UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-12
HIGH PLAINS GAS, 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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
HPG
High Plains Gas, Inc.
Dear Fellow Shareholder:
You are cordially invited to attend the High Plains Gas, Inc. Annual
Meeting of Shareholders on Wednesday, June 29, 2011, at 2:00 p.m. (Mountain
Time). The meeting will be held at the Denver Petroleum Club, 1325 Glenarm
Place, Denver, Colorado 80204; phone (303) 552-4577.
The matters to be acted upon are described in the accompanying notice of
Annual Meeting and Proxy Statement. At the meeting, we will also report on our
Company's operations, including the recent acquisitions and the progress we have
made in commercializing those operations.
This year we are pleased to again apply the U.S. Securities and Exchange
Commission rule that allows companies to furnish proxy materials to stockholders
primarily over the Internet. We believe this method should expedite receipt of
your proxy materials, lower costs of our Annual Meeting and help conserve
natural resources. We encourage you to vote via the Internet by following the
links to the Proxy Statement and Annual Report, which are both available at
www.proxyvote.com.
YOUR VOTE IS VERY IMPORTANT. I URGE YOU TO VOTE "FOR" ALL PROPOSALS.
Please review your proxy materials carefully and vote today.
On behalf of the Board of Directors, I express appreciation for your continued
support toward the profitable growth of High Plains Gas. We look forward to
seeing you at the Annual Meeting.
Very truly yours,
/s/ Brent M. Cook
-----------------
Brent M. Cook
Chief Executive Officer
Gillette, Wyoming
May 23, 2011
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HIGH PLAINS GAS, INC.
3601 SOUTHERN DRIVE
GILLETTE, WYOMING 82718
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of High Plains Gas, Inc. will be held at
the Denver Petroleum Club, 1325 Glenarm Place, Denver, Colorado, on Wednesday,
June 29, 2011, at 2:00 p.m. (Mountain Time). At the meeting, the holders of
our outstanding stock will act on the following matters:
1. election of five Directors to serve until the next Annual Meeting of
Shareholders or until their respective successors have been elected
and qualified;
2. ratification of the selection of Eide Bailly CPA's as our independent
registered public accounting firm for the fiscal year ending December
31, 2011;
3. such other business as may properly come before the meeting and any
adjournment or postponement thereof.
The board recommends that you vote FOR election of the nominated slated of
directors; and FOR ratification of the appointment of Eide Bailly as our
independent registered public accounting firm for the fiscal year 2011 ending
December 31, 2011.
Only shareholders of record at the close of business on May 23, 2011, will
be entitled to notice of and to vote at the Annual Meeting of Shareholders and
any adjournment or postponement thereof.
WE URGE YOU TO VOTE YOUR SHARES PROMPTLY. PLEASE REFER TO THE SPECIFIC
VOTING INSTRUCTIONS.
By Order of the Board of Directors,
/s/ Brent M. Cook
-----------------
Brent M. Cook
Chief Executive Officer
Gillette, Wyoming
May 23, 2011
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INTERNET AVAILABILITY OF PROXY MATERIALS
We are furnishing proxy materials to our shareholders primarily via the
Internet under rules adopted by the U.S. Securities and Exchange Commission
(SEC), instead of mailing printed copies of those materials to each shareholder.
Our shareholders are receiving a Notice of Internet Availability of Proxy
Materials containing instructions on how to access our proxy materials,
including our Proxy Statement and our Annual Report. The Notice of Internet
Availability of Proxy Materials also instructs you on how to access your proxy
card to vote via the Internet or telephone.
This process is designed to expedite shareholders' receipt of proxy
materials, lower the cost of the Annual Meeting and help conserve natural
resources. If you would prefer to continue to receive printed proxy materials,
please follow the instructions included in the Notice of Internet Availability
of Proxy Materials.
HOW TO VOTE
If your shares are held by a broker, bank or other stockholder of record
exercising fiduciary powers which holds securities of record in nominee name or
otherwise, typically referred to as being held in "street name", you may receive
a separate voting instruction form, or you may need to contact your broker, bank
or other stockholder of record to determine whether you will be able to vote
electronically via the Internet or telephone.
As a reminder, your broker will NOT be able to vote your shares with
respect to the election of directors if you have not provided directions to your
broker. We strongly encourage you to submit your proxy card and exercise your
right to vote as a shareholder.
If you are a stockholder with shares registered in your name, you may vote
by either of the following methods:
- VOTE VIA THE INTERNET, by going to the web address www.proxyvote.com
and following the instructions for Internet voting.
- VOTE BY TELEPHONE, by dialing 1-800-690-6903 and following the
instructions for telephone voting.
