<PAGE>
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
BENTON OIL AND GAS 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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF BENTON OIL AND GAS COMPANY]
June 21, 1995
Dear Fellow Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders of
Benton Oil and Gas Company to be held on Wednesday, July 26, 1995, at the Four
Seasons Biltmore Hotel, 1260 Channel Drive, Santa Barbara, California at 3:00
p.m. For those stockholders wishing to stay at the Four Seasons Biltmore Hotel,
there are a limited number of rooms available the nights of July 25, 26 and 27,
at significantly reduced rates. Please mention that you are a Benton
stockholder when making your reservation.
The matters to be acted on at the meeting are set forth in the accompanying
Notice of Annual Meeting and Proxy Statement.
During this meeting, we will report on the operations of the Company during 1994
and its plans for 1995. Your board of directors, executive officers and
management look forward to personally greeting and answering the questions of
those stockholders able to attend.
It is important that your shares be represented at the meeting. Please sign,
date and mail the enclosed proxy in the envelope provided at your earliest
convenience. There is a space on the enclosed proxy for you to indicate if you
will be able to attend the meeting. If you attend the meeting, you may, at your
discretion, withdraw the proxy and vote in person.
It is always a pleasure to meet with our stockholders, and we personally look
forward to seeing as many of you as possible at the Annual Meeting.
Sincerely,
A. E. BENTON
Chairman of the Board,
Chief Executive Officer and President
<PAGE>
BENTON OIL AND GAS COMPANY
1145 EUGENIA PLACE, SUITE 200
CARPINTERIA, CALIFORNIA 93013
(805) 566-5600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Benton Oil and Gas Company, a Delaware
corporation (the "Company"), will be held at the Four Seasons Biltmore Hotel,
1260 Channel Drive, Santa Barbara, California on the 26th day of July, 1995 at
3:00 p.m., Pacific Daylight Time, for the following purposes:
1. To elect (5) five directors to the Board of Directors for terms of one
(1) year or until their successors are elected and qualified;
2. To approve an amendment to the Company's Directors' Stock Option Plan
to increase the number of shares authorized to be issued thereunder
from 200,000 shares to 400,000 shares;
3. To approve and ratify the appointment of Deloitte & Touche LLP as
independent auditors for the fiscal year ending December 31, 1995; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only stockholders of record at the close of business on June 21, 1995 are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. The stock transfer books will not be closed. A list of stockholders
of the Company as of June 21, 1995 will be available for inspection by
stockholders of the Company at the offices of the Company during the ten (10)
days immediately preceding the date of the Annual Meeting.
By Order of the Board of Directors
TONI L. JACKSON
Secretary
June 21, 1995
IMPORTANT
PLEASE VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
THE ENCLOSED POSTAGE-PAID, ADDRESSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND
THE ANNUAL MEETING. IF YOU ATTEND THE ANNUAL MEETING AND SO DESIRE, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY
2
<PAGE>
BENTON OIL AND GAS COMPANY
1145 EUGENIA PLACE, SUITE 200
CARPINTERIA, CALIFORNIA 93013
(805) 566-5600
____________________
PROXY STATEMENT
____________________
The accompanying Proxy is solicited by the Board of Directors of Benton Oil
and Gas Company (the "Company") for use at the Annual Meeting of Stockholders to
be held on July 26, 1995, at 3:00 p.m., Pacific Daylight Time, at the Four
Seasons Biltmore Hotel, 1260 Channel Drive, Santa Barbara, California, or at any
adjournments thereof. When the Proxy is properly executed and returned to the
Company, the shares it represents will be voted at the Annual Meeting in
accordance with the directions noted thereon or, if no direction is indicated,
such shares will be voted in favor of the proposals set forth in the Notice of
Annual Meeting of Stockholders attached hereto. The shares represented by any
Proxy which directs abstention on any proposal will not be voted on such
proposal, but will be included in calculating the shares represented by Proxy at
the Annual Meeting. Broker non-votes on the proposals are treated as shares as
to which voting power has been withheld by the beneficial holders of those
shares, and as shares not entitled to vote on the proposal as to which there is
a broker non-vote. Any stockholder may revoke his or her Proxy at any time
before it is voted by delivering a later Proxy to the Secretary of the Company
at the Company's principal office. A stockholder may also revoke his or her
Proxy at any time before it is voted at the Annual Meeting by delivering a later
Proxy to the Secretary of the Company, or by voting in person at the Annual
Meeting. The cost of the solicitation of Proxies will be borne by the Company.
Only stockholders of record at the close of business on June 21, 1995 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
The Company has outstanding only common stock, $.01 par value (the "Common
Stock"), of which 25,106,993 shares were issued and outstanding at the close of
business on June 21, 1995. Each outstanding share of Common Stock is entitled
to one vote.
This Proxy Statement, together with the Notice of Annual Meeting of
Stockholders, Proxy and the Annual Report of the Company for the fiscal year
ended December 31, 1994, was first mailed to stockholders on or about June 23,
1995.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to (i) each person
known to the Company to be the beneficial owner of more than five percent of the
issued and outstanding Common Stock of the Company as of June 21, 1995, (ii) the
directors, (iii) the executive officers, and (iv) all officers and directors as
a group. The Common Stock ownership information includes current stockholdings,
Common Stock subject to options under the Company's stock option plans which are
currently exercisable or exercisable within 60 days and securities which are
convertible into shares of Common Stock within 60 days.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER OWNED BENEFICIALLY OWNED (1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Scudder, Stevens & Clark, Inc. 2,275,900 (2) 9.06%
Scudder, Stevens & Clark of Canada Ltd.
Scudder, Stevens & Clark du Canada Ltee.
345 Park Avenue
New York, NY 10154
A.E. Benton 1,285,000 (3) 4.98%
William H. Gumma 275,000 (4) 1.08%
David H. Pratt 291,667 (5) 1.16%
Bruce M. McIntyre 90,000 (6) *
Michael B. Wray 100,300 (7) *
Richard W. Fetzner 61,667 (8) *
All directors and executive officers as a group 2,619,000 (9) 9.74%
(11 persons)
</TABLE>
- -----------------------
*Less than 1%
(1) The percentage of Common Stock is based upon 25,106,993 shares of Common
Stock outstanding as of June 21, 1995.
(2) The number of shares and the nature of beneficial ownership of Scudder,
Stevens & Clark, Inc. is as of March 31, 1995 and is based upon the
Schedule 13F and Schedule 13G filed with the Securities and Exchange
Commission by Scudder, Stevens & Clark, Inc., on behalf of itself and the
two other entities listed above. Pursuant to such Schedule 13G, Scudder,
Stevens & Clark, Inc., Scudder, Stevens & Clark of Canada Ltd., and
Scudder, Stevens & du Canada Ltee., registered investment advisors and
reporting persons, reported sole dispositive power with respect to all such
shares and disclaimed beneficial ownership.
(3) Includes 685,000 shares subject to options which are currently exercisable
or exercisable within 60 days after June 21, 1995, under the Company's
stock option plans.
(4) Includes 275,000 shares subject to options which are currently exercisable
or exercisable within 60 days after June 21, 1995, under the Company's
stock option plans.
(5) Includes 131,667 shares subject to options which are currently exercisable
or exercisable within 60 days after June 21, 1995, under the Company's
stock option plans.
(6) Includes 80,000 shares subject to options which are currently exercisable
or exercisable within 60 days after June 21, 1995, under the Company's
stock option plans.
(7) Includes 80,000 shares subject to options which are currently exercisable
or exercisable within 60 days after June 21, 1995, under the Company's
stock option plans.
(8) Includes 61,667 shares subject to options which are currently exercisable
or exercisable within 60 days after June 21, 1995, under the Company's
stock option plans.
(9) Includes 1,781,002 shares subject to options which are currently
exercisable or exercisable within 60 days after June 21, 1995, under the
Company's stock option plans.
4
<PAGE>
PROPOSAL 1. - ELECTION OF DIRECTORS
GENERAL
The Bylaws of the Company provide for a Board of Directors composed of five
directors. Directors are elected at the annual stockholders' meeting and hold
office until the next annual stockholders' meeting or until their successors are
elected and qualified. The Company's five current directors are A.E. Benton,
Bruce M. McIntyre, Michael B. Wray, Richard W. Fetzner and William H. Gumma.
