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CROFF ENTERPRISES, INC.
621 17TH STREE, SUITE 830
DENVER, COLORADO 80239
303-383-1555
April 18, 2000
Division of Corporate Finance-Proxy Review
Small Business Section
Securities and Exchange Commission
450 5th Street N.W.
Washington, D.C. 20549
RE: Croff Enterprises, Inc.- Proxy Filing
Commission File Number 1-100
Dear Sirs:
Enclosed with this cover letter are the five preliminary proxy statements
required by your office for review. This proxy material includes the
following documents:
1. Proxy Statement
2. Notice of Annual Meeting
3. Proxy Ballot Form
This letter will also advise your office that the company has concurrently filed
this proxy material electronically with the commission. Since this material
includes a request to increase the authorized capital of one class of stock,
we deem that it was necessary to file this preliminary proxy material under
Rule 14a-6. We would request your prompt review and comments pertaining to
this filing so that we can complete our solicitation of shareholders for the
proposed annual meeting on June 20, 2000. It is our further understanding
that if we do not receive any comments from your office within the next ten
days, we may then proceed with distribution of this proxy material to our
shareholders and file the required definitive final copies with your office.
Please note that Croff is not traded on any exchange or NASDAQ.
Consequently, we do not file with any exchange. Since we have only one known
market maker, we have typically mailed copies to that firm.
May we thank you for your attention to this matter.
Sincerely,
Gerald L. Jensen
President
PROXY STATEMENT
CROFF ENTERPRISES, INC.
2000 ANNUAL MEETING OF SHAREHOLDERS
April 18, 2000
General Information & Incorporation by Reference:
THIS PROXY STATEMENT IS BEING MAILED TO ALL SHAREHOLDERS OF
RECORD IN CONNECTION WITH THE SOLICITATION OF THEIR VOTE BY THE BOARD OF
DIRECTORS OF CROFF ENTERPRISES, INC. ("the Company" or "Croff") with regard to
the Annual Meeting to be held on June 20, 2000 at 1:00 p.m. at 621
Seventeenth Street, Suite 830, Denver, Colorado 80293,
Telephone: (303) 383-1555. This Proxy Statement should be reviewed in
connection with the enclosed copy of the Annual Report filed on SEC Form 10-K
dated December 31, 1999.
VARIOUS ITEMS OF IMPORTANT INFORMATION AND ACCOUNTING FOR
THE COMPANY RELATED TO THIS PROXY STATEMENT ARE SET-OUT IN THE
ENCLOSED ANNUAL REPORT ON FORM 10-K. SUCH DETAILED INFORMATION
MAY BE RELEVANT IN REVIEWING THIS PROXY STATEMENT, BUT IS NOT
REPEATED IN THIS DOCUMENT. ACCORDINGLY, EACH SHAREHOLDER SHOULD
REFER TO THE FORM 10-K BEFORE COMPLETING THEIR PROXY BALLOT.
Proxies voted in accordance with the accompanying ballot form, which are
properly executed and received by the Secretary to the Company prior to the
Annual Meeting, will be voted.
Revocability of Proxy
A shareholder returning the enclosed proxy ballot has the power to revoke it
atany time before it is exercised and may do so by written notice to the
Secretary of the Company at the address set forth above, effective upon
receipt of such written notice, or by voting in person at the
Annual Meeting. Attendance at the Annual Meeting, in and of itself,
will not constitute revocation of a proxy.
Solicitation and Voting Procedures
The record date for the determination of shareholders entitled to vote at the
Annual Meeting is the close of business on April 30, 2000. There were
issued, outstanding and entitled to vote on such date approximately 526,315
shares of the 20,000,000 authorized common shares. The Company has only one
class of Common Shares, each of which is entitled to one vote. The Company
does not have cumulative voting. Accordingly, each shareholder must vote all
of his shares on each separate ballot proposal or nominee, or abstain from
voting on that item. The Company will bear all costs of this proxy
solicitation.
