<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
---------
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
-------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM TO
---- ----
Commission file number 0-2517
------
TOREADOR ROYALTY CORPORATION
----------------------------
(Exact name of registrant as specified in its charter)
Delaware 75-0991164
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
530 Preston Commons West
8117 Preston Road
Dallas, Texas 75225
---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 369-0080
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at June 30, 1995
------------------------------- ----------------------------
Common Stock, $.15625 par value 5,343,371
<PAGE> 2
PART I. FINANCIAL INFORMATION
TOREADOR ROYALTY CORPORATION
ITEM 1. CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, June 30, December 31,
1995 1994 1994
-------------- ------------- --------------
( Unaudited ) ( Unaudited )
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,217,593 $ 3,821,190 $ 3,893,666
Marketable securities, at market value 635,040 912,870 674,730
Accounts receivable 151,631 174,429 160,701
Federal income tax receivable 68,014 9,961 68,014
Prepaid expenses and deposits 69,840 14,340 14,340
-------------- ------------- --------------
Total current assets 4,142,118 4,932,790 4,811,451
-------------- ------------- --------------
Properties and equipment, less accumulated
depreciation, depletion and amortization 2,917,886 2,779,617 2,733,101
Other assets 49,852 60,962 105,352
-------------- ------------- --------------
Total assets $ 7,109,856 $ 7,773,369 $ 7,649,904
============== ============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 104,881 $ 62,542 $ 164,763
-------------- ------------- --------------
Total current liabilities 104,881 62,542 164,763
-------------- ------------- --------------
Deferred tax liabilities 209,885 275,315 223,380
Other liabilities - 14,145 -
-------------- ------------- --------------
Total liabilities 314,766 352,002 388,143
Stockholders' equity:
Preferred stock, $1.00 par value, 4,000,000 shares
authorized; none issued - - -
Common stock, $.15625 par value, 10,000,000
shares authorized; 5,349,071 shares issued 835,792 835,792 835,792
Capital in excess of par value 3,560,042 3,560,199 3,560,042
Retained earnings 2,085,688 2,568,788 2,526,164
Minimum pension liability - (37,965) -
Net unrealized gain on marketable securities 330,312 511,297 356,507
-------------- ------------- --------------
6,811,834 7,438,111 7,278,505
Less 5,700 shares of common stock
in treasury, at cost (16,744) (16,744) (16,744)
-------------- ------------- --------------
Total stockholders' equity 6,795,090 7,421,367 7,261,761
-------------- ------------- --------------
Total liabilities and stockholders' equity $ 7,109,856 $ 7,773,369 $ 7,649,904
============== ============= ==============
</TABLE>
The Company uses the successful efforts method of accounting for its oil and
gas producing activities. See accompanying notes to the consolidated financial
statements.
- 2 -
<PAGE> 3
TOREADOR ROYALTY CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1995 1994 1995 1994
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 299,387 $ 387,378 $ 643,064 $ 744,700
Lease bonuses and rentals - - 41,896 226,780
Interest and other income 66,116 43,628 117,827 100,494
----------- ---------- ---------- -----------
Total revenues 365,503 431,006 802,787 1,071,974
COSTS AND EXPENSES:
Lease operating expense 92,471 85,245 161,934 157,458
Dry holes and abandonments 105,977 35,543 175,378 35,543
Depreciation, depletion and
amortization 52,988 71,534 109,963 148,940
Geological and geophysical 62,552 20,298 112,080 72,171
General and administrative 492,712 253,141 683,908 489,654
----------- ---------- ---------- -----------
Total costs and expenses 806,700 465,761 1,243,263 903,766
----------- ---------- ---------- -----------
INCOME BEFORE FEDERAL INCOME TAXES (441,197) (34,755) (440,476) 168,208
PROVISION (BENEFIT) FOR FEDERAL INCOME
TAX EXPENSE - - - -
----------- ---------- ---------- -----------
NET INCOME $ (441,197) $ (34,755) $ (440,476) $ 168,208
=========== ========== ========== ===========
INCOME PER SHARE $ (0.08) $ (0.01) $ (0.08) $ 0.04
=========== ========== ========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 5,343,371 4,803,990 5,343,371 4,746,098
=========== ========== ========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
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<PAGE> 4
TOREADOR ROYALTY CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ $ (34,755) $ (440,476) $ 168,208
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation, depletion and amortization 52,988 71,534 109,963 148,940
Dry holes and abandonments 105,977 35,543 175,378 35,543
Loss (gain) on sale of oil and gas
properties and equipment - 494 - (24,731)
Decrease in accounts receivable 16,222 8,814 9,070 19,716
Increase in federal income tax receivable - - - (9,961)
Pension funding in excess of expense - 3,387 - 6,774
Increase in prepaid expenses and deposits 36,872 47,600 - -
Decrease in accounts payable and