Except where authority to vote is withheld, the proxyholders will vote the
Proxies received by them FOR the nominees shown below for terms of one year or
until their successors are duly elected and qualified. Although the Board of
Directors has no reason to believe that any of the nominees will decline or be
unable to serve as a director, should that occur the Proxies will be voted by
the proxyholders for such other persons as may be designated by the present
Board of Directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS.
INFORMATION REGARDING NOMINEES
The following information was supplied to the Company by the listed nominees
of the Company.
<TABLE>
<CAPTION>
FIRST YEAR ELECTED
NAME AGE PRINCIPAL OCCUPATION OR
APPOINTED DIRECTOR
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A. E. Benton 52 Chairman of the Board, Chief Executive 1988
Officer and President
Bruce M. McIntyre 67 Private Investor; Oil and Gas Consultant 1988
Michael B. Wray 59 Independent Financial Consultant 1988
Richard W. Fetzner 66 Associate Professor of California 1990
Lutheran University
William H. Gumma 47 Senior Vice President - Operations of 1994
the Company
</TABLE>
A. E. BENTON.
A. E. Benton, founder of the Company, was first elected President, Chief
Executive Officer and Chairman of the Board of the Company in September 1988.
He has served as director of the Company since September 1988. From 1986 to
October 1988, Mr. Benton was employed as president and director of Benton
Petroleum Company. From 1981 to 1986, Mr. Benton was employed by May Petroleum
Inc., becoming its senior vice president of exploration. From 1979 to 1981, Mr.
Benton was employed by TransOcean Oil Company and, upon TransOcean's acquisition
by Mobil Oil Corporation, he was employed by another subsidiary of Mobil Oil
Corporation as manager of geophysics. He was employed from 1968 to 1979 by
Amoco Oil Company in various positions, including director of applied
geophysical research. Mr. Benton has a B.S. degree in geophysics from
California State University. Mr. Benton serves as a director of First Seismic
Corporation.
BRUCE M. MCINTYRE.
Bruce M. McIntyre has served as director of the Company since November 1988.
Mr. McIntyre is a private investor and a consultant in the oil and gas industry,
in which he has been involved since 1952. He also serves in a management
capacity with several small, private companies in the energy field. He
currently serves as a director of MSC Corp., a private company which manages oil
wells in Illinois. From 1981 to 1984, Mr. McIntyre served as president of Rocky
Mountain Exploration Company, ultimately negotiating its merger into Carmel
Energy, Inc., on whose board of directors he served until March 1986. Prior to
that time, Mr. McIntyre held various management positions with C&K Petroleum,
Inc. (now ENSTAR Petroleum, Inc.), Jenney Oil Company and Sinclair Oil & Gas
Company. Mr. McIntyre is a graduate of Harvard College and the Harvard
University Graduate School of Business Administration.
5
<PAGE>
MICHAEL B. WRAY.
Michael B. Wray has served as director of the Company since November 1988.
Mr. Wray is currently serving as a consultant to the Company and Chairman of the
Finance Committee. From January 1992 until July 1993, Mr. Wray served as vice
president-finance and administration of Del Mar Operating, Inc. From 1985
through 1991, and currently, Mr. Wray had been and is an independent financial
consultant to oil and gas exploration and production companies. From 1979 to
1985, Mr. Wray served as a senior financial officer of Guardian Oil Company,
Huffco Petroleum Corporation and May Petroleum, Inc. Prior to that time, Mr.
Wray worked for over 15 years in New York as an investment banker, security
analyst and officer in various investment firms including Donaldson, Lufkin &
Jenrette, Inc., Drexel & Co. and L.F. Rothschild & Co. Mr. Wray began his
career as an attorney with Morgan, Lewis & Bockius in Philadelphia. Mr. Wray
holds a B.A. degree from Amherst College and a law degree from Columbia Law
School.
RICHARD W. FETZNER.
Richard W. Fetzner has served as director of the Company since May 1990.
Since 1989, Dr. Fetzner has been an associate professor of business
administration at California Lutheran University in Thousand Oaks, California.
From 1984 to 1989, Dr. Fetzner served in various academic capacities at the
University of Singapore and California Lutheran University and was a consultant
to the World Bank. From 1979 to 1984, Dr. Fetzner served as group vice
president of Sun Company, Inc. and president of Sun Exploration and Production
Company in Dallas, Texas. From 1958 to 1979, he served in various management
and professional positions with Sun Oil Company and its subsidiaries including
president of Sun International, Inc. and Sun Marine Transport, Inc. Dr. Fetzner
holds a B.A. from Augustana College, an M.S. in geology from the University of
Wisconsin, a Ph.D. in geology and economics from the University of Wisconsin and
an M.B.A. from Drexel University. Dr. Fetzner is the father-in-law of Clarence
Cottman, III, an officer of the Company.
WILLIAM H. GUMMA.
William H. Gumma was first elected Vice President -- Gulf Coast Operations in
August 1989 and was elected Senior Vice President-Operations of the Company in
September 1990. In September 1994, Mr. Gumma was appointed a director of the
Company to fill a vacancy on the Board of Directors. From 1988 to 1989, Mr.
Gumma was chief geophysicist-international for Maxus Energy Corp. (formerly
Diamond Shamrock, Inc.), where he directed geophysical exploration in Europe,
South America and North Africa. From 1986 to 1988, Mr. Gumma served as vice
president of exploration for BHB Petroleum, Inc. From 1983 to 1986, Mr. Gumma
served as chief geophysicist and later as Gulf Coast exploration manager for May
Petroleum Inc. From 1980 to 1983, Mr. Gumma served as chief geophysicist for
Spectrum Oil and Gas Company. From 1978 to 1980, he was district geophysicist
for Inexco Oil Company. From 1972 to 1978, Mr. Gumma was employed by Amoco Oil
Company in various positions. Mr. Gumma received his B.S. from the Colorado
School of Mines and his M.S. in geophysics from Oregon State University.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors, pursuant to its powers, has designated a Compensation
Committee, an Audit Committee and a Finance Committee. The Board of Directors
has no Nominating Committee or other committee which performs similar functions.
The Board of Directors held four regularly scheduled meetings, held four
telephonic meetings, and took nine actions in writing without a meeting during
the year ended December 31, 1994. Each member of the Board of Directors
attended at least 75% of the aggregate number of meetings held in 1994 of the
Board of Directors and the number of meetings held by all committees of the
Board on which he served.
The Compensation Committee is responsible for making recommendations to the
Board of Directors regarding salaries, benefits and bonuses to be paid to
Company officers, employees and consultants. In addition, the Compensation
Committee has responsibility for the administration of the Company's stock
option plans. Messrs. McIntyre, Wray and Fetzner are presently members of this
committee. During the year ended December 31, 1994, the Compensation Committee
held three meetings and took three actions in writing without a meeting.
6
<PAGE>
The primary functions of the Audit Committee include making recommendations
to the Board of Directors on the selection of the Company's auditors, reviewing
the arrangements and scope of the independent auditors' examination, meeting
with the independent auditors to review the adequacy of internal controls,
reviewing the scope of internal audit procedures and performing any other duties
or functions deemed appropriate by the Board of Directors. Messrs. Fetzner and
McIntyre are presently members of this committee. The Audit Committee held two
meetings during the year ended December 31, 1994.
In June 1994, in recognition of the complex nature of the financing and
reporting requirements of the Company, particularly related to the future
financing of its international projects, the Board of Directors of the Company
formed the Finance Committee of the Board. The Finance Committee is responsible
for reviewing the terms of proposed financings and making recommendations to the
Board of Directors. Messrs. Benton, McIntyre and Wray are presently members of
this committee. The Finance Committee held one meeting during the year ended
December 31, 1994.
MANAGEMENT
INFORMATION REGARDING EXECUTIVE OFFICERS
Information with respect to the executive officers of the Company as of June 21,
1995 is set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------- --- ------------------------------------------------------------
<S> <C> <C>
A.E. Benton (1) 52 Chairman of the Board; Chief Executive Officer; President
William H. Gumma (1) 47 Senior Vice President - Operations
David H. Pratt 45 Vice President - Finance; Chief Financial Officer; Treasurer
Joseph C. White 64 Vice President - Operations
Clarence Cottman, III 39 Vice President - Business Development
E. Sven Hagen 38 Vice President - Exploration and Development
Gregory S. Grabar 40 Vice President - Corporate Development and Administration
Chris C. Hickok 37 Vice President - Controller; Chief Accounting Officer
- ---------------------
</TABLE>
(1) See "Information Regarding Nominees."
