<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14A-101)
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 Rule 14a-11(c) or Rule 14a-12.
</TABLE>
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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
BENTON
OIL & GAS COMPANY
May 19, 1999
To Our Stockholders:
I am pleased to invite you to attend the annual meeting of stockholders of
Benton Oil and Gas Company to be held on Wednesday, June 30, 1999 at 10:00 a.m.
Pacific Time at the Four Seasons Biltmore Hotel, 1260 Channel Drive, Santa
Barbara, California. For those stockholders wishing to stay at the Four Seasons
Biltmore, there are a limited number of rooms available the night of June 29,
1999, at significantly reduced rates. Please mention that you are a Benton
stockholder when making your reservations.
Details regarding the business to be conducted at the meeting are more fully
described in the accompanying Notice of Annual Meeting and Proxy Statement.
Your vote is important. Whether or not you plan to attend the annual meeting, I
hope that you will vote as soon as possible. You may vote over the Internet, by
telephone or by mailing a traditional proxy card. Voting over the Internet, by
phone or by written proxy will ensure your representation at the annual meeting
if you do not attend in person. Please review the instructions on the proxy card
regarding each of these voting options.
Thank you for your ongoing support of and continued interest in Benton Oil and
Gas Company.
Sincerely,
/s/ A.E. Benton
A.E. BENTON
Chairman of the Board, Chief Executive Officer and President
Benton Oil and Gas Company
<PAGE> 3
1999 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
Notice of Annual Meeting of Stockholders ..................................1
Q: Why am I receiving these materials? ...............................2
Q: What information is contained in these materials? .................2
Q: What proposals will be voted on at the meeting? ...................2
Q: What shares owned by me can be voted? .............................2
Q: What is the difference between holding shares as a stockholder
of record and as a beneficial owner? ..............................2
Stockholder of Record ...........................................2
Beneficial Owner ................................................2
Q: How can I vote my shares in person at the meeting? ................2
Q: How can I vote my shares without attending the meeting? ...........3
Q: Can I change my vote? .............................................3
Q: How are votes counted? ............................................3
Q: What is the voting requirement to approve each of the proposals?...3
Q: What does it mean if I receive more than one proxy or voting
instruction card? .................................................3
Q: Where can I find the voting results of the meeting? ...............3
STOCK OWNERSHIP ...........................................................4
Who are the largest owners of Benton's stock? ........................4
How much stock do Benton's directors and executive officers own? .....4
Section 16(a) Beneficial Ownership Reporting Compliance .........5
BOARD STRUCTURE AND COMPENSATION ..........................................6
DIRECTOR COMPENSATION ARRANGEMENTS ........................................7
PROPOSAL NO. 1 ............................................................7
ELECTION OF DIRECTORS .....................................................7
PROPOSAL NO. 2 ............................................................9
RATIFICATION OF INDEPENDENT ACCOUNTANTS ...................................9
EXECUTIVE OFFICERS AND KEY EMPLOYEES .....................................10
EXECUTIVE COMPENSATION ...................................................11
SUMMARY COMPENSATION TABLE ..........................................11
OPTION GRANTS IN LAST FISCAL YEAR ...................................12
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND ..................12
FISCAL YEAR-END OPTION VALUES ............................................12
REPORT OF THE COMPENSATION COMMITTEE .....................................13
<PAGE> 4
STOCK PERFORMANCE GRAPH ..................................................15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ...........................16
ADDITIONAL QUESTIONS AND INFORMATION REGARDING THE ANNUAL MEETING AND
STOCKHOLDER PROPOSALS ...............................................17
Q: What happens if additional proposals are presented at the
meeting? .........................................................17
Q: What class of shares are entitled to be voted? ...................17
Q: What is the quorem requirement for the meeting? ..................17
Q: Who will count the vote? .........................................17
Q: Is my vote confidential? .........................................17
Q: Who will bear the cost of soliciting votes for the meeting? ......17
Q: May I propose actions for consideration at next year's annual
meeting of stockholders or nominate individuals to serve as
directors? .......................................................18
<PAGE> 5
BENTON OIL AND GAS COMPANY
6267 CARPINTERIA, SUITE 200
CARPINTERIA, CALIFORNIA 93013
(805) 566-5600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TIME AND DATE 10:00 a.m. on Wednesday, June 30, 1999
PLACE Four Seasons Biltmore Hotel
1260 Channel Drive
Santa Barbara, California 93013
ITEMS OF BUSINESS (1) To elect directors
(2) To ratify the appointment of independent
accountants
(3) To consider such other business as
may properly come before the meeting
RECORD DATE You are entitled to vote if you were a
stockholder at the close of business on Monday,
May 10, 1999.
