EQUITY OIL COMPANY
P.O. BOX 959 SALT LAKE CITY, UT 84110-0959
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
Notice is hereby given that the Annual Meeting of Stockholders of Equity
Oil Company will be held at the Company's executive office, Suite 806, 10 West
Third South, Salt Lake City, Utah, 84101, on the 13th day of May, 1998 at 2:00
p.m., to consider and act upon the following matters:
1. To elect three Directors to hold office for three years and
until the Annual Meeting of Stockholders in 2001, one Director
to hold office for two years and until the Annual Meeting of
Stockholders in 2000, and until their successors are duly
elected and qualified.
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 March 24, 1998,
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting or any adjournment thereof. The transfer books will
not be closed.
You are cordially invited to attend the meeting. In the event you will be
unable to attend, you are respectfully requested to sign, date and return the
enclosed proxy in the return envelope at your earliest convenience.
BY ORDER OF THE BOARD OF DIRECTORS
CLAY NEWTON, Secretary
PROXY STATEMENT
This Proxy Statement is furnished to Stockholders of Equity Oil Company in
connection with the solicitation of proxies by the Board of Directors of the
Company to be used in voting at the Annual Meeting of Stockholders to be held
May 13, 1998, at 2:00 p.m. at the Company's executive offices, Suite 806, 10
West 300 South, Salt Lake City, Utah, or at any adjournment of said meeting. The
Company's Annual Report is enclosed in the envelope. The approximate date on
which the Proxy Statement and the form of Proxy will be first sent to
Stockholders is April 1, 1998. Only holders of common stock of record at the
close of business on March 24, 1998 will be entitled to vote at the Meeting of
Stockholders. On that date, the Company had issued and outstanding 12,596,500
shares of common stock, which is the only class of securities of the Company.
All outstanding shares of said stock are entitled to vote and each shareholder
of record entitled to vote shall have one vote for each share of stock standing
in his name on the books of the Company. Each shareholder shall have the right
to vote all such shareholders' votes for as many persons as there are Directors
to be elected and for whose election such shareholder has the right to vote.
Cumulative voting is not allowed under the Company's Articles of Incorporation.
The shares represented by valid proxies will, if received by the Company in
time for the meeting, be voted as authorized by such proxies. IF NO INSTRUCTIONS
ARE GIVEN, THE SHAREHOLDERS' SHARES WILL BE VOTED IN FAVOR OF THE DIRECTORS
NAMED, AND UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND
ANY ADJOURNMENT THEREOF. Each proxy is revocable at any time before it is voted.
VOTING PROCEDURES
The Directors will be elected by the affirmative vote of the holders of a
plurality of the shares of common stock present in person or represented by
proxy at the Annual Meeting, provided a quorum is present. A quorum is present
if, as of the record date, the holders of at least a majority of the outstanding
shares of Common Stock are present in person or represented by proxy at the
Annual Meeting. Votes will be counted and certified by one or more Inspector(s)
of Election who are expected to be employees of Chase Mellon Shareholder
Services, the Company's transfer agent. The proxies granted by stockholders will
be voted individually for the election of the nominees listed below, unless
authority to vote is withheld as indicated in the proxy.
<PAGE>
ITEM 1. ELECTION OF DIRECTORS
The Articles of Incorporation of Equity Oil Company provide for a Board of
Directors consisting of not less than six (6) nor more than nine (9) persons,
the exact number within the minimum and maximum to be determined from time to
time by the Board of Directors. On September 17, 1997, the Board increased the
number of Directors from seven (7) to eight (8) persons and on November 20, 1997
Mr. William P. Hartl was elected to serve as the new Director. The Articles
provide that a Director thus elected shall hold office until the next annual
meeting of stockholders and until his successor has been elected and qualified.
The Articles of Incorporation also divide the Board of Directors into three
classes as nearly equal in number as possible with staggered terms of three (3)
years each. The newly created office of Director was put into the same class as
those Directors whose term expires in the year 2000. Accordingly, Mr. Hartl has
been nominated to serve an initial term of two years. Three other nominees have
been nominated to hold office for three (3) years or until the year 2001.
The proxy solicited in connection with this proxy statement cannot be voted
for a greater number than four Directors. All Director nominees are presently
Directors of the Company. Information concerning the Director nominees to be
elected at the annual meeting and the continuing Directors and Officers is
listed below.