PLEASE NOTE THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR
OTHER STOCKHOLDER OF RECORD AND YOU WISH TO VOTE AT THE ANNUAL MEETING, YOU WILL
NOT BE PERMITTED TO VOTE IN PERSON AT THE ANNUAL MEETING UNLESS YOU FIRST OBTAIN
A LEGAL PROXY ISSUED IN YOUR NAME FROM THE RECORD HOLDER.
HIGH PLAINS GAS, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors is furnishing shareholders this proxy statement to
solicit proxies to be voted at the Annual Meeting of Shareholders of High Plains
Gas, Inc. ("High Plains"), a Nevada corporation. The meeting will be held on
Wednesday, June 29, 2011, at 2:00 p.m. local time at the Denver Petroleum Club,
1325 Glenarm Place, Denver, Colorado 80204; phone (303) 552-4577.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Record Date. The record date for the Annual Meeting is the close of
business on May 23, 2011. Only shareholders of record on that date will be
entitled to notice of, and to vote at, the Annual Meeting.
Quorum. The Company's bylaws provide that the holders of a majority of the
stock issued and outstanding and entitled to vote generally in the election of
directors, present in person or represented by proxy, shall constitute a quorum
for the transaction of business at the Annual Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the presence
of a quorum.
Voting Your Proxy. Exercise your vote in accordance with the method of
your choice, via the Internet or by telephone. The proxy will be voted as you
direct. In the event no directions are specified, your shares will be voted (1)
FOR the election of the nominees named below as directors; and (2) FOR the
ratification of the selection of Eide Bailly, CPA's; and at the discretion of
the designated proxy holders as to other matters that may properly come before
the Annual Meeting.
IF YOU ARE A SHAREHOLDER OF RECORD, holding a stock certificate registered
in your name on the books of our transfer agent, Empire Stock Transfer, as of
the close of business on May 23, 2011, and attend the meeting, you may vote in
person at the meeting on proxies available at the meeting for that purpose, or
revoke a previously submitted proxy and complete a new proxy.
IF YOUR SHARES ARE HELD IN A STOCK BROKERAGE ACCOUNT WITH YOU AS A
BENEFICIAL OWNER, your broker will NOT be able to vote your shares with respect
to the election of directors if you have not provided directions to your broker.
We strongly encourage you to exercise your right to vote as a shareholder. In
order to do so,
- you must return your voting instructions to your broker or nominee,
the holder of record, OR
- you must vote your shares through your broker or nominee via the
internet or by phone, OR
- if you wish to vote in person at the meeting, you must obtain from
the record holder and bring to the meeting a proxy SIGNED BY THE
RECORD HOLDER identifying you as the beneficial owner of the shares
and giving you the right to vote the shares at the meeting. (You may
NOT use the voting instruction form provided by your broker or nominee
to vote in person at the meeting.)
Revoking Your Proxy. You may revoke your proxy at any time before the
voting closes by notifying us; no formal procedure is required. Votes are
tabulated by an independent agent, and reported at the Annual Meeting.
We intend to make available to our shareholders this proxy statement,
including the Notice of Annual Meeting of Shareholders, on or about May 23,
2011.
Holders of common stock at the close of business on the record date of May
23, 2011, are entitled to vote at the meeting. As of such date, there were
166,843,602 shares outstanding and entitled to vote.
If you abstain from voting, your shares will be counted as shares present
and entitled to vote in determining the presence of a quorum for the meeting,
but will not be voted in determining approval of any matter submitted to
shareholders for a vote. An abstention will have the same effect as a negative
vote on a matter submitted to shareholders for a vote. If a broker indicates
that it does not have discretionary authority to vote on a particular matter,
broker non-votes, those shares will be counted as shares present in determining
the presence of a quorum for the meeting but will not be considered present or
entitled to vote with respect to that particular matter.
1. ELECTION OF DIRECTORS
At the Annual Meeting, shareholders will elect a Board of five directors by
a plurality of the votes cast. Our Board of Directors proposes the five
nominees named below. We recommend voting FOR the five named nominees.
All nominees named below have served as directors since their appointment
during the last fiscal year. Other than that Joseph Hettinger is the son of Mark
D. Hettinger, there are no family relationships among our executive officers and
directors. BASED ON ITS REVIEW OF THE RELATIONSHIPS BETWEEN ITS EXISTING
DIRECTORS, AS DIRECTOR NOMINEES, AND HIGH PLAINS, THE BOARD OF DIRECTORS HAS
AFFIRMATIVELY DETERMINED THAT IF THESE NOMINEES ARE ELECTED, THREE OF OUR
DIRECTORS WILL BE INDEPENDENT UNDER THE RULES OF HIGH PLAINS' CORPORATE
GOVERNANCE PRINCIPLES.
