DEF 14A: Reserve Petroleum Company Announces 2024 Annual Meeting of Stockholders

The Reserve Petroleum Company will hold its 2024 Annual Meeting of Stockholders on May 21, 2024, to elect directors and ratify the selection of its independent auditor.

Summary

• The Reserve Petroleum Company is holding its 2024 Annual Meeting of Stockholders on May 21, 2024, in Oklahoma City.
• Stockholders will vote to elect eight directors for a one-year term and ratify the selection of HoganTaylor LLP as the company's independent registered public accountants for 2024.
• The record date for determining stockholders eligible to vote is April 11, 2024.
• The company estimates the costs of soliciting proxies to be $17,000.
• As of the record date, there were 154,906 shares of common stock outstanding and entitled to be voted.
• The approval of each proposal requires the affirmative vote of a majority of the shares represented at the meeting, provided a quorum is present.

Sentiment

Score: 6

Explanation: The document is primarily factual and procedural, with a slight negative sentiment due to the reported net loss in 2023. However, the company maintains good governance practices and stockholder support for its executive compensation.

Positives

• The company has a Code of Ethics for Senior Officers in place.
• The Audit Committee has reviewed the company's financial statements and recommended their inclusion in the Annual Report on Form 10-K.
• The company provides employee benefits such as life and health insurance and a 401(k) savings plan.
• The company received approximately 98% stockholder approval for its executive compensation at the 2022 Annual Meeting.

Negatives

• The company experienced a net loss of $55,648 in 2023, compared to a net income of $4,000,751 in 2022, which led to a decrease in bonus compensation for executives.
• The company's stock is thinly traded on the OTC Pink Sheets, and the stock price is volatile.

Risks

• The company's stock is thinly traded on the OTC Pink Sheets, and the stock price is volatile depending on the last bid that was accepted.
• The company acknowledges that its stock price may not accurately reflect the performance of the company.

Future Outlook

The Board determined that it will include the Say-On-Pay Vote in our proxy materials once every three years until the next Frequency of Say-On-Pay Vote, which will occur no later than our 2025 Annual Meeting of Stockholders.

Management Comments

• The Board chose to separate the Chief Executive Officer and Board Chairman positions in May 2009 to achieve independent leadership and aid in effective monitoring and oversight.
• The Company and the Board believe that the Say-On-Pay Vote confirmed stockholder support for the Companys executive compensation philosophy, objectives and decisions.

Industry Context

The document provides insight into the corporate governance and executive compensation practices of a small, publicly traded oil and gas company, which can be compared to similar-sized companies in the industry.

Comparison to Industry Standards

• Director compensation at Reserve Petroleum appears to be lower than the average for publicly traded companies, reflecting its smaller size and OTC listing.
• Executive compensation is also likely lower than larger, exchange-listed oil and gas companies, but may be competitive with similarly sized private or OTC-listed firms.
• The company's reliance on a small number of executive officers and the absence of a formal compensation committee are common in smaller reporting companies.

Legal Proceedings

• A Statement of Claim was filed against Robert Savage, a director, and Leonard Securities, Inc. in FINRA Arbitration Case Number 13-03324, alleging churning, suitability, breach of fiduciary duty, negligence, and failure to supervise.
• The Panel of Arbitrators determined that the Respondents were jointly and severally liable to the Claimant in the amount of $200,000 plus interest and $5,400 in fees related to the FINRA Dispute Resolution.

Related Party Transactions

• The Company is affiliated by common management and ownership with Lochbuie LLC.
• Kyle L. McLain and Cameron R. McLain, directors and officers of the Company, as a group, beneficially own approximately 16% of the common stock of the Company and each own a 16.67% interest in Lochbuie.
• Robert L. Savage, a director, is a Financial Consultant with B.B. Graham & Company, Inc. and an advisor with Leonard Investment Advisors.
• James L. Tyler, a director, performs tax consulting services for the Company, and the Company paid him $37,750 in fees during 2023.

Stakeholder Impact

• Stockholders are being asked to vote on important matters related to the company's governance and financial oversight.
• Executive compensation is being disclosed, which impacts shareholders and employees.
• The company's financial performance, including the net loss in 2023, affects shareholders and potentially employees.

Next Steps

• Stockholders are urged to vote by internet, phone, or by signing, dating and returning the enclosed Proxy Card.
• The Board will consider the results of the Say-On-Pay Votes in their future executive compensation philosophy, objectives and decisions.

Key Dates

Keywords

proxy statement, annual meeting, directors, executive compensation, HoganTaylor LLP, audit, oil and gas, governance, stockholders