<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. )
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 Section 240.14a-11(c) or Section
240.14a-12
TOREADOR ROYALTY CORPORATION
(Name of Registrant as Specified In Its Charter)
TOREADOR ROYALTY CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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> 2
TOREADOR ROYALTY CORPORATION
530 Preston Commons West
8117 Preston Road
Dallas, Texas 75225
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 16, 1996
To the Stockholders of Toreador Royalty Corporation:
The Annual Meeting of Stockholders of Toreador Royalty Corporation, a
Delaware corporation (the "Company"), will be held on May 16, 1996, at 10:00
a.m., Dallas, Texas time, in the 36th floor conference center of Thompson &
Knight, P.C., at 1700 Pacific Avenue, Dallas, Texas, for the following
purposes:
(1) To elect seven directors, each to serve until the next annual
meeting of stockholders and until his successor shall be
elected and qualified; and
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 11,
1996, are entitled to notice of and to vote at the meeting or any adjournment
thereof.
A record of the Company's activities and consolidated financial
statements for the year ended December 31, 1995, are contained in the enclosed
1995 Annual Report.
Dated: April 19, 1996
By Order of the Board of Directors,
Peter R. Vig
Chairman of the Board
________________________
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE MARK,
SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING
ENVELOPE. IF YOU DO ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON. THE PROMPT RETURN OF PROXIES WILL INSURE A QUORUM AND SAVE
THE COMPANY THE EXPENSE OF FURTHER SOLICITATION.
<PAGE> 3
TOREADOR ROYALTY CORPORATION
530 Preston Commons West
8117 Preston Road
Dallas, Texas 75225
PROXY STATEMENT
For Annual Meeting Of Stockholders
To Be Held On May 16, 1996
GENERAL
The accompanying proxy is solicited by the Board of Directors of
Toreador Royalty Corporation (the "Company") for use at the Annual Meeting of
Stockholders of the Company to be held on May 16, 1996, at 10:00 a.m., Dallas,
Texas time in the 36th floor conference center of Thompson & Knight, P.C., at
1700 Pacific Avenue, Dallas, Texas. The approximate date on which the proxy
statement and form of proxy are being sent to stockholders is April 19, 1996.
The cost of soliciting proxies will be borne by the Company. The
Company has retained Corporate Investor Communications, Inc., a proxy
solicitation firm in Carlstadt, New Jersey, to solicit proxies from brokers,
banks, nominees, institutional holders and individual holders for use at the
meeting at a fee of approximately $2,500 plus certain expenses. In addition,
the Company may use its officers and employees (who will receive no special
compensation therefor) to solicit proxies in person or by telephone, facsimile
or similar means. The Company will reimburse brokers or other persons holding
stock in their names or in the names of their nominees for their charges and
expenses in forwarding proxies and proxy materials to the beneficial owners of
such stock.
PROXIES
Shares represented by a proxy in the accompanying form, duly signed,
dated and returned to the Company and not revoked, will be voted at the meeting
in accordance with the directions given. If no direction is given, shares will
be voted for the election of the nominees for directors named in the
accompanying form of proxy and for the other proposals set forth in the notice.
Any stockholder returning a proxy may revoke it at any time before it has been
exercised by giving written notice of such revocation to the Secretary of the
Company, by filing with the Company a proxy bearing a subsequent date or by
voting in person at the meeting. The Board knows of no other business to come
before the meeting, but if other matters properly come before the meeting, the
persons named in the proxy intend to vote thereon in accordance with their best
judgment.
VOTING PROCEDURES AND TABULATION
The Company will appoint one or more inspectors of election to act at
the meeting and to make a written report thereof. Prior to the meeting, the
inspectors will sign an oath to perform their duties in an impartial manner and
to the best of their abilities. The inspectors will ascertain the number of
shares outstanding and the voting power of each of the shares, determine the
shares represented at the meeting and the validity of proxies and ballots,
count all votes and ballots and perform certain other duties as required by
law.
