SCHEDULE 14A INFORMATION
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 ss. 240.14a-11(c) or ss. 240.14a-12
TEXOIL, 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:
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:
<PAGE>
TEXOIL, INC.
110 Cypress Station Drive, Suite No. 220
Houston, Texas 77090-1629
(281) 537-9920 (281) 537-8324 - Fax
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 10, 2000
Notice is hereby given that the annual meeting of shareholders of Texoil,
Inc. (the "Company"), will be held at the Houston Marriott North at Greenspoint,
255 North Sam Houston Parkway East, Houston, Texas 77060, on Friday, November
10, 2000, at 2:00 P.M. (Houston time), for the following purposes:
1. For the holders of Common Stock, to elect two Class A directors to
serve until the 2003 annual meeting of shareholders or until their
successors are elected and qualified.
2. For the holders of Series A Preferred Stock, to elect three Class B
directors to serve until the next annual meeting of the shareholders
or until their successors are elected and qualified.
3. To approve the appointment of Arthur Andersen LLP as the independent
accountant for the Company for the year ending December 31, 2000.
4. To consider and act upon such other business as may be properly
presented at the meeting or any adjournment thereof.
A record of shareholders has been taken as of the close of business on
October 13, 2000, and only those shareholders of record on that date will be
entitled to notice of, and to vote at the meeting or any adjournment thereof. A
complete list of shareholders so entitled to vote will be available at the
Company's principal office at 110 Cypress Station Drive, Suite 220, Houston,
Texas 77090-1629, commencing October 31, 2000, for inspection by any shareholder
during usual business hours prior to the annual meeting.
All shareholders of the Company are invited to attend the meeting. The
Board of Directors, however, requests that you promptly sign, date and mail or
send by facsimile the enclosed proxy, even if you plan to be present at the
meeting. If you attend the meeting, you can either vote in person or by your
proxy. Please return your proxy in the enclosed postage-paid envelope or send
both sides of the signed proxy by facsimile to (281) 537-8324.
By Order of the Board of Directors
Jerry M. Crews
Secretary
October 18, 2000
<PAGE>
SHAREHOLDERS MAY OBTAIN, WITHOUT CHARGE, A COPY OF TEXOIL'S ANNUAL REPORT
ON FORM 10-KSB FOR THE YEAR-ENDED DECEMBER 31, 1999, THE INTERIM REPORTS ON
FORM 10-QSB FOR THE QUARTERS ENDED MARCH 31, 2000, AND JUNE 30, 2000, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, BY WRITING TO TEXOIL AT
110 CYPRESS STATION DRIVE, SUITE NO. 220, HOUSTON, TEXAS 77090-1629,
ATTENTION: INVESTOR RELATIONS. Copies of Texoil's Annual Report and
Quarterly Reports may also be obtained directly from the Securities and
Exchange Commissions' web site at HTTP//WWW.SEC.GOV or from Texoil's web
site at HTTP//WWW.TEXOIL.COM.
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN AND RETURN THE
ACCOMPANYING PROXY FORM IN THE ENVELOPE PROVIDED.
<PAGE>
TEXOIL, INC.
110 Cypress Station Drive, Suite No. 220
Houston, Texas 77090-1629
Telephone (281) 537-9920, Fax (281) 537-8324
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are being mailed to
shareholders of Texoil, Inc. (the "Company"), a Nevada corporation commencing on
or about October 18, 2000. The Company's Board of Directors is soliciting
proxies to be voted at the Company's annual meeting of shareholders to be held
at the Houston Marriott North at Greenspoint, 255 North Sam Houston Parkway
East, Houston, Texas 77060, on Friday, November 10, 2000, and at any adjournment
thereof, for the purposes set forth in the accompanying notice. The shares
covered by a proxy, if properly executed and received prior to the meeting, will
be voted in accordance with the directions specified thereon regarding election
of directors, and with respect to any other matters which may properly come
before the meeting, in accordance with the judgment of the persons designated as
proxies. A proxy may be revoked at any time before it is exercised by giving
written notice to, or filing a duly executed proxy bearing a later date with,
the Secretary of the Company or by voting in person at the meeting. The Company
is sending one form of proxy to the holders of Common Stock and another form of
proxy to the holders of Series A Preferred Stock.
At the close of business on October 13, 2000, the record date for
determining the shareholders entitled to notice of, and to vote at the meeting
(the "Record Date"), there were outstanding and entitled to vote 6,665,402
shares of the Company's Common Stock, par value $.01 per share ("Common Stock"),
and 2,936,487 shares of Series A Preferred Stock, par value $.01 per share
("Preferred Stock"). Each share of Common Stock entitles the holder to one vote
on all matters presented to the common stockholders at the meeting, except the
election of Class B Directors. Holders of Common Stock have no vote with respect
to the election of Class B Directors. Each share of Preferred Stock entitles the
holder to two votes on all matters presented to the Common stockholders at the
meeting, except the election of Class A Directors. Holders of Preferred Stock
have no vote with respect to the election of Class A Directors, but have the
sole right to elect the Class B Directors. There is no cumulative voting with
respect to the Common Stock or the Preferred Stock.
The Company will bear the costs of soliciting proxies in the accompanying
form. In addition to solicitations by mail, a number of regular employees of the
Company may solicit proxies in person or by telephone.
THE COMPANY
Texoil, Inc., is an independent energy company engaged in the acquisition
and development of oil and gas reserves through an active and diversified
program which includes purchases of reserves, re-engineering, development and
exploration activities, currently focused in Texas, South Louisiana and the
Texas Gulf Coast. The Company merged with Cliffwood Oil & Gas Corp.
("Cliffwood") on December 31, 1997 ("Merger")
<PAGE>
PROPOSAL 1.
