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
MAYNARD OIL COMPANY
- --------------------------------------------------------------------------------
(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
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(1) Title of each class of securities to which transaction applies:
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computed pursuant to Exchange Act Rule 0-11 (set forth the
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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:
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(4) Date Filed:
MAYNARD OIL COMPANY
8080 N. Central Expressway
Suite 660
Dallas, Texas 75206
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held May 16, 2001
The annual meeting of stockholders of MAYNARD OIL COMPANY will be held
on Wednesday, May 16, 2001, at 9:30 A.M., Dallas Time, at the offices of the
Company, 8080 N. Central Expressway, Suite 660, Dallas, Texas, for the following
purposes:
1. To elect three directors to hold office in accordance with
the Company's Certificate of Incorporation, as amended, until the 2002
Annual Meeting of Stockholders, or until their successors shall be duly
elected.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 2,
2001, as the record date for determination of stockholders entitled to notice of
and to vote at the meeting.
Please sign, date and return the accompanying Proxy in the enclosed
envelope which requires no postage if mailed in the United States. All
stockholders of the Company are invited to attend the meeting in person.
By order of the Board of Directors
Linda K. Burgess
Secretary
Dallas, Texas
April 16, 2001
YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
PROXY STATEMENT
MAYNARD OIL COMPANY
ANNUAL MEETING OF STOCKHOLDERS
May 16, 2001
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of Maynard Oil
Company on or about April 16, 2001, in connection with the solicitation of
proxies for use at the annual meeting of stockholders of the Company to be held
on May 16, 2001, at the time and place and for the purposes set forth in the
accompanying Notice of the meeting.
THE ACCOMPANYING PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY AND IS REVOCABLE AT ANY TIME PRIOR TO BEING VOTED. All shares of
the Company's Common Stock, par value $.10, represented by properly executed and
unrevoked proxies will be voted, if the proxies are received in time for the
meeting. Any Stockholder giving a proxy has the right to revoke it at any time
before the proxy is exercised by giving notice to the Company in writing or in
open meeting.
The Company will bear the cost of solicitation of the proxies. In
addition to solicitation by mail, certain directors, officers and other
employees of the Company, not specifically employed for the purpose, may solicit
proxies, without additional remuneration therefor, by personal interview, mail,
telephone or telegraph. The Company may also reimburse brokers or other persons
holding shares in their name, or in the names of nominees, for expenses in
sending proxy material to principals and obtaining their proxies.
Each holder of Common Stock of record at the close of business on April
2, 2001, is entitled to one vote per share on all matters to come before the
meeting. Cumulative voting is not permitted under the Company's Certificate of
Incorporation and By-Laws. At the close of business on April 2, 2001, there were
outstanding and entitled to vote at the meeting 4,880,400 shares of Common
Stock. A majority of the outstanding shares must be represented at the meeting
in person, or by proxy, in order to have a quorum to conduct business at the
meeting.
A stockholder may, with respect to the election of directors, (i) vote
for all nominees named herein, (ii) withhold authority to vote for all such
nominees or (iii) vote for all such nominees other than any nominee with respect
to whom the stockholder withholds authority to vote. The nominees receiving the
highest number of votes cast for the number of positions to be filled shall be
elected. Accordingly, withholding authority to vote for a director nominee will
not prevent him from being elected. On any other matter which may properly come
before the meeting, the affirmative vote of the holders of a majority of the
shares represented in person, or by proxy, at the meeting and entitled to vote
is required. Broker non-votes will have no effect on any matter at the meeting.
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
On April 2, 2001, 4,880,400 shares of the Company's Common Stock were
issued and outstanding. The following table shows with respect to each director
and nominee for director of the Company, each 5% stockholder, each executive
officer named in the Summary Compensation Table below, and with respect to all
directors and executive officers as a group: (i) the total number of shares of
Common Stock beneficially owned as of April 2, 2001, and (ii) the percent of the
total number of shares of Common Stock outstanding as of that date:
