MAYNARD OIL COMPANY
8080 N. Central Expressway
Suite 660
Dallas, Texas 75206
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held May 21, 1996
The annual meeting of stockholders of MAYNARD OIL COMPANY will be
held on Tuesday, May 21, 1996, at 9:30 A.M., Dallas Time, at the offices
of the Company, 8080 N. Central Expressway, Suite 660, Dallas, Texas, for
the following purposes:
1. To elect three directors to hold office in accordance with
the Company's Certificate of Incorporation, as amended, until the
1997 Annual Meeting of Stockholders, or until their successors shall
be duly elected.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 8,
1996, as the record date for determination of stockholders entitled to
notice of and to vote at the meeting.
Please sign, date and return the accompanying Proxy in the enclosed
envelope which requires no postage if mailed in the United States. All
stockholders of the Company are invited to attend the meeting in person.
By order of the Board of Directors
Linda K. Burgess
Secretary and Controller
Dallas, Texas
April 16, 1996
YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
PROXY STATEMENT
MAYNARD OIL COMPANY
ANNUAL MEETING OF STOCKHOLDERS
May 21, 1996
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of Maynard Oil
Company on or about April 16, 1996, in connection with the solicitation of
proxies for use at the annual meeting of stockholders of the Company to be
held on May 21, 1996, at the time and place and for the purposes set forth
in the accompanying Notice of the meeting.
THE ACCOMPANYING PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY AND IS REVOCABLE AT ANY TIME PRIOR TO BEING
VOTED. All shares of the Company's Common Stock, par value $.10,
represented by properly executed and unrevoked proxies will be voted, if
the proxies are received in time for the meeting. Any Stockholder giving
a proxy has the right to revoke it at any time before the proxy is
exercised by giving notice to the Company in writing or in open meeting.
The Company will bear the cost of solicitation of the proxies. In
addition to solicitation by mail, certain directors, officers and other
employees of the Company, not specifically employed for the purpose, may
solicit proxies, without additional remuneration therefor, by personal
interview, mail, telephone or telegraph. The Company may also reimburse
brokers or other persons holding shares in their name, or in the names of
nominees, for expenses in sending proxy material to principals and
obtaining their proxies.
Each holder of Common Stock of record at the close of business on
April 8, 1996, is entitled to one vote per share on all matters to come
before the meeting. Cumulative voting is not permitted under the
Company's Certificate of Incorporation and By-Laws. At the close of
business on April 8, 1996, there were outstanding and entitled to vote at
the meeting 4,889,795 shares of Common Stock. A majority of the
outstanding shares must be represented at the meeting in person or by
proxy in order to have a quorum to conduct business at the meeting.
A stockholder may, with respect to the election of directors, (i)
vote for all nominees named herein, (ii) withhold authority to vote for
all such nominees or (iii) vote for all such nominees other than any
nominee with respect to whom the stockholder withholds authority to vote.
The nominees receiving the highest number of votes cast for the number of
positions to be filled shall be elected. Accordingly, withholding
authority to vote for a director nominee will not prevent him from being
elected. On any other matter which may properly come before the meeting,
the affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the meeting and entitled to vote is
required. Broker non-votes will have no effect on any matter at the
meeting.
PRINCIPAL STOCKHOLDERS
James G. Maynard (whose address is 344 Westmoreland Building, Skokie,
Illinois, 60077, and whose shareholdings are shown below) and Dimensional
Fund Advisors, Inc. ("Dimensional"), a registered investment advisor,
located at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, are the
only persons known to the Company to be the beneficial owners of more than
5% of the outstanding Common Stock of the Company. As set forth in the
table below, Dimensional is deemed to have beneficial ownership of 331,900
shares of Common Stock as of April 8, 1996. All of such shares are held
in portfolios of DFA Investment Dimensions Group Inc. and the DFA
Investment Trust Company, each registered open-end investment companies.