accrued liabilities (47,539) (19,967) (59,882) (70,394)
Decrease in taxes payable - - - (70,039)
------------ ------------ ------------ -----------
Net cash (used) provided by
operating activities (276,677) 112,650 (205,947) 204,056
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for oil and gas property
and equipment (184,145) (426,599) (466,782) (470,814)
Purchase of furniture and fixtures (3,344) (4,585) (3,344) (8,055)
Proceeds from sale of oil and gas
properties and equipment - (494) - 24,731
Lease of undeveloped acreage - - - 95,372
------------ ------------ ------------ -----------
Net cash used for investing activities (187,489) (431,678) (470,126) (358,766)
------------ ------------ ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
stock - 2,615,876 - 2,615,876
------------ ------------ ------------ -----------
Net cash provided by financing activities - 2,615,876 - 2,615,876
------------ ------------ ------------ -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (464,166) 2,296,848 (676,073) 2,461,166
CASH & CASH EQUIVALENTS, BEGINNING OF
PERIOD 3,681,759 1,524,342 3,893,666 1,360,024
------------ ------------ ------------ -----------
CASH & CASH EQUIVALENTS, END OF PERIOD $ 3,217,593 $ 3,821,190 $ 3,217,593 $ 3,821,190
============ ============ ============ ===========
SUPPLEMENTAL SCHEDULE OF CASH
FLOW INFORMATION:
Cash paid during the period for:
Income taxes $ - $ - $ - $ 80,000
</TABLE>
See accompanying notes to the consolidated financial statements.
- 4 -
<PAGE> 5
TOREADOR ROYALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements should be read in the context
of the consolidated financial statements and notes thereto filed with the
Securities and Exchange Commission in Toreador Royalty Corporation's (the
"Company") 1994 Annual Report on Form 10-K. In the opinion of the Company, the
information furnished herein reflects all adjustments consisting of only normal
recurring adjustments, necessary for a fair presentation of the results of the
interim periods reported herein. Operating results from the interim period may
not necessarily be indicative of the results for the year ended December 31,
1995.
CAPITALIZATION POLICY FOR OIL AND GAS ACTIVITIES
The Company follows the successful efforts method of accounting for
oil and gas exploration and development expenditures. Under this method, costs
of successful exploratory wells and all development wells are capitalized.
Costs to drill exploratory wells which do not find proved reserves are
expensed. Acquisition costs of mineral interests in oil and gas properties
remain capitalized until they are impaired or a determination has been made to
discontinue exploration of the lease, at which time all related costs are
charged to expense. Impairment of unproved properties is assessed and recorded
on a property-by-property basis. Upon sale or abandonment of units of property
or the disposition of miscellaneous equipment, the cost is removed from the
asset account, the related reserves relieved of the accumulated depreciation or
depletion and the gain or loss is credited to or charged against operations.
Maintenance and repairs are charged to expense; betterments of property are
capitalized and depreciated.
EARNINGS PER SHARE
Earnings per common share is based on the weighted average number of
shares, including common share equivalents (except where inclusion of such
common share equivalents would have an antidilutive effect), outstanding.
FEDERAL INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income
Taxes", which was adopted effective January 1, 1993.
- 5 -
<PAGE> 6
TOREADOR ROYALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 1995
NOTE 2 - MARKETABLE SECURITIES
Marketable securities are comprised of 105,840 shares in the San Juan
Basin Royalty Trust at June 30, 1995 and 1994, and at December 31, 1994. The
Company's cost in this royalty trust is $126,258. At June 30, 1995, the
market value of these securities which are designated as available for sale
aggregated $635,040, resulting in a gross unrealized gain in the amount of
$508,782 and an unrealized gain, net of tax effect, of $330,312. At June 30,
1994, the market value of these securities was $912,870, resulting in a gross
unrealized gain in the amount of $786,612, and an unrealized gain, net of tax
effect, of $511,297. At December 31, 1994, the market value of these securities
was $674,730, resulting in a gross unrealized gain in the amount of $548,472,
and an unrealized gain, net of tax effect, of $356,507.
NOTE 3 - NON-PRODUCING MINERAL AND ROYALTY INTERESTS
Principal properties include mineral fee interests acquired by the
Company during 1951 and 1958. These interests totaled approximately 530,000 net
mineral acres underlying approximately 870,000 surface acres in the Texas
Panhandle and West Texas. It is recognized that the ultimate realization of the
investment in these properties is dependent upon future exploration and
development operations which are dependent upon satisfactory leasing and
drilling arrangements with others. Additionally, the Company owns working or
royalty interests in Texas, New Mexico, Oklahoma, Arkansas, Louisiana and
Colorado.