If any nominee is unable to serve, we solicit discretionary authority to
vote to elect another person unless we reduce the size of the Board. Each
director will serve until the next Annual Meeting of Shareholders, or until his
or her successor has been elected and qualified, or until his or her earlier
resignation or removal. We believe that all nominees will be available for
election as a director for the prescribed term.
Mark D. Hettinger, Chairman of the Board of Directors, President and Chief
Operating Officer
Mr. Hettinger has over 30 years of experience in oil and gas construction,
fabrication and process equipment. Mr. Hettinger founded Hettinger Welding in
1980 to provide welding and fabrication services to energy companies in Wyoming.
In October 2006, after 28 years as principal owner and CEO, Mr. Hettinger sold
Hettinger Welding. Mr. Hettinger's unique vision and professional ambition grew
Hettinger Welding to over 1,400 employees and a $200 million plus dollar annual
market share, solidifying Hettinger Welding as one of the largest oil and gas
construction firms in the Western United States. In 2009, Mr. Hettinger retired
as CEO of Hettinger Welding to focus on oil and gas production and became
managing member of High Plains Gas, LLC, which was acquired by the Company in
connection with the Reorganization Agreement.
Joseph Hettinger, Director and Chief Financial Officer
Mr. Hettinger has over 10 years of experience in accounting and finance in
the banking and energy industries. Mr. Hettinger co-authored the internal
control structure for Sarbanes Oxley Sec. 404 for a publicly traded bank in
2004. In 2004, Mr. Hettinger co-founded Rocky Mountain Development Group, Inc.
where he served as the Vice President of Acquisitions and Finance through 2006.
Mr. Hettinger became a member of the Hettinger Companies in 2007 as the Southern
Wyoming Regional Manager and Director of Contract Administration. In 2008, Mr.
Hettinger managed oil and gas facility construction projects worth over $90
million dollars for the Hettinger Companies. Mr. Hettinger became a managing
member of High Plains Gas, LLC, which was acquired by the Company in connection
with the Reorganization Agreement.
Gary Davis, Director
Mr. Davis is the President and Founder of Kahuna Ventures LLC, formed in
1999, a natural gas processing, treating and project-consulting firm, and has
well over 32 years in the natural gas space. Kahuna Ventures currently has 40
employees, including 20 engineers and 7 field construction managers or
inspectors. Previous to founding Kahuna, Mr. Davis worked at Western Gas
Resources, Inc. for over 14 years. Mr. Davis' tenure included holding such
positions as Corporate Controller, Sr. Vice President of Engineering &
Production, Environmental and Safety, Vice President of Southern Region and Vice
President of Engineering & Environmental. During Mr. Davis' time with Western
Gas, he assisted in growing a 50-employee company into a major independent
mid-stream corporation with over 950 employees and a gross income in excess of
$1 billion. Mr. Davis has extensive experience in all project functions
including due diligence, site and right of way acquisition, legal, environmental
and permitting, safety and operations. Mr. Davis has a B.S. degree from the
Colorado School of Mines (CSM) in Chemical and Petroleum Refining Engineering.
Cordell Fonnesbeck, Director
Mr. Fonnesbeck is the owner and founder of his own public accounting firm,
Cordell Fonnesbeck, CPA, P.C. since 1991 and has been a member of the American
Institute of Certified Public Accountants (AICPA) since 1974. Mr. Fonnesbeck
resides in Casper, Wyoming and has been a Certified Public Accountant with over
39 years of public accounting experience. Mr. Fonnesbeck established his Casper,
Wyoming CPA firm in 1991 and prior to that was in partnership with three other
CPAs. Mr. Fonnesbeck's practice consists mainly of assisting small to medium
size businesses and individuals throughout Wyoming and the Intermountain West in
the areas of tax compliance, tax planning and accounting services. This practice
includes several energy and related industry clients in the Powder River Basin
area of Wyoming. From 2005 - 2009, Mr. Fonnesbeck was the accountant for High
Plains Gas, LLC, which was the predecessor to High Plains Gas, Inc. Mr.
Fonnesbeck serves on the Board of Directors for a Private Charitable Foundation
located in Casper. Mr. Fonnesbeck received his bachelor of science degree in
business and accounting from Utah State University in 1972.
Alan R. Smith, Director
Mr. Smith began his career in the energy industry in 1966 and has been an
exploration geologist, geological consultant, exploration manager, division
manager, business development manager (international), and V.P. of international
development for such companies as Amoco Production Co., Mountain Fuel Supply Co.
(Questar), Lear Petroleum, Davis Oil Co., Inexco Oil Co., and Pennzoil
Exploration and Development Co., in both domestic and international capacities.
