DEF 14A 1 proxy.txt TEXAS VANGUARD OIL COMPANY 9811 Anderson Mill Road Suite 202 Austin, Texas 78750 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO THE SHAREHOLDERS: NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of TEXAS VANGUARD OIL COMPANY, a Texas Corporation, will be held at 9811 Anderson Mill Road, Austin, Texas, on Thursday, June 13, 2002, at 10:00 A.M., local time, for the purpose of taking action on: 1. The election of three (3) directors to serve until the next Annual Meeting of Shareholders, and until their successors shall be duly elected and qualified; 2. To ratify the appointment of Sprouse & Anderson, L.L.P., as independent public auditors of the Company for the fiscal year ending December 31, 2001; and 3. To transact such other business as may properly come before the meeting or any adjournment thereof. Stockholders of record at the close of business on April 23, 2002, are entitled to notice and to vote at this meeting and any adjournments thereof. BY ORDER OF THE BOARD OF DIRECTORS LINDA R. WATSON Secretary April 26, 2002 Austin, Texas PLEASE RETURN YOUR SIGNED PROXY Please complete and promptly return your proxy form in the postage-paid envelope. This will not prevent you from voting in person at the meeting. It will, however, help to assure a quorum and avoid unnecessary solicitation costs. Your vote is very important. TEXAS VANGUARD OIL COMPANY PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS SOLICITATION AND REVOCATION OF PROXY The accompanying proxy is solicited by the Board of Directors of Texas Vanguard Oil Company, 9811 Anderson Mill Road, Ste. 202, Austin, Texas, 78750, telephone (512) 331-6781 (the "Company"), for use at the Annual Meeting of Shareholders to be held on June 13, 2002, at 10:00 A.M. at 9811 Anderson Mill Road, Austin, Texas or any adjournments. The Company will bear the cost of this solicitation. Solicitation of proxies will be by mail and it is anticipated that the proxy materials will be mailed to shareholders on or about May 6, 2002. Brokerage houses and other custodians, nominees and fiduciaries will be requested to forward soliciting material to the beneficial owners of Common Stock and will be reimbursed for their reasonable expenses. All properly executed proxies will be voted (except to the extent that authority to vote in the election of directors has been withheld), and where a choice has been specified by the shareholder as provided on the proxy, it will be voted in accordance with the specifications so made. Proxies submitted without specification will be voted for the proposed nominees for directors and other proposals set forth herein. Any shareholder may revoke his proxy at any time before it is voted by giving written notice of the revocation to the Company's Corporate Secretary or by voting in person at the meeting. VOTING SECURITIES The voting securities of the Company consist of one class of Common Stock ($.05 par value), 12,500,000 shares authorized for issuance. Only shareholders of record at the close of business April 23, 2002, will be entitled to vote at the Annual Meeting of Shareholders. As of the record date, there were outstanding 1,417,087 shares of Common Stock of the Company. The presence, in person or by proxy of a majority of the outstanding shares of Common Stock on the record date is necessary to constitute a quorum to transact business at the Annual Meeting of Shareholders. Each share of Common Stock is entitled to one vote on each of the shares represented in person or by the proxy at the meeting. A majority is required for the election of directors and for the ratification of the appointment of independent auditors. PRINCIPAL HOLDERS OF SECURITIES The following table sets forth, as of March 25, 2002, the number of shares of outstanding Common Stock of the company owned by each person who owns of record or beneficially more than 5% of such stock: Name and Address Amount and Nature Percent of Beneficial Owner of Beneficial Ownership of Class Robert N. Watson, Jr. (1) 1,017,066 71.77% 9811 Anderson Mill Road Austin, Texas 78750 Wistar Morris, III (2) 102,151 7.208% Boenning & Scattergood, Inc. 4 Tower Bridge, Suite 300 200 Barr Harbor Drive West Conschohocken, PA 19428-2979 (1) 992,626 shares are owned by Robert Watson, Inc., of which Robert N. Watson, Jr. is President and controlling stockholder; and 24,440 shares are held in a retirement trust. Robert N. Watson, Jr. exercises shared voting and investment