NOTE 4 - INTEREST AND OTHER INCOME
Items in interest and other income consist of:
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------
1995 1994
-------- --------
<S> <C> <C>
Interest - Certificates of Deposit and
U. S. Treasury Bills $ 54,639 $ 20,778
Distribution from Grantor Trust:
San Juan Basin Royalty Trust 11,477 19,344
Sale of oil and gas properties and equipment - (494)
Management fees - 4,000
-------- --------
$ 66,116 $ 43,628
======== ========
</TABLE>
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<PAGE> 7
TOREADOR ROYALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 1995
NOTE 5 - CAPITAL
On May 23, 1994, the Company privately placed 809,071 shares of common
stock for an aggregate consideration of $2,831,749. In its private placement
agreement with the purchasers, the Company granted them registration rights,
pursuant to which a registration statement on Form S-3 covering all the shares
was filed on June 22, 1994. The registration statement was declared effective
July 11, 1994 and the Company is obligated to maintain such effectiveness until
May 23, 1996. In connection with the private placement, the Company's placement
agent received a five-year warrant to purchase 106,867 shares of common stock
at a price of $4.375 per share. The placement agent has rights to participate
in registered offerings of common stock by the Company.
The net proceeds to the Company from the private placement (after
deducting the placement agent's fee of $141,112 and expenses of approximately
$75,000) were approximately $2,616,000.
NOTE 6 - STOCKHOLDER RIGHTS PLAN
The Company adopted a stockholder rights plan on April 3, 1995
designed to assure that the Company's stockholders receive fair and equal
treatment in the event of any proposed takeover of the Company and to guard
against partial tender offers and other abusive takeover tactics to gain
control of the Company without paying all stockholders a fair price. Under the
rights plan, the Company declared a dividend of one right ("Right") on each
share of Toreador common stock. Each Right will entitle the holder to purchase
one one-hundredth of a share of a new Series A Junior Participating Preferred
Stock, par value $1.00 per share, at an exercise price of $12.00. The Rights
are not currently exercisable and will become exercisable only in the event a
person or group acquires beneficial ownership of 20 percent or more of
Toreador's outstanding common stock or announces a tender offer or exchange
offer to acquire such ownership level. The Rights are subject to redemption by
the Company for $.01 per Right at any time prior to the tenth day after the
first public announcement of the acquisition by any person or group of
beneficial ownership of 20 percent or more of Toreador common stock. The
dividend distribution was made on April 13, 1995 to stockholders of record at
the close of business on that date. The rights will expire on April 13, 2005.
- 7 -
<PAGE> 8
TOREADOR ROYALTY CORPORATION
For the three and six months ended June 30, 1995
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resource
Historically, most of the exploration activity on the Company's
acreage has been funded and conducted by other oil companies and this activity
is expected to continue. Exploration activity typically generates lease bonus
and option income to the Company. If drilling is successful, the Company
receives royalty income from the oil or gas production but bears none of the
capital or operating costs. In order to accelerate the evaluation of its
acreage as well as increase its ownership in any reserves discovered, the
Company intends to increase its level of participation in exploring its acreage
by acquiring working interests. The extent to which the Company may acquire
working interests will depend on the availability of outside capital and cash
flow from operations. Currently, the primary sources of capital for the
financing of the Company's operations are cash flow provided from revenues
generated by its proportionate share in oil and natural gas sales and existing
cash, including that from the private offering. To the extent cash flow from
operations does not significantly increase and external sources of capital are
limited or unavailable, the Company's ability to make the capital investment to
participate in 3-D seismic surveys and increase its interest in projects on its
acreage will be limited. Future funds are expected to be provided through
production from existing producing properties and new producing properties that
may be discovered through exploration of the Company's acreage by third parties
or by the Company itself. Funds may also be provided through external financing
in the form of debt or equity. There can be no assurance as to the extent and
availability of these sources of funding.
The Company has no debt and maintains its excess cash funds in
interest-bearing deposits and commercial paper. The Company is not aware of
any demands, commitments or events which will result in its liquidity
increasing or decreasing in a material way. From time to time, the Company may
receive lease bonuses that cannot be anticipated and, when funds are available,
the Company may elect to participate in exploratory ventures. The Company also
may acquire producing oil and gas assets which could require the use of debt.
Management believes that sufficient funds are available internally to
meet anticipated capital requirements for fiscal 1995.
- 8 -
<PAGE> 9
TOREADOR ROYALTY CORPORATION
For the three and six months ended June 30, 1995
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995 VS
THREE MONTHS ENDED JUNE 30, 1994
Revenues for the second quarter 1995, were $365,503, versus $431,006
for the same period in 1994. Oil and gas sales were $299,387 in 1995 versus
$387,378 in 1994. The average gas price for the period dropped 44.7% to $1.09
per MCF in 1995 from $1.97 per MCF for the same quarter of 1994. This resulted
in a number of gas wells being shut-in or curtailed. Consequently, gas volumes
declined 27.0% to 65,659 MCF in 1995 from 89,994 MCF in 1994. Oil volumes
remained flat at 12,856 BBL for the second quarter 1995 compared to 12,858 for
the same period in 1994. Oil prices were up 8.3%, representing an average oil
price of $17.70 per barrel in 1995 versus $16.34 per barrel in 1994. Interest
and other income was $66,116 in 1995 versus $43,628 in 1994. Interest income
increased by $33,861 to $54,639 in 1995 from $20,778 in 1994 due to increased
investment balances resulting from the successful private placement of stock in
the second quarter of 1994. Royalty trust distributions declined by $7,867 to
$11,477 in 1995 from $19,344 in 1994. The acreage joint venture for which the
Company received $4,000 in management fees in 1994 ended in the fourth quarter
of 1994.
