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CROFF ENTERPRISES
621 Seventeenth Street, Suite 830
Denver, Colorado 80293
(303) 383-1555
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
November 9, 2001
11:00 A.M. (MST)
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
November 9, 2001 at 11:00 a.m. for the following purposes:
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;
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 September 24, 2001 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
Gerald L. Jensen
Chairman of the Board
October 15, 2001
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.
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PROXY STATEMENT
CROFF ENTERPRISES, INC.
2001 ANNUAL MEETING OF SHAREHOLDERS
November 9, 2001
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 November 9, 2001 at 11:00 a.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, 2000 and current
10-Q Report for the period ending June 30, 2001.
VARIOUS ITEMS OF IMPORTANT INFORMATION AND FINANCIAL STATEMENTS FOR THE
COMPANY RELATED TO THIS PROXY STATEMENT ARE SET-OUT IN THE ENCLOSED ANNUAL
REPORT ON FORM 10-K AND MOST CURRENT 10-Q QUARTERLY REPORT. SUCH DETAILED
INFORMATION MAY BE RELEVANT IN REVIEWING THIS PROXY STATEMENT, BUT IS NOT
NECESSARILY REPEATED IN THIS DOCUMENT. ACCORDINGLY, EACH SHAREHOLDER
SHOULD REFER TO THE FORM 10-K AND 10-Q 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 at any 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 September 24, 2001. 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.
Preferred B Shares are not entitled to vote in this election.
Shares entitled to vote will be determined based upon the official
shareholder record of September 24, 2001. 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.
Quorum
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.
Abstentions
Abstentions will be counted for purposes of determining both (i) the
presence or absence of a quorum for the transaction of business and (ii) the
total number of Votes Cast with respect to a proposal (other than the election
of directors). In the absence of controlling precedent to the contrary, the
Company intends to treat abstentions in this manner. Accordingly, abstentions
will have the same effect as a vote against the proposal.
Broker Non-Votes
Broker non-votes will be counted for purposes of determining the presence
or absence of a quorum for the transaction of business, but will not be
counted for purposes of determining the number of Votes Cast with respect to
the particular proposal on which the broker has expressly not voted.
Accordingly, broker non-votes will not affect the outcome of the voting on a
proposal that requires a majority of Votes Cast.
Stock Ownership of Certain Beneficial Owners and Management
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 SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
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%
(1) 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 31,2002. 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. Mr. Julian D. Jensen has an
approximate 43% beneficial interest in this Trust and Mr. Gerald L.
Jensen has an approximate 38% beneficial interest.
MATTERS SUBJECT TO SHAREHOLDER VOTE
Proposal 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, 61, PRESIDENT AND DIRECTOR.
President of Croff Oil Company on a part-time basis since October, 1985.
Mr. Jensen in 1999 and 2000 participated in founding Online Launch, Inc., a
start-up business-to-business incubator company, which is now inactive. Mr.
Jensen continues as the Chairman of Provisor Capital, Inc., a medical
financing company financed by Online Launch, Inc. 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, finance, and oil and gas companies.
RICHARD H. MANDEL, JR., 70, 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, 60, 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. For the last ten
years he has been an investment advisor and a lawyer in private practice. 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., 65, 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, 53, DIRECTOR.
Mr. Julian Jensen is the brother of the Company's president and has served
as legal counsel to the Company for the past twelve years. Mr. Jensen has
practiced law, primarily in the areas 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
Percentage of
Director Number of Shares Issued and
NAME Since Compensation (Beneficial & Legal) Outstanding
GERALD L. JENSEN 1985 Salary as President: 213,345 37.01%
$54,000 (See Principal (See Principal
No Director Compensation Shareholder Chart, Shareholder Chart,
- See Below* above) (1) above)
DILWORTH NEBEKER 1981 Normal Director Stipend 1,300 (2) .25%
Only (See Below)**
RICHARD MANDEL 1985 Normal Director Stipend 10,100 (2) 1.75%
Only (See Below)**
EDWIN PEIKER, JR. 1985 Normal Director Stipend 14,000 (2) 2.43%
Only (See Below)**
JULIAN D. JENSEN 1990 Normal Director Stipend 46,532 8.04%
Only (See Below)** (See Principal
Shareholder Chart,
above) (2) & (3)
* Mr. Gerald Jensen also receives an IRA contribution from the Company of
$1,620 (3% of salary) per year.
** Directors are paid $350 for a half day meeting and $500 for a full day
meeting.
(1) Includes shares held by Jensen Development Corporation (132,130)
which is wholly owned by Gerald L. Jensen.
(2) Includes warrant expiring December 31, 2002 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 exercised 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.
Board and Committee Meetings
During the fiscal year ended December 31,2000 (the "Last Fiscal Year"),
the Board of Directors held three (3) meetings. The Board has held 3 meetings
in calendar year 2001 to date. The Board of Directors does not have separate
sections or committees. All audits and compensation issues, as well as other
matters, are addressed as a committee of the whole.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers and persons who beneficially own
more than 10% of the Company's Common Stock to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission ("SEC"). Such persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms filed by such persons.
Based solely on the Company's review of such forms furnished to the
Company and representations from certain reporting persons, the Company
believes that all filing requirements applicable to the Company's executive
officers, directors and more than 10% stockholders were complied with during
the Last Fiscal Year.
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 Director 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 setout in
the enclosed 10-K Report and incorporated by this reference.
Management's Stock Rights and Options
A discussion of management's stock rights and options are referenced above
and further discussed in the enclosed and incorporated 10-K Report.
Management's Recommendations
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.
Proposal II.
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, 2001. 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.
Transaction of Other Business
At the date of this Proxy Statement, the only business that the Board of
Directors intends to present or knows that others will present at the meeting
is as set forth above. If any other matter or matters are properly brought
before the meeting, or any adjournment thereof, it is the intention of the
persons named in the accompanying form of proxy to vote the proxy on such
matters in accordance with their best judgment.
Any stockholder may present a matter from the floor for consideration at
a meeting so long as the procedures established for such meeting and the
Bylaws are followed:
Other Information
Financial Reports & Other Important Documents
The financial reports for the Company's operations ending December 31,
2000, (10-K) and a summary of the quarterly results through June 30, 2001 is
attached. The 10-K is considered an integral part of this Proxy Statement
and is incorporated by this reference. See also, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the
enclosed 10-K Report which is also incorporated by this reference.
Dated: October 15, 2001
BY ORDER OF THE BOARD OF DIRECTORS:
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CROFF ENTERPRISES PROXY BALLOT
ANNUAL MEETING, NOVEMBER 9, 2001
Please complete, sign and provide any additional information on this Proxy
Statement and return it to the Company by mailing it back prior to November 9,
2001 in the enclosed envelope.
FOR AGAINST ABSTAIN PROPOSAL
- ----- ------- ------- -------------------------------------------------------
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
Mr. Gerald L. Jensen, Dir. and Pres.
- ----- ------- -------
Mr. Richard H. Mandel, Jr., Director
- ----- ------- -------
Mr. Edwin Peiker, Director & Sec.
- ----- ------- -------
Mr. Dilworth A. Nebeker, Director
- ----- ------- -------
Mr. Julian D. Jensen, Director
- ----- ------- -------
OTHER MATTERS
Election to retain Causey, Demgen & Moore as
- ----- ------- ------- independent CPAs for the Company.
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.)
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(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 #:
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- ------------------------------------ No. Of Shares:
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- ------------------------------------ Date:
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