ELECTION OF DIRECTORS
NOMINEES
At the meeting, the holders of Common Stock will elect two nominees to the
Company's Board of Directors, as Class A Directors. Each Class A Director will
hold office until the 2003 annual meeting of the shareholders, or until a
successor is elected and qualified.
At the meeting, the holders of Preferred Stock will elect three nominees
to the Company's Board of Directors, as Class B Directors. Each Class B Director
will hold office until the next annual meeting of the shareholders or until a
successor is elected and qualified.
Whether you hold Common Stock or Preferred Stock, unless your proxy
specifies otherwise, or withholds authority to vote for one or more nominees
named thereon and described below, it is intended that the shares of Common or
Preferred Stock represented by your proxy will be voted for the election of the
nominees for these respective classes. Proxies cannot be voted for a greater
number of persons than the number of nominees named in the class in which the
shares are entitled to vote. If any nominee in Class A should become unavailable
for election, your proxy may be voted for a substitute nominee selected by the
Board, or the Board may be reduced accordingly. If a nominee for Class B should
become unavailable, only the holders of Preferred Stock may select or propose a
substitute nominee, and the number of Class B Directors may be reduced without
affecting the total number of votes allocated to the Class B Directors as a
group. The Board is unaware of any circumstances likely to render any nominee
unavailable.
Set forth below are the names, ages and positions of the directors who are
nominated for election to the Board of Directors. The Board of Directors
recommends that shareholders vote FOR the director nominees.
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
COMMON STOCK
Robert E. LaJoie............. 75 Director (Class A)
Thomas A. Reiser............. 49 Director (Class A)
PREFERRED STOCK
Jeffrey A. Jones............. 45 Director (Class B)
Toby R. Neugebauer........... 29 Director (Class B)
S. Wil VanLoh, Jr............ 30 Director (Class B)
ROBERT E. LAJOIE, has been a Director of the Company since December 31,
1997, and was a Director of Cliffwood since July 1996. Mr. LaJoie retired in
1977 and is a private investor with more than forty years experience in the oil
and natural gas, real estate and food services industries. He is a graduate of
the University of Michigan.
THOMAS A. REISER, has been a Director of the Company since December 31,
1997, and was a Director of Cliffwood since April 1996. For more than the past
five years he has served as Chairman and President of Technical Risks, Inc., a
private insurance brokerage firm which he founded. He is a graduate of the
College of William and Mary.
2
<PAGE>
JEFFREY A. JONES, has been a Director of the Company since November 1999.
He is a co-founder and principal of Quantum Energy Partners, L.P., and has been
the lead geologist/geophysicist of the West Texas based energy companies Jones
Company Ltd. and JHJ Exploration, Ltd. since 1978. Mr. Jones is a graduate of
West Texas State University with a degree in Geology.
TOBY R. NEUGEBAUER, has been a Director of the Company since November
1999. He is a co-founder and principal of Quantum Energy Partners, L.P., and is
also a co-founder and director of Windrock Capital, Ltd. Mr. Neugebauer is a
former investment banker with Kidder, Peabody & Co. and also currently serves on
the board of directors of several private companies engaged in various oil and
gas activities. He holds a Finance degree from New York University.
S. WIL VANLOH, JR., has been a Director of the Company since November
1999. He is a co-founder and principal of Quantum Energy Partners, L.P. a
Houston-based private equity fund focused on making corporate equity investments
in North American exploration, acquisition and exploitation companies. Mr.
VanLoh is also a director of Windrock Capital, Ltd., an energy investment
banking firm he co-founded in 1994. He is a former investment banker with
Kidder, Peabody & Co. and NCNB/NationsBank. Mr. VanLoh also currently serves on
the board of directors of several private companies engaged in various oil and
gas activities. He is a graduate of Texas Christian University with a degree in
Finance.
Set forth below are the names, ages and positions of Directors who are not
standing for reelection at this annual shareholders' meeting.
Messrs. T. W. Hoehn, III and Michael A. Vlasic are Class A Directors (see
resumes immediately below) and are not standing for reelection at this annual
shareholders' meeting. Messrs. Hoehn and Vlasic's terms expire in 2001. Messrs.
Frank A. Lodzinski and Jerry M. Crews are Class A Directors, as well as
Executive Officers (see resumes under "Executive Officers" below), and are not
standing for reelection at this annual shareholders' meeting. Messrs. Lodzinski
and Crews' terms expire in 2002.
T. W. HOEHN, III (age 50), has been a Director of the Company since 1984.
He is President and General Manager of Hoehn Motors, Inc., a multi-line
automobile agency located in Carlsbad, California, where he has been employed
since 1975. He is a graduate of Stanford University. Mr. Hoehn's term expires in
2001.
MICHAEL A. VLASIC (age 40), has been a Director of the Company since
December 31, 1997, and was a Director of Cliffwood since July 1996. For more
than the past five years, he has been a principal with Vlasic Investments,
L.L.C. He is a graduate of Brown University. Mr. Vlasic's term expires in 2001.
BOARD AND COMMITTEE ACTIVITIES - STRUCTURE AND COMPENSATION
The Company's operations are managed under the broad supervision and
direction of the Board of Directors, which has the ultimate responsibility for
the establishment and implementation of the Company's general operating
philosophy, objectives, goals and policies. Pursuant to delegated authority,
certain Board functions are discharged by the Board's three current standing
committees, the Executive, Audit and Compensation Committees. The Board of
Directors has no standing nominating or similar committee. During the fiscal
year ended December 31, 1999, the Board of Directors held two meetings; the
Executive Committee held
3
<PAGE>
one meeting; the Audit Committee held one meeting; and the Compensation
Committee held one meeting. Incumbent members of the Board attended or
participated in at least 75% of the aggregate number of (i) Board meetings and
(ii) committee meetings held by all committees of the Board on which he served.
