<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BENTON OIL AND GAS COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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: ...........................................................
================================================================================
<PAGE> 2
[LOGO]
April 30, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders of
Benton Oil and Gas Company to be held on Tuesday, June 10, 1997, 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 night of June 9, 1997, 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 1996
and its plans for 1997. 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> 3
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 June,
1997 at 10:00 a.m., Pacific Daylight Time, for the following purposes:
1. To elect five (5) directors to the Board of Directors for
terms of one (1) year or until their successors are elected and qualified;
2. To approve and ratify the appointment of Deloitte & Touche
LLP as independent auditors for the fiscal year ending December 31, 1997; and
3. 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 April 21, 1997
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 April 21, 1997 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
April 30, 1997
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
<PAGE> 4
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 June 10, 1997, 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 April 21, 1997
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 29,004,516 shares were issued and outstanding at the
close of business on April 21, 1997. 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, 1996, was first mailed to stockholders on or about May 2,
1997.
<PAGE> 5
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 April 21, 1997,
(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. 1,796,975 (2) 6.20%
345 Park Avenue
New York, NY 10154
LGT Partners 1,617,800 (3) 5.58%
50 California Street, 27th Floor
San Francisco, CA 94111
A.E. Benton 1,535,000 (4) 5.13%
Michael B. Wray 159,300 (5) *
William H. Gumma 50,001 (6) *
Joseph C. White 38,333 (7) *
Clarence Cottman, III 45,333 (8) *
E. Sven Hagen 76,667 (9) *
Bruce M. McIntyre 97,000(10) *
Richard W. Fetzner 66,667(11) *
Garrett A. Garrettson 21,500(12) *
All directors and executive officers as a group 2,192,368(13) 7.18%
(11 persons)
</TABLE>
*Less than 1%
(1) The percentage of Common Stock is based upon 29,004,516 shares of
Common Stock outstanding as of April 21, 1997.
(2) The number of shares and the nature of beneficial ownership
of Scudder, Stevens & Clark, Inc. is as of December 31, 1996 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) The number of shares and the nature of beneficial ownership of LGT
Partners is as of December 31, 1996 and is based upon the Schedule 13G
filed with the Securities and Exchange Commission.
(4) Includes 935,000 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(5) Includes 140,000 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997,
under the Company's stock option plans.
(6) Includes 50,001 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans. Mr. Gumma resigned from the Company
on April 22, 1997.
(7) Includes 38,333 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(8) Includes 45,333 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(9) Includes 76,667 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(10) Includes 85,000 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(11) Includes 66,667 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(12) Includes 12,000 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
(13) Includes 1,541,668 shares subject to options which are currently
exercisable or exercisable within 60 days after April 21, 1997, under
the Company's stock option plans.
2
<PAGE> 6
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the American Stock Exchange. Officers, directors and greater than
ten-percent shareholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the last fiscal
year all filing requirements applicable to its officers, directors, and greater
than ten-percent beneficial owners were complied with except that one late
report was filed by each of Messrs. Garrettson and McIntyre, covering an
aggregate of one and two transactions, respectively.
PROPOSAL 1. - ELECTION OF DIRECTORS
GENERAL
The Bylaws of the Company provide for a Board of Directors composed of
five directors. Directors are elected at the annual stockholders' meeting and
hold office until the next annual stockholders' meeting or until their
successors are elected and qualified. The Company's five current directors are
A.E. Benton, Michael B. Wray, Bruce M. McIntyre, Richard W. Fetzner, 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 OR
NAME AGE PRINCIPAL OCCUPATION APPOINTED DIRECTOR
------------------------ ------- -------------------------------------------- ------------------------
<S> <C> <C> <C>
A. E. Benton 54 Chairman of the Board and Chief 1988
Executive Officer of the Company
Michael B. Wray 61 President and Chief Financial Officer of 1988
the Company
Bruce M. McIntyre 69 Private Investor; Oil and Gas Consultant 1988
Richard W. Fetzner 68 Associate Professor of California Lutheran 1990
University
Garrett A. Garrettson 53 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.
3
<PAGE> 7
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.
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.
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.
4
<PAGE> 8
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors, pursuant to its powers, has designated a
Compensation Committee and an Audit Committee. The Board of Directors has no
Nominating Committee or other committee which performs similar functions. The
Board of Directors held 4 regularly scheduled meetings, took 3 actions in
writing without a meeting and held 3 telephonic meetings during the year ended
December 31, 1996. Each member of the Board of Directors attended at least 75%
of the aggregate number of meetings held in 1996 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 Garrettson are presently members of this
committee. During the year ended December 31, 1996, the Compensation Committee
held 5 meetings and took 2 actions in writing without a meeting.
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. Garrettson and McIntyre are presently members of this
committee. The Audit Committee held 3 meetings during the year ended December
31, 1996.
