TEXAS VANGUARD OIL COMPANY
9811 Anderson Mill Road
Suite 202
Austin, Texas 78750
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of TEXAS VANGUARD
OIL COMPANY, a Texas Corporation, will be held at 9811 Anderson Mill Road,
Austin, Texas, on Thursday, June 6, 1996, at 10:00 A.M., local time, for the
purpose of taking action on:
1. The election of four (4) directors to serve until the next Annual Meeting
of Shareholders, and until their successors shall be duly elected and
qualified;
2. To ratify the appointment of KPMG Peat Marwick, as independent public
auditors of the Company for the fiscal year ending December 31, 1996; and
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Stockholders of record at the close of business on April 18, 1996, are entitled
to notice and to vote at this meeting and any adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
LINDA R. WATSON
Secretary
April 30, 1996
Austin, Texas
PLEASE RETURN YOUR SIGNED PROXY
Please complete and promptly return your proxy form in the postage-paid
envelope. This will not prevent you from voting in person at the meeting.
It will, however, help to assure a quorum and avoid unnecessary solicitation
costs. Your vote is very important.
<PAGE> 1
TEXAS VANGUARD OIL COMPANY
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SOLICITATION AND REVOCATION OF PROXY
The accompanying proxy is solicited by the Board of Directors of Texas Vanguard
Oil Company, 9811 Anderson Mill Road, Suite 202, Austin, Texas, 78750, telephone
(512) 331-6781 (the "Company"), for use at the Annual Meeting of Shareholders
to be held on June 6, 1996, at 10:00 A.M. at 9811 Anderson Mill Road, Austin,
Texas or any adjournments. The Company will bear the cost of this solicitation.
Solicitation of proxies will be by mail and it is anticipated that the proxy
materials will be mailed to shareholders on or about May 6, 1996. Brokerage
houses and other custodians, nominees and fiduciaries will be requested to
forward soliciting material to the beneficial owners of Common Stock and will
be reimbursed for their reasonable expenses. All properly executed proxies will
be voted (except to the extent that authority to vote in the election of
directors has been withheld), and where a choice has been specified by the
shareholder as provided on the proxy, it will be voted in accordance with the
specifications so made. Proxies submitted without specification will be voted
for the proposed nominees for directors and other proposals set forth herein.
Any shareholder may revoke his proxy at any time before it is voted by giving
written notice of the revocation to the Company's Corporate Secretary or by
voting in person at the meeting.
VOTING SECURITIES
The voting securities of the Company consist of one class of Common Stock
($.05 par value), 12,500,000 shares authorized for issuance. Only shareholders
of record at the close of business April 18, 1996, will be entitled to vote at
the Annual Meeting of Shareholders. As of the record date, there were
outstanding 1,427,087 shares of Common Stock of the Company. The presence, in
person or by proxy of a majority of the outstanding shares of Common Stock on
the record date is necessary to constitute a quorum to transact business at the
Annual Meeting of Shareholders. Each share of Common Stock is entitled to one
vote on each of the shares represented in person or by the proxy at the meeting
is required for the election of directors and for the ratification of the
appointment of independent auditors.
PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth, as of April 18, 1996, the number of shares of
outstanding Common Stock of the company owned by each person who owns of record
or beneficially more than 5% of such stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
<S> <C> <C>
Robert N. Watson, Jr. (1) 1,014,876 71.11%
9811 Anderson Mill Road
Austin, Texas 78750
</TABLE>
(1) 992,626 shares are owned by Robert Watson, Inc., of which Robert N.
Watson, Jr. is President and controlling stockholder; and 22,250 shares
are held in a retirement trust. Robert N. Watson, Jr. exercises shared
voting and investment powers as one of the three directors of Robert
Watson, Inc. Linda Watson and William G. Watson are also directors of
Robert Watson, Inc.