Names, Principal Occupations During the Past Five Years, and Selected Other
Information Concerning Nominees for Director
Served as
Director
Since
THREE YEAR NOMINEES:
PAUL M. DOUGAN Age - 60 1992
Director
President and Chief Executive Officer, Equity Oil Company
President and Director, Symskaya Exploration, Inc.
Director, Leucadia National Corporation.
Mr. Dougan acted as Corporate Secretary form 1968 until
his appointment as President in January, 1994.
DOUGLAS W. BRANDRUP Age - 57 1975
Director
Chairman of the Board of Directors Senior Partner,
Griggs Baldwin & Baldwin Attorney at Law - New York City,
New York Director, 3-D Geophysical, Inc.
JOSEPH C. BENNETT Age - 65 1995
Director
Self-employed. Mining and oil and gas investments.
Director, Coeur d'Alene Mines Corporation
Director, Paragon Petroleum Limited.
TWO YEAR NOMINEE:
WILLIAM P. HARTL Age - 63 1997
Director
Vice President, Investor Relations, Ashland, Inc.
Past President, Petroleum Investor Relations Association
Past Chairman, National Investor Relations Institute
Director, The Communications Strategy Group, Inc.
It is intended that the shares represented by the enclosed proxy will be
voted for the election of the above named nominees, Paul M. Dougan, Douglas W.
Brandrup, Joseph C. Bennett, and William P. Hartl. In the event that any nominee
for Director should be unavailable or unable to serve, which is not anticipated,
it is intended that such shares shall be voted for such substitute nominee as
may be selected by the Board of Directors.
<PAGE>
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Served Term
Since Expires
WILLIAM D. FORSTER Age - 51 1994 2000
Director
Co-Chairman, Cheniere Energy, Inc.
RANDOLPH G. ABOOD Age - 47 1997 2000
Director
Manager and member of The Ninigret Group, L.C. Tax
attorney, Satterlee Stephens Burke & Burke 1976 to
1996. Director, Royster-Clark, Inc.
P.J. "JACK" BERNHISEL Age - 50 1996 2001
Director
Owner, European Marble & Granite Company. Former
Senior Vice President - Law and Finance for
Kennecott Corporation, 1986 - 1993, and Corporate
Controller for the Standard Oil Company. Attorney
and Certified Public Accountant.
W. DURAND EPPLER Age - 44 1997 2001
Director
Mr. Eppler was appointed on November 20, 1997 to
fill the unexpired term of Mr. L.E. Buzarde, Jr.,
who resigned from the Board of Directors on
February 7, 1997. Vice-President, Business
Development and Planning, Newmont Gold Company.
Formerly Managing Director of Chemical Securities,
Inc. Metals and Mining Group.
CLAY NEWTON Age - 40 1991
Corporate Secretary and Treasurer, Equity Oil
Company; Director and Treasurer, Symskaya
Exploration, Inc.
JAMES B. LARSON Age - 36 1997
Vice President - Operations
Mr. Larson, a registered petroleum engineer, was
appointed to the office of Vice President -
Operations on November 15, 1996. He has been
employed by the Company for over 10 years.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
Title of Amount and Nature of Percent
Class Name Beneficial Ownership of Class
- ------------------------
Common 1Paul M. Dougan 592,476 4.5
President, Chief Executive Officer
and Director Nominee
2Douglas W. Brandrup 65,200 .5
Chairman of the Board of Directors
and Director Nominee
Joseph C. Bennett 12,000 .1
Director Nominee
William P. Hartl 1,000 -
Director Nominee
P.J. "Jack" Bernhisel 14,000 .1
Director
William D. Forster 18,000 .1
Director
Randolph G. Abood 12,000 .1
Director
W. Durand Eppler 500 -
Director
3James B. Larson 62,800 .5
Vice President - Operations
4Clay Newton 65,400 .5
Corporate Secretary and
Chief Financial Officer
5Total Ownership of Directors 843,376 6.4
and Executive Officers as a Group
- --------
1 The calculation of beneficial ownership includes 333,500 shares subject to
outstanding options that were exercisable at the table date or within 60 days of
such date; 66,676 shares owned by Mr. Dougan's wife and 31,206 shares held in a
Family Limited Partnership of which Mr. Dougan is the general partner. The
calculation does not include 3,470 shares for which Mr. Dougan's wife acts as
trustee and 302,570 shares owned by Mr. Dougan's married daughters and their
families over which Mr. Dougan has no voting power and concerning which he is
not the beneficial owner.