The inspectors will tabulate the number of votes cast for or withheld
as to the vote on each nominee for director. Under Delaware law and the
Company's Certificate of Incorporation and Bylaws, abstentions and broker non-
votes will have no effect on the voting on the election of directors, provided
a quorum is present, because directors are elected by a plurality of the shares
of Common Stock present in person or by proxy at the meeting and entitled to
vote. Under the rules of the Nasdaq National Market, brokers who hold stock in
street name have the authority to vote on certain routine matters when they
have not received instructions from beneficial owners. Brokers that do not
receive instructions are entitled to vote on the election of directors.
<PAGE> 4
VOTING SECURITIES
The only voting security of the Company outstanding is its Common
Stock, par value $.15625 per share. Only the holders of record of Common Stock
at the close of business on April 11, 1996, the record date for the meeting,
are entitled to notice of and to vote at the meeting. As of March 17, 1996,
there were 5,264,446 shares of Common Stock outstanding and entitled to be
voted at the meeting. A majority of such shares, present in person or by
proxy, is necessary to constitute a quorum. Each share of Common Stock is
entitled to one vote.
ELECTION OF DIRECTORS
The business and affairs of the Company are managed by the Board of
Directors, which exercises all corporate powers of the Company and establishes
broad corporate policies. The Bylaws of the Company provide that the Board
will consist of not less than seven nor more than 15 directors, with the actual
number determined from time to time by resolution of the Board. The Board has
fixed the number at seven. At the meeting seven directors will be elected.
Directors are elected by plurality vote, and cumulative voting is not
permitted. All duly submitted and unrevoked proxies will be voted for the
nominees for director selected by the Board, except where authorization so to
vote is withheld. If any nominee should become unavailable for election for
any presently unforeseen reason, the persons designated as proxies will have
full discretion to vote for another person designated by the Board. Proxies
cannot be voted for a greater number of persons than the number of nominees for
the office of director named herein. Directors are elected to serve until the
next annual meeting of stockholders and until their successors have been
elected and qualified.
The seven nominees of the Board of Directors are named below. Each
has consented to serve as a director, if elected. The table below sets forth
information with respect to the nominees. All of the nominees are presently
directors of the Company and were elected as directors at the 1995 annual
meeting. Each has served continuously as a director since the date of his
first election to the Board in the year indicated.
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<PAGE> 5
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NOMINEE AGE DURING PAST FIVE YEARS SINCE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Donald E. August 53 Director and Executive Vice President of Frontier 1990
(1)(4)(5) Capital Management Co., an investment advisory
firm, since 1981
John V. Ballard 71 Private investor since 1984; prior to 1984, 1987
(1)(2)(3) President, Tribune Oil Corporation, a public oil
production and exploration company
J. W. Bullion 82 Of Counsel, Thompson & Knight, P.C., Dallas, Texas 1986
(2) since 1983; prior to 1983, a partner in the firm;
Secretary of the Company
Thomas P. Kellogg, Jr. 60 Director of Crusader Limited, an Australian oil and 1992
(2)(4) gas company; private investor since 1992; 1990 and
1991, consultant for Ensign Oil & Gas, Inc.; 1960
to 1990, Vice President of J. P. Morgan & Co., a
commercial and investment bank
John Mark McLaughlin 65 Attorney, San Angelo, Texas 1976
(1)(2)(3)(4)
Peter R. Vig 55 Chairman of the Board, Chief Executive Officer, 1988
(1)(4) President and Treasurer of the Company; initially
Vice President-Acquisition, then Sr. Vice President
and Chief Financial Officer, Sabine Corp., Dallas,
Texas from 1983 to 1988; prior to 1983, President
and Chief Operating Officer, Cambridge Royalty Co.,
Houston, Texas
Jack L. Woods 66 Consulting geologist since 1987; prior to 1987, 1991
(2)(3)(5) Vice President of Exploration -- Gulf Coast,
Celeron Oil and Gas Corporation
</TABLE>
_______________
(1) Member of executive committee
(2) Member of audit committee
(3) Member of compensation committee
(4) Member of finance committee
(5) Member of exploration committee
There is no family relationship between any of the nominees or between
any nominee and any executive officer of the Company.