Name of Beneficial Owner Number of Shares(1) Percent of Class
------------------------ ---------------- -----------------
James G. Maynard 1,756,596(2) 36.00
9933 Lawler Avenue
Suite 344
Skokie, IL 60077
Maynard Partners, L.P. (3) 1,000,000 20.49
9933 Lawler Avenue
Suite 344
Skokie, IL 60077
Franklin Resources, Inc. (4) 465,000 9.53
777 Mariners Island Blvd.
San Mateo, CA 94404
Dimensional Fund Advisors Inc. (5) 392,700 8.05
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
FMR Corp. (6) 487,200 9.98
82 Devonshire Street
Boston, MA 02109
Robert B. McDermott 5,000 0.10
Ralph E. Graham 2,200 0.04
Glenn R. Moore -- --
L. Brent Carruth -- --
Kenneth W. Hatcher -- --
Linda K. Burgess -- --
All directors and executive
officers as a group
(9 persons) 1,763,796 36.14
- -----------------------------------
2
(1) In accordance with regulations of the Securities and Exchange
Commission, stock ownership reflects shares with respect to which the
director, nominee, principal stockholder or executive officer has
voting power or investment power, or has a right to acquire such power.
Each director, nominee, principal stockholder or executive officer has
both sole voting power and sole investment power with respect to the
shares set forth in the table. Beneficial ownership is disclaimed by
each director, nominee, principal stockholder or executive officer of
shares listed of which he or it would not, but for Rule 13d-3 under the
Securities Exchange Act of 1934, be deemed to be the beneficial owner.
(2) Includes 300,000 shares held of record by a corporation controlled by
Mr. Maynard and 1,456,596 shares held of record by Mr. Maynard, as
trustee of a trust for his benefit.
(3) Joan B. Maynard, spouse of James G. Maynard, is the sole general
partner of Maynard Partners, L.P., and James G. Maynard is the sole
limited partner of this partnership.
(4) According to a Form 13G dated February 2, 2001 filed with the
Securities and Exchange Commission, these shares are beneficially owned
by one or more open or closed-end investment companies or other managed
accounts which are advised by direct and indirect investment advisory
subsidiaries (the "Adviser Subsidiaries") of Franklin Resources, Inc.
("FRI"). Such advisory contracts grant to such Adviser Subsidiaries all
investment and/or voting power over the securities owned by such
advisory clients, and therefore, the Adviser Subsidiaries may be deemed
to be the beneficial owner of the shares listed above.
Additionally, Charles B. Johnson and Rupert H. Johnson, Jr. each own in
excess of 10% of the outstanding Common Stock of FRI and are the
principal shareholders of FRI and may be deemed to be the beneficial
owner of shares held by persons and entities advised by FRI
subsidiaries.
(5) According to a Form 13G dated February 2, 2001 filed with the
Securities and Exchange Commission, Dimensional Fund Advisers, Inc.
("Dimensional"), a registered investment adviser, furnishes investment
advice to four investment companies and serves as investment manager to
certain other investment vehicles, including commingled group trusts
and separate accounts(these investment companies, trusts, and accounts
are the "Funds"). In its role as investment adviser or manager,
Dimensional possesses both voting and/or investment power over the
shares owned by the Funds and may be deemed to be the beneficial owner
of such shares.
(6) According to a Form 13G dated February 14, 2001 filed with the
Securities and Exchange Commission, FMR Corp. is the parent holding
company which has the right to receive or the power to direct the
receipt of dividends or the proceeds from the sale of the above
referenced securities through its wholly-owned subsidiary Fidelity
Management & Research Company ("Fidelity"), on behalf of Fidelity Low-
Priced Stock Fund, a registered investment company, and as such, FMR
and Fidelity may be deemed to be the beneficial holder's of such
shares. Additionally,
3
Edward C. Johnson, 3d, Abigail P. Johnson, and members of the Edward C.
Johnson, 3d family are the predominant owners of common stock of FMR
Corp. and may be deemed to be the beneficial owners of shares held by
persons and/or entities advised by FMR Corp.
ELECTION OF DIRECTORS
In accordance with the Company's By-laws, three directors are to be
elected at the annual meeting. Each director elected will hold office until the
next annual meeting and until his successor is elected and qualified. Shares
represented by valid proxies will be voted for the election of the three
nominees listed below.