The Executive Committee is authorized to exercise, to the extent permitted
by law, the power of the full Board of Directors when a meeting of the full
Board is not practicable or necessary. The Executive Committee is currently
comprised of Messrs. Lodzinski, Crews, LaJoie, VanLoh and Vlasic.
The Audit Committee recommends to the Board the independent accountants of
the Company and reviews the Company's annual report on Form 10-KSB, internal
controls and accounting operations and any transactions of the Company in which
management or controlling persons of the Company have an interest. The Board of
Directors has adopted a written charter for the Audit Committee, which is
attached to this Proxy Statement as Appendix A. The Compensation Committee is
responsible for formulating and adopting or recommending to the Board, executive
compensation plans and policies, including those relating to incentive
compensation and benefits. The Audit Committee is currently comprised of Messrs.
Hoehn, LaJoie and VanLoh. The Compensation Committee is currently comprised of
Messrs. LaJoie, Reiser and VanLoh.
Directors who are not employed by the Company are authorized to be paid a
fee of $1,000 for each meeting of the Board of Directors attended (including
Committee meetings, if any, held in conjunction therewith). The Company
reimburses each Director for his actual and necessary expenses reasonably
incurred in connection with attending meetings of the Board and its committees.
MANAGEMENT
EXECUTIVE OFFICERS
FRANK A. LODZINSKI (age 51), has been Chairman of the Board, President,
Chief Executive Officer and a Director of the Company since December 31, 1997.
He has been President and a Director of Cliffwood since he founded the
predecessor entity and commenced operations in 1996. From 1992 to 1995 he served
as President and a Director of Hampton Resources Corporation, a public
corporation which he co-founded. From 1995, when Hampton was sold to Bellwether
Exploration Company, to 1996, he was self-employed and was a consultant to
Bellwether Exploration Company. From 1984 to 1992, Mr. Lodzinski was engaged in
the oil and natural gas business through Energy Resource Associates, Inc., a
closely held Texas corporation which he owned and controlled. Prior to 1984, he
was employed in public accounting with Arthur Andersen LLP and in various
capacities with independent oil and gas companies. He is a Certified Public
Accountant and holds a BSBA degree from Wayne State University.
JERRY M. CREWS (age 50), has been an Officer and Director of the Company
since December 31, 1997, and was an Officer and Director of Cliffwood since
1996. For the preceding 12 years he was an Officer of Citation Oil & Gas Corp.
and was responsible for all production operations. His experience includes
acquisitions, drilling and development operations in most of the producing
basins of the United States. Prior experience was with
4
<PAGE>
Conoco and Lear Petroleum. He is a registered Professional Engineer in the state
of Texas and holds a B.S. in Petroleum Engineering from Texas A&M University.
FRANCIS M. MURY (age 48), has been an Officer of the Company since
December 31, 1997, and was an Officer of Cliffwood since 1996. For the preceding
4 years he was Vice president of Operations for Hampton Resources Corporation.
Prior experience was with Energy Resource Associates, Inc., Wainoco Oil and Gas
Company and Texaco, Inc. He holds a B.S. degree from Nichols State University.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table reflects all forms of compensation for the years ended
December 31, 1999, 1998 and 1997, for Messrs. Lodzinski, Crews and Mury and for
Mr. Ruben Medrano, who served as Chief Executive Officer until the merger with
Cliffwood. Except as shown below, no executive officer, other than Mr. Medrano,
had salary and bonus which exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------- ----------------------------------------
SECURITIES
AWARDS UNDER-
OTHER RESTRICTED LYING PAYOUTS
ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
YEAR SALARY BONUS COMPEN-SATION AWARDS SARS (#) PAYOUTS COMPENSATION
------- ----------- ---------- ------------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Frank A. Lodzinski 1999 $94,000 $35,000 - - - - -
Chairman of the Board 1998 $58,000 - - - - - -
and Chief Executive 1997 - - - - - - -
Officer (1)
Jerry M. Crews 1999 $85,500 $32,500 - - - - -
Executive Vice 1998 $77,700 -
President (2)
Francis M. Mury 1999 $87,500 $27,500 - - - - -
Executive Vice 1998 $82,950 - - - - - -
President (2)
Ruben Medrano 1997 $72,940 $10,000 $18,253
Former President
and Chief Executive
Officer (3)
</TABLE>
(1) As a result of the Merger, Mr. Lodzinski became Chairman of the Board,
President, Chief Executive Officer and Director on December 31, 1997. Mr.
Lodzinski received no compensation from Texoil in 1997.
(2) As a result of the Merger, Messrs. Crews and Mury became Executive Vice
Presidents on December 31, 1997.
(3) Mr. Medrano resigned as President and Chief Executive Officer effective
December 31, 1997.
CLIFFWOOD OPTIONS
Prior to the Merger, Cliffwood granted options to purchase 573,000 shares
of Common Stock under Cliffwood's 1997 Stock Option Plan and Non-Employee
Director Stock Option Plan. Pursuant to the Merger agreement, these options were
canceled and replaced by options to purchase 6.74 shares of Texoil Common Stock
for every share that could have been purchased under the Cliffwood plans. In
June 1999, the replacement options were adjusted for the net 1-for-6 reverse
stock split. The table below reflects the number of shares underlying options
and
5
<PAGE>
the related exercise price, both as adjusted. There were no amendments to
the terms or conditions of the options, except for proportional changes in the
number and exercise price.
OPTION GRANTS
As described above, new options were granted to current Executive Officers
of the Company, following the Merger as a result of the conversion of Cliffwood
options as described in "Cliffwood Options." No new options were granted to the
Executive Officers in 1998 or 1999, so the table below only reflects the
adjustment for the stock split in June. The following table sets forth
additional information with respect to these stock option grants.