The executive officers of the Company consist of Mr. Peter R. Vig,
Chairman of the Board, Chief Executive Officer, President and Treasurer; Mr.
James S. Blair, Vice President -- Land and Acquisitions; and Mr. J. W. Bullion,
Secretary. Mr. Blair, 44, was appointed as a Vice President in January 1990,
having been a consultant to the Company since March 1989. Prior to March 1989,
he was employed as the Vice President of Business Development for Germany Oil
Company, Dallas, Texas, where he managed the acquisition of oil and gas
properties. Prior to 1988, he was employed in the business development
department of Tenneco Oil Company, Houston, Texas, where he evaluated potential
oil and gas property acquisitions. Mr. Bullion has served as Secretary since
1987.
-3-
<PAGE> 6
As permitted by the bylaws of the Company, the Board has designated
from its members, an executive committee, an audit committee and a compensation
committee. The executive committee is empowered to act in lieu of the Board in
the management of the Company subject to certain limitations. The audit
committee reviews the scope, plan and results of the annual audit with the
independent auditors; reviews each professional service provided by the
independent auditors; considers the independence of the auditors; and reviews
all non-audit fees paid to the independent auditors. The compensation
committee reviews and approves the compensation and benefit plans for all
employees of the Company.
The audit committee met once and the compensation committee met twice
in 1995. In addition, there were four regularly scheduled meetings of the
Board of Directors of the Company and three special meetings of the Board, two
of which were by means of telephone conference, in 1995. All directors
attended at least 75% of such meetings.
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<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 17, 1996 the beneficial
ownership of Common Stock of the Company (the only equity securities of the
Company presently outstanding) by (i) each director and nominee for director of
the Company, (ii) each person who was known to the Company to be the beneficial
owner of more than five percent of the outstanding shares of Common Stock and
(iii) directors and executive officers of the Company as a group. Peter R.
Vig, Chairman of the Board, Chief Executive Officer and a Director of the
Company, is the only "named executive officer" listed in the Summary
Compensation Table appearing in this Proxy Statement.
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
---------------------------------------------------
Number Percent of
of Shares Class
-------------- --------------
<S> <C> <C>
Name
- ----
DIRECTORS
Donald E. August . . . . . . . . . . . . . . . . . . 20,333 (1) *
John V. Ballard . . . . . . . . . . . . . . . . . . . 88,333 (1) 1.67% (1)
J. W. Bullion . . . . . . . . . . . . . . . . . . . . 28,257 (1) *
Thomas P. Kellogg, Jr. . . . . . . . . . . . . . . . 7,733 (2) *
John Mark McLaughlin . . . . . . . . . . . . . . . . 253,869 (1) 4.81% (1)
Peter R. Vig . . . . . . . . . . . . . . . . . . . . 335,566 (3) 6.11% (3)
Jack L. Woods . . . . . . . . . . . . . . . . . . . . 20,333 (1) *
BENEFICIAL OWNER OF 5% OR MORE (EXCLUDING PERSONS
NAMED ABOVE)
Peter L. Falb, Edward Nathan Dane, 840,500 (4) 15.97% (4)
Firethorn I Limited Partnership and
Dane, Falb, Stone & Co., Inc.
c/o Peter L. Falb
33 Broad Street
Boston, Massachusetts 02109
ALL DIRECTORS AND OFFICERS AS A GROUP OF 8 809,257 (5) 14.41% (5)
</TABLE>
- -----------------------------
*Less than one percent
(1) Includes 13,333 shares of Common Stock with respect to which such
person has the right to acquire beneficial ownership upon exercise of
currently exercisable options (the percentage is calculated on the
basis that such shares are deemed outstanding).
(2) Includes 6,733 shares of Common Stock with respect to which Mr.
Kellogg has the right to acquire beneficial ownership upon exercise of
currently exercisable options (the percentage is calculated on the
basis that such shares are deemed outstanding).