The following table shows with respect to each director and nominee
for director of the Company, each 5% stockholder, each executive officer
named in the Summary Compensation Table below, and with respect to all
directors and executive officers as a group: (i) the total number of
shares of Common Stock beneficially owned as of April 8, 1996, and (ii)
the percent of the total number of shares of Common Stock outstanding as
of that date:
Amount and
Name of Nature of Percent
Beneficial Beneficial of
Owner Ownership(1) Class
---------- ------------- -------
James G. Maynard 2,756,596 (2) 56.37
Dimensional Fund
Advisors, Inc 331,900 6.79
Robert B. McDermott 5,000 0.10
Ralph E. Graham 2,200 0.04
Glenn R. Moore 250 *
L. Brent Carruth 100 *
Kenneth W. Hatcher 100 *
All directors and executive
officers as a group
(6 persons) 2,764,246 56.53
__________________________
* Less than .01%
(1) In accordance with regulations of the Securities and Exchange
Commission, stock ownership reflects shares with respect to which the
director, nominee, principal stockholder or executive officer has
voting power or investment power, or has a right to acquire such
power. Each director, nominee, principal stockholder or executive
officer has both sole voting power and sole investment power with
respect to the shares set forth in the table. Beneficial ownership
is disclaimed by each director, nominee, principal stockholder or
executive officer of shares listed of which he or it would not, but
for Rule 13d-3 under the Securities Exchange Act of 1934, be deemed
to be the beneficial owner.
(2) Includes 300,000 shares held of record by a corporation controlled by
Mr. Maynard and 2,456,596 shares held of record by Mr. Maynard, as
trustee of a trust for his benefit.
ELECTION OF DIRECTORS
In accordance with the Company's By-laws three directors are to be
elected at the annual meeting. Each director elected will hold office
until the next annual meeting and until his successor is elected and
qualifies. Shares represented by valid proxies will be voted for the
election of the three nominees listed below.
The nominees have consented to serve on the Board, if elected, but
should any of the three be unable to serve in this capacity at the time of
the meeting, the proxies will be voted by the proxy holders in their
discretion for any substitute nominee who may be designated by Management.
It is anticipated that the nominees will be available to serve as
directors.
Names of Nominees Position with Company, Business
for Election Age Experience and other Directorships
----------------- --- ----------------------------------
Ralph E. Graham 76 Director of the Company since 1993.
Partner of Day Oil Company, an oil and gas
exploration and drilling partnership.
James G. Maynard 70 Chief Executive Officer and Chairman of the
Board of the Company, since its
incorporation in 1971.
Robert B. McDermott 68 Director of the Company since 1971. Of
Counsel to the law firm of McDermott, Will
and Emery, since March 1, 1992 (prior to
which he was a partner in such firm).
Director of The Cherry Corporation, an
electronics manufacturer.
MEETINGS OF THE BOARD OF DIRECTORS AND THE COMMITTEES OF THE BOARD OF
DIRECTORS
During the past fiscal year, the Board of Directors met six times,
the Compensation Committee of the Board, comprised of Messrs. Maynard,
Graham and McDermott, met twice and the Audit Committee, comprised of
Messrs. McDermott and Graham, met twice. The Audit Committee recommended,
and the Board of Directors selected Price Waterhouse to audit the
Company's financial statements for the year ended December 31, 1995. The
Compensation Committee sets the compensation of the officers of the
Company and the Audit Committee meets with the public accountants and
accounting personnel of the Company for review of their respective
information, opinions and functions. Mr. Maynard's compensation was
determined by Messrs. McDermott and Graham as more fully described in the
Compensation Committee Report on Executive Compensation. The Board of
Directors does not have a nominating committee. No incumbent director
attended fewer than 75% of the total number of meetings of the Board of
Directors and of the committees on which he served.