From 1998 to 2003 Mr. Smith was Vice President, International Business
Development, for EEX Corporation, where he oversaw the evaluation of exploration
and production projects in Asia and Australasia. Mr. Smith has developed and
managed many relationships with government oil companies in Indonesia, Brunei
and New Zealand. Mr. Smith holds a Bachelor of Science (1966) and Master of
Science (1968) in Geology from Brigham Young University and is a Certified
Petroleum Geologist with the American Association of Petroleum Geologists and is
a Registered Professional Geologist in the State of Wyoming
VOTE REQUIRED
The affirmative vote of a plurality of the shares our common stock
represented in person or by proxy at the Annual Meeting is necessary for the
election of the individuals named above. There is no cumulative voting in
elections of directors. Unless otherwise specified, proxies will be voted in
favor of the five nominees described above.
RECOMMENDATION
Our Board of Directors recommends that shareholders vote FOR the election
of each of the individuals named above.
CORPORATE GOVERNANCE
The Company's Corporate Governance Principles and Corporate Code of Conduct
(covering all employees and directors), as well as the Certificate of
Incorporation and the By-Laws are all available on our website at
www.highplainsgas.com.
BOARD MEETINGS AND COMMITTEES
The Board has two committees, as follows:
AUDIT COMMITTEE COMPENSATION COMMITTEE
------------------------- ----------------------
Cordell Fonnesbeck, Chair Alan R. Smith, Chair
Gary Davis Gary Davis
Alan R. Smith Cordell Fonnesbeck
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During the fiscal year ended December 31, 2010, the board of directors met
11 times. In 2010, all directors attended at least 75% of all meetings of the
board of directors served after becoming a member of the board. We expect all
directors to attend the next Annual Meeting barring unforeseen circumstances or
irresolvable conflicts.
Audit Committee
The function of the Audit Committee is to assist the Board in fulfilling
its responsibility to the shareholders relating to our corporate accounting
matters, financial reporting practices, and the quality and integrity of our
financial reports. The Audit Committee's purpose is to assist the Board with
overseeing:
- the reliability and integrity of our financial statements, accounting
policies, internal controls and disclosure practices;
- our compliance with legal and regulatory requirements, including our
disclosure controls and procedures;
- our independent auditor's qualifications, engagement, compensation,
and independence;
- the performance of our independent auditor; and
- the production of an annual report of the Audit Committee for
inclusion in our annual proxy statement.
The Audit Committee is to be comprised of not less than three of our
independent directors. The Board has determined that each member of the Audit
Committee is an independent director in accordance with applicable legal or
regulatory requirements. It has also determined that each member is financially
literate and has identified Mr. Fonnesbeck, who is a certified public
accountant, as an audit committee financial expert as defined by the Securities
and Exchange Commission.
Compensation Committee
The purpose of the Compensation Committee is to:
- review and approve corporate goals and objectives relevant to CEO
compensation, evaluate the CEO's performance in light of those goals
and objectives, and determine and approve the CEO's compensation level
based on this evaluation;
- review and approve the compensation of our other officers based on
recommendations from the CEO;
- review, approve and make recommendations to the Board with respect to
incentive compensation plans or programs, or other equity-based plans
or programs; and
- produce an annual report of the Compensation Committee on executive
compensation for inclusion in our annual proxy statement.
The Compensation Committee is to be comprised of not less than three of our
independent directors. The Board has determined that each member of the
Compensation Committee is an independent director in accordance with applicable
legal or regulatory requirements.
SHAREHOLDER COMMUNICATIONS TO THE BOARD
Shareholders may send communications in writing to the Board, committees of
the Board, and/or to individual directors, at our corporate address in care of
our Secretary. Written communications addressed to the Board are reviewed by
the Chairman of the Board for appropriate handling. Written communications
addressed to an individual Board member are forwarded to that person directly.
BENEFICIAL OWNERSHIP OF SHARES
The following table shows the beneficial ownership of the Company's common
stock as of May 23, 2011. The table shows the amount of shares owned by each
person known to the Company who will own beneficially more than five percent of
the outstanding shares of any class of the Company's stock, based on the number
of shares outstanding assuming completion of the reorganization; each of the
Company's Directors and Executive Officers; and all of its Directors and
Executive Officers as a group.