MANAGEMENT
INFORMATION REGARDING EXECUTIVE OFFICERS
Information with respect to the executive officers of the Company as of April
22, 1997 is set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
--------------------- --- -----------------------------------------------------
<S> <C> <C>
A.E. Benton (1) 54 Chairman of the Board and Chief Executive Officer
Michael B. Wray (1) 61 President and Chief Financial Officer
Joseph C. White 66 Vice President - Operations
Clarence Cottman, III 41 Vice President - Business Development
E. Sven Hagen 40 Vice President - Exploration and Development
Gregory S. Grabar 42 Vice President - Finance
Chris C. Hickok 39 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.
5
<PAGE> 9
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.
GREGORY S. GRABAR was first appointed Vice President-Corporate Development and
Administration in April 1993 and was first appointed manager of administration
in October 1990. In July 1996, Mr. Grabar was elected Vice President-Finance.
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 at Hayward
and is a Certified Management Accountant.
6
<PAGE> 10
EXECUTIVE COMPENSATION
REMUNERATION OF EXECUTIVE OFFICERS
The following table sets forth as to the Chief Executive Officer and
the four most highly compensated executive officers, whose annual salaries and
bonuses exceeded $100,000, information regarding all forms of compensation paid
or payable by the Company for services in all capacities for the years
indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ OTHER ------------ ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- --------------------------------- ---------- ----------- ------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
A. E. Benton, 1996 $425,000 $100,000 (1) 125,000 $1,157(2)
Chief Executive Officer 1995 279,000 50,000 125,000 460
1994 250,000 0 250,000 473
Michael B. Wray 1996 380,000 50,000 (1) 200,000 $2,821(2)
President (3)
William H. Gumma 1996 275,000 0 (1) 0 $668(2)
Senior Vice President - 1995 189,000 55,000 50,000 272
Operations (4) 1994 175,000 20,000 100,000 273
Joseph C. White 1996 135,000 10,000 (1) 10,000 $4,884(2)
Vice President - Operations 1995 116,000 20,000 15,000 902
1994 96,000 0 40,000 902
Clarence Cottman, III 1996 125,000 15,000 (1) 15,000 $410(2)
Vice President - 1995 105,000 15,000 0 174
Business Development 1994 95,000 0 50,000 118
E. Sven Hagen 1996 115,000 15,000 (1) 15,000 $373(2)
Vice President - Exploration 1995 98,000 20,000 35,000 81
and Development 1994 84,000 0 40,000 81
</TABLE>
(1) The aggregate amount of prerequisite compensation to be reported
herein is less than the lesser of either $50,000 or 10% of the total of
annual salary and bonus reported for the named executive officer. No
other annual compensation was paid or payable to the named executive
officers in the years indicated.
(2) Represents premiums paid by the Company with respect to term life
insurance for the benefit of the named executive officer.
(3) Mr. Wray was elected President of the Company in January 1996. During
1994 and 1995, Mr. Wray provided consulting services to the Company.
See "Certain Relationships and Related Transactions."
(4) Mr. Gumma resigned from the Company effective April 22, 1997.
7
<PAGE> 11
The following table shows information concerning options to purchase
Common Stock granted to certain individuals during 1996.
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS/SARS
GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE ($)(1)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A.E. Benton 125,000 20.4% $21.50 12/16/06 $1,936,250
Michael B. Wray 50,000 8.2% $21.50 12/16/06 $ 774,500
Joseph C. White 10,000 1.6% $21.50 12/16/06 $ 154,900
Clarence Cottman, III 15,000 2.4% $21.50 12/16/06 $ 232,350
E. Sven Hagen 15,000 2.4% $21.50 12/16/06 $ 232,350
Michael B. Wray 150,000 24.4% $15.00 01/03/06 $1,594,500
</TABLE>
(1) To calculate the present value of option/SAR grants, the Company has
used the Black-Scholes option pricing model. The actual value, if any, an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is no
assurance the value realized by an executive will be at or near the value
estimated by the Black-Scholes model. The estimated value under that model for
the stock option granted on December 16, 1996 is based on the assumptions that
include (i) a stock price volatility of 54%, (ii) a risk-free rate of return
based on a 10-year U.S. Treasury rate at the time of grant of 6.39%, and (iii)
an option exercise term of ten years. The estimated values under that model for
the stock options granted on January 3, 1996 are based on the assumptions that
include (i) a stock price volatility of 54%, (ii) a risk-free rate of return
based on a 10-year U.S. Treasury rate at the time of grant of 5.68% and (iii) an
option exercise term of ten years. No adjustments were made for the
non-transferability of the options or to reflect any risk of forfeiture prior to
vesting. The Securities and Exchange Commission requires disclosure of the
potential realizable value or present value of each grant. The Company's use of
the Black-Scholes model to indicate the present value of each grant is not an
endorsement of this valuation, which is based on certain assumptions, including
the assumption that the option will be held for the full ten-year term prior to
exercise.