The nominees have consented to serve on the Board, if elected, but
should any of the three be unable to serve in this capacity at the time of the
meeting, the proxies will be voted by the proxy holders in their discretion for
any substitute nominee who may be designated by Management. It is anticipated
that the nominees will be available to serve as directors.
Names of Nominees Position with Company, Business
for Election Age Experience and other Directorships
------------ --- ----------------------------------
Ralph E. Graham 81 Director of the Company since 1993.
Independent oil and gas producer.
James G. Maynard 75 Chief Executive Officer and Chairman of the Board
of the Company since its incorporation in 1971.
Robert B. McDermott 73 Director of the Company since 1971.
Business Consultant.
MEETINGS OF THE BOARD OF DIRECTORS AND THE COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met five times during 2000. Each director,
during the last fiscal year, attended 100% of the aggregate of (a) the total
number of meetings of the Board and (b) the total number of meetings held by all
committees of the Board on which he served. The Compensation Committee of the
Board, comprised of Messrs. Maynard, Graham and McDermott, met twice and the
Audit Committee, comprised of Messrs. McDermott and Graham, met four times. The
Audit Committee meets with the public accountants and accounting personnel of
the Company for review of their respective information, opinions and functions.
For the year ended December 31, 2000, the Audit Committee recommended, and the
Board of Directors selected, PricewaterhouseCoopers LLP to audit the Company's
financial statements. The current members of the Audit Committee meet the
definition of an independent director as defined by the NASDAQ rules. It is
contemplated that a third member will be added to the Audit Committee to comply
with the additional NASDAQ listing standards. The Compensation Committee sets
the compensation of the executive officers of the Company. Mr. Maynard's
compensation was determined by Messrs. McDermott and Graham as more fully
described in the Compensation Committee Report on Executive Compensation. The
Board of Directors does not have a nominating committee.
4
EXECUTIVE COMPENSATION
The table below sets forth certain information concerning the annual
and long-term compensation for services in all capacities to the Company for the
three years ended December 31, 2000, 1999 and 1998, of those persons who were,
at December 31, 2000 (i) the chief executive officer, and (ii) its four other
most highly compensated executive officers ("named executive officers").
SUMMARY COMPENSATION TABLE
Annual Compensation(1)
---------------------------------------- All Other
Name and Principal Fiscal Compen-
Position Year Salary(2) Bonus(3) sation(4)
- ---------------------- ---- --------- -------- ---------
James G. Maynard 2000 $114,231 -0- $11,424(5)
Chairman of the Board, 1999 106,515 -0- 10,652
Chief Executive 1998 105,000 -0- 10,500
Officer and
Treasurer
Glenn R. Moore 2000 186,923 9,450 473,310(6)
President 1999 173,892 -0- 16,000
1998 169,962 -0- 16,000
L. B. Carruth 2000 153,592 7,765 252,250(7)
Executive Vice President 1999 146,785 7,395 14,678
of Operations 1998 143,794 -0- 14,380
Kenneth W. Hatcher 2000 142,308 7,240 228,365(8)
Executive Vice President 1999 132,904 6,700 13,290
of Finance 1998 130,050 -0- 13,006
Linda K. Burgess 2000 109,038 5,513 184,678(9)
Vice President of Accounting 1999 104,346 5,250 10,434
and Corporate Secretary 1998 102,433 -0- 10,242
(1) The Company does not maintain a "long term incentive plan" as that term
is defined in the applicable rules.
(2) Includes amounts deferred under the Company's Thrift Investment Plan.
(3) Includes bonus awards earned for performance in the fiscal year even
though such amounts could be payable in subsequent years.
(4) Totals shown consist of the Company's contributions to (i) the Stock
Participation Plan as enumerated in the table below, (ii) the
Retirement Plan in the amount of 5% of annual salary for 1998, 1999 and
2000, unless otherwise specified below and (iii) the Thrift Investment
Plan for the remainder.
(5) During 2000, $5,712 was accrued in the Retirement Plan and $5,712 in
the Thrift Investment Plan on behalf of Mr. Maynard.
5
(6) During 2000, $8,000 was accrued in the Retirement Plan and $8,000 in
the Thrift Investment Plan on behalf of Mr. Moore.
(7) During 2000, $8,000 was accrued in the Retirement Plan and $8,000 in
the Thrift Investment Plan on behalf of Mr. Carruth.