powers as one of the three directors of Robert Watson, Inc. Linda Watson is also a director of Robert Watson, Inc. (2) Includes 51,584 shares held by his immediate family and as co-trustee for a foundation. SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth, as of April 23, 2002, the number of shares of outstanding Common Stock of the Company owned beneficially by each director and by all directors and officers of the Company as a group: Name and Address Amount and Nature Percent of Beneficial Owner of Beneficial Ownership of Class Direct Other Robert Watson, Inc. (1) 992,626 --- 70.04% 9811 Anderson Mill Road Austin, Texas 78750 Robert N. Watson, Jr. (2) (3) 0 1,017,066 71.77% 9811 Anderson Mill Road Austin, Texas 78750 Linda R. Watson 26,000 --- 1.83% 9811 Anderson Mill Rd. Austin, Texas 78750 Robert L. Patterson 30,250 --- 2.13% P.O. Box 26296 Austin, Texas 78755 All Directors (Watson, Jr., Watson, and Patterson) and Officers of the Company as a group (3 persons, including the preceding) --- 1,073,316 75.74% (1) Robert Watson, Inc. owns directly and of record 992,626 shares of common stock of the Company which shares may be regarded as also owned indirectly and beneficially by Robert N. Watson, Jr., since he owns 100% of the common stock in Robert Watson, Inc. (2) Robert N. Watson, Jr., his wife Linda R. Watson, and Robert L. Patterson are directors of the Company. (3) A retirement trust of Robert N. Watson, Jr., owns 24,440 shares. ELECTION OF DIRECTORS A board of three directors is to be elected, with each director to hold office until the next annual meeting and until his successor is elected and qualified. The person named as proxies in the enclosed proxy have been designated by management and intend to vote for the election of the Board of Directors of the persons named below. Although management has no reason to believe that any of the nominees named below will be unable to serve as director, if any nominee withdraws or otherwise becomes unavailable to serve, the person named as proxies will vote for any substitute nominee designated by management. Certain information concerning the nominees is set forth below: Director Name Since Principal Occupation -------------------------------------------------------------------------- Robert N. Watson, Jr. 1982 President of the Company Linda R. Watson 1982 Secretary-Treasurer of the Company Robert L. Patterson 1983 Independent Consulting Petroleum Engineer Robert N. Watson, Jr. (age 59), received his B.A. and B.B.A. degrees from The University of Texas at Austin in 1966 and 1967. He is the director and President of Robert Watson, Inc., an oil and gas and real estate development firm, which he founded in 1969. He has been a director of the Company and its Chief Executive Officer since 1982. Linda R. Watson (age 58), received her B.A. degree from The University of Texas at Austin in 1966. She has been a director and Secretary-Treasurer of Robert Watson, Inc., for more than the last five years. Robert L. Patterson (age 62), received his B.S. and M.S. degrees from The University of Texas at Austin in 1963 and 1964. He was employed by Union Oil Company of California from 1965 through 1975, serving in various engineering capacities. He was a Vice President of Argonaut Energy Corporation from 1976 through 1982. He was the President of Medallion Equipment Corporation and President of Argonaut Energy Corporation from July, 1985 through January, 1989. He has been an independent consulting petroleum engineer since 1983. During the year ended December 31, 2001, the Board of Directors met 3 times, with a majority of the members in attendance. The Board of Directors has not appointed any audit, nominating or compensating committees, or any committee performing similar functions. EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS Summary of Compensation of Executive Officers The following sets forth in summary form the compensation received during each of the Company's last three complete fiscal years by the Chief Executive Officer of the Company. No other officers of the Company received salary, bonus or otherannual compensation in total, in excess of $100,000. SUMMARY COMPENSATION TABLE Annual Compensation Long Term Compensation Name and 1980 Plan All Other Principal Position Year Salary Bonus Management SARs(#) Compensation ($) ($) Fees($) /Options ($) ------------------------------------------------------------------------------ Robert N. Watson, Jr. 