The following table provides information regarding the exercise of stock options
during 1996 by certain individuals and the year-end value of unexercised options
for certain individuals.
AGGREGATED OPTIONS/SAR EXERCISES IN 1996 AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY
SHARES VALUE YEAR-END (#) OPTIONS/SARS ($)
NAME ACQUIRED ON REALIZED --------------------- --------------------
EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A.E. Benton 0 0 893,333 291,667 13,525,701 2,026,049
Michael B. Wray 0 0 90,000 200,000 1,523,775 1,200,000
William H. Gumma 310,000 4,850,936 33,333 66,667 347,910 754,174
Joseph C. White 50,000 1,010,000 31,666 33,334 443,532 288,344
Clarence Cottman, III 53,000 910,547 35,333 31,667 465,496 276,880
E. Sven Hagen 50,000 979,175 63,333 51,667 869,768 426,432
</TABLE>
8
<PAGE> 12
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.
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
serves as President and Chief Financial Officer with an annual base salary of
$380,000. On December 16, 1996, Mr. Benton's annual base salary was increased to
$485,000 and Mr. Wray's annual base salary was increased to $400,000. 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 an
annual retainer of $20,000 and 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.
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.
9
<PAGE> 13
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 1996
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.
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 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 1996 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 16, 1996 at an exercise price of $21.50 per share. Mr. Benton's base
salary was increased to $425,000 in January 1996 and to $485,000 in December
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 GARRETT A. GARRETTSON BRUCE M. MCINTYRE
10
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors
during 1996 were Messrs. Fetzner, Garrettson and McIntyre. Mr. Benton, Chief
Executive Officer of the Company, made recommendations to the Compensation
Committee regarding compensation levels of each of the other executive officers
of the Company.
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, 1996. 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
ANNUAL RETURNS CUMULATIVE GROWTH OF $100
----------------------------- ------------------------------
Date Dom Oil S&P 500 Benton Dom Oil S&P 500 Benton
---- ------- ------- ------ ------- ------- ------
12/31/91 $100 $100 $100
12/31/92 6.029 7.684 -29.851 $106 $108 $70
12/31/93 9.639 9.992 -14.894 $116 $118 $60
12/30/94 2.733 1.286 82.500 $119 $120 $109
12/29/95 15.594 37.481 64.384 $138 $165 $179
12/31/96 39.130 23.070 50.833 $192 $203 $270
11
<PAGE> 15
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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1994, the Company entered into a consulting agreement with
Mr. Wray, 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. In June 1996,
the Company loaned $600,000 to Mr. Wray with interest at 6% for the purchase of
a home. At April 21, 1997, the outstanding balance owed to the Company was
$630,378.
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 sold the home in 1996 for $1.5 million.
During 1996, the Company loaned $268,154 to Mr. Benton and in February 1997, the
Company loaned $100,000 to Mr. Benton, each loan bearing interest at 6%. At
April 21, 1997, the balance owed to the Company was $383,650.
The Company has made loans to several of its officers and employees,
with interest varying from 6% to prime plus 1%. At April 21, 1997, an aggregate
of 3 executive officers owed an aggregate balance of $1,064,941.
PROPOSAL 2. - 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, 1997. 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.
12
<PAGE> 16
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, 1996,
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 1998 Annual Meeting of Stockholders must be
received at the Company's executive offices not later than February 11, 1998.
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 and Two. 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
April 30, 1997
13
<PAGE> 17
PROXY
BENTON OIL AND GAS COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
JUNE 10, 1997
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 and to be signed on other side)
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 18
The shares represented by this Proxy will be voted as directed. If no direction
is indicated, the shares will be voted "FOR" proposals 1 and 2.
Please mark
your votes as
indicated in
this example
[ X ]
1. ELECTION OF DIRECTORS:
FOR all nominees WITHHOLD
listed below (except AUTHORITY
as marked to the to vote for all nominees
contrary below) listed below.
[ ] [ ]
A. E. Benton, Bruce M. McIntyre, Michael B. Wray, Richard W. Fetzner, Garrett
A. Garettson
(INSTRUCTION: To withhold authority for any individual nominee write the
nominee's name on the space provided below.)
- ---------------------------------------------
2. To approve and ratify the appointment of Deloitte & Touche LLP as
independent auditors for the fiscal year ending December 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Date: , 1997
---------------------------------------
- ---------------------------------------------
(Signed)
- ---------------------------------------------
(Signed)
If the shares are issued in the name of two or more persons, each person should
sign the Proxy. If the shares are issued in the name of a corporation or
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 Attorney, Executor,
Administrator, Trustee, Guardian or in any other representative capacity,
please give your full title as such.
PLEASE DATE, SIGN AND MAIL YOUR PROXY PROMPTLY
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