DAVID H. PRATT was first elected Vice President-Finance, Chief Financial Officer
and Treasurer in April 1989. From 1987 to 1989, Mr. Pratt was a consultant in
the accounting services and systems industry. From 1982 to 1987, Mr. Pratt was
employed by May Petroleum Inc., becoming assistant treasurer. He also served as
budget and planning manager, and managed corporate and partnership investor
relations and other administrative areas. From 1974 to 1982, Mr. Pratt was
employed by Arthur Andersen & Co. and he became a Certified Public Accountant in
1975. Mr. Pratt holds B.S. and M.B.A. degrees from Texas Christian University.
JOSEPH C. WHITE was elected Vice President-Operations of the Company in February
1993. Previously, Mr. White was president of J.C. White and Associates, Inc.,
an independent consulting firm that prepared the Company's independent reserve
reports from 1988 through 1992. Mr. White was employed by Texaco for 30 years
in a variety of engineering and management positions. In 1968, he was appointed
assistant to the vice president for Latin America and Trinidad in Texaco's New
York City executive office and in 1971 was appointed assistant to the senior
vice president for Texaco's worldwide producing operations. In 1972, he was
appointed assistant division manager for Texaco's Denver Division in Colorado.
In this position, he was responsible for all engineering and operational matters
for Texaco's operations in the Rocky Mountain area.
CLARENCE COTTMAN, III was first appointed Land Manager in June 1989, was elected
Vice President-Land of the Company in September 1990 and was elected Vice
President-Business Development in July 1993. Mr. Cottman, a Certified Petroleum
Landman, was previously employed by Oryx Energy Company (formerly Sun
Exploration and Production Company) from June 1982 to May 1989. Mr. Cottman had
held a variety of exploration and production land positions in Oryx's Dallas,
Houston, and Denver offices. Most recently, he was district landman for Oryx in
Ventura, California, and responsible for all land activity
7
<PAGE>
on the West Coast. Mr. Cottman holds a B.A. degree from Rochester Institute of
Technology and an M.B.A. from the University of Rhode Island. Mr. Cottman is
the son-in-law of Richard W. Fetzner.
E. SVEN HAGEN was first appointed gulf coast geologist in March 1990 and was
elected Vice President-Exploration and Development in April 1995. From March
1987 to February 1990, Mr. Hagen was employed by Shell Oil Company as an
exploration geologist responsible for the technical evaluation of the oil and
gas potential of West Africa salt basins including Angola, Congo, Gabon and
Namibia. From December 1985 to February 1987, Mr. Hagen was employed by
Standard Oil Production Company as an Exploration Geologist. Mr. Hagen holds a
B.A. degree in geology from the University of California at Santa Barbara and a
Ph.D. in geology from the University of Wyoming.
GREGORY S. GRABAR was first elected Vice President-Corporate Development and
Administration in April 1993 and was first appointed manager of administration
in October 1990. From 1989 to 1990, Mr. Grabar was in the corporate finance
department of Citicorp Real Estate, Inc. From 1988 to 1989, Mr. Grabar was a
consultant in the accounting services industry. From 1981 to 1988, Mr. Grabar
was a vice president in the corporate finance department at Bateman Eichler,
Hill Richards, Inc., a Kemper Securities Inc. company. From 1977 to 1981, Mr.
Grabar was in both the audit and tax departments of Arthur Andersen & Co. and
became a Certified Public Accountant. Mr. Grabar graduated cum laude from
California State University with a B.A. in business administration and received
his M.B.A. from the University of California at Los Angeles.
CHRIS C. HICKOK was first appointed controller in November 1991 and was elected
Vice President-Controller in January 1995. From March 1979 to September 1991,
Mr. Hickok was employed by Mission Resources, Inc. and held various positions in
the accounting and finance department including financial analyst, assistant
controller and controller. Mr. Hickok holds a B.S. degree in business
administration from California State University at Hayward and is a Certified
Management Accountant.
EXECUTIVE COMPENSATION
REMUNERATION OF EXECUTIVE OFFICERS
The following table sets forth as to the Chief Executive Officer and the most
highly compensated executive officers, whose annual salaries and bonuses
exceeded $100,000, information regarding all forms of compensation paid or
payable by the Company for services in all capacities for the years indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------ ------------
OTHER ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A. E. Benton, 1994 $250,000 $ 0 (1) 250,000 $473 (2)
Chief Executive Officer, 1993 165,000 50,000 125,000 448
President 1992 165,000 35,000 150,000 442
William H. Gumma 1994 175,000 20,000 (1) 100,000 273 (2)
Senior Vice President - 1993 125,000 30,000 50,000 195
Operations 1992 105,000 20,000 75,000 208
David H. Pratt 1994 110,000 0 (1) 20,000 181 (2)
Vice President - Finance 1993 90,000 20,000 15,000 183
1992 90,000 0 20,000 170
</TABLE>
- -----------------------
(1) The aggregate amount of prerequisite compensation to be reported herein is
less than the lesser of either $50,000 or 10% of the total of annual salary
and bonus reported for the named executive officer. No other annual
compensation was paid or payable to the named executive officers in the
years indicated.
(2) Represents premiums paid by the Company with respect to term life insurance
for the benefit of the named executive officer.
8
<PAGE>
The following table shows information concerning options to purchase Common
Stock granted to certain individuals during 1994.
<TABLE>
% OF TOTAL
OPTIONS/SARS GRANT
GRANTED TO EXERCISE DATE
OPTIONS/SARS EMPLOYEES IN OR EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR BASE PRICE DATE VALUE
($/sh) ($) (1)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A.E. Benton 125,000 15.2% $5.625 4/21/04 $390,238
A.E. Benton 125,000 15.2% 9.125 12/30/04 633,263
William H. Gumma 50,000 6.1% 5.625 4/21/04 156,095
William H. Gumma 50,000 6.1% 9.125 12/30/04 253,305
David H. Pratt 20,000 2.4% 5.625 4/21/04 62,438
</TABLE>
- -------------------------
(1) To calculate the present value of option/SAR grants, the Company has used
the Black-Scholes option pricing model. The actual value, if any, an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is no
assurance the value realized by an executive will be at or near the value
estimated by the Black-Scholes model. The estimated values under that
model for the stock options granted on April 21, 1994 are based on the
assumptions that include (i) a stock price volatility of 48.14%, (ii) a
risk-free rate of return based on a 10-year U.S. Treasury rate at the time
of grant of 6.99% and (iii) an option exercise term of ten years. The
estimated values under that model for the stock options granted on December
30, 1994 are based on the assumptions that include (i) a stock price
volatility of 48.14%, (ii) a risk-free rate of return based on a 10-year
U.S. Treasury rate at the time of grant of 7.82% and (iii) an option
exercise term of ten years. No adjustments were made for the non-
transferability of the options or to reflect any risk of forfeiture prior
to vesting. The Securities and Exchange Commission requires disclosure of
the potential realizable value or present value of each grant. The
Company's use of the Black-Scholes model to indicate the present value of
each grant is not an endorsement of this valuation, which is based on
certain assumptions, including the assumption that the option will be held
for the full ten-year term prior to exercise.
The following table provides information regarding the exercise of stock
options during 1994 by certain individuals and the year-end value of unexercised
options for certain individuals.
<TABLE>
<CAPTION>
AGGREGATED OPTIONS/SAR EXERCISES IN 1994 AND YEAR-END OPTION/SAR VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT YEAR-END(#) IN-THE-MONEY OPTIONS/SARS($)
--------------------------- ----------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A.E. Benton 0 $0 551,667 383,333 $1,428,834 $547,917
William H. Gumma 0 $0 217,367 158,333 506,002 226,042
David H. Pratt 0 $0 113,333 36,667 359,633 84,167
</TABLE>
EMPLOYMENT AGREEMENTS
In June 1992, the Board of Directors approved employment agreements with
certain key employees of the Company (the "Employment Agreements"), which
contain severance provisions in the event of a change in control of the Company.