Costs and expenses were $806,700 in 1995 versus $465,761 for the same
period in 1994. Lease operating expenses were $92,471 versus $85,245 in 1994.
Dry holes and abandonments were $105,977 in 1995 compared to $35,543 in 1994.
Geological and geophysical costs were $62,552 compared to $20,298 for the same
period in 1994. Both dry holes and abandonments and geological and geophysical
costs increased due to the Company's aggressive efforts to evaluate and develop
Company-owned mineral interests. Depreciation, depletion and amortization
declined $18,546 to $52,988 in 1995 from $71,534. This reduction results from
the Company's decline in oil and gas sales. General and administrative expenses
increased by $239,571 to $492,712 from $253,141 in 1994. The increase is a
direct result of the Company defending an attempt to take control of the
Company by a competing slate of directors submitted by a Boston-based group of
investors.
The Company recognized a loss of $441,197, or $(.08) per share, for the second
quarter of 1995 versus a $34,755 loss, or $(.01) per share, for the same period
of 1994.
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<PAGE> 10
TOREADOR ROYALTY CORPORATION
For the three and six months ended June 30, 1995
SIX MONTHS ENDED JUNE 30, 1995 VS
SIX MONTHS ENDED JUNE 30, 1994
Revenues for the six months ended June 30, 1995 decreased 25.1% to
$802,787 compared to $1,071,974 for 1994. Oil and gas sales declined 13.6% to
$643,064 in 1995 from $744,700 in 1994, resulting from the reduction of
equivalent barrel production in 1995 of 50,540 from 56,979 in 1994. This
decline in equivalent barrel production was further felt as the price per
equivalent barrel slipped to $12.72 in 1995 from $13.07 in 1994. Lease bonus
and rental income decreased by 81.5% to $41,896 in 1995 from $226,780 in 1994.
The decrease is due to the Company evaluating its own mineral interests for
future development. Interest and other income increased 17.2%, or $17,333, to
$117,827 from $100,494 in 1994. Increased investment balances resulting from
the successful private placement of stock in the second quarter of 1994
contributed to this increase.
Total costs and expenses for the first half of 1995 were $1,243,263
compared to $903,766 for the first half of 1994, representing a 34.2% increase.
Of this increase, 57.2% is attributable to general and administrative expenses
as a direct result of the Company defending an attempt to take control of the
Company by a competing slate of directors submitted by a Boston-based group of
investors, which increased these expenses to $683,908 in 1995 from $489,654 in
1994. The Company completed its participation in the evaluation of certain
drilling commitments resulting in dry holes and abandonments of $175,378 in
1995 versus $35,543 in 1994 representing 41.2% of the increase in total costs
and expenses. Geological and geophysical costs increased $39,909, to $112,080
from $72,171, or 11.8% of the increase in total costs and expenses. The
remaining component, contributing 1.3% of the increase in total costs and
expenses, is lease operating expense which increased $4,476 to $161,934 from
$157,458 in 1994. These increases were partly offset by the decline in
depreciation, depletion and amortization of $38,977 to $109,963 from $148,940
in 1994.
The Company recognized a loss of $440,476, or $(.08) per share, in
1995 as compared to net income of $168,208, or $.04 per share, for the same
period in 1994.
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<PAGE> 11
TOREADOR ROYALTY CORPORATION
June 30, 1995
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of stockholders of the Company was held at 10:00
a.m., local time, on Thursday, May 18, 1995.
(b) The following directors were elected at the annual meeting of
stockholders: Donald E. August, John V. Ballard, J. W. Bullion, Thomas
P. Kellogg, Jr., John Mark McLaughlin, Peter R. Vig and Jack L. Woods.
Except for the foregoing directors, no other director's term continued
after the date of the meeting.