(8) During 2000, $7,450 was accrued in the Retirement Plan and $7,450 in
the Thrift Investment Plan on behalf of Mr. Hatcher.
(9) During 2000, $5,714 was accrued in the Retirement Plan and $5,714 in
the Thrift Investment Plan on behalf of Ms. Burgess.
In September, 2000 the Company's Board of Directors approved an amendment to the
stock participation plan (SPAR). Under the original terms of the plan, no
awarded units could be exercised until the employee terminated his employment
with the Company. Pursuant to terms of the amended plan, each employee holding
SPARs was given the opportunity to cash out all, or a portion, of the units held
at an exercise price of $20.81 per share (NASDAQ closing price on September 27,
2000).
The table below summarizes the cash amount received by each named executive
officer for his stock participation units exercised during the year ended
December 31, 2000.
Aggregated Stock Participation (SPAR) Exercises in 2000
Number of
Securities
Underlying Value
Exercised of
SPARs in the SPARs
year ended Exercised
12/31/00 during year
Exercised/ ended
Remaining 12/31/00
--------- --------
Maynard -0- $ -0-
Moore 29,000/0 457,310
Carruth 15,000/0 236,250
Hatcher 13,500/0 213,465
Burgess 11,000/0 173,250
There were no awards of stock participation units to any employee in 2000, nor
are there any remaining unexercised SPARs due "named executive officers."
COMPENSATION OF DIRECTORS
During 2000, each director, who was not an employee of the Company,
received an annual retainer of $10,000. In addition, each committee member who
was not an employee of the Company (two members for both the Compensation and
Audit Committees) received an annual amount of $5,000 for services on each
committee.
6
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee's objective is to maintain a competitive industry posture
by compensating all executives fairly, for both their long-term and recent
contributions to the Company.
Compensation for each executive includes a salary and from time to time
longer-term incentive compensation, such as stock participation units. The
Committee considers the total compensation (earned or potentially available) of
each executive officer in establishing each element of compensation. Cash
bonuses of $122,254 were authorized in 2000 for forty employees of which $41,387
was allocated to executive officers.
Salaries for executives are reviewed by the Committee on an annual
basis and may be increased to reflect the individual's contribution to the
Company or changes in the competitive level of pay. The Committee has access to
a national survey on oil and gas company compensation, which includes executives
in both larger and smaller companies. Companies which participated in the
compensation survey include privately held corporations, as well as companies on
NASDAQ, the American Stock Exchange, and the New York Stock Exchange. This
national survey is believed to be the best available information for the
intended purpose. The executive officers of the Company are paid compensation
which generally ranks them in or below the mid-range of executives in similar
positions for corporations of similar size.
The Compensation Committee evaluates the salary of Mr. Maynard, the
Chief Executive Officer, based largely on the Committee's assessment of his past
and current performance and its expectation as to his future contributions in
leading the Company and its business. The Compensation Committee believes a key
indicator for an oil and gas company, such as Maynard Oil, is the accretion of
shareholder value. Ordinarily, this is measured by the replacement of
hydrocarbon reserves through drilling or acquisition, the cost of such reserves
and the extent of the risk to which the shareholder's investment has been
subjected. During 2000, the Company was successful in acquiring three groups of
producing oil and gas properties which added approximately 800,000 barrels of
oil and 1.5 bcf of gas to the Company's hydrocarbon reserve base at a cost of
$7.8 million, or approximately $7.43 per net equivalent barrel. The acquisition
cost was financed from the Company's existing cash. The Committee believes that
Mr. Maynard's contributions to the Company warrant a salary substantially in
excess of what he is paid; it has limited Mr. Maynard's compensation at Mr.
Maynard's express request.
The Committee also considered the Company's performance in determining
other executive officer salaries for 2000. It considered these factors both on
an absolute basis and relative to the oil and gas industry, in general. In
determining salaries for executive officers, other than Mr. Maynard, the
Committee reviewed the Chief Executive Officer's recommendations based upon
individual performance, as well as the factors mentioned in the above paragraph.