2001 -0- -0- $201,000 (1) -0- -0- President, Principal Executive Officer, 2000 -0- -0- $174,000 (1) -0- -0- and Director 1999 -0- -0- $150,000 (1) -0- -0- (1) Management services are provided by a firm owned by the President of the Company. Option/SAR Grants in Last Fiscal Year: No options/SARs were made during the last completed fiscal year to officers of the Company. Long-Term Incentive Plan: The Company does not make any Long-Term Incentive Plans to its CEO or other executive officers. Pension Plan Table: The Company does not provide any benefit or actuarial plan under which benefits are determined by final compensation and years of service to its CEO or other executive officers. Ten-Year Option/SAR Repricing: The Company has had no repricing of any options/SAR during the last completed fiscal year. Compensation of Directors: The Company compensates its non-salaried directors a $500 director's fee for serving as directors and attending meetings. Options to Purchase Stock The Company enacted an Incentive Stock Option Plan in 1980 which provides for the granting of options to officers, key employees and consultants for the purchase of a total of 150,000 shares of common stock of the Company. At December 31, 2001, none have been granted. The option prices may not be less than 100% of the market price on the date of the grant. Options granted under the plan must be exercised within five years of the date of grant in such amounts as the Board of Directors may determine. Certain Transactions The Company and a management firm owned by the President of the Company have an agreement whereby the latter will provide the Company general corporate management services. This agreement is the same as could be obtained from an independent third party. The affiliated company received $16,750 per month, effective January 1, 2001, as compensation for performance of those services. During 2001, $201,000 was incurred under this agreement. On January 1, 2002, the Company and a management company owned by the President of the Company renewed the agreement for $17,500 per month, until December 31, 2002. AUDITORS Sprouse & Anderson, L.L.P., Certified Public Accountants, has been selected by the Board of Directors as independent auditors of the Company for the fiscal year December 31, 2002. This selection is being presented to shareholders for ratification. Sprouse & Anderson, L.L.P. was engaged as independent auditors of the Company for the fiscal year ending December 31, 2001. Representatives of this firm will be present at the meeting and, while they do not plan to make a statement at the meeting, such representatives will be available to respond to appropriate questions from shareholders. The Board of Directors recommends an affirmative vote for this ratification. VOTE REQUIRED FOR APPROVAL For approval of Proposal 1 and 2, the affirmative vote of the holders of a majority of the shares voting at the Meeting shall be sufficient for the election of Directors and to ratify the selection of Sprouse & Anderson, L.L.P. as auditors. Annual Report The Company's Annual Report on Form 10-K for the year ended December 31, 2001 (as filed with the Securities and Exchange Commission) is being mailed with the proxy materials and such report constitutes the Company's annual report to the shareholders for the year 2001. Exhibits to the Annual Report on Form 10-K will be provided to any shareholder upon written request and upon payment of a copying charge. Requests for exhibits should be directed to Robert N. Watson, Jr., 9811 Anderson Mill Road, Suite 202, Austin, Texas 78750. Proposals for Next Annual Meeting Any proposals of holders of Common Stock intended to be presented at the Annual Meeting of Shareholders of the Company to be held in 2003 must be received by the Company no later than January 12, 2003, in order to be included in the proxy statement and form of proxy relating to that meeting. Other Information Management of the Company knows of no other matters which are likely to be brought before the Annual Meeting; however, if any other matter should properly come before the Annual Meeting or any adjournment thereof, the persons named in the enclosed form of proxy will have discretionary authority to vote such proxy in accordance with their best judgment of such matters. Such proxies will also be voted with respect to matters incident to the conduct of the Annual Meeting. LINDA R. WATSON Secretary Austin, Texas April 23, 2002