(c) Out of a total of 5,343,371 shares of common stock of the Company
outstanding and entitled to vote, 4,030,720 shares were present in
person or by proxy, representing approximately 75 percent. The only
matters voted on by the stockholders, as fully described in the
definitive proxy materials for the annual meeting, were the election
of directors of the Company, and the adoption of the Company's 1994
Non-Employee Director Stock Option Plan. On May 5, 1995, the Company
received notice that certain of the Company's stockholders (the
"Committee") intended to solicit proxies from the Company's
stockholders in opposition to the proxies previously solicited from
the Company's Board of Directors. Specifically, the Committee
proposed (i) the election of a new slate of nominees for director of
the Company and (ii) the rejection of the Board's proposal to adopt
the Company's 1994 Non-Employee Director Stock Option Plan. The
results of the voting were as follows:
1. Election of Directors
<TABLE>
<CAPTION>
NUMBER OF SHARES
----------------
WITHHOLDING
-----------
NUMBER OF SHARES VOTING AUTHORITY TO VOTE FOR
----------------------- ---------------------
MANAGEMENT NOMINEES FOR ELECTION AS DIRECTOR ELECTION AS DIRECTOR
------------------- ------------------------ --------------------
<S> <C> <C>
Donald E. August 2,839,411 49,228
John V. Ballard 2,839,411 49,228
J. W. Bullion 2,839,411 49,228
Thomas P. Kellogg, Jr. 2,839,411 49,228
John Mark McLaughlin 2,839,411 49,228
Peter R. Vig 2,839,411 49,228
Jack L. Woods 2,839,411 49,228
</TABLE>
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<PAGE> 12
TOREADOR ROYALTY CORPORATION
June 30, 1995
PART II. OTHER INFORMATION (Continued)
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (Continued)
1. Election of Directors (Continued)
<TABLE>
<CAPTION>
NUMBER OF SHARES
----------------
WITHHOLDING
-----------
NUMBER OF SHARES VOTING AUTHORITY TO VOTE FOR
----------------------- ---------------------
COMMITTEE NOMINEES FOR ELECTION AS DIRECTOR ELECTION AS DIRECTOR
------------------ ------------------------ --------------------
<S> <C> <C>
Peter L. Falb 1,082,881 58,800
Edward Nathan Dane 1,082,801 58,860
Theodore Johnson 1,079,881 61,800
Paul R. Farago 1,079,881 61,800
Edward J. Stuart III 1,079,881 61,800
</TABLE>
2. Adoption of 1994 Non-Employee Director Stock Option Plan
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
2,498,142 1,265,924 266,254
</TABLE>
There were no broker non-votes for the matters voted on by the
stockholders at the annual meeting.
(d) Inapplicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
The information required by this Item 6(a) is set forth in the
Index to Exhibits accompanying this quarterly report and is
incorporated herein by reference.
(b) Reports on Form 8-K
Form 8-K dated April 3, 1995 (Date of Event: April 3, 1995),
which reported the Company's adoption of a stockholder rights
plan.
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<PAGE> 13
TOREADOR ROYALTY CORPORATION
June 30, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOREADOR ROYALTY CORPORATION,
Registrant
/s/ PETER R. VIG
----------------
Peter R. Vig, Chairman;
the Principal Executive, Financial
and Accounting Officer
August 11, 1995
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<PAGE> 14
TOREADOR ROYALTY CORPORATION
June 30, 1995
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
-------
NUMBER EXHIBIT
------ -------
<S> <C>
3 Certificate of Designations of Series A Junior Participating Preferred
Stock Stock of the Registrant, dated as of April 3, 1995.
4 Rights Agreement dated as of April 3, 1995, between Toreador Royalty
Corporation and Continental Stock Transfer & Trust Company
Company (filed as Exhibit 1 to the Registrant's Form 8-K dated April
3, 1995, and incorporated herein by reference).
10 Form of Indemnification Agreement dated as of April 25, 1995 between
between the Registrant and each of the Registrant's directors.
27 Financial Data Schedule.
99 Press Release, dated May 23, 1995.
</TABLE>
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<PAGE> 1
EXHIBIT 3
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
TOREADOR ROYALTY CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Toreador Royalty Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Corporation"), hereby certifies that the following resolution was adopted
by the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on April 3, 1995:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $1.00 per share (the "Preferred Stock"), of the Corporation
and hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 200,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
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<PAGE> 2
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $.15625 per share (the "Common
Stock"), of the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the
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<PAGE> 3
determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on
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<PAGE> 4
shares of Series A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or
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<PAGE> 5
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received $100 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount to be distributed per share to
holders of shares of Common Stock, or (2) to the holders of shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series A Preferred
stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred Stock.
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<PAGE> 6
Section 10. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the Board and attested
by its Secretary this 3rd day of April, 1995.
