<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 & 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:
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Notes:
<PAGE>
[LOGO]
June 6, 1996
Dear Fellow Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders of
Benton Oil and Gas Company to be held on Wednesday, July 10, 1996, at the Four
Seasons Biltmore Hotel, 1260 Channel Drive, Santa Barbara, California at 10:00
a.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 9, 10, 11 and
12, 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 1995
and its plans for 1996. 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. 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 and
Chief Executive Officer
<PAGE>
BENTON OIL AND GAS COMPANY
1145 EUGENIA PLACE, SUITE 200
CARPINTERIA, CALIFORNIA 93013
(805) 566-5600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO OUR 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 10th day of July, 1996 at
10:00 a.m., Pacific Daylight Time, for the following purposes:
1. To elect (6) six 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 1991-1992 Stock Option Plan to
increase the number of shares authorized to be issued thereunder from
2,500,000 shares to 3,400,000 shares;
3. To approve and ratify the appointment of Deloitte & Touche LLP as
independent auditors for the fiscal year ending December 31, 1996; 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 May 24, 1996 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 May 24, 1996 will be available for inspection by
stockholders of the Company at the Four Seasons Biltmore Hotel, 1260 Channel
Drive, Santa Barbara, California 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 6, 1996
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 10, 1996, at 10:00 a.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 May 24, 1996 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 26,896,156 shares were issued and outstanding at the close of
business on May 24, 1996. 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, 1995, was first mailed to stockholders on or about June 12,
1996.
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 May 24, 1996, (ii) the
directors, (iii) certain of 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. 2,118,600 (2) 7.88%
345 Park Avenue
New York, NY 10154
A.E. Benton 1,410,000 (3) 5.09%
Michael B. Wray 109,300 (4) *
William H. Gumma 260,000 (5) *
Joseph C. White 70,000 (6) *
Clarence Cottman, III 75,967 (7) *
E. Sven Hagen 101,667 (8) *
Bruce M. McIntyre 100,000 (9) *
Richard W. Fetzner 71,667 (10) *
Garrett A. Garrettson 10,000 (11) *
All directors and executive officers as a group 2,686,834 (12) 9.32%
(12 persons)
</TABLE>
*Less than 1%
(1) The percentage of Common Stock is based upon 26,896,156 shares of Common
Stock outstanding as of May 24, 1996.
(2) The number of shares and the nature of beneficial ownership of Scudder,
Stevens & Clark, Inc. is as of December 31, 1995 and is based upon the
Schedule 13G filed with the Securities and Exchange Commission. Pursuant
to such Schedule 13G, Scudder, Stevens & Clark, Inc. reported sole
dispositive power with respect to all such shares and disclaimed beneficial
ownership.
(3) Includes 810,000 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(4) Includes 90,000 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(5) Includes 260,000 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(6) Includes 70,000 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(7) Includes 75,967 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(8) Includes 101,667 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(9) Includes 90,000 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(10) Includes 71,667 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(11) Includes 10,000 shares subject to options which are currently exercisable
or exercisable within 60 days after May 24, 1996, under the Company's stock
option plans.
(12) Includes 1,922,633 shares subject to options which are currently
exercisable or exercisable within 60 days after May 24, 1996, 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 six
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 six current directors are A.E. Benton,
Michael B. Wray, Bruce M. McIntyre, Richard W. Fetzner, William H. Gumma and
Garrett A. Garrettson.
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 53 Chairman of the Board and Chief 1988
Executive Officer of the Company
Michael B. Wray 60 President and Chief Financial Officer of 1988
the Company
Bruce M. McIntyre 68 Private Investor; Oil and Gas Consultant 1988
Richard W. Fetzner 67 Associate Professor of California 1990
Lutheran University
William H. Gumma 48 Senior Vice President - Operations of 1994
the Company; Managing Director of Benton-
Vinccler
Garrett A. Garrettson 52 Chief Executive Officer and President of 1996
Spectrian Corporation
</TABLE>
A. E. BENTON
A. E. Benton, founder of the Company, was first elected 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.
MICHAEL B. WRAY
Michael B. Wray was first elected President and Chief Financial Officer of
the Company in January 1996. He has served as director of the Company since
November 1988. From January 1994 through December 1995, Mr. Wray served as a
consultant to the Company. From January 1992 until July 1993, Mr. Wray served
as vice president-finance and administration of Del Mar Operating, Inc. From
1985 through 1991, Mr. Wray served as 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.
5
<PAGE>
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.
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 December 1995, Mr. Gumma was elected Managing Director of
Benton-Vinccler. 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.
GARRETT A. GARRETTSON
Garrett A. Garrettson has served as director of the Company since his
appointment to fill a vacancy created by the Board in January 1996. In 1996,
Mr. Garrettson was elected chief executive officer and president of Spectrian
Corporation, a publicly held company which is a leading independent supplier of
high-power amplifiers to the wireless communications industry. In 1995, Mr.
Garrettson was elected as chairman, chief executive officer and president of
Contract Recording Technology, Inc. In addition, since 1993, he has served as
president and chief executive officer of Censtor Corporation. From 1986 to
1989, Mr. Garrettson served as vice president of Imprimis Technology. Prior to
that time, after serving in the United States Navy and Naval Reserves, Mr.
