<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 sec. 240.14a-11(c) or sec. 240.14a-12
TOREADOR ROYALTY CORPORATION
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(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(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.:
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(3) Filing Party:
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(4) Date Filed:
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<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 15, 1997
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 15, 1997, 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 10, 1997,
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, 1996, are contained in the enclosed
1996 Annual Report.
Dated: April 18, 1997
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 15, 1997
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 15, 1997, 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 18, 1997.
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 10, 1997, the record date for the meeting, are
entitled to notice of and to vote at the meeting. As of March 17, 1997, there
were 5,138,271 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 1996 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 54 Director and Executive Vice President of 1990
(1)(4)(5) Frontier Capital Management Co., an investment
advisory firm, since 1981
John V. Ballard 72 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 83 Of Counsel, Thompson & Knight, P.C., Dallas, 1986
(2) Texas since 1983; prior to 1983, a partner in
the firm; Secretary of the Company
Thomas P. Kellogg, Jr. 61 Director of Triton Energy Limited, an 1992
(2)(4) international exploration and production
company; Director of Reef Chemical Company, an
oil field chemical company; consultant and
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 66 Attorney and rancher, San Angelo, Texas 1976
(1)(2)(3)(4)
Peter R. Vig 56 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 67 Consulting geologist since 1987; prior to 1987, 1991
(2)(3)(5) Vice President of Exploration -- Gulf Coast,
Celeron Oil and Gas Corporation
</TABLE>
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(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; and
Mr. J. W. Bullion, Secretary. Mr. Bullion has served as Secretary since 1987.
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
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<PAGE> 6
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
1996. In addition, there were four regularly scheduled meetings of the Board
of Directors of the Company in 1996. 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, 1997 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
---------- -----------
Name
----
<S> <C> <C> <C> <C>
Directors
Donald E. August . . . . . . . . 23,666 (1) *
John V. Ballard . . . . . . . . . 91,666 (1) 1.78% (1)
J. W. Bullion . . . . . . . . . . 31,590 (1) *
Thomas P. Kellogg, Jr. . . . . . 17,666 (1) *
John Mark McLaughlin . . . . . . 270,535 (1) 5.25% (1)
Peter R. Vig . . . . . . . . . . 348,232 (2) 6.47% (2)
Jack L. Woods . . . . . . . . . . 23,666 (1) *
Beneficial owner of 5% or more
(excluding persons named above)
Peter L. Falb, Edward Nathan 696,800 (3) 13.56% (3)
Dane, Firethorn I Limited
Partnership and Dane, Falb,
Stone & Co., Inc.
c/o Peter L. Falb
33 Broad Street
Boston, Massachusetts 02109
Wellington Management Company, 509,100 (4) 9.91% (4)
LLC
75 State Street
Boston, Massachusetts 02109
All directors and officers as a 807,021 (5) 14.72% (5)
group of 7
</TABLE>
- -----------------------------
*Less than one percent
(1) Includes 16,666 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 243,332 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).
(3) Based on the most recent amendment to a Schedule 13D dated August 16,
1996 and filed with the Securities and Exchange Commission, these shares
are held as follows: Mr. Falb has sole voting and dispositive power
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<PAGE> 8
with respect to 111,000 shares and shared voting and dispositive power
with respect to 585,800 shares; Mr. Dane has shared voting and
dispositive power with respect to 585,800 shares; Firethorn I Limited
Partnership has sole voting and dispositive power with respect to
188,000 shares; and Dane, Falb, Stone & Co., Inc. has sole voting and
dispositive power with respect to 396,000 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.
(4) Based on a Schedule 13G dated January 15, 1997 and filed with the
Securities and Exchange Commission, these shares are held of record by
clients of Wellington Management Company, LLC ("WMC"), and WMC may be
deemed beneficially to own these shares in its capacity as investment
adviser. Based on the Schedule 13G, WMC has shared voting power with
respect to 150,000 shares and shared dispositive power with respect to
509,000 shares. WMC disclosed in the Schedule 13G that none of its
clients is known to have the right to receive, or the power to direct
the receipt of, dividends from, or the proceeds from the sale of, the
Common Stock, with respect to more than 5% of the Common Stock, except
for The Government of Singapore Investment Corporation Pte. Ltd.
(5) Includes 99,996 shares of Common Stock which are subject to stock
options currently exercisable by the seven directors other than Mr. Vig,
and 243,332 shares of Common Stock which are subject to stock options
currently exercisable by Mr. Vig.
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, 1996 200,000 -- -- -- -- -- 30,709(1)
Chairman of 1995 200,000 -- -- -- -- -- 3,500(2)
the Board 1994 200,000 -- -- -- 50,000 -- --
</TABLE>
- ---------------
(1) In 1996 this amount consisted of (a) $26,709 of term life insurance
premiums and (b) $4,000 in compensation for services provided as a
director.
(2) In 1995 this amount consisted of $3,500 in compensation for services
provided as a director.
During fiscal 1996, Mr. Vig was not granted any stock options. The
following table summarizes the number and value of options exercised during
1996, if any, as well as the number and value of unexercised options, as of
December 31, 1996, held by Mr. Vig.
AGGREGATED OPTION EXERCISES IN 1996 AND DECEMBER 31, 1996 OPTION VALUE
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($) (1)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
-------------------- ----------------- ------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Peter R. Vig -- -- 243,332 shares/ --
16,668 shares
</TABLE>
- ---------------------
(1) The high sales price per share on December 31, 1996 was $2.625 as
reported by the Nasdaq National Market.
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<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, 1996, Mr. Vig had 8.4 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 1995 and 1996.
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, 1997 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 for 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'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 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
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<PAGE> 11
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.
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.
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
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<PAGE> 12
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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1996, all Section
16(a) filing requirements applicable to its directors and officers were
complied with.
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, 1997. 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 21, 1998. Stockholder proposals for
inclusion in the Company's proxy materials for the 1998 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.
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Annual Report of the Company for its fiscal year ended December 31,
1996 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> 13
TOREADOR ROYALTY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter R. Vig proxy with power of
substitution, and hereby authorizes him 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 10, 1997, at the annual meeting of
stockholders to be held on May 15, 1997 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 18, 1997, 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
</TABLE>
(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 his discretion, the proxy is 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)
<PAGE> 14
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 PROXY, 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 proxy, his substitutes, or any of them, may lawfully take in
accordance with the terms hereof.
DATED: , 1997
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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.