/s/ Peter R. Vig
Peter R. Vig
Chairman of the Board
Attest:
/s/ James S. Blair
James S. Blair
Vice President - Land and Acquisitions
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<PAGE> 1
EXHIBIT 10
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement"), made and entered
into as of the 25th day of April, 1995, by and between TOREADOR ROYALTY
CORPORATION, a Delaware corporation (the "Corporation") and
______________________________ ("Director").
W I T N E S S E T H:
WHEREAS, it is essential to the Company to retain and attract as
directors the most capable persons available;
WHEREAS, Director is a director of the Company;
WHEREAS, both the Company and Director recognize the risk of
litigation and other claims being asserted against directors of public
companies; and
WHEREAS, in recognition of Director's need for substantial protection
against personal liability in order to maintain continued service to the
Company in an effective manner and to provide Director with specific
contractual assurance that the protection will be available to Director, the
Company desires to provide in this Agreement for the indemnification of and the
advance of expenses to Director to the full extent permitted by law, as set
forth in this Agreement;
NOW THEREFORE, in consideration of the premises and mutual agreements
contained herein, including Director's continued service to the Corporation,
the Corporation and Director hereby agree as follows:
Section 1. Definitions. The following terms, as used herein,
shall have the following respective meanings:
"Change of Control" means a change in control of the Corporation after
the date of this Agreement in any one of the following circumstances: (a)
there shall have occurred an event required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on
any similar schedule or form) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), whether or not the Corporation is then
subject to such reporting requirement; (b) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) shall have become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding voting securities
without prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person's attaining such
percentage interest; (c) the Corporation is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest, as a consequence of
which members of the Board of Directors in office
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<PAGE> 2
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter or (d) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
"D.G.C.L." means the Delaware General Corporation Law, as currently in
effect or as amended from time to time.
"Expenses" shall include reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating or being or preparing to be a witness in a
Proceeding.
"Independent Counsel" means a law firm, or member of a law firm, that
is experienced in matters of corporation law and neither presently is, nor in
the five years previous to his or her selection or appointment has been,
retained to represent: (a) the Corporation or Director in any matter material
to either such party, (b) any other party to the Proceeding giving rise to a
claim for indemnification hereunder or (c) the beneficial owners, directly or
indirectly, of securities of the Corporation representing 5% or more of the
combined voting power of the Corporation's then outstanding voting securities.
"Matter" is a claim, a material issue, or a substantial request for
relief.
"Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except
one initiated by Director pursuant to Section 10 of this Agreement to enforce
his or her rights under this Agreement.
Section 2. Indemnification. The Corporation shall indemnify,
and advance Expenses to, Director to the fullest extent permitted by applicable
law in effect on the date of the effectiveness of this Agreement, and to such
greater extent as applicable law may thereafter permit. The rights of Director
provided under the preceding sentence shall include, but not be limited to, the
right to be indemnified to the fullest extent permitted by Section 145(b) of
the D.G.C.L. in Proceedings by or in the right of the Corporation and to the
fullest extent permitted by Section 145(a) of the D.G.C.L. in all other
Proceedings. The provisions set forth below in this Agreement are provided in
furtherance, and not by way of limitation, of the obligations expressed in this
Section 2.
Section 3. Expenses Related to Proceedings. If Director is, by
reason of his or her status as a director of the Corporation, a witness in or a
party to and is successful, on the merits or otherwise, in any Proceeding, he
or she shall be indemnified against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection therewith. If
Director
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<PAGE> 3
is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to any Matter in such Proceeding, the Corporation shall indemnify
Director against all Expenses actually and reasonably incurred by him or her or
on his or her behalf relating to each Matter. The termination of any Matter in
such a Proceeding by dismissal, with or without prejudice, shall be deemed to
be a successful result as to such Matter.
Section 4. Advancement of Expenses. Director shall be advanced
Expenses within ten days after requesting them to the fullest extent permitted
by Section 145(e) of the D.G.C.L.
Section 5. Request for Indemnification. To obtain
indemnification Director shall submit to the Corporation a written request with
such information as is reasonably available to Director. The Secretary of the
Corporation shall promptly advise the Board of Directors of such request.
Section 6. Determining Entitlement to Indemnification if No
Change of Control. If there has been no Change of Control at the time the
request for Indemnification is sent, Director's entitlement to indemnification
shall be determined in accordance with Section 145(d) of the D.G.C.L. If
entitlement to indemnification is to be determined by Independent Counsel, the
Corporation shall furnish notice to Director within ten days after receipt of
the request for indemnification, specifying the identity and address of
Independent Counsel. Director may, within fourteen days after receipt of such
written notice of selection, deliver to the Corporation a written objection to
such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of Independent
Counsel and the objection shall set forth with particularity the factual basis
of such assertion. If there is an objection to the selection of Independent
Counsel, either the Corporation or Director may petition the Court of Chancery
of the State of Delaware or any other court of competent jurisdiction for a
determination that the objection is without a reasonable basis and/or for the
appointment of Independent Counsel selected by the court.
Section 7. Determining Entitlement to Indemnification if Change
of Control. If there has been a Change of Control at the time the request for
indemnification is sent, Director's entitlement to indemnification shall be
determined in a written opinion by Independent Counsel selected by Director.