2 The calculation of beneficial ownership includes 24,500 shares concerning
which Mr. Brandrup disclaims any beneficial ownership, consisting of 18,500
shares owned by various trusts for which Mr. Brandrup acts as trustee and has
shared voting and investment power, and 6,000 shares owned by Mr. Brandrup's
wife and children.
3 The calculation of beneficial ownership includes 58,200 shares subject to
outstanding options that were exercisable at the table date or within 60 days of
such date.
4 The calculation of beneficial ownership includes 57,800 shares subject to
outstanding options that were exercisable at the table date or within 60 days of
such date.
5 The calculation of beneficial ownership includes 449,500 shares subject to
outstanding options that were exercisable at the table date of within 60 days of
such date.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers and persons who own more than ten (10%) percent
of the registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
Officers, Directors and greater than ten (10%) percent shareholders are required
to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the reports received by it, or written
representations from certain reporting persons that no filings were required for
those persons, the Company believes that during fiscal 1997, its Officers,
Directors and greater than ten (10%) percent shareholders complied with all
applicable filing requirements, except that one report required to be filed on
Form 4 was not made by Douglas W. Brandrup, Chairman. He became aware of two
transactions made by his wife in December after the time for filing a Form 4 had
expired. These transactions, along with two acquisitions that had previously
qualified as exempt transactions for year-end Form 5 reporting, and which
exemptions were lost as a result of the foregoing transactions, should have been
reported on Form 4 for the month of December. All of the transactions have been
reported on a timely filed Form 5.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has an Audit, Compensation, and Nominating
Committee. The Audit Committee reviews internal and external reporting of the
Company, the scope of the independent audit and any comments by the independent
auditors regarding internal controls and accounting procedures, and further
considers management's response to any such comments. The Audit Committee
consists of William D. Forster, Chairman, P.J. "Jack" Bernhisel, Randolph G.
Abood, and W. Durand Eppler. The Audit Committee met once in 1997 to review the
work of the independent auditors.
The Compensation Committee evaluates management's performance, reviews and
establishes compensation levels for the Company's executive Officers,
administers the Company's cash bonus and incentive stock option plans, and
considers other related matters concerning management motivation and
compensation. The Committee consists solely of outside Directors. The members of
the Committee are Joseph C. Bennett, Chairman, Douglas W. Brandrup, P.J. "Jack"
Bernhisel, William D. Forster, Randolph G. Abood, William P. Hartl, and W.
Durand Eppler. The Committee met twice in 1997.
The Nominating Committee interviews, nominates and recommends individuals
for membership on the Company's Board of Directors. The entire Board of
Directors acts as a Nominating Committee. By February 5 of each year, candidates
are nominated for directorships to be filled. Candidates can be suggested by
Board members or stockholders. There is no specific procedure to be followed by
security holders in submitting recommendations to the Board. In selecting a
candidate, consideration is given to the skills and characteristics required of
Board members in the context of the current makeup of the Board and business of
the Company.
The Board of Directors held four regular and one special meeting in 1997.
No Director attended less than 75% of the meetings.
COMPENSATION OF DIRECTORS
Non-Employee Directors were each paid a retainer fee in the amount of
$4,000 on December 31, 1997. In addition, fees of $500 were paid for each of the
regular meetings attended in 1997. Each Non-Employee Director was granted 2,000
shares of the Company's common stock as additional compensation, as provided for
under the 1993 Incentive Stock Option Plan. The Chairman of the Board receives
additional fees of $2,000 per month.