NAME OF NUMBER OF SHARES PERCENT OF SHARES
PERSON OR GROUP BENEFICIALLY OWNED(1) BENEFICIALLY OWNED(2)
Mark D. Hettinger, 48,080,000(3) 28.7%
Chief Operating Officer
and Director
Joseph Hettinger, 40,540,000(4) 24.2%
Chief Financial Officer
and Director
Brent M. Cook, 22,500,000(5) 13.5%
Chief Executive Officer
Brandon Hargett, 22,500,000(5) 13.5%
Vice President of
Strategy and Business
Development
Gary Davis, Director 240,000(6) *
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Cordell Fonnesbeck,
Director 250,000(7) *
Alan R. Smith, Director 250,000(8) *
Fletcher International, Ltd. 10,000,000(9) 5.7%
All Directors and 111,860,000(10) 66.4%
Officers as a Group
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* Less than 0.1%
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, involving
the determination of beneficial owners of securities, a beneficial owner of
securities is a person who directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise has, or shares, voting
power and/or investment power with respect to the securities, and any person who
has the right to acquire beneficial ownership of the security within sixty days
through means including the exercise of any option, warrant or conversion of a
security.
(2) The percentage of shares owned is based on approximately 166,843,602 shares
of common stock outstanding as of May 18, 2011. Also reflects a one for one
stock dividend effective December 16, 2010. Where the beneficially owned shares
of any individual or group in the following table includes any options,
warrants, or other rights to purchase shares, the percentage of shares owned
includes such shares as if the right to purchase had been duly exercised.
(3) Includes options to purchase 200,000 shares exercisable for five years from
April 21, 2011 at $1.02 per share.
(4) Includes options to purchase 200,000 shares exercisable for five years from
April 21, 2011 at $1.02 per share.
(5) Reflects 22,500,000 shares held by Current Energy Corporation, of which Mr.
Cook and Mr. Hargett may be deemed to be beneficial owners.
(6) Includes options to purchase 200,000 shares exercisable for five years from
April 21, 2011 at $1.02 per share.
(7) Includes options to purchase 200,000 shares exercisable for five years from
April 21, 2011 at $1.02 per share.
(8) Includes options to purchase 200,000 shares exercisable for five years from
April 21, 2011 at $1.02 per share.
(9) Reflects the maximum number of shares issuable to Fletcher International
Corporation pursuant to a warrant to purchase up to $5,000,000 in shares issued
on March 3, 2011. The warrant exercise price is the lesser of $1.25 per share
or the volume weighted average market price for the prior calendar month (with a
minimum exercise price of $0.50 per share).
(10) Includes options to purchase 1,000,000 shares exercisable for five years
from April 21, 2011 at $1.02 per share.
DIRECTOR COMPENSATION
There was no compensation paid to any of the directors during the fiscal
year ended December 31, 2010. The corporation has agreed to compensate
directors at the rate of $20,000 per year and an additional $2,500 for committee
assignments and $2,500 for serving as chairman of such committees. The Company
issued 40,000 shares to Mark Hettinger, Joseph Hettinger and Gary Davis and
50,000 shares to Cordell Fonnesbeck and Alan R. Smith on April 21, 2011 in lieu
of cash payments for such shares.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires our directors and officers, and persons who own more than five percent
of the Common Stock to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC") SEC regulations require reporting
persons to furnish us with copies of all Section 16(a) forms they file.
Based solely on a review of copies of such reports received or written
representations from certain reporting persons, we believe all reporting persons
complied with all applicable reporting requirements.
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE
We have adopted a written policy for the review and approval of related
party transactions which is defined as a sale or purchase of property, supplies
or services to or from any director or officer of the company, members of a
director's or officer's family, or entities in which any of these persons is a
director, officer or owner of 5% or more that that entity's interests. Our
policy requires prior approval by both a majority of our Board of Directors and
a majority of our disinterested directors who are not employees of the company.
INDEBTEDNESS TO RELATED PARTIES.
Mark Hettinger - During 2010 the Company entered into various loan agreements
with Mark Hettinger totaling $4,942,591. The loans are due on demand along with
interest at a rate of 15.0% per annum. No payments were made on these notes
during 2010 and interest totaling $102,719 has been accrued as of December 31,
2010.
Joe Hettinger - During 2010 the Company entered into various loan agreements
with Joe Hettinger totaling $417,194. The loans are due on demand along with
interest at a rate of 15.0% per annum. No payments were made on these notes
during 2010 and interest totaling $7,080 has been accrued as of December 31,
2010.
Accrued wages and compensation - During 2010 the Company accrued unpaid wages
and compensation to various related parties totaling $325,000. The amounts are
due on demand and do not include interest. No payments were made on the accrued
amounts during 2010.
Principal due to related parties was $5,963,900 and $0 and accrued interest was
$111,498 and $0 as of December 31, 2010 and 2009, respectively.
OTHER TRANSACTIONS
Because of the remote location of the Company's headquarters, the Company
periodically utilizes an airplane owned by Mark D. Hettinger for business
related travel. Mr. Hettinger is reimbursed all costs associated with
utilization of such airplane. For the fiscal year ended December 31, 2010,
those expenses totaled $63,200.
Mssrs. Fonnesbeck, Smith and Davis are considered to be independent directors.