Garrettson held various positions with Hewlett Packard Company, including
laboratory director, department manager, project manager, and research engineer.
Mr. Garrettson graduated from Stanford University with a B.S. and M.S. in
engineering physics, and a Ph.D. in mechanical engineering.
6
<PAGE>
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 five regularly scheduled meetings and held one
telephonic meeting during the year ended December 31, 1995. Each member of the
Board of Directors attended at least 75% of the aggregate number of meetings
held in 1995 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 and Fetzner are presently members of this
committee. During the year ended December 31, 1995, the Compensation Committee
held two meetings, took one action in writing without a meeting and held two
telephonic meetings.
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
three meetings during the year ended December 31, 1995.
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 four meetings during the year ended
December 31, 1995.
MANAGEMENT
INFORMATION REGARDING EXECUTIVE OFFICERS
Information with respect to the executive officers of the Company as of May 24,
1996 is set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
A.E. Benton (1) 53 Chairman of the Board and Chief Executive Officer
Michael B. Wray (1) 60 President and Chief Financial Officer
William H. Gumma (1) 48 Senior Vice President - Operations; Managing Director of Benton-Vinccler
Joseph C. White 65 Vice President - Operations
Clarence Cottman, III 40 Vice President - Business Development
E. Sven Hagen 39 Vice President - Exploration and Development
David H. Pratt 46 Vice President - International Finance
Gregory S. Grabar 41 Vice President - Corporate Development and Administration
Chris C. Hickok 38 Vice President - Controller; Chief Accounting Officer
</TABLE>
- -------------------
(1) See "Information Regarding Nominees."
JOSEPH C. WHITE was elected Vice President-Operations of the Company in February
1993. Previously, Mr. White was president of J.C. White & 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.
7
<PAGE>
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, responsible for all land activity 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 July 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.
DAVID H. PRATT was elected Vice President-International Finance in January 1996.
From April 1989 to December 1995, Mr. Pratt served as Vice President-Finance,
Chief Financial Officer and Treasurer of the Company. 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.
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 and Chief Accounting Officer 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 and is a
Certified Management Accountant.
8
<PAGE>
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, 1995 $279,000 $50,000 (1) 125,000 $460(2)
Chief Executive Officer 1994 250,000 0 250,000 473
1993 165,000 50,000 125,000 448
William H. Gumma 1995 189,000 55,000 (1) 50,000 272(2)
Senior Vice President - 1994 175,000 20,000 100,000 273
Operations 1993 125,000 30,000 50,000 195
Joseph C. White 1995 116,000 20,000 (1) 15,000 902(2)
Vice President - Operations 1994 96,000 0 40,000 902
1993 90,000 10,000 0 489
Clarence Cottman, III 1995 105,000 15,000 (1) 0 174(2)
Vice President - 1994 95,000 0 50,000 118
Business Development 1993 85,000 20,000 10,000 118
E. Sven Hagen 1995 98,000 20,000 (1) 35,000 81(2)
Vice President - Exploration and 1994 84,000 0 40,000 81
Development 1993 65,000 0 0 81
</TABLE>
- ----------------------
(1) The aggregate amount of prerequisite compensation to be reported herein is
less than the lesser of either $50,000 or 10% of the total of annual salary
and bonus reported for the named executive officer. No other annual
compensation was paid or payable to the named executive officers in the
years indicated.
(2) Represents premiums paid by the Company with respect to term life insurance
for the benefit of the named executive officer.
The following table shows information concerning options to purchase Common
Stock granted to certain individuals during 1995.
<TABLE>
<CAPTION>
% OF TOTAL GRANT
OPTIONS/SARS EXERCISE DATE
GRANTED TO OR PRESENT
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION VALUE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE ($) (1)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A.E. Benton 125,000 22.8% 15.25 12/20/05 $803,750
William H. Gumma 50,000 9.1% 15.25 12/20/05 321,500
Joseph C. White 15,000 2.7% 15.25 12/20/05 96,450
E. Sven Hagen 20,000 3.7% 12.69 4/26/05 107,120
E. Sven Hagen 15,000 2.7% 15.25 12/20/05 96,450
</TABLE>
- -------------------------
9
<PAGE>
(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 value under that model
for the stock option granted on April 26, 1995 is based on the assumptions
that include (i) a stock price volatility of 35.0%, (ii) a risk-free rate
of return based on a 10-year U.S. Treasury rate at the time of grant of
7.08%, and (iii) an option exercise term of ten years. The estimated
values under that model for the stock options granted on December 20, 1995
are based on the assumptions that include (i) a stock price volatility of
35.0%, (ii) a risk-free rate of return based on a 10-year U.S. Treasury
rate at the time of grant of 5.80% 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 1995 by certain individuals and the year-end value of unexercised
options for certain individuals.
<TABLE>
<CAPTION>
AGGREGATED OPTIONS/SAR EXERCISES IN 1995 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 $ 0 726,667 333,333 $5,823,417 $1,536,458
William H. Gumma 15,000 151,650 276,667 133,333 2,113,517 614,583
Joseph C. White 0 0 63,334 41,666 576,667 203,333
Clarence Cottman, III 80,000 808,000 68,334 36,666 466,042 287,083
E. Sven Hagen 15,000 186,750 88,334 61,666 779,917 249,533
</TABLE>
EMPLOYMENT AGREEMENTS
In June 1995, 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.