The Company has entered into similar agreements with other officers and key
employees.
Pursuant to each Employment Agreement, in the event of a proposed change in
control (as defined in the Employment Agreement), the employee has agreed to
remain with the Company until the earliest of (a) 180 days from the occurrence
of such proposed change in control, (b) termination of the employee's employment
by reason of death or disability (as defined in the Employment Agreement), or
(c) the date on which the employee first becomes entitled to receive benefits
under the Employment Agreement by reason of disability or termination of his
employment following a change in control. Except for this agreement by the
employee to so remain employed by the Company, the Company or the employee may
terminate the employee's employment prior to or after a change in control either
immediately or after certain notice periods, subject to the Company's obligation
to provide benefits specified in the Employment Agreement.
9
<PAGE>
Each Employment Agreement is for a period of either two or three years. In
the event of a change in control, the term of the Employment Agreements will
continue in effect for an additional 24 months after such change in control,
subject to certain exceptions described therein. Following a change in control
of the Company and for a period of 24 months following such event, if the
employee is terminated without cause (as defined in the Employment Agreement) or
if employment is terminated by the employee for good reason (as defined in the
Employment Agreement), the employee is entitled to a cash severance payment
equal to three times his annual base salary at the rate in effect prior to
termination. The employee, and his dependents, will also be entitled to
participate in all life, accidental death, medical and dental insurance plans of
the Company in which the employee was entitled to participate at termination for
a period of up to two years (and up to seven years in certain circumstances).
However, such amounts will not be payable if termination is due to death, normal
retirement, permanent disability, or voluntary action of the employee other than
for good reason (as defined in the Employment Agreement), or by the Company for
cause (as defined in the Employment Agreement) or if such payment is not
deductible by the Company as a result of the operation of Section 280G of the
Internal Revenue Code.
Messrs. Benton, Gumma and Pratt each entered into employment agreements for
terms of three years on June 26, 1992. Pursuant to the employment agreements,
Mr. Benton's initial base salary was $165,000, Mr. Gumma's initial base salary
was $105,000 and Mr. Pratt's initial base salary was $90,000. For 1994, Mr.
Benton's annual base salary was $250,000, Mr. Gumma's annual base salary was
$175,000 and Mr. Pratt's annual base salary was $110,000. Salaries are reviewed
annually and bonuses are within the discretion of the Board of Directors.
REMUNERATION OF DIRECTORS
Directors are elected at the annual stockholders' meeting and hold office
until the next annual stockholders' meeting and until their successors are
elected and qualified. Directors who are not Company officers are paid a fee of
$2,000 for each Board meeting attended, $500 for each committee meeting attended
and $250 for participation in telephonic meetings. Directors are reimbursed for
all travel and related expenses. Beginning July 1995, in addition to the fees
paid per meeting, each director who is not a Company officer will be paid an
annual retainer of $20,000.
Additionally, the Company's Director Stock Option Plan provides that each
person who is elected to serve as a non-employee director of the Company is
annually and automatically granted an option to purchase 10,000 shares of Common
Stock at an exercise price equal to the market price on the date of grant.
During 1994, Mr. Wray served as a consultant to the Company to provide
financial advice. In consideration of such services, the Company paid Mr. Wray
an aggregate of $208,872 during 1994, paid moving expenses of $5,257 and
reimbursed Mr. Wray for all travel and business related expenses. The Company
has provided Mr. Wray with use of a Company car for 1995. See "Certain
Relationships and Related Transactions."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation. This report shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent that Benton Oil and
Gas Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
COMPENSATION PHILOSOPHY. The Company's executive compensation philosophy has
historically been and is currently focused on aligning the interests of its
management team with those of its stockholders. In order to attract, maintain
and reward its key management personnel, the Committee believes that it is
appropriate to grant to these employees and to newly hired key personnel stock
options as an integral part of their overall compensation. The Committee has no
established criteria, formula or guidelines for determining the number of
options to be granted. However, the Committee believes that granting stock
options has the inherent benefit of directly aligning compensation to stock
performance and thus to increase stockholder value. The Compensation Committee
does not consider the amount of options or stock held by an executive officer or
the Chief Executive Officer in determining the amount of options to award. The
base salary, bonus and number of stock options granted to an individual is based
upon the Committee's understanding of the performance of each individual
determined after consultation and recommendations from the Chief Executive
Officer and after a subjective performance review of each of the executive
officers.
10
<PAGE>
Certain of the executive officers have entered into employment agreements with
the Company which provided for an initial base salary with an annual review of
such employee's salary by the Company. Although no relative weight is assigned
to any particular factor in determining the elements and size of an executive
officer's compensation, the Committee in 1994 considered the expansion of the
Company's operations, particularly in Russia and Venezuela, and the expanded
role and responsibility of the executive officers in the Company's international
operations, as well as the base salary provisions set forth in certain of the
executive officers' employment agreements.
Because of the Company's need to retain its cash for its oil and gas
activities, it continues to limit the cash compensation to its executives and
grant stock options as a method of offsetting lower cash compensation.
Generally, the Compensation Committee reviews published compensation data and
proxies from other public companies on an annual basis when making compensation
awards to the Company's executive officers. The Company has not hired any
independent consultants to review similar companies, but from its general review
of published compensation data and proxy statements from other public companies,
the Compensation Committee believes that the cash compensation paid to its
executives is lower than what they could receive from other exploration and
production companies, even with the increases in base salaries which took effect
January 1, 1994.
The Compensation Committee of the Board of Directors has not formalized a
policy with respect to qualifying compensation paid to executive officers under
Section 162(m) of the Internal Revenue Code, but intends to study the Company's
compensation plans to develop a formal policy, if necessary.
CHIEF EXECUTIVE OFFICER COMPENSATION. In determining the 1994 salary, bonus
and annual stock grants to Mr. Benton, CEO, the Committee considered the
Company's successes in expanding its operations internationally as well as
domestically and the significant contribution made thereto by Mr. Benton, with
no relative weight assigned to any particular factor of the Company's
operational performance. In addition, the Committee considered the initial base
salary provision ($165,000) set forth in the employment agreement between the
Company and Mr. Benton. In keeping with the Committee's overall compensation
philosophy discussed above, Mr. Benton's salary was increased from 1993 to 1994
by 33% to $250,000. Stock options for 125,000 shares were granted in April 1994
at an exercise price of $5.625 per share and stock options for 125,000 shares
were granted in December 1994 at an exercise price of $9.125 per share. The
Committee has no established measures of performance, guidelines or formula it
uses when determining the number of stock options granted to the Chief Executive
Officer and does not consider the number of options or stock held by the Chief
Executive Officer in determining the number of options to award.
RICHARD W. FETZNER BRUCE M. MCINTYRE MICHAEL B. WRAY
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors during
1994 were Messrs. Wray, Fetzner and McIntyre. Mr. Benton, Chief Executive
Officer of the Company, made recommendations to the Compensation Committee
regarding compensation levels of each of the other executive officers of the
Company. On January 24, 1994, Mr. Wray entered into a consulting agreement with
the Company to provide financial advice for a period of six months with
compensation of $15,000 per month. In May 1994, as amended in January 1995, Mr.
Wray's January consulting agreement was canceled and a new consulting agreement
was entered into pursuant to which Mr. Wray will provide financial advice
through December 31, 1995, with compensation of $20,000 per month and the use of
a Company car, with all travel and business related expenses reimbursed by the
Company.
11
<PAGE>
CORPORATE PERFORMANCE GRAPH
The Stock Price Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent Benton Oil and Gas Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The graph below compares the yearly percentage change in the cumulative
stockholder return on the Company's Common Stock with the cumulative total
return of the Wilshire Domestic Oil Index and the S&P Composite - 500 Stock
Index over the five-year period ending on December 31, 1994. The stockholder
return shown on the graph below is not necessarily indicative of future
performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF BENTON COMMON STOCK,
THE WILSHIRE DOMESTIC OIL INDEX AND THE S&P 500 INDEX
PERFORMANCE GRAPH APPEARS HERE
Measurement Period BENTON WILSHIRE S&P
(Fiscal Year Covered) COMMON STOCK DOMESTIC OIL 500 INDEX
- --------------------- ------------ ------------ ----------
Measurement Pt- 12/29/89 $100.00 $100.00 $100.00
FYE 12/31/90 $333.00 $ 95.00 $ 97.00
FYE 12/31/91 $344.00 $ 89.00 $126.00
FYE 12/31/92 $241.00 $ 94.00 $136.00
FYE 12/31/93 $205.00 $103.00 $150.00
FYE 12/30/94 $374.00 $106.00 $152.00
TOTAL RETURNS ASSUME DIVIDENDS REINVESTED ON EX-DATE.