REPORT OF THE COMPENSATION COMMITTEE
This report of the Compensation Committee (the "Committee") shall not be deemed
incorporated by reference by any general statement incorporating the Proxy
Statement by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934 (the "Acts"), except to the extent that High
Plains specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
High Plains' compensation program consists of base salary, bonus, stock options,
other incentive awards and other benefits, which the Committee generally reviews
annually. The Committee's overall philosophy is to align compensation with our
business strategy and to support achievement of our long-term goals. In order
to attract and retain competent executives, we believe it is essential to
maintain an executive compensation program that provides overall compensation
competitive with that paid to executives with comparable qualifications and
experience.
The Board of Directors is in the process of reviewing all compensation plans to
assure effectiveness and fiduciary responsibility.
COMPENSATION COMMITTEE REPORT:
We have reviewed and discussed with management certain Executive Compensation
and Compensation Discussion and Analysis provisions which was included in the
Company's Annual Report on Form 10-K, filed pursuant to the Securities Exchange
Act of 1934, as amended (the "Annual Report"). Based on the reviews and
discussions referred to above, we recommend to the Board of Directors that the
Executive Compensation and Compensation Discussion and Analysis provisions
referred to above be included in the Company's Annual Report.
Submitted by the Compensation Committee of the Board of Directors
REPORT OF THE AUDIT COMMITTEE
The Audit Committee reviewed and discussed with management our audited
financial statements as of and for the year ended December 31, 2010, as well as
our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q before those
reports were filed.
The Audit Committee discussed with our independent registered accountants,
Eide Bailly, CPA's, the matters required to be discussed by Statement on
Auditing Standards No. 61, "Communication with Audit Committees," as issued,
modified or supplemented.
The Audit Committee received the written disclosures from Eide Bailly
required by Independence Standards Board Standard No. 1, "Independence
Discussions with Audit Committees," as issued, modified or supplemented. The
Audit Committee discussed with Eide Bailly their independence from management
and from High Plains.
The Audit Committee discussed with Eide Bailly the overall scope, plans and
budget for its audit. In addition, the Audit Committee meets with Eide Bailly
regularly, with or without management present, to discuss the results of Eide
Bailly's examination, evaluation of High Plains' internal controls, and the
overall quality of High Plains' financial reporting.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements as
of and for the year ended December 31, 2010, be included in our Annual Report on
Form 10-K for the year ended December 31, 2010.
Submitted by the Audit Committee of the Board of Directors
EXECUTIVE OFFICERS
The following table identifies the Company's principal executive officer,
the Company's principal financial officer and the Company's most highly paid
executive officers.
Name Corporate Office(s)
----------------- --------------------------------------
Brent M. Cook Chief Executive Officer
Mark D. Hettinger President and Chief Operating Officer
Joseph Hettinger Chief Financial Officer
Vice President of Strategy and
Brandon Hargett Business Development
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table summarizes the total compensation awarded to, earned by
or paid by us for services rendered by the named executive officers that served
during the fiscal years 2010 and 2009.
NAME AND OPTION ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS COMPENSATION TOTAL
--------------------------- ---- ------ ----- ------ ------------ -----
Current Executive Officers: -- -- -- -- --
Brent M. Cook, 2010
Chief Executive Officer
-- -- -- -- --
Mark D. Hettinger, 2010
Chairman of the Board of -- -- -- -- --
Directors and Chief 2009
Operating Officer
-- -- -- -- --
Joseph Hettinger, 2010
Chief Financial Officer -- -- -- -- --
and Director 2009
-- -- -- -- --
Brandon Hargett, 2010
Vice President Strategy
and Business Development -- -- -- -- --
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COMPENSATION DISCUSSION AND ANALYSIS
The primary objectives of the Company's executive compensation programs are
to:
- attract, retain and motivate skilled and knowledgeable individuals;
- ensure that compensation is aligned with the Company's corporate
strategies and business objectives;
- promote the achievement of key strategic and financial performance
measures by linking short-term and long-term cash and equity
incentives to the achievement of measurable corporate and individual
performance goals; and
- align executives' incentives with the creation of stockholder value.
To achieve these objectives, the Company's Compensation Committee and board
of directors evaluates the Company's executive compensation program with the
objective of setting compensation at levels they believe will allow the Company
to attract and retain qualified executives. In addition, a portion of each
executive's overall compensation is tied to key strategic, financial and
operational goals set by the Company's board of directors. The Company also
generally provides a portion of the Company's executive compensation in the form
of options that vest over time, which the Company believes helps the Company
retain the Company's executives and align their interests with those of the
Company's stockholders by allowing the executives to participate in the
Company's longer term success as reflected in asset growth and stock price
appreciation.