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following information is furnished for the years ended December 31,
1997, 1996 and 1995 respectively, for the Company's President and Chief
Executive Officer and each of the other executive Officers of the Company whose
salary and bonus exceeded $100,000 during 1997.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
Other Annual Restricted Options/ All other
Name and Principal Position Year Salary ($) Bonus ($)(3 Compensation Stock Awards SAR's(1) Compensation(2)
---- ---------- --------- ------------ ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul M. Dougan, 1997 235,000 47,000 NA NA 35,000 38,039
President and 1996 235,000 35,250 NA NA 89,500 36,934
Chief Executive Officer 1995 200,000 80,000 NA NA 35,000 31,148
Clay Newton 1997 105,000 21,000 NA NA 9,000 17,382
Corporate Secretary, 1996 100,000 15,000 NA NA 13,000 16,684
Treasurer, and 1995 87,000 34,800 NA NA 9,000 14,198
Chief Financial Officer
James B. Larson 1997 105,000 21,000 NA NA 11,000 17,159
Vice-President of Operations 1996 90,000 13,500 NA NA 13,000 15,184
1995 79,000 31,600 NA NA 9,000 12,998
</TABLE>
NOTES
(1) Does not include tandem SARs granted in 1997 as follows: (i) Mr. Dougan
35,000; (ii) Mr. Newton, 3,000; (iii) Mr. Larson, 5,000; SARs are issued in
tandem with non-qualified options, either of which, but not both, may be
exercised. See Options Granted table for more information.
(2) The amounts shown in this column for the last fiscal year include the
following: (i) Mr. Dougan, $24,000 - annual Company contribution to the defined
contribution plan (DCP), $11,250 - contribution to a supplemental retirement
plan, $2,789 - value of Company paid term life insurance premiums; (ii) Mr.
Newton, $15,750 - annual Company contribution to the DCP,$1,632 - value of
Company paid term life insurance premiums. (iii) Mr. Larson, $15,750 annual
Company contribution to the DCP, $1,409 - value of Company paid term life
insurance.
(3) Bonus amounts shown are those earned for the year indicated. 75% of
1997 bonuses were paid in cash, with the remainder paid in Company stock as
follows: Mr. Dougan, 4,700 shares, Mr. Newton and Mr. Larson, 2,100 shares.
<PAGE>
OPTIONS GRANTED IN 1997
The following information is furnished for the year ended December 31, 1997 for
the Company's named executive Officers for stock options granted in 1997.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
Individual Grants of Stock Price Appreciation
for Option Term
% of Total
Options/SARs
Granted to
Options Employees in Exercise or
SARs Granted Fiscal Base Price Expiration
(#) Year ($/SH) Date 5% 10%
Name
<S> <C> <C> <C> <C> <C> <C>
Paul M.Dougan....... (1) - 0.0% $3.5625 1/25/2007 $ - $ -
(2)35,000 28.8% $3.5625 1/25/2007 $78,255 $198,475
(3)35,000 28.8% $3.5625 1/25/2007 $78,255 $198,475
Clay Newton...........(1) 6,000 4.9% $3.5625 1/25/2007 $15,154 $39,565
(2) 3,000 2.5% $3.5625 1/25/2007 $ 7,577 $19,782
(3) 3,000 2.5% $3.5625 1/25/2007 $ 7,577 $19,782
James B. Larson.......(1) 6,000 4.9% $3.5625 1/25/2007 $15,154 $39,565
(2) 5,000 4.1% $3.5625 1/25/2007 $12,629 $32,970
(3) 5,000 4.1% $3.5625 1/25/2007 $12,629 $32,970
</TABLE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END VALUES
Number of Value of Unexercised
Unexercised Options in the money Options
Shares SARs at FY-End /SARs at FY-End
Acquired on Value (#)Exercisable/ (#)Exercisable/
Name Exercise Realized($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Paul M. Dougan NA NA 298,500/35,000 -/-
Clay Newton NA NA 48,000/32,000 -/-
James B. Larson NA NA 48,000/34,000 -/-
</TABLE>
NOTES
(1) Options granted under the Company's Incentive Stock Option Plan. Under
the terms of the Plan, options are 10 year options with vesting periods ranging
from 1 to 6 years, generally terminating 3 months following an optionee's death
or retirement.
(2) Non-qualified stock options granted under the Company's Incentive Stock
Option Plan. Under the terms of the Plan, these are 10 year options with vesting
periods ranging from 1 to 6 years, generally expiring 3 years following an
optionee's retirement.