(3) Includes 226,666 shares of Common Stock with respect to which Mr. Vig
has the right to acquire beneficial ownership upon exercise of
currently exercisable options (the percentage is calculated on the
basis that such shares are deemed outstanding).
-5-
<PAGE> 8
(4) Based on the most recent amendment to a Schedule 13D dated May 9, 1995
and filed with the Securities and Exchange Commission, these shares
are held as follows: Mr. Falb has sole voting and dispositive power
with respect to 111,000 shares and shared voting and dispositive power
with respect to 729,500 shares; Mr. Dane has shared voting and
dispositive power with respect to 729,500 shares; Firethorn I Limited
Partnership has sole voting and dispositive power with respect to
187,000 shares; and Dane, Falb, Stone & Co., Inc. has sole voting and
dispositive power with respect to 541,700 shares and shared voting and
dispositive power with respect to 800 shares. The group disclosed in
the Schedule 13D, as amended, that although there is no written or
oral agreement between any of the reporting persons with respect to
the voting and/or disposition of the shares reported on this schedule,
it is anticipated that all reporting persons, acting through Mr. Dane
and Mr. Falb, will vote all shares in the same manner and may (or may
not) make dispositive decisions in the same manner.
(5) Includes 73,398 shares of Common Stock which are subject to stock
options currently exercisable by the seven directors other than Mr.
Vig, 226,666 shares of Common Stock which are subject to stock options
currently exercisable by Mr. Vig, 53,333 shares of Common Stock which
are subject to a stock option currently exercisable by Mr. James S.
Blair, Vice President of Land and Acquisitions and 1,500 shares of
Common Stock which are otherwise owned directly by Mr. Blair.
Except as otherwise indicated, all shares shown in the above table are
owned directly and the holder thereof has sole voting and investment powers
with respect to such shares.
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<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS
SUMMARY COMPENSATION TABLE
The following table sets forth summary information regarding the
compensation awarded to, covered by or paid to Peter R. Vig, the Chairman of
the Board, Chief Executive Officer, President and Treasurer of the Company.
Mr. Vig is the only officer of the Company whose total compensation earned
during fiscal 1995 exceeded $100,000.
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
---------------------------------- ---------------------- -------
Other
Annual Restricted Securities All Other
Name and Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options/ Payouts sation
Position Year Salary ($) Bonus ($) ($) ($) SARs (#) ($) ($)
- --------- ---- ---------- --------- --------- --------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter R. Vig, 1995 200,000 -- -- -- -- -- 3,500(1)
Chairman of 1994 200,000 -- -- -- 50,000 -- --
the Board 1993 184,000 9,000 -- -- -- -- --
</TABLE>
(1) In his capacity as Chairman of the Board, Mr. Vig received
compensation for services provided as a director. See "Compensation
of Directors."
During fiscal 1995, Mr. Vig was not granted any stock options. The
following table summarizes the number and value of options exercised during
1995, as well as the number and value of unexercised options, as of December
31, 1995, held by Mr. Vig.
AGGREGATED OPTION EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTION VALUE
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)(1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- --------------------- ----------------- -------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Peter R. Vig -- -- 260,000 shares/ --
33,334 shares
</TABLE>
- ----------------------
(1) The high sales price per share on December 31, 1995 was $2.75 as
reported by the Nasdaq National Market.
-7-
<PAGE> 10
PENSION BENEFITS
The following table shows the annual pension benefits which would be
payable under the Company's retirement plan for retirement at age 65 for
various levels of final average annual pay and years of service. As of
December 31, 1995, Mr. Vig had 7.4 credited years of service under the
retirement plan.