EXECUTIVE COMPENSATION
The table below sets forth certain information concerning the annual
and long-term compensation for services in all capacities to the Company
for the fiscal years ended December 31, 1995, 1994 and 1993, of those
persons who were, at December 31, 1995 (i) the chief executive officer,
and (ii) the other three executive officers of the Company with
compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> Long-Term
Compensation
Annual Compensation(1) Stock All Other
Name and Principal Fiscal Participation Compen-
Position Year Salary(2) Bonus(3) Units(shs)(4) sation(5)
------------------ ------ --------- -------- ------------- ---------
<S> <C> <C> <C> <C> <C>
James G. Maynard 1995 $105,000 $ -0- -0- $ 3,150(6)
Chairman of the Board, 1994 97,200 -0- -0- 3,664
Chief Executive 1993 97,200 -0- -0- 7,413
Officer and
Treasurer
Glenn R. Moore 1995 152,692 4,400 -0- 12,000(7)
President 1994 149,000 7,500 -0- 12,520
1993 149,000 -0- 14,000 11,920
L. B. Carruth 1995 128,846 3,800 -0- 10,808(8)
Vice President of 1994 125,000 6,250 -0- 10,000
Operations 1993 123,972 -0- 7,500 9,918
Kenneth W. Hatcher 1995 115,446 3,400 -0- 9,683(9)
Vice President of 1994 112,000 5,600 -0- 8,960
Finance 1993 111,243 -0- 6,000 8,899
____________________________
(1) The Company does not maintain a "long term incentive plan" as that
plan is defined in the applicable rules.
(2) Includes amounts deferred under the Company's Thrift Investment Plan.
(3) Includes bonus awards earned for performance in the fiscal year even
though such amounts could be payable in subsequent years.
(4) During August 1993, the Company issued stock participation units of
14,000, 7,500, and 6,000 to Messrs. Moore, Carruth, and Hatcher at
$5.625 per share. These shares vested 25% in August, 1995 and the
balance in equal annual installments. Payments are made upon
termination of the employee's employment over a twenty-four month
period.
(5) Totals shown consist of the Company's contributions to (i) the
Retirement Plan in the amount of 3% of annual salary and (ii) the
Thrift Investment Plan for the remainder.
(6) During 1995, $3,150 was accrued in the Retirement Plan on behalf of
Mr. Maynard.
(7) During 1995, $4,500 was accrued in the Retirement Plan and $7,500 in
the Thrift Investment Plan on behalf of Mr. Moore.
(8) During 1995, $4,053 was accrued in the Retirement Plan and $6,755 in
the Thrift Investment Plan on behalf of Mr. Carruth.
(9) During 1995, $3,631 was accrued in the Retirement Plan and $6,052 in
the Thrift Investment Plan on behalf of Mr. Hatcher.
</TABLE>
The table below summarizes certain information with respect to the value
of the stock options exercised and the stock participation units held by
executive officers at December 31, 1995.
Aggregated Option/Stock Participation (SPAR) Exercises in 1995
and December 31, 1995 Stock Participation (SPAR) Values
<TABLE>
<CAPTION> Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
SPARs at SPARs(2) at
Shares Value 12/31/95 (#) 12/31/95 ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) $ Unexercisable Unexercisable
---- ------------ -------- ------------- -------------
<S> <C> <C> <C> <C>
Maynard -0- $ -0- 0/0 $ 0/0
Moore 10,000 20,000 18,500/10,500(3) 37,688/11,812
Carruth 5,000 10,000 9,375/5,625(4) 18,984/6,328
Hatcher 5,000 10,000 9,000/4,500(5) 18,563/5,062
(1) The Company's Stock Option Plan expired March 31, 1992 and,
therefore, no additional stock options can be granted. All options
were exercised in September, 1995.
(2) Based upon a price of $6.75 per share, the last bid price on NASDAQ
of the Company's Common Stock on December 31, 1995.
(3) Represents 29,000 SPARs of which 18,500 have vested.
(4) Represents 15,000 SPARs of which 9,375 have vested.
(5) Represents 13,500 SPARs of which 9,000 have vested.
There were no awards of stock participation units to any employee in 1995.