Since the price of the Company's stock is affected to a significant
degree by oil and gas prices, over which executives have no control, and various
other factors over which they have limited control, the Committee has focused on
salaries as the principal means of providing incentives and rewarding executive
performance. The Company did not award stock options, stock participation units
or other stock based incentives in 2000.
7
During 2000, the Compensation Committee consisted of Ralph E. Graham,
James G. Maynard and Robert B. McDermott, all directors of the Company. Mr.
Maynard does not take part in the determination of his compensation.
For the Compensation Committee
James G. Maynard
Robert B. McDermott
Ralph E. Graham
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James G. Maynard is Chief Executive Officer and Chairman of the Board
of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that
certain of the Company's officers, its directors and 10% shareholders file with
the Securities and Exchange Commission and Nasdaq an initial statement of
beneficial ownership and certain statements of changes in beneficial ownership
of Common Stock of the Company. Based solely on its review of such forms
received by the Company and written representation from the directors and
officers that no other reports were required, the Company is unaware of any
instances of noncompliance, or late compliance, with such filings during the
fiscal year ended December 31, 2000.
AUDIT COMMITTEE REPORT
The responsibilities of the Audit Committee, which are set forth in the
Audit Committee Charter adopted by the Board of Directors (a copy of which is
attached to this Proxy Statement as Exhibit A), include providing oversight to
the Company's financial reporting process through periodic meetings with the
Company's independent auditors and management to review accounting, auditing,
internal controls and financial reporting matters. The management of the Company
is responsible for the preparation and integrity of the financial reporting
information and related systems of internal controls. The Audit Committee, in
carrying out its role, relies on the Company's senior management, including
senior financial management, and its independent auditors.
We have reviewed and discussed with senior management the Company's
audited financial statements included in the 2000 Annual Report to Stockholders.
Management has confirmed to us that such financial statements (i) have been
prepared with integrity and objectivity and are the responsibility of management
and, (ii) have been prepared in conformity with generally accepted accounting
principles.
We have discussed with PricewaterhouseCoopers LLP, our independent
auditors, the matters required to be discussed by SAS 61 (Communications with
Audit Committee). SAS 61 requires our independent auditors to provide us with
additional information regarding the scope and results of their audit of the
Company's financial statements, including with respect to (i) their
responsibility under generally accepted auditing standards, (ii) significant
accounting policies, (iii) management judgments and estimates, (iv) any
significant audit
8
adjustments, (v) any disagreements with management, and (vi) any difficulties
encountered in performing the audit.
We have received from PricewaterhouseCoopers LLP, a letter providing
the disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) with respect to any
relationships between PricewaterhouseCoopers LLP, and the Company that in their
professional judgment may reasonably be thought to bear on independence.
PricewaterhouseCoopers LLP, has discussed its independence with us, and has
confirmed in such letter that, in its professional judgment, it is independent
of the Company within the meaning of the federal securities laws.
Based on the review and discussions described above with respect to the
Company's audited financial statements included in the Company's 2000 Annual
Report to Stockholders, we have recommended to the Board of Directors that such
financial statements be included in the Company's Annual Report on Form 10-K for
filing with the Securities and Exchange Commission.
As specified in the Audit Committee Charter, it is not the duty of the
Audit Committee to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and in accordance with generally
accepted accounting principles. That is the responsibility of management and the
Company's independent auditors. In giving our recommendation to the Board of
Directors, we have relied on (i) management's representation that such financial
statements have been prepared with integrity and objectivity and in conformity
with generally accepted accounting principals, and (ii) the report of the
Company's independent auditors with respect to such financial statements.
AUDIT COMMITTEE
Robert B. McDermott, Chairman
Ralph E. Graham
9
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return of the NASDAQ Stock Market for U.S. Companies and the NASDAQ Industry
Index for oil and gas production companies for the five fiscal years ending
December 29, 2000. This graph assumes that $100 was invested on December 31,
1995 and that all dividends were reinvested. The performance shown on the graph
below is not necessarily indicative of future performance. The Company will make
available to requesting stockholders the identities of the companies within the
CRSP Index for NASDAQ stock (SIC-1300-1399 US Companies). All of the companies
listed in this index are involved in oil and gas extraction.