Director shall give the Corporation written notice advising of the identity and
address of the Independent Counsel so selected. The Corporation may, within
seven days after receipt of such written notice of selection, deliver to
Director a written objection to such selection. Director may, within five days
after the receipt of such objection from the Corporation, submit the name of
another Independent Counsel and the Corporation may, within seven days after
receipt of such written notice of selection, deliver to Director a written
objection to such selection. Any objection is subject to the limitations in
Section 6 of this Agreement. Director may petition the Court of Chancery of
the State of Delaware or any other court of competent jurisdiction for a
determination that the Corporation's objection to the first and/or second
selection of Independent Counsel is without a reasonable basis and/or for the
appointment as Independent Counsel of a person selected by the court.
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<PAGE> 4
Section 8. Procedures of Independent Counsel. If there has
been a Change of Control before the time the request for indemnification is
sent by Director, Director shall be presumed (except as otherwise expressly
provided in this Agreement) to be entitled to indemnification upon submission
of a request for indemnification in accordance with Section 5 of this
Agreement, and thereafter the Corporation shall have the burden of proof to
overcome the presumption in reaching a determination contrary to the
presumption. The presumption shall be used by Independent Counsel as a basis
for a determination of entitlement to indemnification unless the Corporation
provides information sufficient to overcome such presumption by clear and
convincing evidence or the investigation, review and analysis of Independent
Counsel convinces him or her by clear and convincing evidence that the
presumption should not apply.
Except in the event that the determination of entitlement to
indemnification is to be made by Independent Counsel, if the person or persons
empowered under Section 6 or 7 of this Agreement to determine entitlement to
indemnification shall not have made and furnished to Director in writing a
determination within sixty days after receipt by the Corporation of the request
therefor, the requisite determination of entitlement to indemnification shall
be deemed to have been made and Director shall be entitled to such
indemnification unless Director knowingly misrepresented a material fact in
connection with the request for indemnification or such indemnification is
prohibited by law. The termination of any Proceeding or of any Matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Director to indemnification
or create a presumption that (a) Director did not act in good faith and in a
manner that he or she reasonably believed, in the case of conduct in his or her
official capacity as a director of the Corporation, to be in the best interests
of the Corporation or in all other cases that at least his or her conduct was
not opposed to the Corporation's best interests, or (b) with respect to any
criminal Proceeding, that Director had reasonable cause to believe that his or
her conduct was unlawful.
Section 9. Expenses of Independent Counsel. The Corporation
shall pay any and all reasonable fees and expenses of Independent Counsel
incurred acting pursuant to this Agreement and in any proceeding to which it is
a party or witness in respect of its investigation and written report and shall
pay all reasonable fees and expenses incident to the procedures in which such
Independent Counsel was selected or appointed. No Independent Counsel may
serve if a timely objection has been made to his or her selection until a court
has determined that such objection is without a reasonable basis.
Section 10. Trial De Novo. In the event that (a) a determination
is made pursuant to Section 6 or 7 of this Agreement that Director is not
entitled to indemnification under this Agreement, (b) advancement of Expenses
is not timely made pursuant to Section 4 of this Agreement, (c) Independent
Counsel has not made and delivered a written opinion determining the request
for indemnification (i) within ninety days after being appointed by a court,
(ii) within ninety days after objections to his or her selection have been
overruled by a court or (iii) within ninety days after the time for the
Corporation or Director to object to his or her selection or (d) payment of
indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Section 6, 7 or 8 of this Agreement, Director shall be entitled to
an adjudication in any court of competent
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<PAGE> 5
jurisdiction of his or her entitlement to such indemnification or advancement
of Expenses. In the event that a determination shall have been made that
Director is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 10 shall be conducted in all
respects as a de novo trial on the merits, and Director shall not be prejudiced
by reasons of that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding commenced pursuant to this Section 10, the
Corporation shall have the burden of proving that Director is not entitled to
indemnification or advancement of Expenses, as the case may be. If a
determination shall have been made or deemed to have been made that Director is
entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding commenced pursuant to this Section 10,
or otherwise, unless Director knowingly misrepresented a material fact in
connection with the request for indemnification, or such indemnification is
prohibited by law.
The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 10 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Corporation is bound by all provisions of
this Agreement. In the event that Director, pursuant to this Section 10, seeks
a judicial adjudication to enforce his or her rights under, or to recover
damages for breach of, this Agreement, Director shall be entitled to recover
from the Corporation, and shall be indemnified by the Corporation against, any
and all Expenses actually and reasonably incurred by him or her in such
judicial adjudication, but only if he or she prevails therein. If it shall be
determined in such judicial adjudication that Director is entitled to receive
part but not all of the indemnification or advancement of Expenses sought, the
Expenses incurred by Director in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
Section 11. Non-Exclusivity. The rights of indemnification and
to receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Director may at any time be
entitled under applicable law, the Certificate of Incorporation, Bylaws, a vote
of stockholders, a resolution of the Board of Directors or otherwise. No
amendment or modification of this Agreement or any provision hereof shall be
effective as to any Director for acts, events and circumstances that occurred,
in whole or in part, before such amendment or modification. The provisions of
this Agreement shall continue as to an Director whose status as a director of
the Corporation has ceased and shall inure to the benefit of his or her heirs,
executors and administrators.