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.
10
<PAGE>
Messrs. Benton and Gumma entered into employment agreements for terms of
three years on June 26, 1995. Mr. Cottman entered into an employment agreement
for a term of three years on July 11, 1994. Mr. Hagen entered into an
employment agreement for a term of three years on April 26, 1995. Pursuant to
the employment agreements, Mr. Benton's annual base salary was $300,000, Mr.
Gumma's annual base salary was $200,000, Mr. Cottman's annual base salary was
$95,000 and Mr. Hagen's annual base salary was $100,000. On December 30, 1994,
Mr. Cottman's annual base salary was increased to $105,000. On December 20,
1995, Mr. Cottman's annual base salary was increased to $125,000 and Mr. Hagen's
annual base salary was increased to $115,000. On January 3, 1996, Mr. Benton's
annual base salary was increased to $425,000 and Mr. Gumma's annual base salary
was increased to $275,000. Mr. Wray entered into an employment agreement for a
term of three years on January 3, 1996. Pursuant to the agreement, Mr. Wray
will serve as President and Chief Financial Officer with an annual base salary
of $380,000. 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 is 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 1995, 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 $246,000 during 1995 and reimbursed Mr. Wray for all travel and
business related expenses. The Company 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. 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 1995 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.
11
<PAGE>
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 comparable to what they could receive from other exploration and
production companies, including consideration of the increases in base salaries
which took effect June 26, 1995 and January 3, 1996.
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 1995 salary, bonus
and annual stock grants to Mr. Benton, Chief Executive Officer, the Committee
considered the Company's successes in expanding its operations internationally
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 base salary provision
($300,000) set forth in the June 26, 1995 employment agreement between the
Company and Mr. Benton. Stock options for 125,000 shares were granted December
1995 at an exercise price of $15.25 per share. Mr. Benton's base salary was
increased to $425,000 in January 1996. 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
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors during
1995 were Messrs. Wray, Fetzner and McIntyre. On January 3, 1996, Mr. Wray
resigned from the Compensation Committee simultaneously with his election as
President and Chief Financial Officer of the Company. 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 provided
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.
12
<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, 1995. 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
<TABLE>
<CAPTION>
Measurement Period S&P DOMESTIC OIL
(Fiscal Year Covered) BENTON 500 INDEX INDEX
- -------------------- ---------- --------- ------------
<S> <C> <C> <C>
Measurement Pt- 12/31/90 $100 $100 $100
FYE 12/31/91 $103 $131 $ 94
FYE 12/31/92 $ 72 $141 $100
FYE 12/31/93 $ 62 $155 $109
FYE 12/31/94 $112 $157 $112
FYE 12/31/95 $185 $215 $130
</TABLE>
TOTAL RETURNS ASSUME DIVIDENDS REINVESTED ON EX-DATE
FISCAL YEAR ENDED 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.
13
<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
provided 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 were comparable to those
fees that have been charged by independent consultants providing similar
services. On January 3, 1996, Mr. Wray was elected President and Chief
Financial Officer of the Company.
On December 31, 1993, the Company guaranteed a loan made to Mr. A. E. Benton,
its Chief Executive Officer, for $300,000. In January 1994, the Company loaned
$800,000 to Mr. Benton with interest at prime plus 1.0%; in September 1994, Mr.
Benton made a payment of $207,014 against this loan. In December 1995, the
Company purchased a home from Mr. Benton for $1.73 million, based on two
independent appraisals, and from the proceeds Mr. Benton repaid the balance owed
to the Company of $592,986 plus accrued interest and the $300,000 loan
guaranteed by the Company. The Company anticipates selling the home in 1996.
The Company loaned Mr. Pratt $95,000 on November 11, 1993 on the same terms as
the $800,000 loan to Mr. Benton, which is payable on demand by the Company.
PROPOSAL 2. -- AMENDMENT TO 1991-1992
STOCK OPTION PLAN (SEE EXHIBIT A)
The stockholders are asked to approve an amendment to the Company's 1991-1992
Stock Option Plan (the "Plan") to increase the number of shares issuable
pursuant to the plan from 2,500,000 shares to 3,400,000 shares. The plan, which
was approved by the stockholders in July 1992, permits the granting of non-
qualified stock options ("NQSOs") and incentive stock options ("ISOs") for up to
2,500,000 shares of Common Stock to officers and employees of the Company. As
of May 24, 1996, there were approximately 40 employees of the Company and its
subsidiaries who were eligible to receive options under the Plan, and 32
employees held outstanding options. As of May 24, 1996, options to purchase an
aggregate of 148,033 shares of Common Stock had been exercised, options to
purchase an aggregate amount of 2,439,467 shares of Common Stock at exercise
prices ranging from $5.50 to $15.25 per share were outstanding, and no options
remained available for grant under the Plan. The amount of options in excess of
2,500,000 shares is the result of options granted, which are subject to approval
of the amendment to the Plan, to the two employees discussed on the subsequent
page.