Comparison of Five-Year-Cumulative Total Returns
Prepared by the Center for Research in Security Prices, University of Chicago
[graph omitted]
CRSP Index
CRSP Index For
for NASDAQ
Nasdaq Stock Stocks (SIC
Fiscal Year Maynard Oil Market 1300-1399
Covered Company (US Companies) US Cos.)*
---------- -------- -------------- ------------
12/31/95 100.0 100.0 100.0
12/31/96 277.8 123.0 163.6
12/31/97 151.9 150.7 177.0
12/31/98 111.1 212.5 80.2
12/31/99 148.1 394.8 99.2
12/29/00 259.3 237.4 199.5
Note:
* The peer index includes results from all US companies trading on NASDAQ
in the 130 SIC group, oil and gas extraction and production companies,
which includes 173 Companies over the period presented and 57 active at
December 29, 2000.
10
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP audited the Company's financial statements
for the year ending December 31, 2000 and has been selected as the independent
accounting firm who will audit the Company's financial statements for the year
ending December 31, 2001. Representatives of PricewaterhouseCoopers are expected
to be present at the meeting and will be given the opportunity to make a
statement if they desire to do so and are expected to be available to respond to
appropriate questions.
AUDIT FEES
The aggregate fees billed by PricewaterhouseCoopers LLP for
professional services rendered in connection with (i) the audit of the Company's
annual financial statements set forth in the Company's Annual Report on Form
10-K for the year ended December 31, 2000, and (ii) the review of the Company's
quarterly financial statements set forth in the Company's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2000, June 30, 2000 and September 30,
2000, were approximately $66,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed to the Company by PricewaterhouseCoopers LLP
in this category for the most recent fiscal year.
ALL OTHER FEES
The aggregate fees for all other services rendered by
PricewaterhouseCoopers LLP for the Company's most recent fiscal year were
approximately $17,000. These fees include work performed by the independent
auditors with respect to income tax compliance.
The Audit Committee has advised the Company that it has determined that
the non- audit services rendered by the Company's independent auditors during
the Company's most recent fiscal year are compatible with maintaining the
independence of such auditors.
STOCKHOLDER'S PROPOSALS
Any proposal by a stockholder of the Company intended to be presented
at the 2002 annual meeting of stockholders and included in the Company's proxy
statement and form of proxy relating to that meeting, must be received by the
Company at its principal executive office not later than December 17, 2001, and
must also comply with other requirements of the proxy solicitation rules of the
Securities and Exchange Commission.
11
In accordance with the Company's By-laws, any stockholder proposals
with respect to nominations or other stockholder business intended to be
presented at the 2002 annual meeting of stockholders, but not included in the
Company's proxy statement and form of proxy relating to that meeting, must be
made by notice in writing, delivered or mailed by first class United States
mail, postage prepaid, to the Company's Secretary no later than February 15,
2002. Such notice shall set forth (i) the name, age, business address and
residence address of the proponent of each proposal in such notice, (ii) the
principal occupation or employment of such proponent, and (iii) the number of
shares of the Company's stock beneficially owned by such proponent.
OTHER MATTERS
The Management of the Company does not know of any other matters that
are to be presented for action at the annual meeting. Should any other matter
come before the meeting, however, the persons named in the enclosed proxy will
have discretionary authority to vote all proxies with respect to such matter in
accordance with their judgment.
By Order of the Board of Directors
Linda K. Burgess
Secretary
Dallas, Texas
April 16, 2001
12
Exhibit A
AUDIT COMMITTEE CHARTER
PURPOSE
- -------
The Audit Committee is appointed by the Board of Directors for the
primary purposes of:
o Assisting the Board of Directors in fulfilling its oversight
responsibilities as they relate to the Company's accounting
policies and internal controls, financial reporting practices and
legal and regulatory compliance, and
o Maintaining, through regularly scheduled meetings, a line of
communication between the Board of Directors, the Company's
financial management, and independent accountants.
