Oilexco Incorporated issued a cautionary note with respect to its upcoming Annual General Meeting to be held May 7, 2008, and in particular encourages all shareholders to carefully consider the vote on the renewal of the Employee Stock Option Plan. It has come to the Company's attention that some advisors on corporate governance have recommended voting against the approval of unallocated options under the Stock Option Plan. If this resolution is voted down, then the Company will not have the ability to issue stock options to new employees, which in turn may adversely impact the ability of the company to attract new talent needed to continue the recent growth of the Company.
"Oilexco has been blessed with the ability to attract and retain extremely good employees, partially because of our philosophy that all employees should contribute to the growth in shareholder value and participate in it within reasonable parameters," said Arthur Millholland, CEO of Oilexco. "There are some theoretical models out there which attempt to limit the current value of the options granted over the last 5 years, which end up punishing companies like ours that have grown quickly and therefore have high volatility in share prices.
Oilexco's compensation plan is the oldest one available, a simple 10% rolling stock option program which has been accepted by shareholders for decades and, considering the growth in shareholder value over the last few years, seems to be working well."
The Toronto Stock Exchange requires listed companies to seek shareholder approval of the number of shares which may be issued under stock option plans on a three year cycle, and this year Oilexco is seeking re-approval to continue option grants up to 10% of the number of shares outstanding from time to time. This is no change from past approvals. Currently Oilexco has options outstanding which account for approximately 7% of its outstanding shares. However, certain advisors on corporate governance have told Oilexco that they recommend that institutional shareholders vote this provision down as it exceeds by 4% their recommended compensation levels, as calculated by their models. This recommendation is based on a mechanical exercise applicable to all companies and does not take into account either the significant increase in shareholder value, nor the way that the Oilexco Stock Option Plan has been administered by the independent Compensation Committee of the Board; nor does it take into account the significant benefit which Oilexco has in strategically awarding options to attract new employees.
If any Registered or Beneficial Shareholder has any questions regarding the process of voting their proxy which is set out on pages 6 and 7 in the Company's Information Circular dated March 20, 2008, please contact our Corporate Secretary, Faralee Chanin at (403) 260-8514.
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