Options may be granted as ISOs, NQSOs or a combination of each, with exercise
prices not less than the fair market value of the common stock on the date of
the grant. The amount of ISOs that may be granted to any one participant is
subject to the dollar limitations imposed by the Internal Revenue Code of 1986,
as amended. In the event of a change in control of the Company, all outstanding
options become immediately exercisable to the extent permitted by the 1991-1992
Stock Option Plan. All options granted to date under the 1991-1992 Stock Option
Plan vest ratably over a three-year period from their dates of grant.
The Board of Directors approved the amendment after evaluating the Company's
existing compensation programs. The Board of Directors believes that approval
of the amendment will be in the best interests of the Company and its
stockholders by permitting the Company to continue to utilize stock options as a
means to attract, retain and motivate key employees who are in a position to
contribute to the success of the Company, by aligning the interests of key
employees with the interests of stockholders, and to enable the Company to
compete effectively for the services of such employees.
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.
14
<PAGE>
Because options granted under the Plan are granted by the discretion of the
Compensation Committee of the Board of Directors, it is not possible to
determine the amount of options that may be granted to the executive officers
listed in the Compensation Table or to the executive officers or the employees
as a whole, if the amendment to the Plan is approved. As of the date of this
Proxy Statement, no determination has been made regarding the identity of the
employees to whom options may be granted with respect to any of the additional
options issuable under the Plan, or the number of options that will be granted
to any employee if the amendment is approved except as set forth below:
1991-1992 STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME DOLLAR VALUE NUMBER OF OPTIONS
- -------------------------------------------------------------------------------------
<S> <C> <C>
A.E. Benton $ 0 0
William H. Gumma 0 0
Joseph C. White 0 0
E. Sven Hagen 0 0
Clarence Cottman, III 0 0
Executive Group (1) 412,500 150,000
Non-Executive Director Group 0 0
Non-Executive Officer Employee Group (2) 153,125 25,000
</TABLE>
(1) Options were granted to Mr. Wray, President and Chief Financial Officer of
the Company, subject to approval of the amendment to the Plan. The dollar
value of the option is based upon the difference between the stock's
closing price on June 6, 1996 and the option's strike price multiplied by
the number of options.
(2) Options were granted to one employee upon her employment with the Company
subject to approval of the amendment to the Plan. The dollar value of the
option is based upon the difference between the stock's closing price on
June 6, 1996 and the option's strike price multiplied by the number of
options.
In January 1996, the Board of Directors approved an amendment to the Plan to
increase the number of shares issuable pursuant to the Plan from 2,500,000
shares to 3,400,000 shares. 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 officers and
employees and as incentive for officers and employees, 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 1991-1992 STOCK OPTION PLAN.
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, 1996. 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.
15
<PAGE>
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, 1995,
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 1997 Annual Meeting of Stockholders must be
received at the Company's executive offices not later than March 12, 1997. 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.
The entire cost of soliciting proxies for the Annual Meeting will be borne by
the Company. Corporate Investor Communications, Inc. has 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 and
Chief Executive Officer
June 6, 1996
16
<PAGE>
EXHIBIT A
BENTON OIL AND GAS COMPANY
RESTATED 1991-1992 STOCK OPTION PLAN
I. PURPOSE
The purpose of this 1991-1992 Stock Option Plan (the "Plan") is to enable
Benton Oil and Gas Company (the "Company"), and such of its subsidiaries (as
defined in Section 424(f) of the Internal Revenue Code of 1986 (the "Code")) as
the Board of Directors of the Company (the "Board") shall from time to time
designate ("Participating Subsidiaries"), to attract and retain qualified
employees, and to provide such persons with additional motivation to advance the
interests of the Company and its Participating Subsidiaries. The Plan provides
for the grant of Stock Options, Limited Rights and Supplemental Bonuses to
employees of the Company.
II. CERTAIN DEFINITIONS
2.1 "Change of Control". The term "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") cease 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 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 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 Employee
by virtue of any transaction which results in such Employee, or a group of
Persons which includes such Employee, acquiring, directly or indirectly, 25% or
more of the combined voting power of the Company's outstanding securities.
2.2 "Common Stock". Common Stock means Common Stock, par value $0.01 share
------------
of the Company.
2.3 "Disinterested Person". A Disinterested Person is a person who, at the
--------------------
time he exercises discretion in administering the Plan, qualifies as a
"disinterested person" under Rule 16b-3(c)(2) under the Exchange Act.
2.4 "Employee". An Employee is an employee of the Company or any
--------
Participating Subsidiary.
A-1
<PAGE>
2.5 "Exchange Act". "Exchange Act" means the Securities Exchange Act of
------------
1934, as amended from time to time.
2.6 "Fair Market Value". The Fair Market Value of a share of Common Stock
-----------------
on any date shall be the closing price of Common Stock as reported in the Wall
Street Journal for securities listed on the NASDAQ 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, unless otherwise specified by
the Subcommittee.
2.7 "Limited Right". A Limited Right is the right 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
Option Price per share under the Stock 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 any ISO, the amount
computed under part (A) of the foregoing formula shall be equal to the Fair
Market Value of Common Stock on the date the Limited Right is in fact exercised,
and provided further that, in the case of any other 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 six months or more after the
date of grant of the Limited Right (with such Fair Market Value otherwise
determined in accordance with the foregoing formula).