</TABLE>
COMPENSATION OF DIRECTORS
During 1995, each director, who was not an employee of the Company,
received an annual retainer of $10,000. In addition, each committee
member, who was not an employee of the Company, (two each for both the
Compensation and Audit Committees) received an annual amount of $3,000.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee's goal is to compensate all executives fairly, for both
their long-term and recent contributions to the Company. The Committee
believes that services of outstanding value can be rendered in periods of
financial or operating stringency, as well as in boom times.
Compensation for each executive includes a salary and from time to
time longer-term incentive compensation, such as stock options and stock
participation units. The Committee considers the total compensation
(earned or potentially available) of each executive officer in
establishing each element of compensation. At the end of 1995, the
Committee authorized cash bonuses totalling $30,650 to a total of 19
employees, excluding Mr. Maynard, to recognize meritorious performance
during the year.
Salaries for executives are reviewed by the Committee on an annual
basis and may be increased to reflect the individual's contribution to the
Company or changes in the competitive level of pay. The Committee has
access to a national survey on oil and gas compensation, which includes
executives in both larger and smaller companies. Companies which
participated in the compensation survey include privately held
corporations, as well as companies on NASDAQ, the American Stock Exchange,
and the New York Stock Exchange. This national survey covers more
companies than are included in the Performance Graph on Page 9 and it is
believed to be the best available information for the intended purpose.
Mr. Maynard, Mr. Moore, Mr. Carruth and Mr. Hatcher are paid compensation
which generally ranks them in or below the mid-range of executives in
similar positions for corporations of similar size.
The Compensation Committee evaluates the salary of Mr. Maynard, the
Chief Executive Officer, based largely on the Committee's assessment of
his past and current performance and its expectation as to his future
contributions in leading the Company and its business. The Compensation
Committee believes the key indicator for an oil and gas exploration and
production company is the replacement of hydrocarbon reserves through
drilling or acquisition, the cost of such reserves and the extent of the
risk to which the shareholder's investment has been subjected. The
Company's net equivalent barrels of reserves have increased, largely
through acquisition, by 30% during 1994 and by an additional 39% in 1995.
The Committee believes that Mr. Maynard's contributions to the Company
warrant a salary substantially in excess of what he is paid; it has
limited Mr. Maynard's compensation at Mr. Maynard's express request.
The Committee also considered the Company's performance in
determining other salaries and bonus awards for 1995. It considered these
factors both on an absolute basis and relative to the oil and gas
industry, in general. In determining salaries for employees, other than
Mr. Maynard, the Committee reviewed the Chief Executive Officer's
recommendations based upon individual performance, as well as the factors
mentioned in the above paragraph.
Since the price of the Company's stock is affected to a significant
degree by oil and gas prices, over which executives have no control, and
various other factors over which they have limited control, the Committee
has focused on salaries as the principal means of providing incentives and
rewarding executive performance and bonuses. The Company did not award
stock options or stock participation units ("shadow stock") in 1995.
During 1995, the Compensation Committee consisted of Ralph E. Graham,
James G. Maynard and Robert B. McDermott, all directors of the Company.
Mr. Maynard does not take part in the determination of his compensation.
The Compensation Committee Report on Executive Compensation shall not
be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities Act
of 1933 or under the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates the information by reference,
and shall not otherwise be deemed filed under such Acts.
For the Compensation Committee
James G. Maynard
Robert B. McDermott
Ralph E. Graham
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James G. Maynard is Chief Executive Officer and Chairman of the Board
of the Company. During 1995, the Compensation Committee consisted of
Ralph E. Graham, James G. Maynard and Robert B. McDermott, all directors
of the Company.
Until March 1, 1992, Robert B. McDermott was a partner in the law
firm of McDermott, Will & Emery, which serves as legal counsel to the
Company.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly cumulative total
stockholder return on the Company's Common Stock against the cumulative
total return of the NASDAQ Stock Market for U.S. Companies and the NASDAQ
Industry Index for oil and gas production companies for the five fiscal
years ending December 30, 1995. This graph assumes that $100 was invested
on December 31, 1990 and that all dividends were reinvested. The
performance shown on the graph below is not necessarily indicative of
future performance. The Company will make available to requesting
stockholders the identities of the companies within the CRSP Index for
NASDAQ stock (SIC-1300-1399 US Companies). All of the companies listed in
this index are involved in oil and gas extraction.
The Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
Prepared by the Center for Research in Security Prices,
University of Chicago
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
MAYNARD OIL COMPANY 100.0 83.3 77.1 87.5 83.3 112.5
CRSP Index for Nasdaq Stock Market (US Companies) 100.0 160.5 186.8 214.5 209.7 296.6
CRSP Index for Nasdaq Stocks (SIC 1300-1399 US Cos.)* 100.0 96.8 100.2 128.7 120.3 148.8
Note:
* The peer index includes results from all US companies trading on NASDAQ in the 130 SIC group,
oil and gas extraction and production companies, which inlcudes 235 Companies over the period
presented and 133 active at December 30, 1995.
</TABLE>
INDEPENDENT ACCOUNTANTS
Price Waterhouse audited the Company's financial statements for the
year ending December 31, 1995 and has been selected as the independent
accounting firm who will audit the Company's financial statements for the
year ending December 31, 1996. Representatives of Price Waterhouse are
expected to be present at the meeting and will be given the opportunity to
make a statement if they desire to do so and are expected to be available
to respond to appropriate questions.
STOCKHOLDER'S PROPOSALS
Any proposal by a stockholder of the Company intended to be presented
at the next annual meeting of stockholders and included in the Company's
proxy statement and form of proxy relating to that meeting, must be
received by the Company at its principal executive office not later than
December 17, 1996, and must also comply with other requirements of the
proxy solicitation rules of the Securities and Exchange Commission. In
addition, the notice provisions contained in the Company's By-laws must be
satisfied in order for a stockholder to bring business properly before any
meeting of stockholders.
OTHER MATTERS
The Management of the Company does not know of any other matters that
are to be presented for action at the annual meeting. Should any other
matter come before the meeting, however, the persons named in the enclosed
proxy will have discretionary authority to vote all proxies with respect
to such matter in accordance with their judgment.
By Order of the Board of Directors
Linda K. Burgess
Secretary and Controller
Dallas, Texas
April 16, 1996
MAYNARD OIL COMPANY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James G. Maynard and Glenn R. Moore as
Proxies, each with the power to appoint a substitute and hereby authorizes
them to vote, as designated on the reverse side, all shares of common stock
of Maynard Oil Company held of record by the undersigned on April 8, 1996,
at the Annual Meeting of Stockholders to be held on May 21, 1996, or any
adjournment or adjournments thereof.
In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting. THIS PROXY WHEN
PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED
STOCKHOLDER, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
DIRECTOR NOMINEES.
(continued on reverse side)
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1.
1. To vote for the election of James G. Maynard, Ralph E. Graham, and
Robert B. McDermott as directors, to hold office until the 1997 Annual
Meeting of Stockholders. If it is desired that votes be withheld from
the election of any of the individual nominees, his name should be
written in the following space.
FOR WITHHOLD AUTHORITY
TO VOTE --------------------------------------
2. In their discretion, the Proxies THIS PROXY IS SOLICITED ON
are authorized to vote upon BEHALF OF THE COMPANY'S
such other business as may BOARD OF DIRECTORS WHICH ENCOURAGES
properly come before the meeting. EACH SHAREHOLDER OF RECORD TO VOTE.
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please
sign in full corporate name by
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
Dated: ---------------------, 1996
----------------------------------
Signature
----------------------------------
Signature if held jointly
PLEASE MARK INSIDE BLUE BOXES SO THAT PLEASE MARK, SIGN, DATE AND RETURN
DATA PROCESSING EQUIPMENT WILL RECORD THE PROXY CARD PROMPTLY USING
YOUR VOTES THE ENCLOSED ENVELOPE