<PAGE> 2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 18, 1996, the number of shares of
outstanding Common Stock of the Company owned beneficially by each director
and by all directors and officers of the Company as a group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
ofBeneficial Owner of Beneficial Ownership of Class
Direct Other
<S> <C> <C> <C>
Robert N. Watson, Inc. (1) 992,626 --- 69.55%
9811 Anderson Mill Road
Austin, Texas 78750
Robert N. Watson, Jr. (2) (3) 0 1,014,876 71.11%
9811 Anderson Mill Road
Austin, Texas 78750
William G. Watson (2) 27,199 --- 1.91%
P.O. Box 2253
Midland, Texas 79702
Linda R. Watson 5,250 --- .37%
9811 Anderson Mill Rd.
Austin, Texas 78750
Robert L. Patterson 30,250 --- 2.11%
P.O. Box 26296
Austin, Texas 78755
All Directors (Watson, Jr.,
Watson, Watson, and Patterson)
and Officers of the Company as
a group (4 persons, including
the preceding) --- 1,077,575 75.51%
</TABLE>
(1) Robert Watson, Inc. owns directly and of record 992,626 shares of common
stock of the Company which shares may be regarded as also owned
indirectly and beneficially by Robert N. Watson, Jr., since he owns 100%
of the common stock in Robert Watson, Inc.
(2) Robert N. Watson, Jr., his wife Linda R. Watson, his brother William G.
Watson, and Robert L. Patterson are directors of the Company.
(3) A retirement trust of Robert N. Watson, Jr., owns 22,250 shares.
ELECTION OF DIRECTORS
A board of four directors is to be elected, with each director to hold office
until the next annual meeting and until his successor is elected and qualified.
The person named as proxies in the enclosed proxy have been designated by
management and intend to vote for the election of the Board of Directors of
the persons named below. Although management has no reason to believe that
any of the nominees named below will be unable to serve as director, if any
nominee withdraws or otherwise becomes unavailable to serve, the person named
as proxies will vote for any substitute nominee designated by management.
<PAGE> 3
Certain information concerning the nominees is set forth below:
<TABLE>
<CAPTION>
Director
Name Since Principal Occupation
- - --------------------------------------------------------------------------
<S> <C> <C>
Robert N. Watson, Jr. 1982 President of the Company
William G. Watson 1982 Vice President of the
Company
Linda R. Watson 1982 Secretary-Treasurer of the
Company
Robert L. Patterson 1983 Independent Consulting
Petroleum Engineer
</TABLE>
Robert N. Watson, Jr. (age 53), received his B.A. and B.B.A. degrees from The
University of Texas at Austin in 1966 and 1967. He is the director and
President of Robert Watson, Inc., an oil and gas and real estate development
firm, which he founded in 1969. He has been a director of the Company and its
Chief Executive Officer since 1982.
William G. Watson (age 47), received his B.A. degree from Texas Tech University
in 1970 and his M.S. degree from The University of Texas at Arlington in 1974.
He was employed by Union Oil Company of California for ten years, serving in
various geological capacities. He has been a director of Robert Watson, Inc.
and a director and President of William Watson, Inc., an independent petroleum
geological firm, which he founded in 1983, for more than the last five years.
Linda R. Watson (age 52), received her B.A. degree from The University of Texas
at Austin in 1966. She has been a director and Secretary-Treasurer of Robert
Watson, Inc., for more than the last five years.
Robert L. Patterson (age 56), received his B.S. and M.S. degrees from The
University of Texas at Austin in 1963 and 1964. He was employed by Union Oil
Company of California from 1965 through 1975, serving in various engineering
capacities. He was a Vice President of Argonaut Energy Corporation from 1976
through 1982. He was the President of Medallion Equipment Corporation and
President of Argonaut Energy Corporation from July, 1985 through January, 1989.
He has been an independent consulting petroleum engineer since 1983.
During the year ended December 31, 1995, the Board of Directors met 3 times,
with a majority of the members in attendance. The Board of Directors has not
appointed any audit, nominating or compensating committees, or any committee
performing similar functions.
EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS
Summary of Compensation of Executive Officers
The following sets forth in summary form the compensation received during each
of the Company's last three complete fiscal years by the Chief Executive Officer
of the Company. No other officers of the Company received salary, bonus or other
annual compensation in total, in excess of $100,000.