The Company has two classes ("A" & "B") of non-voting preferred shares. No "A"
shares have been issued. Each holder of common stock, as of 1994, was issued
one share of class "B" preferred stock for each common share owned. One of
the proposals made in this Proxy will be to request shareholder approval of a
Board Resolution to increase the number of class "B" preferred shares from
500,000 to 1,000,000 primarily to have sufficient matching class "B" shares
to be issued in the future upon the exercise of options, which include both
common and preferred B shares.
Shares entitled to vote will be determined based upon the official
shareholder record of April 30, 2000. Actual votes cast will be determined
by the physical counting of votes in person or proxy by the Inspector of
Elections to be appointed prior to the meeting by the Board of Directors.
Any dispute as to votes or entitlement to vote will be decided by majority vote
of the Board of Directors. Abstentions and broker non-votes will not be
counted for either quorum or ballot purposes.
As to each item to be voted upon in this Proxy, a numerical majority of the
issued and outstanding shares must be present or voted by Proxy at the
meeting (shares, or as otherwise determined by the Inspector of Elections at
the time of meeting). Each proposal to be voted upon will only be adopted by
a majority vote of shares voted at the meeting, provided a quorum is
present. That is, each item will be adopted by an affirmative vote of not
less than 263,158 shares, or a greater majority of those shares present as
otherwise determined by the Inspector of Elections.
There are no matters to be voted upon as described by this Proxy upon which
management will proceed absent majority shareholder approval as described
above.
The Company knows of no person or group, except the following, which, as of
the date of this Proxy Statement, beneficially owns and has the right to vote
more than 5% of the Company's Common Stock:
NAMES AND
ADDRESS OF BENEFICIAL OWNER SHARES BENEFICIALLY
OWNEDPERCENT OFCLASS
1. Jensen Development Company (1) 132,130 22.93%
621 17th Street, Suite 830
Denver, Colorado 80293
2. Gerald L. Jensen (2) 81,215 14.09%
3. Julian D. Jensen (2)&(3) 46,532 8.04%
Jensen Family Trust
4. Directors as a Group (2) 285,277 49.5%
Jensen Development Company is wholly owned by Gerald L. Jensen.
(2) Includes warrants to purchase 10,000 shares of the Company's common
stock and an equal number of Preferred "B" shares by each director at
$1.00 per common share, expiring December 2001. Mr. Gerald Jensen's
warrant is for 20,000 shares. Only 10,000 of the warrants have been
exercised by Mr. Gerald L. Jensen.
(3) Mr. Julian D. Jensen owns 5,000 shares directly and holds a warrant
for 10,000 shares (see Note 2, above); 31,532 shares are held by him as
the Trustee of the Jensen Family Trust.
beneficial interest
in this Trust and Mr. Gerald L. Jensen has an approximate 38%
beneficial interest.
MATTERS SUBJECT TO SHAREHOLDER VOTE
I.
Election of Directors
The Croff Board consists of Gerald L. Jensen, Dilworth A. Nebeker, Richard
H.Mandel, Jr., Edwin W. Peiker, Jr., and Julian D. Jensen. Each director
will serve until the next annual meeting of shareholders, or until his
successor is duly elected and qualified. The following information is
provided with respect to each current officer and director of the Company
who are current nominees for re-election.
GERALD L. JENSEN, 60, PRESIDENT AND DIRECTOR.
President of Croff Oil Company on a part-time basis since October, 1985.
Mr. Jensen in 1999 became the chairman and C.E.O. of Online Launch, Inc.,
a start-up business to business incubator company. Mr. Jensen was a
director of Pyro Energy Corp., a public company engaged primarily in
coal production from 1978 until the company was sold in 1989.
Mr. Jensen is also an owner of private real estate, development,
and oil and gas companies.
RICHARD H. MANDEL, JR., 69, DIRECTOR.
Since 1982, Mr. Mandel has been President and a Board Member of American
Western Group, Inc., an oil and gas producing company in Denver, Colorado.