<TABLE>
<CAPTION>
ANNUAL BENEFITS FOR YEARS OF SERVICE (1)
------------------------------------------------------------------------------
FINAL AVERAGE PAY (2) 5 10 15 20 25
- --------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$100,000 . . . . . . . . $ 23,550 $ 47,100 $ 70,650 $ 80,070 $ 80,070
150,000 . . . . . . . . 32,250 70,650 105,975 120,105 120,105
200,000 . . . . . . . . 47,100 94,200 141,300 160,140 160,140
</TABLE>
__________________________
(1) Benefits are based on the average of the last five consecutive years
of service of the participant. After two years of service, a
participant has a 20% vested interest in accrued benefits, and an
additional 20% vests each subsequent year. Accrued benefits are the
product of a participant's benefit at age 65 multiplied by the number
of years of completed service divided by the total number of years of
service at age 65. Benefits are computed on the basis of straight
life annuity amounts and are not subject to deduction for Social
Security or other offset amounts.
(2) The pension benefits accruing to the participant are based on total
compensation, even if it exceeds the limitation imposed by the
Internal Revenue Code of 1986, as amended (the "Code"). Under Section
401 of the Code, the highest annual salary on which benefits can be
calculated is $150,000 for 1994 and 1995.
EMPLOYMENT AGREEMENT AND OTHER CHANGE OF CONTROL ARRANGEMENTS
In 1988, the Company entered into an employment agreement with Mr. Vig
pursuant to which he has been employed to serve as the Chairman of the Board
and the Chief Executive Officer of the Company. The agreement, which has been
amended since 1988, expires December 31, 1996 and provides Mr. Vig with an
annual salary of $200,000 a year. The agreement provides for a lump sum
severance payment equal to the total salary which is payable over the remaining
term of the agreement or $200,000, whichever is larger, if Mr. Vig is
discharged by the Company without cause. If Mr. Vig resigns for cause, the
agreement further provides for a lump sum severance payment of $400,000.
Resignation following a change in control of the Company constitutes a
resignation with cause. Under the employment agreement a change in control is
deemed to have occurred, among other occurrences, if any person or group, other
than a director or officer of the Company on the date of the agreement, becomes
the beneficial owner of securities of the Company representing 25% or more
combined voting power of all outstanding securities as a passive investor
without board or other representation; if any person or group in any other
capacity becomes the beneficial owner of securities representing 15% or more of
the combined voting power of the Company's outstanding securities in a
transaction which is not approved in advance by the Board; or if and when
during any period of 24 consecutive months, individuals who at the beginning of
such 24-month period were directors for whom Mr. Vig had voted cease for any
reason to constitute at least a majority of the Board. The Company believes
that, for purposes of the employment agreement, a change in control occurred
upon the filing by Dane, Falb, Stone & Co., Inc. and others of the Schedule 13D
referred to above in the table under the heading, "Security Ownership of
Certain Beneficial Owners and Management." Under the employment agreement, if
Mr. Vig resigns before December 31, 1996, his resignation shall be deemed "with
cause" entitling him to a lump sum severance payment. Mr. Vig presently has no
intention to exercise his rights under the employment agreement.
The Company's 1990 Stock Option Plan contains certain "changes in
control" provisions which are applicable to options issued under this plan,
including the options held by Peter R. Vig. Such provisions include
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<PAGE> 11
the following: In the event of: (i) a dissolution or liquidation of the
Company, (ii) a sale of all or substantially all of the Company's assets, (iii)
a merger or consolidation in which the Company is not the surviving corporation
or (iv) a transaction in which another corporation becomes the owner of 50% or
more of the outstanding Common Stock, then every outstanding option granted
under the plan shall terminate; provided, however, the holders of each such
outstanding option shall have the right immediately prior to such dissolution,
liquidation, sale of assets, merger, consolidation or transaction to exercise
any unexercised options that have not at that time expired or have been
terminated without regard to any vesting periods under the holder's option
agreement. Further, the Stock Option Committee may, in its sole and absolute
discretion, accelerate the time of exercisability of any option that has been
granted.
In April 1995, the Stock Option Committee authorized an amendment to
an Incentive Stock Option Agreement between Peter R. Vig and the Company
pursuant to which Mr. Vig was granted an option to purchase 50,000 shares of
Common Stock at an exercise price of $3.25 per share (the "Incentive Option").