VOTING BY PROXY Please submit the proxy as soon as possible so
that your shares can be voted at the meeting in
accordance with your instructions. You may
submit your proxy (1) over the Internet, (2) by
telephone or (3) by mail. For specific
instructions, please refer to the Questions and
Answers beginning on page 2 of this proxy
statement and the instructions on the proxy
card.
STOCKHOLDER LISTING A list of our stockholders as of May 10, 1999
will be available for inspection by our
stockholders at the Four Seasons Biltmore
Hotel, 1260 Channel Drive, Santa Barbara,
California during the ten days immediately
preceding the date of the Annual Meeting.
By Order of the Board of Directors
/s/ A.E. Benton
A.E. BENTON
Chairman of the Board
This proxy statement and accompanying proxy card are being distributed
on or about May 19, 1999.
<PAGE> 6
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The Board of Directors of Benton Oil and Gas Company ("Benton") is providing
these proxy materials for you in connection with Benton's annual meeting of
stockholders, which will take place on June 30, 1999. You are invited to
attend the meeting and are requested to vote on the proposals described in
this proxy statement.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the proposals to
be voted on at the meeting, the voting process, the compensation of
directors and our most highly paid officers, and certain other required
information. Our 1998 Annual Report to Stockholders is also enclosed.
Q: WHAT PROPOSALS WILL BE VOTED ON AT THE MEETING?
A: There are two proposals scheduled to be voted on at the meeting:
- The election of directors
- The ratification of independent accountants
Q. WHAT SHARES OWNED BY ME CAN BE VOTED?
A: You may vote all shares owned by you as of May 10, 1999, the record date.
These shares include those (1) held directly in your name as a stockholder
of record and (2) held for you as the beneficial owner through a
stockbroker, bank or other nominee.
Q. WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER OF RECORD AND
AS A BENEFICIAL OWNER?
A: Many Benton stockholders hold their shares through a stockbroker, bank or
other nominee rather than directly in their own names. As summarized below,
there are some distinctions between shares held of record and those owned
beneficially.
STOCKHOLDER OF RECORD
If your shares are registered directly in your name with Benton's transfer
agent, Norwest Bank, you are considered the stockholder of record with
respect to those shares, and these proxy materials are being sent directly
to you by Benton. As a stockholder of record, you have the right to grant
your voting proxy directly to Benton or to vote in person at the meeting.
Benton has enclosed a proxy card for your use.
BENEFICIAL OWNER
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of the shares held in
street name, and these proxy materials are being forwarded to you by your
broker or nominee who is considered the stockholder of record with respect
to those shares. As the beneficial owner, you have the right to direct your
broker on how to vote and are also invited to attend the meeting. However,
since you are not the stockholder of record, you may not vote these shares
in person at the meeting. Your broker or nominee has enclosed a voting
instruction card for your use.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE MEETING?
A: Shares held directly in your name as the stockholder of record may be voted
in person at the annual meeting. If you choose to do so, please bring the
enclosed proxy card or proof of identification.
EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING, WE RECOMMEND THAT
YOU ALSO SUBMIT YOUR PROXY AS DESCRIBED BELOW SO THAT YOUR VOTE WILL BE
COUNTED IF YOU LATER CANNOT ATTEND OR DECIDE NOT TO ATTEND THE MEETING.
2
<PAGE> 7
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE MEETING?