2.8 "Minimum Price Per Share". Minimum Price Per Share means 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 Subcommittee shall take such action, as in
its judgment it deems appropriate, to establish the cash value of such
consideration, but such valuation shall not be less than the value, if any,
attributed to such consideration in writing by any party to such Transaction,
tender offer or exchange offer other than the Company.
2.9 "Participant". A Participant is an Employee to whom a Stock Option,
-----------
Limited Right or Supplemental Bonus is granted.
2.10 "Stock Option". A Stock Option is the right granted under the Plan to
------------
an Employee to purchase, at such time or times and at such price or prices
("Option Price") as are determined by the Subcommittee, the number of shares of
Common Stock determined by the Subcommittee.
2.11 "Subcommittee". Subcommittee means the Committee described in Section
------------
IV.
2.12 "Supplemental Bonus". A Supplemental Bonus is the right to receive
------------------
payment, in shares of Common Stock, cash or a combination of shares of Common
Stock and cash, of an amount specified by the Subcommittee pursuant to Section
7.6.
2.13 "Transaction". A Transaction is (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, (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.
For purposes of this Plan, the Subcommittee may, by resolution, clarify the
date as of which a Change of Control shall be deemed to have occurred.
A-2
<PAGE>
III. INCENTIVE STOCK OPTIONS AND NONSTATUTORY STOCK OPTIONS
The Stock Options granted under the Plan may be either:
(a) Incentive Stock Options ("ISOs") which are intended to be "incentive
stock options" as that term is defined in Section 422 of the Code: or
(b) Nonstatutory Stock Options ("NSOs") which are intended to be options that
do not qualify as "incentive stock options" under Section 422 of the Code.
The individual Option Agreement(s) shall clearly designate whether the Stock
Options granted are ISOs or NSOs. Subject to other provisions of the Plan, a
Participant may receive ISOs and NSOs at the same time, provided that the ISOs
and NSOs are clearly designated as such.
Except as otherwise expressly provided herein, all of the provisions and
requirements of the Plan relating to Stock Options shall apply to ISOs and NSOs.
IV. ADMINISTRATION
4.1 Subcommittee. The Plan shall be administered by a Subcommittee of the
-------------
Compensation Committee of the Board. The Subcommittee shall consist of at least
two members of the Board of Directors who are not employed by the Company and
who shall be Disinterested Persons. Subject to the provisions of the Plan, the
Subcommittee shall have full authority to administer the Plan, including
authority to grant awards under the Plan and determine the terms thereof, to
interpret and construe any provision of the Plan and any Stock Option, Limited
Right or Supplemental Bonus granted thereunder, to adopt such rules and
regulations for administering the Plan, including those it may deem necessary in
order to comply with the requirements of the Code or in order that Stock Options
that are intended to be ISOs will be classified as incentive stock options under
the Code, or in order to conform to any regulation or to any change in any law
or regulation applicable thereto and to make all other decisions and
determinations under the plan.
4.2 Actions of Subcommittee. All actions taken and all interpretations and
------------------------
determinations made by the Subcommittee in good faith (including determinations
of Fair Market Value) shall be final and binding upon all Participants, the
Company and all other interested persons. No member of the Subcommittee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan, and all members of the Subcommittee shall,
in addition to their rights as directors, be fully protected by the Company with
respect to any such action, determination or interpretation.
V. ELIGIBILITY AND PARTICIPATION
5.1 Eligible Employees. Grants of Stock Options, Limited Rights and
-------------------
Supplemental Bonuses may be made to Employees. Any director of the Company or
of a Participating Subsidiary who is also an Employee shall also be eligible,
but directors who are not Employees shall not be eligible, to receive Stock
Options, Limited Rights and Supplemental Bonuses under the Plan. The
Subcommittee shall from time to time determine the Employees to whom Stock
Options shall be granted, the number of shares of Common Stock subject to each
Stock Option to be granted to each such Employee, the Option Price of such Stock
Options and the terms and conditions of such Stock Options, subject to the
provisions of this Plan.
5.2 Option Price. Except as otherwise provided in Section 7.8, the Option
-------------
Price of any ISO or NSO shall not be less than the Fair Market Value of a share
of Common Stock on the date on which the Stock Option is granted and shall not
be less than par value of Common Stock. If an ISO is granted to an Employee who
then owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary corporation of
the Company, the Option Price of such ISO shall be at least 110% of the Fair
Market Value of the Common Stock subject to the ISO on the date such ISO is
granted, and such ISO shall not be exercisable after five years after the date
on which it was granted.
5.3 Option Agreement. Each Stock Option shall be evidenced by a written
----------------
agreement ("Option Agreement") containing such terms and provisions as the
Subcommittee may determine, subject to the provisions of this Plan.