COMPONENTS OF THE COMPANY'S EXECUTIVE COMPENSATION PROGRAM
The primary elements of the Company's executive compensation program will
be base salaries and equity grant incentive awards, although the board of
directors has the authority to award cash bonuses, benefits and other forms of
compensation as it sees fit.
The Company does not have any formal or informal policy or target for
allocating compensation between short-term and long-term compensation, between
cash and non-cash compensation or among the different forms of non-cash
compensation. Instead, the Company has determined subjectively on a
case-by-case basis the appropriate level and mix of the various compensation
components. Similarly, the Company does not rely on benchmarking against the
Company's competitors in making compensation related decisions.
BASE SALARIES
Base salaries will be used to recognize the experience, skills, knowledge
and responsibilities required of the Company's Named Executive Officers. Base
salary, and other components of compensation, may be evaluated by the Company's
board of directors for adjustment based on an assessment of the individual's
performance and compensation trends in the Company's industry.
EQUITY AWARDS
The Company's stock option award program will be the primary vehicle for
offering long-term incentives to the Company's executives. On April 21, 2011,
the Company issued a total of 200,000 options exercisable for five years at
$1.02 per share to each of the Company's five directors. The Company intends
the Company's equity awards to executives to generally be made in the form of
common stock or warrants. The Company believes that equity grants in the form
of warrants provide the Company's executives with a direct link to the Company's
long-term performance, create an ownership culture, and align the interests of
the Company's executives and the Company's stockholders.
CASH BONUSES
The Company's board of directors has the discretion to award cash bonuses
based on the Company's financial performance and individual objectives. The
corporate financial performance measures (revenues and profits) will be given
the greatest weight in this bonus analysis. The Company has not yet granted any
cash bonuses to any named executive officers.
BENEFITS AND OTHER COMPENSATION
The Company's Named Executive Officers are permitted to participate in such
health care, disability insurance, bonus and other employee benefits plans as
may be in effect with the Company from time to time to the extent the executive
is eligible under the terms of those plans. As of the date of this Memorandum,
with exception to health care, the Company has not implemented any such employee
benefit plans.
EXECUTIVE COMPENSATION AGREEMENTS
As discussed above, the Company has agreed to pay the Named Executive
Officers an annual salary. Base salary may be increased from time to time with
the approval of the board of directors. The following table summarizes the
agreed annual salary of each of the Named Executive Officers:
Summary Annual Salary
Name Annual Salary
--------------- --------------
Brent Cook $ 175,000
Mark Hettinger $ 175,000
Joe Hettinger $ 150,000
Brandon Hargett $ 80,000
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GRANTS OF PLAN-BASED AWARDS TABLE FOR FISCAL YEAR 2010
The Company's 2010 Employee and Consultant Stock Option Plan provides for
the issuance of up to 12,000,000 options to purchase common stock. The options
may either be qualified or unqualified, but the plan requires that the exercise
price reflect then current market price. No options under that plan have been
issued. During fiscal 2010, the Company did not grant any equity awards under
any equity award plan.
OPTION EXERCISES FOR FISCAL 2010
During fiscal 2010, none of the Named Executive Officers exercised options.
NONQUALIFIED DEFERRED COMPENSATION
The Company currently offers no defined contribution or other plan that
provides for the deferral of compensation on a basis that is not tax-qualified
to any of the Company's employees, including the Named Executive Officers.
2. ELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Eide Bailly CPA's ("Eide Bailly") were appointed for the fiscal year ended
December 31, 2010 to be the independent registered public accountants for the
company.
Fees Billed by Principal Accountants - The following table presents fees
for professional services billed by Eide Bailly and Chang G. Park CPA for the
years ended December 31, 2010 and 2009:
2009 2010 2010 2010
-------------- -------------- ----------- ----------
Full Year
Chang G. Park Chang G. Park Eide Bailly Total
-------------- -------------- ----------- ----------
Audit fees $ 8,500 $ 17,500 - $ 17,500
Tax fees - - - -
Audit related fees (1) - - - -
-------------- -------------- ----------- ----------
TOTAL $ 8,500 $ 17,500 - $ 17,500
============== ============== =========== ==========
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AUDIT COMMITTEE PRE-APPROVAL OF SERVICES OF PRINCIPAL ACCOUNTANTS
The Audit Committee has the sole authority and responsibility to select,
evaluate, determine the compensation of, and, where appropriate, replace the
independent auditor. After determining that providing the non-audit services is
compatible with maintaining the auditor's independence, the Audit Committee
pre-approves all audits and permitted non-audit services to be performed by the
independent auditor, except for de minimus amounts.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The persons named in the enclosed proxy will vote to ratify the selection
of Eide Bailly as independent public accountants for the year ending December
31, 2011, unless otherwise directed by the shareholders. Shareholder
ratification of Eide Bailly as the Company's independent public accountants is
not required by the Company's bylaw or otherwise. However, the Company is
submitting selection of Eide Bailly to the shareholders for ratification as a
matter of good corporate practice. If the shareholders do not ratify the
selection of Eide Bailly as the Company's independent public accountants, the
Audit Committee will reconsider the selection of such independent public
accountants. If the selection is ratified, the Audit Committee may, in its
discretion, direct the appointment of different independent public accountants
at any time during the year if it determines that such a change would be in the
best interest of the Company and its shareholders.