<TABLE>
<CAPTION>
PERCENT OF
TOTAL
NUMBER OF OPTIONS/SARS
TEXOIL GRANTED TO
SHARES EXERCISE EMPLOYEES
UNDERLYING OR BASE EFFECTIVE
OPTIONS PRICE JANUARY 1, EXPIRATION
NAME GRANTED ($/SHARE) 1997 DATE
----------------------------------------------------- ----------------- --------- ----------------- ------------------
<S> <C> <C> <C> <C>
Frank A. Lodzinski................................. 112,333 $3.12 21.1% August 12, 2007
Francis M. Mury.................................... 101,100 $3.12 18.9% August 12, 2007
Jerry M. Crews..................................... 101,100 $3.12 18.9% August 12, 2007
</TABLE>
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth information with respect to Cliffwood
options issued to the named executive officers of the Company.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
----------------------------------------------- ----------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------------- --------------------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Frank A. Lodzinski.......... 112,333 0 $204,446 $0.00
Francis M. Mury............. 101,100 0 $184,002 $0.00
Jerry M. Crews.............. 101,100 0 $184,002 $0.00
</TABLE>
EMPLOYMENT AGREEMENT
In connection with the issuance of Series A Convertible Preferred Stock,
Messrs. Lodzinski, Crews, Mury and one other officer entered into employment
agreements with Texoil that generally provide for a competitive base salary and
certain benefits and expense reimbursements consistent with established policies
of the Company. The base annual salaries specified in the employment agreements
for Messrs. Lodzinski, Crews and Mury are $120,000, $110,000 and $110,000,
respectively. The term of the agreements is to the earliest of (a) the first
date the holders of preferred stock cease to own preferred or conversion shares,
(b) the effective date of any sale transaction (as defined by the preferred
stock agreement) or (c) the resignation or termination of the employee. Should
the employee resign or be terminated, such employee is contractually restricted
from certain activities as provided by non-compete provisions of the employment
agreement.
Prior to November 1999, Mr. Lodzinski was the only officer or employee
with an employment agreement. That agreement provided for an annual salary of
$90,000, subject to increases at the discretion of the Board of Directors, and a
bonus at the sole discretion of the
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<PAGE>
Board of Directors. That agreement also provided for the grant of options to
purchase Common Stock. Mr. Lodzinski voluntarily reduced his annual salary in
April 1998 from $90,000 to $48,000 as part of a corporate initiative to reduce
general and administrative costs in response to declining oil prices. Messrs.
Crews and Mury also incurred voluntary salary reductions in April 1998. In July
1999 the Board increased the salaries of Messrs. Lodzinski, Mury and Crews to
prior levels.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of September 15, 2000, the number of
shares of the Company's equity securities owned by (i) each person known by the
Company (based on publicly-available filings with the Commission) to be the
holder of more than five percent of its voting securities, (ii) each Director
and each executive officer of the Company, and (iii) all of the Company's
directors and executive officers as a group. Unless otherwise indicated, each
holder has sole voting and investment power with respect to the shares of
capital stock owned by such holder.
<TABLE>
<CAPTION>
COMMON STOCK CONVERTIBLE PREFERRED (19)
--------------------------------- --------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL PERCENT OF BENEFICIAL OF
(ADDRESS INDICATED IF NOT A DIRECTOR OR AN OFFICER) OWNERSHIP CLASS OWNERSHIP CLASS
--------------------------------------------------- -------------------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Frank A. Lodzinski, Director, President and Chief Executive
Officer................................................... 2,442,883 (1) 31.54% 456,250 15.54%
Michael A. Vlasic, Director......................................... 2,318,633 (2) 30.26% 456,250 15.54%
Jerry M. Crews, Director, Executive Vice President and Secretary 393,503 (3) 5.80% 6,250 .21%
Robert E. LaJoie, Director.......................................... 174,117 (4) 2.60% - -
T. W. Hoehn, III, Director.......................................... 461,688 (5) 6.93% - -
Thomas A. Reiser, Director.......................................... 89,921 (6) 1.34% 6,767 .23%
S. Wil VanLoh, Jr., Director........................................ 4,059,950 (7) 37.85% 2,029,975 69.13%
Toby R. Neugebauer, Director........................................ 4,059,950 (8) 37.85% 2,029,975 69.13%
Jeffrey A. Jones, Director.......................................... 4,059,950 (9) 37.85% 2,029,975 69.13%
Francis M. Mury, Executive Vice President........................... 211,682 (17) 3.13% - -
All Directors and Executive Officers as a group (9 persons)......... 7,861,827 (18) 64.84% 2,499,242 85.11%
Quantum Energy Partners, L.P........................................ 4,059,950 (10) 37.85% 2,029,975 69.13%
777 Walker
2530 Two Shell Plaza
Houston, Texas 77002
RIMCO............................................................... 609,124 (11) 9.14% - -
22 Waterville Road
Avon, CT 06001-2000
The Lincoln National Life Insurance Company......................... 880,413 (12) 12.65% - -
200 East Berry Street
Ft. Wayne, Indiana 46802
First Union Capital Partners, Inc................................... 562,604 (13) 8.21% - -
1001 Fannin, Suite No. 2255
Houston, Texas 77002
V&C Energy Limited Partnership...................................... 2,290,550 (14) 30.00% 456,250 15.54%
710 Woodward
Bloomfield Hills, Michigan 45304
Vlasic Investments, L.L.C........................................... 2,318,633 (15) 30.26% - -
710 Woodward
Bloomfield Hills, Michigan 45304
EnCap Investments, L.L.C............................................ 1,239,862 (16) 16.58% 405,995 13.83%
1100 Louisiana, Suite No. 3150
Houston, Texas 77002
</TABLE>
(1) Includes 1,321,883 shares of Common Stock, 56,167 shares of Common Stock
underlying presently exercisable warrants and 456,250 purchased shares of
Series A Convertible Preferred Stock beneficially owned through V&C Energy
Limited Partnership ("V&C"), of which Energy Resource Associates, Inc.