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<PAGE>
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 3,400,000 shares, subject to
---------
adjustment as provided in Section 6.2. Such shares may be authorized and
unissued shares or may be treasury shares. The aggregate Fair Market Value
(determined as of the time the ISO is granted) of the Common Stock as to which
all ISOs granted to an individual may first become exercisable in a particular
calendar year may not exceed $100,000, provided that to the extent that Stock
Options intended to be ISOs (together with all incentive stock options granted
under other Company plans to such individual) become exercisable in a given year
in excess of this limit, such Stock Options shall be deemed to be NSOs and shall
be exercisable as such. If any shares of Common Stock subject to Stock Options
are not purchased or otherwise paid for before such Stock Options expire or
otherwise terminate, unless such Stock Options are surrendered upon exercise of
Limited Rights, such shares may again be made subject to Stock Options or
otherwise issued under the Plan. Shares shall be treated as issued under the
Plan and counted against the limitation set forth in this Section 6.1, including
with respect to the payment of Supplemental Bonuses, in a manner that complies
with applicable requirements under Rule 16b-3 under the Exchange Act.
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 Subcommittee shall,
in order to prevent dilution or enlargement of Participants' rights, make
appropriate adjustments in: (i) the number and kind of shares theretofore made
subject to Stock Options, and in the Option Price of said shares; and (ii) the
aggregate number 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. EXERCISE OF STOCK OPTIONS
7.1 Time of Exercise. Subject to the provisions of the Plan, including
----------------
without limitation Section 7.7, the Subcommittee, in its discretion, shall
determine the time when a Stock Option, or a portion of a Stock Option, shall
become exercisable, and the time when a Stock Option, or a portion of a Stock
Option, shall expire. Such time or times shall be set forth in the Option
Agreement evidencing such Stock Option. An ISO shall expire, to the extent not
exercised, no later than the tenth anniversary of the date on which it was
granted, and an NSO shall expire, to the extent not exercised, no later than 10
years and one day after the date on which it was granted. The Subcommittee may
accelerate the vesting of any Participant's Stock Option by giving written
notice to the Participant. Unless otherwise determined by the Subcommittee, the
acceleration of the exercise period of a Stock Option shall not affect the
expiration date of that Stock Option.
7.2 Surrender of Shares in Payment of Exercise Price. The Subcommittee, in
------------------------------------------------
its sole discretion, may permit a Participant to surrender to the Company shares
of the Common Stock as part or full payment for the exercise of a Stock Option.
Such surrendered shares shall be valued at their Fair Market Value on the date
of exercise. Unless otherwise determined by the Subcommittee, any such shares
surrendered by the Participant shall have been held by him for at least six
months prior to surrender.
7.3 Use of Promissory Note; Exercise Loans. The Subcommittee may, in its
--------------------------------------
sole discretion, impose terms and conditions, including conditions relating to
the manner and timing of payments of the Option Price, on the exercise of Stock
Options. Such terms and conditions may include, but are not limited to,
permitting a Participant to deliver to the Company his promissory note as
payment for the exercise of a Stock Option; provided that, with respect to any
promissory note given as payment or partial payment for the exercise of an ISO,
all terms of such note shall be determined at the time a Stock Option is granted
and set forth in the Option Agreement. The Subcommittee, in its sole
discretion, may authorize the Company to make a loan to a Participant in
connection with the exercise of Stock Options, or authorize the Company to
arrange or guaranty loans to a Participant by a third party, including in
connection with broker-assisted cashless exercises. The foregoing
notwithstanding, a Participant shall pay at least the par value of the Common
Stock to be acquired upon exercise of a Stock Option in the form of lawful
consideration under the Delaware General Corporation Law prior to issuance of
such shares.
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<PAGE>
7.4 Stock Restriction Agreement. The Subcommittee may provide that shares
---------------------------
of Common Stock issuable upon the exercise of a Stock Option shall, under
certain conditions, be subject to restrictions whereby the Company has a right
of first refusal with respect to such shares or a right or obligation to
repurchase all or a portion of such shares, which restrictions may survive a
Participant's term of employment with the Company. The acceleration of time or
times at which the Stock Option becomes exercisable may be conditioned upon the
Participant's agreement to such restrictions.
7.5 Termination of Employment Before Exercise. If a Participant's
-----------------------------------------
employment with the Company or a Participating Subsidiary shall terminate for
any reason other than the Participant's disability, any ISO then held by the
Participant, to the extent then exercisable under the applicable Option
Agreement(s), shall remain exercisable after the termination of his employment
for a period of three months. If the Participant's employment is terminated
because the Participant is disabled within the meaning of Section 22(e)(3) of
the Code, any ISO then held by the Participant, to the extent then exercisable
under the applicable Option Agreement(s), shall remain exercisable after the
termination of his employment for a period of one year (but in no event beyond
ten years from the date of grant of the ISO). If the Stock Option is not
exercised during the applicable period, it shall be deemed to have been
forfeited and of no further force or effect. The period and extent to which an
NSO may be exercised following termination of employment shall be determined by
the Subcommittee.