(3) SARs issued in tandem with non-qualified options above, either of
which, but not both, may be exercised.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION PHILOSOPHY AND OBJECTIVES
The Company is in the oil and gas exploration and production business, an
industry characterized by unpredictable revenues resulting from price volatility
in world oil and gas markets. Because of this unstable environment, the
Company's compensation policies are not based upon short term, quarterly or even
yearly financial results; rather, the policies focus on longer term objectives
and achievements, calculated not only to maintain but to expand the Company's
asset base through acquiring producing reserves at attractive costs, locating
and exploring promising prospects, and implementing projects designed to
increase reserves and production on existing properties.
The philosophy upon which the development and administration of the
Company's cash bonus and stock option plans are based is to directly align the
interests of executive management and other key employees with those of our
shareholders. The major components of this philosophy are:
o Creating compensation plans which enable the Company to attract and
retain Officers and key employees important to the Company's success,
and to provide them a compensation package reflecting the Company's
performance, measured by success in achieving strategic, operating and
financial objectives.
o Providing meaningful cash and equity-based incentives for executives,
and other key employees, to ensure they are motivated over the short
and long term to respond to the Company's challenges and opportunities
as owners, rather than simply as employees.
o Rewarding executives and key employees for superior performance when
shareholders receive an attractive return on their investment over the
longer term.
The Committee's objective is to set executive and other key employee base
salaries at or below the average base salaries of similar companies in the
energy sector, based upon industry surveys. These surveys include the
registrants used by the Company in its self-constructed peer group. However, in
addition to average or below average base salary levels, the Committee provides
incentives through a combination of a cash bonus program, an equity-based stock
option program, and a profit sharing retirement plan.
Under the cash bonus program, executives and other key employees can earn
additional compensation up to 50% of their base salary. In determining the size
of the bonus, the key factors considered by the Committee, in order of their
importance, are: (i) the year-end stock price exceeding a 3-year rolling average
of year-end stock prices, (ii) reserve replacement exceeding production by a
meaningful measure and (iii) finding costs. Along with these factors, the
Committee subjectively considers the degree of success in meeting strategic,
operating and financial objectives such as oil and gas production levels,
earnings per share, operating cash flow, and developing exploration and
development prospects, among other considerations. These latter measures, while
not specifically weighted, are all critical to building shareholder value which
is the ultimate goal of the Company and its compensation programs.
The stock option program provides a method of encouraging long term results
beneficial to our shareholders since the potential value of each stock option is
tied to increased shareholder value. The options are always awarded at present
market value, and vest in 1 to 6 years. All stock options have a duration of ten
years before expiration. The Company has a policy of not repricing stock
options.
<PAGE>
COMPANY PERFORMANCE AND CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation of the Company's President and Chief Executive Officer is
determined in the same manner as the compensation for other Officers and key
employees of the Company as described above. While there is no specific
relationship between corporate performance and base salary, incentive
compensation of the Company's President and Chief Executive Officer is largely
dependent upon the overall performance of the Company. In setting Mr. Dougan's
base salary, the Committee considered his contribution in developing and
executing the Company's growth strategy, progress in the area of reserve
replacement, and the continued high level of energy which he devoted to the
Company. The Committee further reviewed his salary based on the type of industry
evaluation discussed above. According to the performance criteria of the cash
bonus program, which includes reserve replacement success, stock price
appreciation, and finding cost performance, Mr. Dougan earned a bonus equivalent
to 20% of his 1997 base salary based upon reserve replacement success, which was
paid in early 1998. The Committee also determined in early 1998 to grant him
54,000 non-qualified options.
Respectfully submitted,
Equity Oil Company Compensation Committee
Joseph C. Bennett, Chairman Douglas W. Brandrup
P.J. "Jack" Bernhisel W. Durand Eppler
William D. Forster William P. Hartl
Randolph G. Abood
CHANGE IN CONTROL AGREEMENTS
The Company has entered into change in control agreements with Messrs.
Dougan, Larson, and Newton. The initial term of each agreement expires on
December 31, 1999, or twenty-four months following a "Change in Control" (as
defined below). Mr. Dougan's agreement provides that in the event of a Change in
Control, followed by the occurrence of certain specified events, including the
assignment of the Mr. Dougan to duties inconsistent with his position
immediately prior to the change in control, a reduction in his salary, or
requiring him to be relocated, he will receive an amount equal to two and
one-half times his Average Annual Earnings, as defined in Section 280G of the
Internal Revenue Code, and is entitled to receive medical and other benefits for
a two year period. Mr. Larson's and Mr. Newton's agreements provide for a
payment in similar circumstances equal to two times their Average Annual
Earnings.