("ERA"), a Texas corporation owned and controlled by Mr. Lodzinski, is a
general partner. Includes 112,333 shares of Common Stock underlying
presently exercisable options owned by Mr. Lodzinski. Mr. Lodzinski,
through ERA, has sole voting power for all matters associated with
securities held by V&C,
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<PAGE>
except in connection with the disposition of all or substantially all such
securities, which requires the approval of the limited partner. Mr.
Lodzinski has an economic interest in a portion of such securities.
(2) Includes 1,321,883 shares of Common Stock, 56,167 shares of Common Stock
underlying presently exercisable warrants and 456,250 purchased shares of
Series A Convertible Preferred Stock beneficially owned through V&C Energy
Limited Partnership, of which Vlasic Investments L.L.C. ("Vlasic
Investments") is the limited partner. Mr. Vlasic is the Chief Executive
Manager of Vlasic Investments. Includes 28,083 shares of Common Stock
underlying presently exercisable options assigned by Mr. Vlasic to Vlasic
Investments. Mr. Vlasic, in his capacity as Chief Executive Manager of
Vlasic Investments, has an economic interest in Texoil securities held by
V&C. Mr. Vlasic does not have voting rights associated with such
securities, but has certain approval rights related to the disposition of
such securities.
(3) Includes 101,100 shares of Common Stock owned by Mr. Crews, underlying
presently exercisable options and 6,250 purchased shares of Series A
Convertible Preferred Stock.
(4) Includes 140,417 shares of Common Stock held by Mr. LaJoie, as General
Partner to a family limited partnership, and 33,700 shares of Common Stock
underlying presently exercisable options owned by Mr. LaJoie.
(5) Includes 357,116 shares of Common Stock held by Mr. Hoehn, as Executor of
the Estate of T. W. Hoehn, Jr.
(6) Includes 28,083 shares of Common Stock owned by Mr. Reiser, underlying
presently exercisable options, 6,250 purchased shares of Series A
Convertible Preferred Stock and 517 shares of Series A Convertible
Preferred Stock paid in dividends.
(7) Includes 1,875,000 purchased shares of Series A Convertible Preferred
Stock and 154,975 shares of Series A Convertible Preferred Stock paid in
dividends, beneficially owned through Quantum Energy Partners, L.P. of
which Mr. VanLoh is a co-founder and principal.
(8) Includes 1,875,000 purchased shares of Series A Convertible Preferred
Stock and 154,975 shares of Series A Convertible Preferred Stock paid in
dividends, beneficially owned through Quantum Energy Partners, L.P. of
which Mr. Neugebauer is a co-founder and principal.
(9) Includes 1,875,000 purchased shares of Series A Convertible Preferred
Stock and 154,975 shares of Series A Convertible Preferred Stock paid in
dividends, beneficially owned through Quantum Energy Partners, L.P. of
which Mr. Jones is a co-founder and principal.
(10) Includes 1,875,000 purchased shares of Series A Convertible Preferred
Stock and 154,975 shares of Series A Convertible Preferred Stock paid in
dividends.
(11) Includes 30,000 shares of Common Stock beneficially owned through RIMCO
Partners, LP; 225,215 shares of Common Stock beneficially owned through
RIMCO Partners, LP II; 96,521 shares of Common Stock beneficially owned
through RIMCO Partners, LP III; and 257,388 shares of Common Stock
beneficially owned through RIMCO Partners, LP IV.
(12) Includes 293,471 shares of Common Stock underlying presently exercisable
warrants.
(13) Includes 188,158 shares of Common Stock, underlying presently exercisable
warrants.
(14) Includes 1,321,883 shares of Common Stock, 56,167 shares of Common Stock
underlying presently exercisable warrants and 456,250 purchased shares of
Series A Convertible Preferred Stock beneficially owned through V&C Energy
Limited Partnership, of which Energy Resource Associates, Inc. ("ERA"), a
Texas corporation owned and controlled by Mr. Lodzinski, is a general
partner. Mr. Vlasic, in his capacity as Chief Executive Manager of Vlasic
Investments, has an economic interest in Texoil securities held by V&C.
Mr. Vlasic does not have voting rights associated with such securities,
but has certain approval rights related to the disposition of such
securities.
(15) Includes 1,321,883 shares of Common Stock, 56,167 shares of Common Stock
underlying presently exercisable warrants and 456,250 purchased shares of
Series A Convertible Preferred Stock beneficially owned through V&C Energy
Limited Partnership, of which Vlasic Investments L.L.C. ("Vlasic
Investments") is the limited partner. Mr. Vlasic is the Chief Executive
Manager of Vlasic Investments. Includes 28,083 shares of Common Stock
underlying presently exercisable options assigned by Mr. Vlasic to Vlasic
Investments. Mr. Vlasic, in his capacity as Chief Executive Manager of
Vlasic Investments, has an economic interest in Texoil securities held by
V&C. Mr. Vlasic does not have voting rights associated with such
securities, but has certain approval rights related to the disposition of
such securities.
(16) Includes 320,904 shares of Common Stock and 143,682 purchased shares of
Series A Convertible Preferred Stock and 11,876 shares of Series A
Convertible Preferred Stock paid in dividends, beneficially owned through
EnCap Equity 1996 Limited Partnership, of which EnCap Investments, L.L.C.,
is the general partner. Also includes 106,968 shares of Common Stock and
93,750 purchased shares of Series A Convertible Preferred Stock and 7,749
shares of Series A Convertible Preferred Stock paid in dividends,
beneficially owned through Energy Capital Investment Company PLC, for
which EnCap Investments L.L.C. serves as investment advisor. In addition,
includes 137,568 purchased shares of Series A
8
<PAGE>
Convertible Preferred Stock and 11,370 shares of Series A Convertible
Preferred Stock paid in dividends, beneficially owned through El Paso
Capital Investment Company, LLC.