7.6 Grant of Supplemental Bonuses. The Subcommittee, either at the time of
-----------------------------
grant or at any time prior to exercise of any NSO or Limited Right, may provide
for a Supplemental Bonus from the Company or Participating Subsidiary in
connection with a specified number of shares of Common Stock then purchasable,
or which may become purchasable, under an NSO, or a specified number of Limited
Rights which may be or become exercisable. A Supplemental Bonus shall be
automatically payable upon the exercise of the NSO or Limited Right with regard
to which such Supplemental Bonus was granted. A Supplemental Bonus shall not
exceed the amount necessary to reimburse the Participant for the income tax
liability incurred by him upon the exercise of the NSO or upon the exercise of
such Limited Right, calculated using the maximum combined federal and applicable
state income tax rates then in effect and taking into account the tax liability
arising from the Participant's receipt of the Supplemental Bonus, all as
determined by the Subcommittee. The Subcommittee may, in its discretion, elect
to pay any part or all of the Supplemental Bonus in: (i) cash; (ii) shares of
Common Stock; or (iii) any combination of cash and shares of Common Stock;
provided that bonuses payable in respect of Limited Rights shall be payable only
in cash. The Subcommittee's election shall be made by giving written notice to
the Participant not later than 90 days after the related exercise, which notice
shall specify the portion which the Subcommittee elects to pay in cash, shares
of Common Stock or a combination thereof. In the event any portion is to be
paid in shares of Common Stock, the number of shares to be delivered shall be
determined by dividing the amount which the subcommittee elects to pay in shares
of Common Stock by the Fair Market Value of one share of Common Stock on the
date of exercise. Any fractional share resulting from any such calculation
shall be disregarded. Said shares, together with any cash payable to the
Participant, shall be delivered within said 90-day period.
7.7 Option Vesting Upon Change of Control of The Company. In the event of a
----------------------------------------------------
Change of Control of the Company, the vesting of Stock Options granted pursuant
to the Plan shall automatically be accelerated, so that all Stock Options
outstanding at the time of such Change of Control will be exercisable
immediately except as otherwise provided in Section 2.1.
7.8 Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
-------------------------------------------------------
under the Plan may, in the discretion of the Subcommittee, be granted either
alone or in addition to, in tandem with, or in substitution for, any other award
granted under the Plan or any other plan of the Company or any Participating
Subsidiary or any other right of a Participant to receive payment from the
Company or any Participating Subsidiary. If an award is granted in substitution
for another such award, the Committee shall require the surrender of such other
award in consideration for the grant of the new award. Awards granted in
addition to or in tandem with other awards may be granted either as of the same
time as or a different time from the grant of such other awards. The per share
Option Price of any Stock Option:
(A) Granted in substitution for an outstanding award shall be not less
than the lesser of the Fair Market Value of a share of Common Stock at the date
such substitute award is granted or such Fair Market Value at that date reduced
to reflect the fair market value (as determined by the Subcommittee) at that
date of the award required to be surrendered by the Participant as a condition
to receipt of the substitute award; or
(B) Retroactively granted in tandem with an outstanding award shall be
not less than the lesser of the Fair Market Value of a share of Common Stock at
the date of grant of the later award or at the date of grant of the earlier
award.
Except for the Option Price required to be paid upon the exercise of Stock
Options and except as provided in this Section 7.8, only services may be
required as consideration for the grant of any award under the Plan.
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<PAGE>
VIII. LIMITED RIGHTS
8.1 Grant of Limited Rights. The Subcommittee may in its discretion grant
------------------------
Limited Rights to a Participant concurrently with the grant of each ISO or at
any time with respect to any NSO. Such Limited Rights shall be exercisable with
respect to the number of shares of Common Stock which are, or may become,
purchasable under any such Stock Option. The Subcommittee may, in its
discretion, specify the terms and conditions of such rights, including without
limitation the date or dates upon which such rights shall expire and become void
and unexercisable, except that Limited Rights granted with respect to an ISO
shall only be exercisable, and shall expire, at the time or times the ISO is
exercisable and expires, respectively. In any event, a Limited Right shall not
be exercisable within six months from the date of grant of the Limited Right.
Each Participant 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 such Limited Right shall be exercisable for a period of 60
days following 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 Participant shall exercise his Limited Rights
by delivering a written notice to the Subcommittee specifying the number of
shares with respect to which he exercises Limited Rights and agreeing to
surrender the right to purchase an equivalent number of shares of Common Stock
subject to his Stock Option. If a Participant exercises Limited Rights, payment
of his Limited Rights shall be made in accordance with Section 8.3 on or before
the thirtieth day after the date of exercise of the Limited Rights. A Limited
Right shall remain exercisable during the exercise periods specified in
accordance with Section 8.1 and this Section in the event of a termination of
employment of the Participant holding the Limited Right after a Change of
Control. Notwithstanding the above, upon a termination of the employment of the
holder of the Limited Right before the occurrence of any Change of Control, the
Limited Right shall expire immediately.
8.3 Form of Payment. If a Participant elects to exercise Limited Rights as
---------------
provided in Section 8.2, the Company shall pay to the Participant in cash the
amount set forth in Section 2.7 hereof, calculated with respect to the shares as
to which the Participant has exercised Limited Rights, within thirty days of the
date of exercise of the Limited Rights. If such amount is not paid in full
within the prescribed period, the Company shall be liable to such Participant
for the costs of collection of such amount, including attorney's fees.
8.4 Termination. When a Limited Right is exercised, the Stock 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 Stock Option, any Limited Right
granted with respect thereto shall terminate to the extent of the number of
shares as to which such Stock Option was exercised or terminated.