The terms of the amendment as set forth in a Letter Agreement dated May 15,
1995, provide that upon the occurrence of a "change in control" of the Company,
the maturity of the Incentive Option shall be accelerated automatically, so
that the Incentive Option shall become exercisable in full with respect to all
shares as to which the Incentive Option shall not have previously been
exercised or become exercisable; provided that no such acceleration shall occur
with respect to the Incentive Option if Mr. Vig's employment with the Company
shall have terminated prior to the occurrence of such "change in control". A
"change in control" includes certain mergers, consolidations, reorganizations,
sales of assets or a dissolution of the Company; a change in the majority of
the Board of Directors; or the acquisition by a stockholder of 20% or more of
the Common Stock of the Company.
The Company's Bylaws, as amended, provide for mandatory
indemnification of and advancement of expenses to directors and officers,
including former directors and officers, of the Company in circumstances
involving a "change in control." The Company has entered into separate
agreements with its directors embodying and expanding upon these
indemnification provisions in accordance with the Delaware General Corporation
Law.
COMPENSATION OF DIRECTORS
Directors of the Company are each paid an annual retainer of $2,000,
plus $500 for each regularly scheduled Board of Directors meeting they attend
and are reimbursed for reasonable travel expenses. In addition, each Board
member that attended the special meeting of the Board on June 29, 1995 was paid
$500 plus reasonable travel expenses.
On May 24, 1991, the Board of Directors authorized the Company to
enter into a stock option agreement with each non-employee director of the
Company, subject to stockholder approval within one year of the date of grant
of the option. The agreements were approved by the Company's stockholders at
the Annual Meeting of Stockholders held on May 22, 1992. Identical agreements
were entered into with Donald E. August, John V. Ballard, J. W. Bullion, John
Mark McLaughlin and Jack L. Woods. At the time, Mr. Kellogg was not a
director. Each agreement granted an option to purchase 10,000 shares of Common
Stock at a price of $3.625 per share, exercisable during the period commencing
May 22, 1992 and ending May 24, 2001, subject to certain conditions. On
February 17, 1994, the Company granted Mr. Kellogg an option to purchase 10,000
shares of Common Stock at a price of $3.625 per share, exercisable until
February 17, 2004, subject to certain conditions.
On September 8, 1994, the Board adopted the 1994 Non-Employee Director
Stock Option Plan (the "1994 Plan"), pursuant to which each non-employee
director was, and each newly elected non-employee director is, granted an option
to purchase 10,000 shares of Common Stock subject to shareholder approval. The
1994 Plan was approved by the Company's stockholders at the Annual Meeting of
Stockholders held on May 18, 1995. As a result, the Company's non-employee
directors at the time - including Messrs. August, Ballard, Bullion, Kellogg,
McLaughlin and Woods - each received options to purchase 10,000 shares of
Common Stock at $3.50 per share. The options under the 1994 Plan are granted
at fair market value on the grant date and become exercisable, subject to
certain conditions, in three equal annual installments on the first three
anniversaries of the grant date and terminate ten years from the grant date
unless terminated sooner as a result of the death or termination of
directorship of the holder thereof.
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<PAGE> 12
The 1994 Plan provides for accelerated vesting of options granted in
certain instances constituting a "change in control." Upon the occurrence of a
"change in control" of the Company, the maturity of the option shall be
accelerated automatically so that the option shall become exercisable in full
with respect to all shares as to which the option shall not have previously
been exercised or become exercisable; provided that no such acceleration shall
occur with respect to the option if a director ceases to be a member of the
Board of Directors prior to the occurrence of such "change in control." A
"change in control" includes mergers, consolidations, reorganizations, sales of
assets or a dissolution of the Company; a change in the majority of the
Board of Directors; or the acquisition by a stockholder of 20% or more of the
Common Stock of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Bullion, a director and executive officer of the Company, is of
counsel to Thompson & Knight, a Professional Corporation, a Dallas, Texas law
firm that has been retained by the Company as its corporate counsel.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires directors and officers of
the Company, and persons who own more than 10 percent of the Common Stock, to
file with the SEC initial reports of ownership and reports of changes in
ownership of the Common Stock. Directors, officers and more than 10 percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1995, all Section
16(a) filing requirements applicable to its directors and officers were
complied with, except that the Statement of Changes in Beneficial Ownership on
Form 4 of James S. Blair, an executive officer, for March 1995, and the Annual
Statement of Beneficial Ownership of Securities on Form 5 for the non-employee
directors with respect to the options granted under the 1994 Plan, and Peter R.