(17) Includes 101,100 shares of Common Stock owned by Mr. Mury, underlying
presently exercisable options.
(18) Includes only the number of shares held by each executive officer and
director so that shares are not double counted.
(19) The Series A Preferred Stock is immediately convertible into Common Stock
on a 2-for-1 basis. At any time after December 31, 2002, the Series A
Convertible Preferred Stock is mandatorily convertible into Class B Common
Stock, based on the Company's achievement of certain net asset and per
share values, on a 2-for-1 basis, subject to anti-dilution adjustments.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
CONVERTIBLE PREFERRED STOCK
In November 1999 the Company closed a private placement of Series A
Convertible Preferred Stock. Certain officers, directors and shareholders
participated in the offering as follows:
1) The V&C Energy Limited Partnership ("V&C") purchased 456,250 shares of
the Series A Convertible Preferred Stock. Mr. Frank A. Lodzinski, a
director and Chief Executive Officer of Texoil, is the general partner
of V&C through a wholly-owned Texas corporation. Mr. Michael A.
Vlasic, a director, has interests in V&C through Vlasic Investments,
L.L.C.
2) Certain affiliates of EnCap Investments, L.L.C. who are shareholders
of Texoil purchased 375,000 shares of the Series A Convertible
Preferred Stock.
3) Mr. Jerry M. Crews, a director and Executive Vice President, purchased
6,250 shares of the Series A Convertible Preferred Stock.
4) Mr. Thomas A Reiser, a director, purchased 6,250 shares of the Series
A Convertible Preferred Stock.
All investments by related parties were made on the same terms and
conditions as third-party non-affiliated investors.
CLIFFWOOD ACQUISITION 1996 LIMITED PARTNERSHIP
In May 1998 the Company acquired certain properties from the Cliffwood
Acquisition 1996 Limited Partnership, an affiliated partnership, in which the
Company owned a 10% interest. Proceeds to Limited Partners were $4.5 million
cash and 149,667 shares of common stock.
TECHNICAL RISKS, INC.
As a normal part of its business, the Company purchases various
performance bonds and insurance, including but not limited to general liability
insurance, automobile insurance, well control insurance, pollution liability
insurance, and directors and officers liability insurance. The Company purchases
these coverages on a competitive basis. Technical Risks, Inc. has been in the
past, and may be in the future, the broker used by the Company for these
purchases. Mr. Thomas A. Reiser, a director of the Company, is Chairman and
President of Technical Risks, Inc.
9
<PAGE>
PROPOSAL 2.
INDEPENDENT ACCOUNTANTS
The Company has engaged Arthur Andersen LLP as its independent accountants
as of March 4, 1998. Arthur Andersen LLP served as auditors of Cliffwood prior
to its merger with the Company. The Audit Committee recommends that Arthur
Andersen LLP be appointed as the independent accountant for the year ending
December 31, 2000. Representatives of Arthur Andersen LLP are expected to be
present at the annual meeting and will have an opportunity to make a statement
if they desire to do so, and are expected to be available to respond to
appropriate questions.
The Board of Directors recommends that shareholders vote FOR the Proposal
to approve the independent accountants. This proposal will be adopted if more
shareholders vote for, rather than against the proposal.
OTHER MATTERS
REQUIRED VOTE
Only holders of Common Stock and Preferred Stock as of the Record Date
will be entitled to vote in person or by proxy at the meeting. A majority of the
voting power of issued and outstanding shares of each of the Common Stock and
Preferred Stock of the Company, as of the Record Date, represented at the
meeting in person or by proxy will constitute a quorum for the election of the
respective classes of directors. For other matters, a majority of the combined
voting power is sufficient for a quorum. Abstentions and broker non-votes will
be counted for purposes of determining the presence or absence of a quorum.
Holders of Common Stock and Preferred Stock will vote together as one class on
all matters, except the election of directors. Provided that a quorum of voting
power of Common Stock is present at the meeting, the two Class A nominees who
receive the greatest number of votes cast for election by holders of Common
Stock entitled to vote will be elected. The three Class B nominees must be
elected by a majority of the voting power of the issued and outstanding
Preferred Stock. Votes withheld in connection with the election of one or more
director nominees will not be counted as votes cast for such individuals.
Proposal 2 to approve Arthur Andersen LLP as the Company's independent
accountants for the year ending December 31, 2000, may be approved if more votes
of all classes together are cast in favor than against.
Votes will be tabulated by ChaseMellon Shareholder Services, the transfer
agent and registrar for the Common Stock, and the results will be certified by
the inspector of election who is required to resolve impartially any
interpretive questions as to the conduct of the vote. In tabulating votes, a
record will be made of the number of shares of each class (a) voted for each
nominee, (b) with respect to which authority to vote for each nominee has been
withheld, and (c) present at the meeting but not voting.
OWNERSHIP REPORTS
Section 16(a) of the 1934 Act requires the Company's officers, directors
and persons who own more than 10% of its Common Stock to file with the
Securities and Exchange Commission reports of their ownership and changes of
ownership of Common Stock. These persons are
10
<PAGE>
required to furnish the Company with copies of all Section 16(a) reports that
they file. Based solely upon a review of reports and related written
representations received by it, the Company believes that all required reports
were filed on a timely basis during and in respect of the fiscal year ended
1999.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal for action to be included
in the proxy statement and form of proxy relating to the Company's 2001 annual
shareholders' meeting must submit the proposal to the Company on or before
February 15, 2001. Any such proposals should be timely sent by certified mail,
return receipt requested, to the Secretary of the Company, 110 Cypress Station
Drive, Suite No. 220, Houston, Texas 77090-1629.