<PAGE> 4
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
1980 Plan
Name and Management Options/ All Other
Principal Position Year Salary($) Bonus($) Fees ($) SARs(#) Compensation($)
- - -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Watson, Jr. 1995 -0- -0- $108,000 (1) -0- -0-
President, Principal
Executive Officer, 1994 -0- -0- $ 81,000 (1) -0- -0-
and Director
1993 -0- -0- $108,000 (1) -0- -0-
</TABLE>
(1) Management services are provided by a firm owned by the President of the
Company.
Option/SAR Grants in Last Fiscal Year:
No options/SARs were made during the last completed fiscal year to officers
of the Company.
Long-Term Incentive Plan:
The Company does not make any Long-Term Incentive Plans to its CEO or other
executive officers.
Pension Plan Table:
The Company does not provide any benefit or actuarial plan under which
benefits are determined by final compensation and years of service to its
CEO or other executive officers.
Ten-Year Option/SAR Repricing:
The Company has had no repricing of any options/SAR during the last completed
fiscal year.
Compensation of Directors:
The Company reimburses its out-of-town directors for expenses incurred on
behalf of the Company for attendance at annual meetings, plus a $500
director's fee.
Options to Purchase Stock
The Company enacted an Incentive Stock Option Plan in 1980 which provides for
the granting of options to officers, key employees and consultants for the
purchase of a total of 150,000 shares of common stock of the Company. At
December 31, 1995, none have been granted. The option prices may not be less
than 100% of the market price on the date of the grant. Options granted under
the plan must be exercised within five years of the date of grant in such
amounts as the Board of Directors may determine.
Certain Transactions
In February 1995, the Company and a management firm owned by the President of
the Company executed an agreement whereby the latter will provide the Company
general corporate management services. This agreement is the same as could be
obtained from an independent third party. The affiliated company received
$9,000 per month, effective February 1, 1995, as compensation for performance
of those services. During 1995, $108,000 was incurred under this agreement.
Management fees totaling $27,000 under this agreement were forgiven in 1994.
On February 1, 1996, the Company and a management company owned by the
President of the Company renewed the agreement of $9,000 per month, until
January 31, 1997.
<PAGE> 5
AUDITORS
KPMG Peat Marwick, Certified Public Accountants, has been selected by the Board
of Directors as independent auditors of the Company for the fiscal year
December 31, 1996. This selection is being presented to shareholders for
ratification.
KPMG Peat Marwick was engaged as independent auditors of the Company for the
fiscal years ending December 31 1984 through December 31, 1995. Representatives
of this firm will be present at the meeting and, while they do not plan to make
a statement at the meeting, such representatives will be available to respond
to appropriate questions from shareholders.
The Board of Directors recommends an affirmative vote for this ratification.
VOTE REQUIRED FOR APPROVAL
For approval of Proposal 1 and 2, the affirmative vote of the holders of a
majority of the shares voting at the Meeting shall be sufficient for the
election of Directors and to ratify the selection of KPMG Peat Marwick as
auditors.
Annual Report
The Company's Annual Report on Form 10-K for the year ended December 31, 1995
(as filed with the Securities and Exchange Commission) is being mailed with
the proxy materials and such report constitutes the Company's annual report
to the shareholders for the year 1995. Exhibits to the Annual Report on Form
10-K will be provided to any shareholder upon written request and upon payment
of a copying charge. Requests for exhibits should be directed to Robert N.
Watson, Jr., 9811 Anderson Mill Road, Suite 202, Austin, Texas 78750.
Proposals for Next Annual Meeting
Any proposals of holders of Common Stock intended to be presented at the Annual
Meeting of Shareholders of the Company to be held in 1997 must be received by
the Company no later than January 12, 1997, in order to be included in the
proxy statement and form of proxy relating to that meeting.
Other Information
Management of the Company knows of no other matters which are likely to be
brought before the Annual Meeting; however, if any other matter should properly
come before the Annual Meeting or any adjournment thereof, the persons named in
the enclosed form of proxy will have discretionary authority to vote such proxy
in accordance with their best judgment of such matters. Such proxies will also
be voted with respect to matters incident to the conduct of the Annual Meeting.
LINDA R. WATSON
Secretary
Austin, Texas
April 30, 1996
<PAGE> 6
