavender, with full power
of substitution, as proxy to vote the Common Stock of the undersigned in Capital
City Energy Group, Inc. at the above Annual Meeting and at any adjournment
thereof.
THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS HEREIN SPECIFIED. IF A CHOICE
IS NOT SPECIFIED, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 and 2.
|
1.
|
|
Election
of Directors:
|
|
|
|
|
|
|
|
Nominees:
Timothy W. Crawford, Daniel Coffee, Joseph Smith, Lee Robinson, James
Bishop, and David Tenwick
|
|
|
|
|
|
|
|
o
FOR
o
WITHHELD
|
|
|
|
|
|
|
|
For,
except vote withheld from the following
nominees:
|
|
2.
|
|
Ratification
of GBH CPA, PCs as independent auditors:
|
|
|
|
|
|
|
|
o
FOR
o
AGAINST
o
ABSTAIN
|
THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER.
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY BY MAIL TO CAPITAL CITY ENERGY GROUP,
INC., 8351 N. HIGH STREET, SUITE 101, COLUMBUS, OHIO 43235 OR BY FACSIMILE TO
614-310-1610 ENVELOPE.
|
|
|
|
|
|
|
|
|
SIGNATURE
|
|
DATED
|
|
|
|
|
|
|
|
|
|
SIGNATURE
(IF JOINTLY OWNED)
|
|
PRINT
NAME
|
|
|
|
|
|
|
|
|
|
PRINT
NAME (IF JOINTLY OWNED)
|
|
|
NOTE:
This Proxy must be signed exactly as your name appears hereon. Executors,
administrators, trustees, etc. should give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized
officer.
Capital City Energy (GM) (USOTC:CETG)
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