AVAILABILITY OF ANNUAL REPORT AND RELATED FINANCIAL INFORMATION
The Company has previously furnished to all of its shareholders or
otherwise made available, a copy of its annual report on Form 10-KSB for the
fiscal year ended December 31, 1999, and its quarterly reports on Form 10-QSB
for the periods ending March 31, 2000, and June 30, 2000. This proxy statement
incorporates by reference the financial information required to be furnished in
connection herewith from its annual and quarterly reports as previously sent.
By Order of the Board of Directors,
Jerry M. Crews
Secretary
October 18, 2000
11
<PAGE>
APPENDIX A TO PROXY STATEMENT
TEXOIL, INC.
AMENDED AND RESTATED
AUDIT COMMITTEE CHARTER
The Audit Committee ("the Committee"), of the Board of Directors ("the Board")
of Texoil, Inc. ("the Company"), will have the oversight responsibility,
authority and specific duties as described below.
COMPOSITION
The Committee will be comprised of at least three Directors as determined by the
Board. The members of the Committee will meet the independence and experience
requirements required by the NASDAQ or any stock exchange, stock trading
marketplace, where the Company's stock is traded and any Federal or state
Securities Agency. The members of the Committee will be elected annually at the
organizational meeting of the full Board held on or near the date of the annual
meeting of the shareholders of the Company, and will be listed in the annual
report to shareholders. One of the members of the Committee will be elected
Committee Chair by the Board.
RESPONSIBILITY
The Committee is a part of the Board. Its primary function is to assist the
Board in fulfilling its oversight responsibilities with respect to (i) the
interim and annual financial information to be provided to shareholders and the
Securities and Exchange Commission (SEC); (ii) the system of internal controls
that management has established; and (iii) the internal (as required) and
external audit process of Directors, the independent accountants, financial
management and the Board. The Committee should have a clear understanding with
the independent accountants that they must maintain an open and transparent
relationship with the Committee, and that the ultimate accountability of the
independent accountants is to the Board and the Committee. The Committee will
make regular reports (at least annually) to the Board concerning its activities.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent accountants. Nor is it the duty
of the Audit Committee to conduct investigations, to resolve disagreements, if
any, between management and the independent accountants or to assure compliance
with laws and regulations and the Company's business conduct guidelines.
AUTHORITY
Subject to the prior approval of the Board, the Committee is granted the
authority to investigate any matter or activity involving financial accounting
and financial reporting, as well as the internal controls of the Company. In
that regard, the Committee will have the authority to approve the retention of
external professionals to render advice and counsel in such matters. All
<PAGE>
employees will be directed to cooperate with respect thereto as requested by
members of the Committee.
MEETINGS
The Committee is to meet in separate executive sessions with the Chief Financial
Officer, or such other party or parties having management responsibility for
financial and accounting matters and independent accountants at least once each
year and at other times when considered appropriate.
ATTENDANCE
Committee members will strive to be present at all meetings. As necessary or
desirable, the Committee Chair may request that members of management and
representatives of the independent accountants be present at Committee meetings.
SPECIFIC DUTIES
In carrying out its oversight responsibilities, the Committee will:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
2. Review annually with the Company's independent accountants their summary
observations about the Company's internal controls.
3. Review with the Company's management and independent accountants
significant accounting and reporting principles, practices and procedures
applied by the Company in preparing its financial statements. Discuss with
the independent accountants their judgments about the quality, not just
the acceptability, of the Company's accounting principles used in
financial reporting.
4. Review the scope and general extent of the independent accountants' annual
audit. The Committee's review should include an explanation from the
independent accountants of the factors considered by the accountants in
determining the audit scope, including the major risk factors. The
independent accountants should confirm to the Committee that no
limitations have been placed on the scope or nature of their audit
procedures. The Committee will review annually with management a summary
of all fees for services performed for the Company by the independent
accountants.
5. Inquire as to the independence of the independent accountants review with
the independent accountants, at least annually, relationships between the
independent accountants and the Company that in the independent
accountants' professional judgment may reasonably be thought to bear on
independence.
6. Have a predetermined arrangement with the independent accountants whereby
they will advise the Committee through its Chair and management of the
Company of any significant accounting or reporting issues noted in their
limited review of the interim
<PAGE>
quarterly financial statements, and that such notification as required
under standards for communication with Audit Committees is to be made
prior to the related press release or, if not practicable, prior to filing
Forms 10-QSB.
7. At the completion of the annual audit, review with management and the
independent accountants the following:
- The annual financial statements and related footnotes and financial
information to be included in the Company's annual report to
shareholders and on Form 10-KSB.
- Results of the audit of the financial statements and the related report
thereon and, if applicable, a report on changes during the year in
accounting principles and their application.
- Significant changes to the audit plan, if any, and any serious disputes
or difficulties with management encountered during the audit. Inquire
about the cooperation received by the independent accountants during
the audit, including access to all requested records, data and
information. Inquire of the independent accountants whether there have
been any disagreements with management, which, if not satisfactorily
resolved, would have caused them to issue a nonstandard report on the
Company's financial statements.
- Other communications as required to be communicated by the independent
accountants by Statement of Auditing Standards (SAS) 61 as amended by
SAS 90 relating to the conduct of the audit.
8. After preparation by management and review by independent accountants,
approve the report required under SEC rules to be included in the
Company's annual proxy statement. The Charter is to be published as an
appendix to the proxy statement every three years.
9. Also, elicit the comments of management regarding the responsiveness of
the independent accountants to the Company's needs.
10. Meet with management and the independent accountants to discuss any
relevant significant recommendations that the independent accountants may
have, particularly any characterized as "material" or "serious".