He is President and also a Board Member of Richard H. Mandel, Ltd., an oil
and gas production company in Denver, Colorado. From 1977 to 1984, he was
President of Universal Drilling Co., Denver, Colorado. Since May 1988,
he has been a Board Member of Richmond Exploration Company. Since
July 1990,he has been a Board Member of Pacific Petroleum, LTD,
an OTC Nevada Company.
DILWORTH A. NEBEKER, 59, DIRECTOR.
Mr. Nebeker served as President of Croff from September 2, 1983 to June 24,
1985, and has been a director of Croff since December, 1981. He has been a
lawyer in private practice for the past seven years. Prior thereto, he was
a lawyer employed by Tosco Corporation, a public corporation, from 1973 to
1978. He was a lawyer with the Securities and Exchange Commission from 1967
to 1973.
EDWIN W. PEIKER, JR., 64, DIRECTOR AND SECRETARY.
Mr. Peiker was President of Royal Gold, Inc. from 1988 through 1991, and
continues to be a director. Since 1986, Mr. Peiker has been a Vice President
and director of Royal Gold, Inc., a public company engaged in gold
exploration and mining activities. Prior thereto he was involved in private
investments in oil and gas exploration and production. Mr. Peiker was
employed in responsible positions with AMAX, Inc., a public corporation,
From 1963 to 1983. AMAX is primarily engaged in mine evaluation and resource
analysis.
JULIAN D. JENSEN, 52, DIRECTOR.
Mr. Julian Jensen is the brother of the Company's president and has served as
legal counsel to the Company for the past eleven years. Mr. Jensen has
practiced law, primarily in the are as of corporate and securities law,
in Salt Lake City, Utah since 1975. Mr. Jensen is currently associated with
the firm of Jensen, Duffin, Carman, Dibb & Jackson which acts as legal
counsel for the Company.
SUMMARY INFORMATION AS TO DIRECTORS
NAME DIRECTOR
SINCE COMPENSATION NUMBER OF SHARES PERCENTAGE
BENEFICAL & LEGAL OF ISSUE
& OUTSTANDING
GERALD L JENSEN 1985 $54,000 SALARY 213,345 37.01%
NO DIRECTOR
COMPENSATION (1) & *
DILWORTH NEBEKER 1981 NORMAL 1,300 .25%
DIRECTOR STIPEND
ONLY (SEE BELOW) (2)
RICHARD MANDEL 1985 NORMAL
DIRECTOR STIPEND 10,100
ONLY (SEE BELOW) (2) 1.75%
EDWIN PEIKER, JR. 1985 NORMAL
DIRECTOR STIPEND 14,000
ONLY (SEE BELOW) (2) 2.43%
JULIAN D. JENSEN 1990 NORMAL 46,532
DIRECTOR STIPEND
ONLY (SEE BELOW) (2) &(3) 8.04%
* Mr. Gerald Jensen also receives an IRA contribution fron the Company o
$1,620 (3% of salary) per year.
(1) Includes shares held by Jensen Development Corporation (132,130) which is
wholly owned by Gerald L. Jensen.
(2) Includes warrant expiring December 31, 2001 to acquire 10,000 shares by
each Director at $1.00/shares; except
Gerald L. Jensen, who holds a remaining warrant for 10,000 shares.
Mr. Gerald Jensen exercises 10,000 warrants
for an equal number of shares in 1999 . No other warrant has been
extended by majority vote of the Board.
(3) Includes shares held in Jensen Family Trust (31,532) in which Julian D.
Jensen is the managing Trustee and an approximate 43% beneficial owner.
Mr. Gerald L. Jensen holds an approximate 38% beneficial interest in
this Trust.
Executive Compensation
Certain additional required information concerning remuneration, other
compensation and ownership of securities by the Directors and Officers is
set-out in the enclosed 10-K Report and incorporated by this reference.
Proposed Remuneration
During the current fiscal year, the Company intends to compensate outside
directors at the rate of $350 for a half-day meeting and $500 for a full day
meeting. No changes are currently contemplated in salaries or directors
compensation.