Section 12. Insurance and Subrogation. To the extent the
Corporation maintains an insurance policy or policies providing liability
insurance for directors or officers of the Corporation or of any other
corporation, partnership, joint venture, trust employee benefit plan or other
enterprise which such person serves at the request of the Corporation,
Directors shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of coverage available for any such director
or officer under such policy or policies.
In the event of any payment hereunder, the Company shall be subrogated
to the extent of such payment to all the rights of recovery of Director, who
shall execute all papers required and take all action necessary to secure such
rights, including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.
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<PAGE> 6
The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if, and to the extent
that, Director has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
Section 13. Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby; and, to the
fullest extent possible, the provisions of this Agreement shall be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
Section 14. Circumstances When Director is Not Entitled to
Indemnification. Notwithstanding any other provision of this Agreement,
Director shall not be entitled to indemnification or advancement of Expenses
under this Agreement with respect to any Proceeding, or any Matter therein,
brought or made by Director against the Corporation.
Section 15. Notices. Any communication required or permitted to
the Corporation shall be addressed to the Secretary of the Corporation and any
such communication to Director shall be given in writing by depositing the same
in the United States mail, with postage thereon prepaid, addressed to the
person to whom such notice is directed at the address of such person on the
records of the Corporation, and such notice shall be deemed given at the time
when the same shall be so deposited in the United States mail.
Section 16. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE.
Section 17. Consent to Jurisdiction. THE CORPORATION AND
DIRECTOR EACH HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF THE COURTS OF
THE STATE OF DELAWARE FOR ALL PURPOSES IN CONNECTION WITH ANY ACTION OR
PROCEEDING WHICH ARISES OUT OF OR RELATES TO THIS AGREEMENT AND AGREE THAT ANY
ACTION INSTITUTED UNDER THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE
COURTS OF THE STATE OF DELAWARE.
Section 18. Amendment. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless made in a writing
signed by each of the parties hereto.
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<PAGE> 7
IN WITNESS WHEREOF, the Company and Director have executed this
Agreement as of the day and year first above written.
TOREADOR ROYALTY CORPORATION
By:___________________________________
Peter R. Vig
Chairman and Chief Executive Officer
______________________________________
(Name of Director)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TOREADOR
ROYALTY CORPORATION UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDING JUNE
30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE
QUARTER ENDING JUNE 30, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,217,593
<SECURITIES> 635,040
<RECEIVABLES> 219,645
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,142,118
<PP&E> 4,129,825
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<PAGE> 1
EXHIBIT 99
FOR IMMEDIATE RELEASE
May 23, 1995
TOREADOR STOCKHOLDERS OVERWHELMINGLY
APPROVE MANAGEMENT'S SLATE OF DIRECTORS
70% of stockholder vote
is cast for management's
slate of directors
DALLAS, May 23 -- Toreador Royalty Corporation (NASDAQ: TRGL) announced today
that stockholders voted to approve management's recommended slate of directors,
as well as the provision for directors' stock options.
A Boston-based group representing 15.7 percent of Toreador's outstanding common
stock had submitted a competing slate of directors in an attempt to take
control of the company. At Toreador's annual stockholder meeting on May 18,
final votes were cast. Election judges reported the official results late
yesterday afternoon.
Toreador's existing board received approximately 2.8 million, or 70 percent, of
the approximately 4 million votes cast, or 53 percent of the total outstanding
stock. The competing slate of directors received approximately 1.1 million, or
27 percent, of the votes cast, or 20 percent of the outstanding stock.
Excluding the shares it controls, the committee's slate of directors gained
only 6 percent of the vote or approximately 5 percent of the total outstanding
stock. The provision for directors' stock options passed with approximately
2.5 million votes for and approximately 1.3 million votes against the
provision, with 266,254 votes abstaining.
Peter Vig, chairman and president, said "We are pleased that stockholders gave
a solid vote of confidence to management and the board. We are fortunate to
have a board of directors with a breadth and depth of capabilities that would
be the envy of companies much larger than Toreador."
"We are also gratified that stockholders voted in support of our philosophy of
proactive management of our 530,000 net mineral acres. We intend to continue
aggressively pursuing the exploration of our land, which is very lightly
explored in comparison to its potential," Vig noted.
Toreador owns in excess of 530,000 net mineral acres located primarily in the
Texas Panhandle and West Texas. In addition, the Company owns working or
royalty interests in Texas, New Mexico, Oklahoma, Arkansas and Louisiana.
Toreador's Common Stock is traded in the NASDAQ market under the symbol "TRGL".
Contact: Peter R. Vig, Chairman
James S. Blair, Vice President
214/369-0080