COMPOSITION AND QUALIFICATIONS
- ------------------------------
The Audit Committee shall be appointed by the Board of Directors and
shall be comprised of two or more Directors (as determined from time to time by
the Board), each of whom shall meet the independence requirements of the Nasdaq
Stock Market, Inc. Each member of the Audit Committee shall have the ability to
understand fundamental financial statements. In addition, at least one member of
the Audit Committee shall have past employment experience in finance or
accounting, professional certification in accounting, or any other comparable
experience or background which results in the individual's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
RESPONSIBILITIES
- ----------------
The Audit Committee will:
(1) Review the annual audited financial statements with management and the
independent accountants. In connection with such review, the Audit
Committee will:
o Discuss with the independent accountants the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
o Review changes in accounting or auditing policies, including
resolution of any significant reporting or operational issues
affecting the financial statements.
o Inquire as to the existence and substance of any significant
accounting accruals, reserves or estimates made by management that
had or may have a material impact on the financial statements.
o Review with the independent accountants any problems encountered in
the course of their audit, including any change in the scope of the
planned audit work and any restrictions placed on the scope of such
work, any management letter
13
provided by the independent accountants, and management's response
to such letter.
(2) Review with management and the independent accountants the Company's
quarterly financial statements in advance of SEC filings.
(3) Oversee the external audit coverage. The Company's independent
accountants are ultimately accountable to the Board of Directors and
the Audit Committee, which have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace the
independent accountants. In connection with its oversight of the
external audit coverage, the Audit Committee will:
o Recommend to the Board the appointment of the independent
accountants.
o Approve the engagement letter and the fees to be paid to the
independent accountants.
o Obtain confirmation and assurance as to the independent accountants
independence, including ensuring that they submit on a periodic
basis (not less than annually) to the Audit Committee a formal
written statement delineating all relationships between the
independent accountants and the Company. The Audit Committee is
responsible for actively engaging in a dialogue with the independent
accountants with respect to any disclosed relationships or services
that may impact the objectivity and independence of the independent
accountants and for recommending that the Board of Directors take
appropriate action in response to the independent accountants'
report to satisfy itself of their independence.
o Meet with the independent accountants prior to the annual audit to
discuss planning and staffing of the audit.
o Review and evaluate the performance of the independent accountants,
as the basis for a recommendation to the Board of Directors with
respect to reappointment or replacement.
(4) Review with the independent accountants and the Company's senior
financial management the adequacy of the Company's internal controls,
and any significant findings and recommendations with respect to such
controls.
(5) Meet periodically with management to review and assess the Company's
major financial risk exposures and the manner in which such risks are
being monitored and controlled.
(6) Meet at least annually in separate executive session with the chief
financial officer and the independent accountants.
(7) Review periodically with the Company's General Counsel (i) legal and
regulatory matters which may have a material affect on the financial
statements, and (ii) corporate compliance policies or codes of conduct.
(8) Report regularly to the Board of Directors with respect to Audit
Committee activities.
14
(9) Prepare the report of the Audit Committee required by the rules of the
Securities and Exchange Commission to be included in the proxy
statement for each annual meeting.
(10) Review and reassess annually the adequacy of this Audit Committee
Charter and recommend any proposed changes to the Board of Directors.
While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent accountants. Nor is
it the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent accountants or to
assure compliance with laws and regulations and the Company's corporate
policies.
15
MAYNARD OIL COMPANY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James G. Maynard and Glenn R. Moore as
Proxies, each with the power to appoint a substitute, and hereby authorizes them
to vote, as designated on the reverse side, all shares of common stock of
Maynard Oil Company held of record by the undersigned on April 2, 2001, at the
Annual Meeting of Stockholders to be held on May 16, 2001, or any adjournment or
adjournments thereof.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting. THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE DIRECTOR
NOMINEES.
(continued on reverse side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
1. To vote for the election of James G. Maynard, Ralph E. Graham and
Robert B. McDermott as directors, to hold office until the 2002 Annual
Meeting of Stockholders. If it is desired that votes be withheld from
the election of any of the individual nominees, his name should be
written in the following space.
------------------------------------
FOR WITHHOLD
AUTHORITY
TO VOTE
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF
OF THE COMPANY'S BOARD OF DIRECTORS
WHICH ENCOURAGES EACH SHAREHOLDER
OF RECORD TO VOTE.
Please sign exactly as name appears
hereon. When shares are held by
joint tenants, both should sign.
When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please sign
in full corporate name by President
or other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
- ------------------------- -------------------------- -----------------
Signature(s) Signature(s) Date