IX. NO CONTRACT OF EMPLOYMENT
Nothing in this Plan shall confer upon the Participant the right to continue
in the employ of the Company, or any Participating Subsidiary, nor shall it
interfere in any way with the right of the Company, or any such Participating
Subsidiary, to discharge the Participant at any time for any reason whatsoever,
with or without cause. Nothing in this Article IX shall affect any rights or
obligations of the Company or any Participant under any written contract of
employment.
X. NO RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder with respect to any
shares of Common Stock subject to a Stock Option, until such Stock 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 Participant, or in any other
rights of the Participant upon exercise of a Stock 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 Participant's Stock Option.
A-6
<PAGE>
XI. NON-TRANSFERABILITY
No Stock Option, Limited Right or Supplemental Bonus right granted under this
Plan, nor any other rights acquired by a Participant under this Plan, shall be
assignable or transferable by a Participant, 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 or Title I of the Employee Retirement
Income Security Act of 1974, and any ISO shall be exercisable, during his
lifetime, only by him. In the event of a Participant's death, the Stock Option
or any Limited Right or Supplemental Bonus right may be exercised by the
Personal Representative of the Participant's estate or, if no Personal
Representative has been appointed, by the successor or successors in interest
determined under the Participant's will or under the applicable laws of descent
and distribution.
XII. COMPLIANCE WITH RULE 16B-3
It is the intent of the Company that the Plan comply in all respects with
Rule 16b-3 under the Exchange Act in connection with any award granted to a
person who is subject to Section 16 of the Exchange Act. Accordingly, if any
provision of the Plan or any agreement hereunder does not comply with the
requirements of Rule 16b-3 as then applicable to any such person, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements with respect to such person.
XIII. AMENDMENT
The Company by action of the Board may amend, modify or terminate this Plan
at any time or, by action of the Subcommittee may amend, modify or terminate any
outstanding Option Agreement, except that any such amendment, modification or
termination of the Plan 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. Moreover, no action may
be taken by the Company without the consent of the affected Participant which
will materially impair the rights of any Participant under any award then
outstanding or which will prevent an ISO from continuing to qualify under
Section 422 of the Code.
XIV. REGISTRATION OF OPTIONED SHARES
No Stock Option shall be exercisable unless the Company's 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 Company's 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, such sale would be exempt
from the registration or qualification requirements of applicable state
securities law.
XV. WITHHOLDING TAXES
The Company or a Participating Subsidiary may take such steps as the
Subcommittee may deem necessary or appropriate for the withholding of any taxes
which the Company or the Participating Subsidiary is required by any law or
regulation or any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Stock Option, Limited
Right or Supplemental Bonus, and to take such other action as the Subcommittee
may deem necessary or advisable to enable the Company and Participants to
satisfy obligations for the payment of tax liabilities in excess of such
withholding obligations relating to any such award. This authority shall
include authority to withhold or receive shares or other property and to make
cash payments in respect thereof in satisfaction of Participant's tax
obligations.
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<PAGE>
XVI. FINANCING ARRANGEMENTS
The Subcommittee, in its discretion, may enter into arrangements with one or
more banks, brokers or other financial institutions to facilitate the exercise,
and the disposition of shares acquired upon exercise of Stock Options or
Supplemental Bonuses, including, without limitation, arrangements for the
simultaneous exercise of Stock Options (including a related Supplemental Bonus),
and sale of the shares acquired upon such exercise.
XVII. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the Plan
to stockholders of the Company for approval shall be construed as creating any
limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any subsidiary now has lawfully put into effect, including,
without limitation, any retirement, pension, savings and stock purchase plan,
insurance, death and disability benefits and executive short-term incentive
plans.
XVIII. EFFECTIVE DATE
This Plan was adopted by the Board of Directors and became effective on
September 26, 1991 and was approved 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 Stock
Options, Limited Rights, or Supplemental Bonus granted under the Plan prior to
such approval of stockholders shall be effective when granted (unless, with
respect to any such award, the Subcommittee specifies otherwise at the time of
grant), 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. No ISO shall be granted subsequent to ten years after
the effective date of the Plan. 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.
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<PAGE>
P R O X Y
BENTON OIL AND GAS COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS
JULY 10, 1996
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.
(CONTINUED ON REVERSE SIDE)
<PAGE>
Please mark your votes this way [X]
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.
1. ELECTION OF DIRECTORS:
FOR all nominees listed below FOR
(except as marked to the contrary below). [_]
WITHHOLD AUTHORITY to WITHHELD
vote for all nominees listed below. [_]
A.E. Benton, William H. Gumma, Bruce M. McIntyre, Michael B. Wray,
Richard W. Fetzner, Garrett A. Garrettson.
(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 1991-1992 Stock Option Plan to
increase the number of shares authorized to be issued thereunder from
2,500,000 shares to 3,400,000 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, 1996.
FOR [_] AGAINST [_] ABSTAIN [_]
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
FOR [_] AGAINST [_] ABSTAIN [_]
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.
Signature(s)________________________________ Date__________________________
PLEASE DATE, SIGN AND MAIL YOUR PROXY PROMPTLY