Certain Relationships and Related Transactions
Certain significant relationships and related transactions are set-out in
the enclosed 10-K Report and incorporated by this reference.
Management's Stock Rights and Options
A discussion of managements stock rights and options are referenced above and
further discussed in the enclosed and incorporated 10-K Report.
The present Board recommends your vote for the existing slate of Directors,
but will provide in the Ballot Form space to vote for other nominees.
II.
Increase In Authorized Class "B" Preferred Shares
It is currently proposed that the authorized class "B" preferred shares be
increased from 520,000 shares to 1,000,000 shares.
When originally created in 1994, the class "B" preferred shares were deemed
to reflect the oil and gas interest in the Company and were to be issued to all
existing shareholders, at the time, on the basis of one class "B" share being is
issued for each common share held. It was anticipated that future issuance
of common stock would most likely be for purposes and consideration unrelated
to the oil and gas operations of the Company, so only class "B" preferred
shares equal to the then outstanding common shares were authorized.
Subsequently, it has been determined by the Board that it would be inequitable
not to allow those holding common stock options in 1994 to also receive an
equal number of Class "B" shares upon the exercise of these options.
Consequently, the Board has recommended increasing the authorized Class "B"
preferred shares to 1,000,000 shares to cover present and future option rights.
THIS RECOMMENDATION IS PRESENTLY BENEFICIAL ONLY TO THE BOARD OF
DIRECTORS WHICH PRESENTLY HOLD THE ONLY OPTIONS IN THE COMPANY AS SET-
OUT ABOVE AND WOULD BE DILUTIVE TO THE CLASS 'B' PREFERRED SHARES
PRESENTLY HELD BY ALL OTHER SHAREHOLDERS. MANAGEMENT, HOWEVER,
BELIEVES THIS PROVISION TO BE FAIR TO THE PRESENT BOARD AND TO CONSTITUTE
REASONABLE COMPENSATION.
III.
Ratification of Appointment of Independent Accountants
The Board of Directors has appointed Causey, Demgen & Moore as independent
certified public accountants for the Company to examine the financial
statements of the Company for the fiscal year ending December 31, 2000.
The appointment of Causey, Demgen & Moore is subject to ratification of the
shareholders and a resolution for such ratification will be offered at the
annual Meeting as is contained in the enclosed proxy ballot. Causey, Demgen
Moore have been acting as independent accountants for the Company for eleven
years and, both by virtue of its familiarity with the Company's affairs, its
lower cost, and its ability, is considered by the Board as best qualified to
continue its performance of these functions. The present Board of Directors
recommends adoption of the resolution retaining the foregoing accounting firm
as independent auditors for the Company. The foregoing accountants may have
a representative present at the Annual Meeting and have agreed to respond
directly to any shareholder accounting questions sent to their office at 1801
California, Suite 4650, Denver, Colorado 80202. The present Board urges your
vote in favor of the ratification of the current auditors.
Other Matters
The Annual Meeting is called for the purposes set forth in the notice thereof.
The Board of Directors does not intend to present, and has not been informed
that any other person intends to present, any matters for action at the
Annual Meeting other than those specifically referred to in the Notice of
Meeting and this Proxy Statement. If any other matters are properly brought
before the Annual Meeting, it is the intention of the proxy holders to vote
on such matters in accordance with their judgment.
Stockholder Proposals
There were no stockholders proposals submitted for consideration at this
Annual Meeting. Stockholder proposals intended to be considered at the next
Annual Meeting of Stockholders must be received by The Company no later than
December 31, 2000. Such proposals may be included in the next proxy
statement if they comply with certain rules and regulations promulgated
by the Securities and Exchange Commission.
Other Information
Financial Reports & Other Important Documents
The financial reports for the Company's operations ending December 31, 1999, as
attached to the 10-K, are considered an integral part of this Proxy Statement
and are incorporated by this reference. See also, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" at in the
enclosed 10-K Report which is also incorporated by this reference.
Dated: April 18, 2000.