FISCAL YEAR ENDING DECEMBER 31.
The Wilshire Domestic Oil index, as prepared by Wilshire Associates
Incorporated, is composed of companies that are classified as domestic oil
companies under Standard Industrial Classification codes (1300-1399, 2900-2949,
5170-5179 and 5980-5989). After an individual review of each company, Wilshire
Associates determines whether such company is primarily engaged in the domestic
oil industry and is appropriate for its index. A list of the companies
comprising the Wilshire Domestic Oil index will be provided, without charge,
upon request to Investor Relations, Benton Oil and Gas Company, 1145 Eugenia
Place, Suite 200, Carpinteria, California 93013, or can be obtained upon written
request to Wilshire Associates Incorporated, 1299 Ocean Avenue, Santa Monica,
California 90401.
12
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1994, the Company entered into a consulting agreement with Mr.
Wray, a director of the Company, to provide financial advice for a period of six
months with compensation of $15,000 per month. Mr. Wray has significant
experience in investment banking, financial management in the oil and gas
industry and financial consulting. The fees payable pursuant to the consulting
agreement were determined based upon negotiations with Mr. Wray, with
compensation comparable to fees paid to unaffiliated management consultants and
financial consultants. In May, 1994, as amended in January 1995, the Company
entered into a new consulting agreement with Mr. Wray pursuant to which Mr. Wray
will provide advice through December 31, 1995, with compensation of $20,000 per
month and the use of a Company car, with all travel and business related
expenses reimbursed by the Company. The term and compensation arrangement were
modified in recognition of the expertise actually provided by Mr. Wray and the
Company's desire to retain his continued participation and service, as
negotiated with Mr. Wray. Mr. Wray has been instrumental in negotiating and
closing certain financing arrangements entered into by the Company since January
1994, and has provided insight and direction in the Company's efforts to pursue
financing for its international projects. The Company believes that the fees
paid to Mr. Wray pursuant to the consulting agreements are comparable to those
fees that would be charged by independent consultants providing similar
services.
On December 31, 1993, the Company guaranteed a loan made to Mr. Benton for
$300,000. The promissory note evidencing such indebtedness is due and payable
on June 30, 1995, with an annual interest rate of 5.85%. The Company secured
the guarantee by a deposit of $300,000 with the bank who loaned the money to Mr.
Benton. In January 1994, the Company loaned $800,000 to Mr. Benton in the form
of a promissory note with interest at prime plus 1%. The promissory note is
payable in November 1995, or upon demand by the Company, whichever occurs first.
In September 1994, Mr. Benton made a payment of $207,014 against this loan. The
Company loaned Mr. Pratt $95,000 on November 11, 1993 on the same terms as the
$800,000 loan to Mr. Benton. The loan is payable in November 1995.
PROPOSAL 2. -- AMENDMENT TO DIRECTORS'
STOCK OPTION PLAN (SEE EXHIBIT A)
The stockholders are asked to approve an amendment to the Directors' Stock
Option Plan (the "Plan") to increase the number of shares issuable pursuant to
the plan from 200,000 shares to 400,000 shares. The plan, which was approved by
the stockholders in July 1992, permits the granting of non-qualified stock
options ("Director NQSOs") for up to 200,000 shares of Common Stock to
nonemployee directors of the Company. Each person who is first elected or
appointed to serve as a nonemployee director of the Company and who has not been
an employee of the Company or any subsidiary during the one year prior to such
election or appointment is automatically granted an option to purchase 10,000
shares of Common Stock. Director NQSOs for 10,000 shares of Common Stock were
automatically granted to each nonemployee director on the effective date of the
Directors' Plan (September 26, 1991), subject to stockholder approval, and an
additional Director NQSO for 10,000 shares of Common Stock is automatically
granted to each nonemployee director on each anniversary of the effective date
of the Directors' Plan, subject to certain limitations. There are currently
three directors eligible to participate in the Directors' Plan.
Each of the Director NQSOs is exercisable at a price equal to the fair market
value of Common Stock on the date of grant. Each of Messrs. Wray, McIntyre and
Fetzner have been granted an option to purchase 10,000 shares of Common Stock at
$10.125, $6.25, $7.00 and $6.813 per share in September 1991, 1992, 1993 and
1994, respectively. The Directors' Plan also provides for the automatic grant
of limited rights. Such limited rights are exercisable with respect to the
number of shares of Common Stock which are, or may become, purchasable under any
stock option. Limited rights are exercisable only during a sixty day period in
connection with a change in control of the Company, in accordance with the terms
of the Plan. The exercise of limited rights obligates the Company to pay to the
holder thereof cash in an amount calculated in accordance with the Plan, and
terminates stock options to the extent of the number of shares of Common Stock
of the Company with respect to which the limited right is exercised.
The exercise price for all such options may be paid in cash or shares of
Common Stock. If a nonemployee director dies or becomes ineligible to
participate in the Plan due to disability, his Director NQSOs expire on the
first anniversary of such event. Director NQSOs expire three months after the
director ceases to serve as a member of the Board for any reason other
13
<PAGE>
than death, disability, or dismissal for cause, unless the director is
immediately employed by the Company. If a nonemployee director retires with the
consent of the Company, his Director NQSOs expire 90 days after his retirement.
In no event may a Director NQSO be exercised more than ten years from the date
of grant. Options and limited rights are not transferable by the optionee other
than by will or the laws of descent and distribution or pursuant to a qualified
domestic relations order.
The Plan may be amended, modified or terminated by the Board of Directors at
any time, subject to approval by the stockholders if required by federal or
state law or other regulation, and provided that the Plan is not amended more
than once every six months. The rights of optionees may not be materially
impaired without their consent.
In April 1995, the Board of Directors approved an amendment to the Plan to
increase the number of shares issuable pursuant to the Plan from 200,000 shares
to 400,000 shares, since only 40,000 shares remain authorized for issuance
thereunder. The Board of Directors recommends that the amendment to the Plan be
approved by the stockholders of the Company in recognition of the valuable
service provided by the Company's non-employee directors and as incentive for
non-employee directors, aligned with stockholders, to continue to devote their
time and effort to maximizing stockholder value.
The affirmative vote of the holders of a majority of the shares present or
represented, and entitled to vote, is required for approval of the amendment to
the Plan. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR
OF APPROVING THE AMENDMENT TO THE DIRECTORS' STOCK OPTION PLAN.
The following table provides information regarding 1994 benefits to persons
specified therein pursuant to the Plan.
<TABLE>
<CAPTION>
1994 BENEFITS
DIRECTORS' STOCK OPTION PLAN
NAME AND POSITION DOLLAR VALUE NUMBER OF UNITS
- --------------------------------------------------------------------------
<S> <C> <C>
A.E. Benton 0 0
President and Chief Executive Officer
William H. Gumma 0 0
Senior Vice President - Operations
David H. Pratt 0 0
Chief Financial Officer
Executive Officers 0 0
as a group
Non-Executive Directors (2) 30,000
as a group (3 persons) (1)
All employees 0 0
as a group
- ---------------------
</TABLE>
(1) Includes all current directors who are not executive officers, each of
whom received options to purchase 10,000 shares of common stock in 1994
pursuant to the Plan.
(2) The options were granted at an exercise price equal to the market price
on the date of grant ($6.813 per share on September 26, 1994). At June 21,
1995, the last sale price of the Common Stock on the NASDAQ - NMS was
$14.063 per share, providing an unrealized dollar value on such date for the
aggregate options granted in 1994 of $217,500.