VOTE REQUIRED
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy at the Annual Meeting is necessary for the ratification of
Eide Bailly as independent public accountants for the fiscal year ended December
31, 2011; noting that on November 15, 2010, the Company changed its reporting
year end from July 31 to December 31.
RECOMMENDATION
Our Board of Directors recommends that shareholders vote FOR the
ratification of Eide Bailly as independent public accountants for the fiscal
year ended December 31, 2011.
PROPOSALS OF SHAREHOLDERS
Shareholders who wish to present proposals under SEC Rule 14a-8 to be
included in our Proxy Statement and form of proxy in connection with the June
2012 Annual Meeting of Shareholders, must submit those proposals so that we
receive them no later than 120 days before the proxy availability date of our
Proxy Statement in connection with that meeting. If we meet this year's proxy
availability date of May 23, 2011, we must receive such proposals for next
year's Annual Meeting no later than January 24, 2012.
Shareholders who wish to present matters outside the processes of SEC Rule
14a-8 to be included in our Proxy Statement and form of proxy in connection with
the June 2012 Annual Meeting of Shareholders, must submit notice of those
matters so that we receive them no later than 45 days before the proxy
availability date of our Proxy Statement in connection that meeting. If we meet
this year's expected availability date of May 23, 2011, we must receive notice
of such matters for next year's Annual Meeting no later than April 7, 2012.
Notice received after April 7, 2012 will be untimely and subject to the
discretionary authority described in the last sentence of this Proxy Statement.
GENERAL
We will pay the cost of soliciting proxies, including preparation,
assembly, printing and mailing of the Notice of Internet Availability of Proxy
Materials, and any additional information furnished to shareholders.
Arrangements will be made to furnish solicitation materials to brokerage houses,
custodians, nominees and other fiduciaries, holding in their names shares of
common stock beneficially owned by others to forward to such beneficial owners.
We will reimburse these third-parties for reasonable out-of-pocket expenses.
Solicitation of proxies by mail may be supplemented by telephone, telegram,
electronic transmission or personal solicitation by our directors, officers or
other regular employees of the Company. No additional compensation will be paid
to directors, officers or other regular employees for such services.
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, any amendments to those reports and any other
reports filed with or furnished to the SEC also are available on or through our
website at www.highplainsgas.com as soon as reasonably practicable after they
are filed with or furnished to the SEC.
Upon written request, we will provide without charge (except for exhibits)
to any shareholder of record or beneficial owner of our securities, a copy of
our Annual Report on Form 10-K filed with the SEC for the year ended December
31, 2010, including the financial statements and schedules thereto. Exhibits to
said report will be provided upon payment of fees limited to our reasonable
expenses in furnishing such exhibits. Written requests should be addressed to:
Secretary, High Plains Gas, Inc., 3601 Southern Dr., Gillette, Wyoming 82718.
Some brokers and other nominee record holders may be participating in the
practice of "householding" corporate communications to shareholders, such as
proxy statements and annual reports. This means that only one copy of this
Proxy Statement, including the Notice of Internet Availability of Proxy
Materials, may have been sent to multiple shareholders in your household. We
promptly will deliver a separate copy of this Proxy Statement to you if you call
or write us at our address or phone number. If in the future you want to
receive separate copies of our corporate communications to shareholders, such as
the Notice of Internet Availability of Proxy Materials, proxy statements and
annual reports, or if you are receiving multiple copies and would like to
receive only one copy for your household, you should contact your broker or
other nominee record holders, or you may contact us at our address and phone
number.
The Board of Directors is not aware of any matter that is to be presented
for action at the meeting other than the matters set forth herein. Should any
other matters requiring a vote of the shareholders arise, the proxies in the
enclosed form confer upon the person or persons entitled to vote the shares
represented by such proxies' discretionary authority to vote the same in respect
of any such other matters in accordance with their best judgment in the interest
of High Plains.
By Order of the Board of Directors,
/s/ Brent M. Cook
-----------------
Brent M. Cook
Chief Executive Officer
Dated: May 23, 2011
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HPG
High Plains Gas, Inc.