BY ORDER OF THE BOARD OF DIRECTORS:
CROFF ENTERPRISES
621 Seventeenth Street, Suite 830
Denver, Colorado 80293
(303) 383-1555
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 20, 2000
____________
To Our Shareholders:
Notice is hereby given of the Annual Meeting of Shareholders (the "Annual
Meeting") of Croff Enterprises, Inc. (the " Company") to all of the
shareholders of the Company. The Annual Meeting will be held in the
conference room of the Company's facilities at 621 Seventeenth Street,
Suite 830, Denver, Colorado on June June 20, 2000 at 1:00 p.m. for the
following purposes:
(1) The election of the entire five member Board of Directors of the Company, to
serve an indefinite term until their respective successors are elected and
qualified;
(2) To increase the number of class "B" preferred shares from 520,000
presently authorized to 1,000,00 shares.
(3) Ratification of the appointment of Causey, Demgen & Moore, Inc.,
independent accountants, as the Company's independent accountants for the
ensuing year;
Consideration and action upon such other business as may properly come before
this meeting or any adjournment Thereof.
The enclosed Proxy Statement includes information relating to these proposals.
All shareholders of record of the Company's common stock at the close of
business on April 30, 2000 are Entitled to notice of and to vote at the
Annual Meeting or any adjournment or postponement thereof. At least a
Majority of the outstanding shares of common stock of the Company present in
person or by proxy is required for A quorum.
By Order of the Board of Directors
/s/Gerald L. Jensen
Chairman of the Board
April 18, 2000
Denver, Colorado
THE BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN THE
COMPANY'S ANNUAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. ACCORDINGLY,
PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY BY MAIL IN THE
POSTAGE-PAID ENVELOPE PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY
WITHDRAW YOUR PROXY, IF YOU WISH, AND VOTE IN PERSON. YOUR PROXY IS
REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
Gerald L. Jensen, Chairman of the Board
CROFF OIL COMPANY PROXY FORM AND BALLOT
ANNUAL MEETING, JUNE 20,2000
Please complete, sign and provide any additional information on this Proxy
Statement and return it to the Company by mailing it back prior to
June 1, 2000 in the enclosed envelope.
Election of all current management nominees to the Board of
Directors. If voting against election of all, indicate below
your individual vote.
YOU MAY VOTE FOR ALL CURRENT NOMINEES ABOVE; OR YOU MAY VOTE INDIVIDUALLY
As TO EACH PROPOSED DIRECTOR BELOW:
______________________________________
FOR AGAINST ABSTAIN
Mr. Gerald L Jensen, Dir. And Pres.
___________________________________
FOR AGAINST ABSTAIN
Mr. Richard H. Mandel, Jr., Director
______________________________________
FOR AGAINST ABSTAIN
Mr. Edwin Peiker, Director & Sec.
______________________________________
FOR AGAINST ABSTAIN
Mr. Dilworth A. Nebeker, Director
______________________________________
FOR AGAINST ABSTAIN
Mr. Julian D. Jensen, Director
______________________________________
OTHER MATTERS
FOR AGAINST ABSTAIN
Election to retain Causey, Demgen & Moore as independent
CPAs for the Company.
_________________________________________________________
FOR AGAINST ABSTAIN
Increase Authorization of Class "B" Preferred Shares from
520,000 Shares to 1,000,000 Shares.
_________________________________________________________
FOR AGAINST ABSTAIN
Grant to current management the right to vote your proxy in
accordance with their judgment on other matters as may
properly come before the meeting.
__________________________________________________________
OTHER SHAREHOLDER PROPOSALS AND/OR NOMINATIONS
(Unless otherwise indicated, your proxy will be voted in favor of any
nomination or proposal indicated below.)
__________________________________________________________
(Attach sheets as necessary)
____ Check here if you plan
to attend meeting
SIGNATURE
___________________________________________________________
_______
Print Shareholder Name(s) exactly
as they appear on your Certificate:
Complete If Known:
Certificate #:
No. of Shares