14
<PAGE>
PROPOSAL 3. - INDEPENDENT PUBLIC ACCOUNTANTS
The stockholders are asked to approve and ratify the Board of Directors'
appointment of Deloitte & Touche LLP as the independent auditors of the Company
for the purpose of auditing and reporting upon the financial statements of the
Company for the fiscal year ending December 31, 1995. Deloitte & Touche LLP has
been performing services of an accounting and auditing nature for the Company
since its inception. Representatives of Deloitte & Touche LLP will be present
at the Annual Meeting. At that time, such representatives will have an
opportunity to make a statement, if they desire to do so, and will be able to
respond to appropriate questions.
An affirmative vote of the holders of a majority of the shares present or
represented, and entitled to vote, is required for approval. THE BOARD OF
DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF THE APPROVAL AND
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
OF THE COMPANY.
Proxies returned by stockholders will be voted FOR the approval of Deloitte &
Touche LLP as independent auditors of the Company unless otherwise directed in
the Proxy.
FINANCIAL STATEMENTS
The financial statements of the Company are not included in this Proxy
Statement as they are not deemed material to the exercise of prudent judgment by
the stockholders with respect to any proposal to be submitted at this Annual
Meeting. The Annual Report of the Company for the year ended December 31, 1994,
including the audited financial statements contained therein, is enclosed with
this Proxy Statement, but such Annual Report is not deemed to be part of the
proxy soliciting material.
STOCKHOLDERS' PROPOSALS
Stockholders' proposals intended for inclusion in the Proxy material
solicited by the Company for the 1996 Annual Meeting of Stockholders must be
received at the Company's executive offices not later than February 7, 1996.
The Company is not required to include in its Proxy Statement or form of proxy a
stockholder proposal which is received after the date or which otherwise fails
to meet requirements for stockholders' proposals established by regulations of
the Securities and Exchange Commission.
GENERAL
The Proxy is solicited by management and confers discretionary authority to
vote on other matters which may properly come before the meeting or any
adjournment thereof, but the Board of Directors does not know of any matter to
be brought before the Annual Meeting other than the matters referred to in the
Notice of Annual Meeting of Stockholders and matters incident thereto. The
persons named in the Proxy solicited by management will vote all properly
executed Proxies. If a stockholder specifies on such Proxy a choice with
respect to a proposal to be acted upon, the Proxy will be voted in accordance
with such specifications. Where no choice is specified, the Proxy will be voted
FOR Proposals One, Two and Three. If any matter not set forth in the Notice of
Annual Meeting of Stockholders is properly brought before the Annual Meeting,
such persons will vote thereon in accordance with their best judgment. The
presence at the Annual Meeting in person or by Proxy of the holders of a
majority of the outstanding shares of Common Stock is necessary to constitute a
quorum as prescribed by the Bylaws of the Company.
15
<PAGE>
The entire cost of soliciting proxies for the Annual Meeting will be borne by
the Company. First Interstate Bank of California and Corporate Investor
Communications, Inc. have been retained by the Company to assist in the
solicitation of proxies at a cost of $4,000 plus reimbursement of reasonable
out-of-pocket expenses. Proxies may also be solicited by officers, directors
and regular employees of the Company personally, by mail, or by telephone or
telegraph, and the Company may reimburse brokers, custodian banks, nominees and
other fiduciaries for their reasonable out-of-pocket expenses in forwarding
proxy material to their principals.
By Order of the Board of Directors
A. E. BENTON
Chairman of the Board,
Chief Executive Officer and President
June 21, 1995
16
<PAGE>
EXHIBIT A
BENTON OIL AND GAS COMPANY
RESTATED DIRECTORS' STOCK OPTION PLAN
I. PURPOSE
The purpose of this Directors' Stock Option Plan (the "Plan") is to assist
Benton Oil and Gas Company in attracting, motivating and retaining qualified
non-employee directors and aligning the interests of non-employee directors with
---------------------------------------------------------
those of the stockholders of the Company by providing a means whereby non-
- ---------------------------------------- ---
employee directors will be given an opportunity to acquire a proprietary
- ------------------
interest in the Company's future growth.
II. CERTAIN DEFINITIONS
When used in this Plan, unless the context otherwise requires:
2.1 "Board of Directors" or "Board" shall mean the Board of Directors of
------------------ -----
Benton Oil and Gas Company as constituted at any time.
2.2 "Change of Control" shall mean any of the following events:
-----------------
(a) Any "Person," as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than Company, any trustee or other fiduciary holding
securities under an employee benefit plan of Company, or any company owned,
directly or indirectly, by the stockholders of Company in substantially the same
proportions as their ownership of stock of Company) is or becomes the
"Beneficial Owner" as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of 25% or more of the combined voting power of Company's outstanding
securities;
(b) Individuals who constitute the Board on the effective date of the
Plan (the "Incumbent Board") ceases for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to
such effective date whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
comprising the Incumbent Board (either by a specific vote or by approval of the
proxy statement of Company in which such person is named as a nominee for
director, without objection to such nomination ) shall be, for purposes of this
clause (B), considered as though such person were a member of the Incumbent
Board;
(c) The stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a reverse
stock split of outstanding voting securities, or consummation of any such
transaction if stockholder approval is not obtained, other than (1) any such
transaction which would result in at least 50% of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction being "Beneficially Owned" (as defined above)
by 75% or more of the holders of outstanding voting securities of the Company
immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially
altered in the transaction, or (2) a merger or consolidation effected to
implement a recapitalization of Company (or similar transaction) in which no
"Person" (as defined above) acquires more than 25% of the combined voting power
of the Company's then outstanding securities; or
(d) The stockholders of the Company approve a plan of complete
liquidation of Company or an agreement for the sale or disposition by Company of
all or substantially all of Company's assets.
Notwithstanding anything in the foregoing to the contrary, no Change of
Control shall be deemed to have occurred with respect to any particular Director
by virtue of any transaction which results in such Director, or a group of
Persons which includes such Director, acquiring, directly or indirectly, 25% or
more of the combined voting power of the Company's outstanding securities.
A-1
<PAGE>
2.3 "Committee" shall mean the Committee as described in Section III hereof.
---------
2.4 "Common Stock" shall mean a share of Common Stock, par value $0.01 per
------------
share, of the Company.
2.5 "Company" shall mean Benton Oil and Gas Company.
-------
2.6 "Director" shall mean a person who, on any date a Directors' Option
--------
would be granted to a Director hereunder, is a member of the Board of Directors
but who is not then an employee of the Company or any Subsidiary and is a
--------
disinterested party as defined in Rule 16b-3 of the Exchange Act; provided,
- ----------------------------------------------------------------
however, that no member of the Board serving as a result of a nomination or
appointment pursuant to the terms of any debt instrument, preferred stock,
underwriting agreement, or other contract entered into by the Company shall be
deemed a Director for purposes of the Plan.
2.7 "Directors' Options" shall mean options to purchase shares (subject to
------------------
adjustment pursuant to Section 6.2 hereof) of Common Stock which may be granted
by the Company to each Director pursuant to Section VII.
2.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time.
2.9 "Fair Market Value" of a share of Common Stock on any date shall mean
-----------------
the closing price of Common Stock as reported in the Wall Street Journal for
securities listed on the NASDAQ-NMS for the date in question, or, if no such
closing price is available, the closing price on the next preceding date for
which a closing price was so reported.
2.10 "Limited Right" shall mean the right, granted pursuant to Section VIII,
-------------
to receive payment, in cash, following a Change of Control, of an amount equal
to the product computed by multiplying (i) the excess of (a) the higher of (x)
the Minimum Price Per Share, if the Change of Control occurs as a result of a
transaction, tender offer or exchange offer, or (y) the highest Fair Market
Value per share during the period commencing thirty days prior to the Change of
Control and ending immediately prior to the date the Limited Right is exercised,
over (b) the exercise price per share under the Directors' Option to which such
Limited Right relates, by (ii) the number of shares of Common Stock as to which
such Limited Right is being exercised provided that, in the case of a Limited
Right that has not been outstanding at least seven months at the time the Change
of Control occurs, the amount computed under part (a) of the foregoing formula
shall be equal to the highest amount that could be computed under part (y) of
such formula using a Fair Market Value that first became determinable (with such
Fair Market Value otherwise determined in accordance with the foregoing
formula).