Vig and James S. Blair with respect to incentive options granted under the 1990
Stock Option Plan, were inadvertently filed late.
AUDITORS
Price Waterhouse LLP, which has served as the Company's independent
public accountants since 1988, has been selected to audit the financial
statements of the Company for the year ended December 31, 1996. This selection
will not be submitted to stockholders for ratification or approval. The
representatives of Price Waterhouse LLP are expected to be present at the
meeting to respond to appropriate questions from the stockholders and will be
given the opportunity to make a statement should they desire to do so.
STOCKHOLDERS' PROPOSALS
It is contemplated that the 1997 Annual Meeting of Stockholders of the
Company is scheduled to take place May 15, 1997. Stockholder proposals for
inclusion in the Company's proxy materials for the 1997 Annual Meeting of
Stockholders must be received by the Company at its offices in Dallas, Texas,
addressed to the Secretary of the Company, not less than 60 days, and not more
than 120 days, in advance of such meeting.
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<PAGE> 13
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Annual Report of the Company for its fiscal year ended December
31, 1995 accompanies this Proxy Statement. The audited financial statements of
the Company are included in the Annual Report.
By Order of the Board of Directors,
Peter R. Vig
Chairman of the Board
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<PAGE> 14
TOREADOR ROYALTY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter R. Vig and James S. Blair, and
either of them, proxies with power of substitution in each, and hereby
authorizes them to represent and to vote, as designated below, all shares of
Common Stock of Toreador Royalty Corporation standing in the name of the
undersigned on April 11, 1996, at the annual meeting of stockholders to be held
on May 16, 1996 at 10:00 a.m. at Dallas, Texas, and at any adjournment thereof
and especially to vote on the items of business specified below, as more fully
described in the notice of the meeting dated April 19, 1996, and the proxy
statement accompanying the same, receipt of which is hereby acknowledged.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed below [ ]
DONALD E. AUGUST JOHN V. BALLARD J. W. BULLION THOMAS P. KELLOGG, JR.
JOHN MARK MCLAUGHLIN PETER R. VIG JACK L. WOODS
(INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee's name in the space
provided below.)
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2. In their discretion, the proxies are authorized to vote upon such other
business or matters as may properly come before the meeting or any
adjournment thereof.
(continued and to be signed on reverse side)
</TABLE>
<PAGE> 15
THIS PROXY, WHEN DULY EXECUTED AND RETURNED, WILL BE VOTED IN THE MANNER
DESIGNATED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF THIS PROXY IS DULY
EXECUTED AND RETURNED, BUT WITHOUT A CLEAR VOTING DESIGNATION, IT WILL BE VOTED
FOR THE ELECTION TO THE BOARD OF DIRECTORS OF THE NOMINEES LISTED ON THIS PROXY
AND, IN THE DISCRETION OF THE PROXIES, ANY OTHER BUSINESS.
The undersigned hereby revokes any proxy or proxies heretofore given to
represent or vote such Common Stock and hereby ratifies and confirms all
actions that said proxies, their substitutes, or any of them, may lawfully take
in accordance with the terms hereof.
<TABLE>
<S> <C>
DATED: , 1996
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Signature(s) of Stockholder(s)
This proxy should be signed exactly as your name
appears hereon. Joint owners should both sign. If
signed as attorney, executor, guardian or in some
other representative capacity, or as officer of a
corporation, please indicate your capacity or title.
Please complete, date and sign this proxy and return it in the enclosed envelope, which requires no postage if mailed in the
United States.
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