Under the agreements, a "Change in Control" is defined as an occurrence of
an event whereby (i) any person or group becomes the beneficial owner of 20% or
more of the combined voting power of the Company's outstanding securities; (ii)
the Company merges or combines into another corporation; or (iii) the business
of the Company is disposed of pursuant to a partial or complete liquidation of
the Company.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Information concerning beneficial owners of more than five percent of
registrant's voting securities is as follows:
Amount and
Nature of
Title of Name and Address of Beneficial Percent
Class Beneficial Owner Ownership of Class
- -------------------------------------------------------------------------------
Common Croft - Leominster, Inc. 950,000 7.5
207 East Redwood Street
Suite 802
Baltimore, MD 21202
1J. Lynn Dougan 860,000 6.8
215 South State Street
Salt Lake City, UT 84101
2Dimensional Fund 789,425 6.3
Advisors, Inc.
1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401
- --------
1 The calculation of beneficial ownership includes 315,000 shares owned by
the Galena Group, a limited partnership of which Mr. Dougan is the general
partner and has sole voting and investment power. Mr. Dougan is the brother of
Paul M. Dougan, President of the Company.
2 According to a Schedule 13-G dated February 6, 1998 by Dimensional Fund
Advisors, Inc. Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 789,425 shares of
Equity Oil Company stock as of December 31, 1997, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
<PAGE>
COMPARISON OF CUMULATIVE SHAREHOLDER RETURN
COMPARISON OF CUMULATIVE SHAREHOLDER RETURN(1)
This page is a graphical representation of the performance graph required
to be filed with this proxy statement. The graph compares the return of an
investment in the Company's Common Stock at December 31, 1992 with a similar
investment in the stocks of the Company's selected peer group, a published
industry or line-of-business index, and a broad equity market index, which in
this case is the Russell 2000 Small Cap index.
The data points of the graph are as follows:
1992(1) 1993 1994 1995 1996 1997
Equity Oil Company 100 124.718 120.821 183.180 95.487 95.487
Peer Group(2) 100 131.035 125.045 158.096 238.375 223.092
Russell 2000 Small Cap 100 118.879 116.711 149.916 174.644 213.700
S&P Oil & Gas Small Cap 100 105.775 104.148 128.598 255.155 226.116
Notes:
(1) Assumes that the value of the investment in the Company's common stock,
and in each index, was $100 on December 31, 1992, and that all dividends were
reinvested.
(2) The Peer Group Index was selected by the Company in 1993, and
originally consisted of 9 companies. Due to the consolidation in the oil and gas
industry, the Group has decreased to 6 companies. The Company is concerned that
additional consolidation will further reduce the number of companies in the peer
group in the future, making it less meaningful as a comparative index. The
Company has elected to use a broader, published industry index for comparative
purposes, beginning with this proxy statement. The self-constructed peer group
index is comprised of the following independent oil and gas companies: Berry
Petroleum, Comstock Resources, Magellan Petroleum Corp., Maynard Oil Co., Swift
Energy Co., and Wiser Oil Co. The index is weighted to reflect the relative
market capitalization of the peer group companies.
(3) The Company has elected to use the Standard & Poors Oil & Gas
(Exploration & Production) Small Cap Index, which consists of 17 companies, as
its published industry index beginning with this proxy statement.
<PAGE>
EXPENSES OF SOLICITATION
The expense of soliciting proxies, including costs of preparing, assembling
and mailing of the notice, proxy, and proxy statement will be paid by the
Company. The Company has engaged D. F. King & Co., Inc., New York, to assist in
the soliciting of proxies from brokerage firms and others, and for forwarding
the soliciting materials to beneficial owners of stock. It is estimated that up
to $5,000 will be incurred by the Company in connection with the solicitation.
In addition to the use of the mails, proxies may be solicited by personal
interview or by telephone by Officers and Directors of the Company.