2.11 "Minimum Price Per Share" shall mean the highest gross price (before
-----------------------
brokerage commissions and soliciting dealer's fees) paid or to be paid for a
share of Common Stock (whether by way of exchange, conversion, distribution or
upon liquidation or otherwise) in any Transaction, tender offer or exchange
offer occurring prior to the date on which such Limited Right is exercised. If
the consideration paid or to be paid in any such transaction, tender offer or
exchange offer shall consist, in whole or in part, of consideration other than
cash, the Board or Committee shall take such action, as in its judgment it deems
appropriate, to establish the cash value, if any, attributed to such
consideration in wiring by any party to such Transaction, tender offer or
exchange offer other than the Company.
2.12 "Plan" shall mean the Restated Directors' Stock Option Plan of the
----- --------
Company initially authorized and adopted by the Board of Directors at its
---------
meeting held on September 26, 1991, as restated by adoption by the Board on
---------------------------------------
April 26, 1995 and as amended from time to time.
- --------------
2.13 "Subsidiary" shall mean any corporation in which the Company owns,
----------
directly or indirectly, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock.
2.14 "Transaction" shall mean (A) any consolidation or merger of the Company
-----------
in which the Company is not the surviving corporation other than a merger solely
to effect a reincorporation or a merger of the Company as to which stockholder
approval is not required pursuant to Sections 251(f) or 253 of the Delaware
General Corporation Law, or (B) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of 50% or more of the
assets or earnings power of the Company, or (C) the adoption of any plan or
proposal for the liquidation or dissolution of the Company.
A-2
<PAGE>
III. ADMINISTRATION
The Plan shall be administered by the Board of Directors or by a Committee
which shall consist of such members of the Board as may be appointed by the
Board. The Board and, if any, the Committee, shall have full power and
authority to construe, interpret and administer the Plan and to make
determination which shall be final, conclusive and binding upon all persons,
including but not limited to the Company, the stockholders and any person having
an interest in any Directors' Options, provided that a Director shall disqualify
himself from deciding any question that is unique to his own Directors' Option.
If a member of the Committee, for any reason, shall cease to serve, the vacancy
may be filled by the Board of Directors. Any member of the Committee may be
removed at any time, with or without cause, by the Board of Directors. No
member of the Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan. Members of the Board
--------------------
or Committee, if applicable, shall be indemnified by the Company for any and all
- --------------------------------------------------------------------------------
liabilities and/or costs incurred by the members in performance of their
- ------------------------------------------------------------------------
functions under the Plan if such members did not act dishonestly or in willful
- ------------------------------------------------------------------------------
violation of the law or regulation under which such liability and/or cost
- -------------------------------------------------------------------------
arises. This indemnification shall not duplicate but may supplement any
- ------------------------------------------------------------------------
coverage available under any applicable insurance.
- --------------------------------------------------
IV. COMPLIANCE WITH RULE 16B-3
It is the intent of the Company that the Plan comply in all material respects
with Rule 16b-3 under the Exchange Act, including the "formula" plan provisions
of Rule 16b-3(c)(2). Accordingly, if any provision of the Plan or any agreement
hereunder does not comply with the applicable requirements of Rule 16b-3, such
provision shall be construed or deemed amended to the extent necessary to
conform to such requirements.
V. ELIGIBILITY
5.1 Eligible Directors. Directors' Options and Limited Rights may be
------------------
granted only to Directors; members of the Board who are not Directors and
employees of the Company or any of its Subsidiaries are not eligible to receive
Directors' Options or other awards under the Plan.
5.2 Option Agreement. Each Directors' Option shall be evidenced by a
----------------
written agreement ("Option Agreement") containing such terms and provisions as
the Board or Committee may determine, subject to the provisions of this Plan.
VI. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
6.1 Maximum Number. The maximum aggregate number of shares of Common Stock
--------------
that may be issued under the Plan shall be 400,000 shares. Such shares may be
-------
authorized and unissued shares or may be treasury shares. If any shares of
Common Stock subject to a Directors' Option are not purchased before such
Directors' Option expires or otherwise terminates, unless the Directors' Option
is surrendered upon exercise of a Limited Right, such shares may again be made
subject to a Directors' Option.
6.2 Capital Changes. In the event any changes are made to the shares of
---------------
Common Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend in excess of one percent (1%) at any single
time, stock split, combination of shares, exchange of shares, extraordinary cash
dividend, change in corporate structure or otherwise), the Board or Committee
shall, in order to prevent dilution or enlargement of Participants' rights, make
appropriate adjustments in: (i) the number and kind of shares of Common Stock
theretofore made subject to Directors' Options, and/or in the exercise price of
said shares; and (ii) the aggregate number and kind of shares which may be
issued under the Plan. If any of the foregoing adjustments shall result in a
fractional share, the fraction shall be disregarded, and the Company shall have
no obligation to make any cash or other payment with respect to such a
fractional share.
VII. ANNUAL OPTION GRANTS
7.1 Initial Grants to New Directors. A Directors' Option to purchase 10,000
-------------------------------
shares of Common Stock shall be automatically granted to each person who is
first elected or appointed to serve as a member of the Board after the effective
date of the Plan and who, at the time of such election or appointment, is a
Director and was not, during the one-year period prior to the date of such
election or appointment, an employee of the Company or any Subsidiary.
A-3
<PAGE>
7.2 Annual Grants to Directors. A Directors' Option to purchase 10,000
--------------------------
shares of Common Stock shall be automatically granted to each Director on the
effective date of the Plan, and an additional Directors' Option to purchase
10,000 shares of Common Stock shall be granted on each anniversary of the
effective date of the Plan to each Director; provided, however, that a
Directors' Option shall not be granted under this Section 7.2 to a Director in a
given year if, during the six-month period prior to and including the date the
Directors' Option would otherwise be granted pursuant to this Section 7.2, such
Director either was granted a Directors' Option pursuant to Section 7.1 or such
Director was an employee of the Company or any Subsidiary.
7.3 Terms of Directors' Options. Directors' Options shall be nonstatutory
---------------------------
stock options which shall be granted for no consideration other than services,
and shall be subject to the following terms and conditions:
(i) Exercise Price. The exercise price per share of Common Stock
--------------
purchasable under a Directors' Option shall be equal to 100% of the Fair Market
Value of a share of Common Stock on the date of grant of such Directors' Option.
A Directors' Option shall be exercised by giving written notice of exercise to
the Company accompanied by payment in full of the exercise price in cash
(including by check) or by surrender of shares of Common Stock acquired by the
Director at least six months prior to the exercise date (if the repurchase of
shares by the Company is permissible on the date of exercise under applicable
law), or a combination of a cash payment and such a surrender of shares. Each
share surrendered in payment of the exercise price shall be valued at its Fair
Market Value at the exercise date.
(ii) Term and Termination of Services. Each Directors' Option shall
--------------------------------
expire ten years after the date of grant, provided, however, that, if a Director
ceases serving as a member of the Board by reason of being dismissed for cause,
such options shall terminate three month after the date of dismissal.
7.4 Option Vesting Upon Change of Control of the Company. In the event of a
----------------------------------------------------
Change of Control of the Company, the vesting of Directors' Options granted
pursuant to the Plan shall automatically be accelerated, so that all Directors'
Options outstanding at the time of such Change of Control will be exercisable
immediately (except as otherwise provided in Section 2.2).
VIII. LIMITED RIGHTS
8.1 Grant of Limited Rights. A Limited Right shall be automatically granted
-----------------------
to each Director concurrently with the grant of each Directors' Option to such
Director. Such Limited Right shall be exercisable with respect to the number of
shares of Common Stock which are, or may become, purchasable under any such
Directors' Option, at the times specified in Section 8.2, and shall expire at
the time the Directors' Option to which the Limited Right relates expires.
Other provisions of this Section 8.1 and Section 8.2 notwithstanding, a Limited
Right shall not be exercisable within six months after the date such Limited
Right is deemed to be granted for purposes of Section 16 of the Exchange Act.
Each Director to whom Limited Rights are granted shall be given written notice
advising him of the grant of such rights and specifying the terms and conditions
of the rights, which shall be subject to all the provisions of this Plan.