Specifically, discuss any such written recommendations prepared by the
independent accountants. The Committee should review responses of
management to any recommendations from the independent accountants and
receive follow-up reports on actions taken.
11. Recommend to the Board the selection, retention or termination of the
Company's independent accountants.
12. Review with management and the independent accountants the methods used to
establish and monitor the Company's policies with respect to unethical or
illegal activities by Company employees that may have a material impact on
the financial statements.
<PAGE>
13. Generally, as part of the review of the annual financial statements,
receive an oral report(s), at least annually, from the Company's corporate
counsel concerning legal and regulatory matters that may have a material
impact on the financial statements.
14. Review and recommend modifications as necessary, to "approval authorities"
vested in management and the Executive Committee of the Board of Directors
related to capital and other expenditures.
August 7, 2000
<PAGE>
TEXOIL, INC.
THIS PROXY TO THE HOLDERS OF COMMON STOCK IS SOLICITED BY THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
NOVEMBER 10, 2000
The undersigned hereby appoints Frank A. Lodzinski and Jerry M. Crews, and
each of them, either one of whom may act without joinder of the other, each with
full power of substitution and ratification, attorneys and proxies of the
undersigned to vote all shares of Texoil, Inc., which the undersigned is
entitled to vote at the annual meeting of stockholders to be held at the Houston
Marriott North at Greenspoint, 255 North Sam Houston Parkway East, Houston,
Texas 77060 on Friday, November 10, 2000, at 2:00 P.M., and at any adjournment
thereof.
This proxy will be voted in accordance with the specifications made hereon.
IF NO CONTRARY SPECIFICATION IS MADE, THEN THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE TWO CLASS A DIRECTOR NOMINEES NAMED AND FOR PROPOSAL 2.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and the Proxy Statement furnished herewith. PLEASE DATE, SIGN
AND RETURN THIS PROXY PROMPTLY in the enclosed, pre-addressed stamped envelope
or fax both sides of the signed proxy to (281) 537-8324.
(Continued and to be Dated and Signed on the Reverse Side.)
--------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Please mark
your votes as
indicated in [X]
this example
ELECTION OF DIRECTORS Nominees: Class A Directors Robert E. LaJoie, Thomas A. Reiser
FOR all nominees WITHHOLD *EXCEPTIONS (INSTRUCTION: To withhold authority to vote for any
listed to the right AUTHORITY individual nominee, mark the "Exception" box and write
(except as marked to vote for all that nominee's name in the space provided below.)
to the contrary) nominees listed
to the right _______________________________________________________
[ ] [ ] [ ]
APPROVAL OF APPOINTMENT OF In their discretion, upon such other matters (including procedural and other matters relating to
ARTHUR ANDERSEN LLP the conduct of the meeting) which may properly come before the meeting and any adjournment thereof.
FOR AGAINST ABSTAIN Please sign exactly as your name appears on your stock
[ ] [ ] [ ] certificate. When signing as executor, administrator,
trustee or other representative, please give your full
title. All joint owners should sign.
Date:___________________________________________, 2000
______________________________________________________
Signature(s) of Stockholders
______________________________________________________
Signature(s) of Stockholders
SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE OR FAX BOTH SIDES OF THE SIGNED
CARD TO (281) 537-8324.
------------------------------------------------------------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
</TABLE>
<PAGE>
TEXOIL, INC.
THIS PROXY TO THE HOLDERS OF PREFERRED STOCK IS SOLICITED BY THE BOARD OF
DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
NOVEMBER 10, 2000
The undersigned hereby appoints Frank A. Lodzinski and Jerry M. Crews, and
each of them, either one of whom may act without joinder of the other, each with
full power of substitution and ratification, attorneys and proxies of the
undersigned to vote all shares of Texoil, Inc., which the undersigned is
entitled to vote at the annual meeting of shareholders to be held at the Houston
Marriott North at Greenspoint, 255 North Sam Houston Parkway East, Houston,
Texas 77060 on Friday, November 10, 2000, at 2:00 P.M., and at any adjournment
thereof.
This proxy will be voted in accordance with the specifications made hereon.
IF NO CONTRARY SPECIFICATION IS MADE, THEN THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE THREE CLASS B DIRECTOR NOMINEES NAMED AND FOR PROPOSAL 2.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of shareholders and the Proxy Statement furnished herewith. PLEASE DATE, SIGN
AND RETURN THIS PROXY PROMPTLY in the enclosed, pre-addressed stamped envelope
or fax both sides of the signed proxy to (281) 537-8324.
(Continued, and to be Dated and Signed on the reverse side.)
--------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Please mark
your votes as
indicated in [X]
this example
ELECTION OF DIRECTORS Class B Director Nominees: Jeffrey A. Jones, Toby R. Neugebauer
and S. Wil Vanloh, Jr.
FOR all nominees WITHHOLD EXCEPTIONS (INSTRUCTION: To withhold authority to vote for any
listed to the right AUTHORITY individual nominee, mark the "Exception" box and write
(except as marked to vote for all that nominee's name in the space provided below.)
to the contrary) nominees listed
to the right _______________________________________________________
[ ] [ ] [ ]
APPROVAL OF APPOINTMENT OF In their discretion, upon such other matters (including procedural and other matters relating to
ARTHUR ANDERSEN LLP the conduct of the meeting) which may properly come before the meeting and any Adjournment thereof.
FOR AGAINST ABSTAIN Please sign exactly as your name appears on your stock
[ ] [ ] [ ] certificate. When signing as executor, administrator,
trustee or other representative, please give your full
title. All joint owners should sign.
Date:___________________________________________, 2000
______________________________________________________
Signature(s) of Shareholders
______________________________________________________
Signature(s) of Shareholders
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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^ FOLD AND DETACH HERE ^
</TABLE>