AUDITORS
The Company's financial statements for the year ended December 31, 1997
were examined by the independent certified public accounting firm of Coopers &
Lybrand L.L.P. The Board of Directors has again selected their firm to serve as
the auditors for the Company for 1998. A representative of Coopers & Lybrand
L.L.P. is expected to be present at the stockholders' meeting to make any
statement they may desire or respond to such questions as may be appropriate.
DATE FOR STOCKHOLDER PROPOSALS
FOR THE 1999 ANNUAL MEETING
If stockholders desire to submit proposals to be presented at the Company's
1999 Annual Meeting, the same should be sent to Equity Oil Company at its
principal executive office: P.O. Box 959, Salt Lake City, Utah 84110-0959, no
later than December 1, 1998; otherwise, the proposal or proposals shall not be
included in the Company's proxy statement or form of proxy for the 1999 Annual
Meeting.
ADDITIONAL INFORMATION
UPON WRITTEN REQUEST OF A BENEFICIAL OWNER OF ITS SECURITIES, ISSUER WILL
SEND WITHOUT CHARGE A COPY OF ISSUER'S ANNUAL REPORT ON FORM 10-K, FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION FOR ISSUER'S MOST RECENT FISCAL YEAR,
INCLUDING APPLICABLE FINANCIAL STATEMENTS AND SCHEDULES. WRITTEN REQUESTS SHOULD
BE DIRECTED TO CLAY NEWTON, SECRETARY, EQUITY OIL COMPANY, P.O. BOX 959, SALT
LAKE CITY, UTAH 84110-0959.
DISCRETIONARY AUTHORITY
The Board of Directors is not aware of any matter which may properly be
presented for action at the meeting other than the matters set forth herein.
Should any other matter requiring a vote of the stockholders arise, the proxies
in the enclosed form confer upon the person or persons entitled to vote the
shares represented by such proxies' discretionary authority to vote the same in
respect of any such other matter in accordance with their best judgement in the
interest of the Company.
BY ORDER OF THE BOARD OF DIRECTORS
CLAY NEWTON, Secretary
<PAGE>
EXHIBIT "A"
FORM OF PROXY
EQUITY OIL COMPANY
P.O. BOX 959 SALT LAKE CITY, UT 84110-0959
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
Notice is hereby given that the Annual Meeting of Stockholders of Equity
Oil Company will be held at the Company's executive office, Suite 806, 10 West
Third South, Salt Lake City, Utah, 84101, on the 13th day of May, 1998 at 2:00
p.m., to consider and act upon the following matters:
1. To elect three directors to hold office for three years and
until the Annual Meeting of Stockholders in 2001, and one
director to hold office for two years and until the Annual
Meeting of Stockholders in 2000, and until their successors
are duly elected and qualified.
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 March 24, 1998,
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting or any adjournment thereof. The transfer books will
not be closed.
You are cordially invited to attend the meeting. In the event you will be
unable to attend, you are respectfully requested to sign, date and return the
enclosed proxy in the return envelope at your earliest convenience.
BY ORDER OF THE BOARD OF DIRECTORS
CLAY NEWTON, Secretary
1. To elect the three directors to hold office for three years
and until the Annual Meeting of Stockholders in 2001, and one
director to hold office for two years and until the Annual
Meeting of Stockholders in 2000, or until their successors are
duly elected and qualified.
Three year director nominees: Paul M. Dougan, Douglas W.
Brandrup, Joseph C. Bennett
Two year director nominee: William P. Hartl
Note: to withhold authority to vote for any individual
nominee, strike a line through that nominee's name. Unless
authority to vote for all the foregoing nominees is withheld,
this proxy will be deemed to confer authority to vote for
every nominee whose name is not stricken. In the event any
nominee should be unable to serve, or for good cause will not
serve, it is intended that this proxy shall be voted for such
substitute nominee as may be selected by the Board of
Directors.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Please sign below exactly as name appears. 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.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
EQUITY OIL COMPANY
The undersigned, revoking all prior proxies, hereby appoints Paul M. Dougan,
President, and Clay Newton, Secretary, and any one or both of them with full
power of substitution, as proxy or proxies of the undersigned, to vote all
shares of common stock of EQUITY OIL COMPANY of the undersigned as if the
undersigned were personally present and voting at the Company's Annual Meeting,
May 13, 1998, and at all adjournments thereof.