8.2 Exercise of Limited Rights. Subject to the limitations set forth in
--------------------------
Section 8.1, a Limited Right may be exercised only during the period beginning
on the first day following the occurrence of a Change of Control and ending on
the sixtieth day following such date; provided, however, that if the Change of
Control occurs prior to the expiration of six months after the date of grant of
a Limited Right, then, solely for purposes of each Limited Right, the Change of
Control shall be deemed to have occurred at the expiration of such six-month
period, and such Limited Right shall be exercisable for a period of 60 days
following the expiration of such six-month period. Upon the occurrence of a
tender or exchange offer constituting a Change of Control, a Limited Right may
be exercised in such manner regardless of whether the Board supports or opposes
such tender or exchange offer. A Director shall exercise his Limited Right by
delivery a written notice to the Board of Directors specifying the number of
shares with respect to which he exercises a Limited Right and agreeing to
surrender the right to purchase an equivalent number of shares of Common Stock
subject to his Directors' Option. If a Director exercises a Limited Right,
payment of his Limited Right shall be made in accordance with Section 8.3 on or
before the thirtieth day after the date of exercise of the Limited Right. In
the event a Director ceases being a member of the Board after a Change of
Control, a Limited Right shall remain exercisable for so long as the Directors'
Option to which it relates is exercisable, as provided in Section 7.3.
Notwithstanding the above, if a Director ceases being a member of the Board
before the occurrence of any Change of Control, his Limited Rights shall expire
immediately.
A-4
<PAGE>
8.3 Form of Payment. If a Director elects to exercise a Limited Right as
---------------
provided in Section 8.2, the Company shall pay to the Director in cash the
amount set forth in Section 2.10 hereof, calculated with respect to the shares
as to which the Director has exercised such Limited Right, within thirty days of
the date of exercise of the Limited Right. If such amount is not paid in full
within the prescribed period, the Company shall be liable to such Director for
the costs of collection of such amount, including attorney's fees.
8.4 Termination. When a Limited Right is exercised, the Directors' Option
-----------
to which it relates, if any, shall cease to be exercisable to the extent of the
number of shares of Common Stock with respect to which such Limited Right was
exercised. Upon the exercise or termination of a Directors' Option, any Limited
Right granted with respect thereto shall terminate to the extent of the number
of shares as to which such Directors' Option was exercised or terminated.
IX. NON-TRANSFERABILITY
No Directors' Option or Limited Right granted under this Plan, nor any other
rights acquired by a Director under this Plan, shall be assignable or
transferable by a Director, other than by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order as defined
under the Internal Revenue Code (the "Code") or Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA"). In the event of his death,
the Directors' Option or any Limited Right may be exercised by the Personal
Representative of the Director's estate or, if no Personal Representative has
been appointed, by the successor or successors in interest determined under the
Director's will or under the applicable laws of descent and distribution.
X. NO RIGHTS AS A STOCKHOLDER
A Director shall have no rights as a stockholder with respect to any shares
of Common Stock subject to a Directors' Option, until such Directors' Option is
exercised. Except as provided in Section 6.2, no adjustment shall be made in
the number of shares of Common Stock issued to a Director, or in any other
rights of the Director upon exercise of a Directors' Option, by reason of any
dividend, distribution, or other right granted to stockholders for which the
record date is prior to the date of exercise of the Director's Option.
XI. AMENDMENT
The Company by action of the Board may amend, modify or terminate this Plan
at any time or amend, modify, or terminate any outstanding option agreement,
except that any such amendment, modification or termination shall be subject to
the approval of the Company's stockholders within one year after such Board
action if such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Common Stock may be listed or quoted, or if the Board in its
discretion determines that obtaining such stockholder approval is for any reason
advisable, provided that any Plan provision that specifies the Directors who may
receive Directors' options, the amount and price of securities to be awarded to
such Directors, and the timing of awards to such Directors, or is otherwise a
"plan provision" within the meaning of Rule 16b-3(c)(2)(ii)(B) under the
Exchange Act or any successor provision thereto, shall not be amended more than
once every six months, other than to conform with changes in the Code, ERISA, or
the rules thereunder. Moreover, no action may be taken by the Company without
the consent of the affected Director which will materially impair the rights of
such Director under any award.
XII. REGISTRATION OF OPTIONED SHARES
The Directors' Options shall not be exercisable unless the sale of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended, or unless, in the opinion of
counsel to the Company, the sale of such optioned shares would be exempt from
the registration requirements of the Securities Act of 1933, as amended, and
unless, in the opinion of such counsel, the sale would be exempt from the
registration or qualification requirements of applicable state securities law.
A-5
<PAGE>
XIII. FINANCING ARRANGEMENTS
The Board of Directors or Committee, in its discretion, may enter into
arrangements with one or more banks, brokers or other financial institutions to
facilitate the exercise of Directors' Options and disposition of shares acquired
upon such exercise, including, without limitation, arrangements for the
simultaneous exercise of Directors' Options and sale of the shares acquired upon
such exercise, provided that so such arrangements may be made if the making of
such arrangements, or the authorization of such arrangements pursuant to this
Section XIII, would cause the Plan to no longer constitute a "formula" plan
meeting the requirements of Rule 16b-3(c)(2) under the Exchange Act, or any
successor thereto.
XIV. EFFECTIVE DATE
This Plan was authorized and adopted by the Board of Directors and became
effective on September 26, 1991, subject to approval by the Company's
stockholders at the annual stockholders' meeting in 1992 by the affirmative
votes of the holders of a majority of shares present in person or represented by
proxy, and entitled to vote at such meeting, or any adjournment thereof, or by
the written consent of the holders of a majority of shares entitled to vote, in
each case in accordance with applicable provisions of the Delaware General
Corporation Law. Any Directors' Option and related Limited Rights granted under
the Plan prior to such approval of stockholders shall be effective when granted,
but no such award may be exercised prior to such stockholder approval, and if
stockholders fail to approve the Plan as specified hereunder, any such award
shall be cancelled. Unless earlier terminated by the Board, the Plan shall
terminate when no shares of Common Stock remain reserved and available for
issuance and the Company has no further obligation with respect to any award
granted under the Plan.
A-6
<PAGE>
- --------------------------------------------------------------------------------
PROXY
BENTON OIL AND GAS COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
JULY 26, 1995
The undersigned hereby appoints A.E. Benton and Gregory S. Grabar, and each
of them, with full power of substitution, as proxies to represent the
undersigned at the Annual Meeting of Stockholders of Benton Oil and Gas Company
(the "Company") and any adjournments or postponements thereof and to vote all
shares of common stock the undersigned would be entitled to vote as indicated
upon all matters referred to herein and in their discretion upon any other
matters which may properly come before the meeting.
1. ELECTION OF DIRECTORS:
[_] FOR all nominees listed below
(except as marked to the contrary below).
[_] WITHHOLD AUTHORITY
to vote for all nominees listed below.
A.E. Benton, William H. Gumma, Bruce M. McIntyre,
Michael B. Wray, Richard W. Fetzner
(INSTRUCTION: To withhold authority for any individual nominee, write the
nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. To approve an amendment to the Company's Director Stock Option Plan to
increase the number of shares authorized to be issued thereunder from
200,000 shares to 400,000 shares.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To approve and ratify the appointment of Deloitte & Touche LLP as
independent auditors for the fiscal year ending December 31, 1995.
[_] FOR [_] AGAINST [_] ABSTAIN
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
(Continued and to be signed on other side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(continued from other side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS INDICATED, THE SHARES WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3.
Date: __________________________________________________________________, 1995
______________________________________________________________________________
(Signed)
______________________________________________________________________________
(Signed)
If the shares are issued in the name of two or more persons, each person should
sign the Proxy. If the shares are issued in the name of a corporation or a
partnership, please sign in the corporate name, by President or other authorized
officer, or in the partnership name, by an authorized person.
Please sign exactly as your name appears and return this Proxy promptly in the
accompanying postage-paid envelope. When signing as an Attorney, Executor,
Administrator, Trustee, Guardian or in any other representative capacity, please
give your full title as such.
SHOULD YOU WISH TO ATTEND THIS MEETING PLEASE CHECK THIS BOX. [_]
PLEASE DATE, SIGN AND MAIL YOUR PROXY PROMPTLY
- --------------------------------------------------------------------------------