A: Whether you hold shares directly as the stockholder of record or
beneficially in street name, you may direct your vote without attending the
meeting. You may vote by granting a proxy or, for shares held in street
name, by submitting voting instructions to your broker or nominee. In most
instances, you will be able to do this over the Internet, by telephone or
mail. Please refer to the summary instructions below and those included on
your proxy card or, for shares held in street name, the voting instruction
card included by your broker or nominee.
BY INTERNET - If you have Internet access, you may submit your proxy from
any location in the world by following the "Vote by Internet" instructions
on the proxy card.
BY TELEPHONE - If you live in the United States or Canada, you may submit
your proxy by following the "Vote by Telephone" instructions on the proxy
card,
BY MAIL - You may do this by signing your proxy card or, for shares held in
street name, the voting instruction card included by your broker or nominee
and mailing it in the enclosed, postage prepaid and addressed envelope. If
you provide specific voting instructions, your shares will be voted as you
instruct. If you sign but do not provide instructions, your shares will be
voted as described below in "HOW ARE VOTES COUNTED?"
Q: CAN I CHANGE MY VOTE?
A: You may change your proxy instructions at any time prior to the vote at the
annual meeting. For shares held directly in your name, you may accomplish
this by granting a new proxy by Internet, telephone or mail or by attending
the annual meeting and voting in person. Attendance at the meeting will not
cause your previously granted proxy to be revoked unless you specifically so
request. For shares held beneficially by you, you may accomplish this by
submitting new voting instructions to your broker or nominee.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote "FOR" all of the nominees, or
your vote may be "WITHHELD" for one or more of the nominees, in which case
your vote will be FOR all the nominees from whom you do not specifically
withhold your vote. For the ratification of independent accountants, you may
vote "FOR," "AGAINST" or "ABSTAIN." If you "ABSTAIN," it has the same effect
as a vote "AGAINST."
If you sign your proxy card or broker instruction card with no further
instructions, your shares will be voted in accordance with the
recommendations of the Board.
Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
A: In the election of directors, the five persons receiving the highest number
of "FOR" votes will be elected. The ratification of independent accountants
requires the affirmative "FOR" vote of a majority of those shares present,
in person or by proxy, and entitled to vote. If you are the beneficial owner
and do not provide your broker or nominee with voting instructions, your
shares may constitute broker non-votes, as described in "WHAT IS THE QUORUM
REQUIREMENT FOR THE MEETING?" on page 17. In tabulating the voting results
for any particular proposal, shares which constitute broker non-votes are
not considered entitled to vote.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY OR VOTING INSTRUCTION
CARD?
A: It means you have shares which are registered in different ways or are held
in more than one account. Please provide voting instructions for all proxy
and voting instruction cards you receive.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE MEETING?
A: We will announce preliminary voting results at the meeting and publish final
results in our quarterly report on Form 10-Q for the second quarter of 1999.
Additional Q&A information regarding the annual meeting and stockholder
proposals may be found on pages 17 and 18 below.
3
<PAGE> 8
STOCK OWNERSHIP
WHO ARE THE LARGEST OWNERS OF BENTON'S STOCK?
The following table shows the amount of Benton common stock
beneficially owned by any person or group that is the direct or beneficial owner
of more than 5% of Benton's common stock as of May 10, 1999.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AGGREGATE NUMBER PERCENT OF
OF SHARES SHARES
NAME AND ADDRESS BENEFICIALLY OWNED OUTSTANDING(1)
- ---------------- ------------------ --------------
<S> <C> <C>
Heartland Advisors 1,878,600(2) 6.35%
790 North Milwaukee Street
Milwaukee, WI 53202
A.E. Benton 1,810,000(3) 6.12%
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The percentage of common stock is based upon 29,576,966 shares of
common stock outstanding on May 10, 1999.
(2) This information is based upon a Schedule 13G filed with the Securities
and Exchange Commission on January 13, 1999.
(3) The information with respect to Mr. Benton's ownership is set forth in
the table below.
HOW MUCH STOCK DO BENTON'S DIRECTORS AND EXECUTIVE OFFICERS OWN?
The following table shows the amount of common stock of Benton
beneficially owned (unless otherwise indicated) by Benton's directors, the
executive officers of Benton named in the Summary Compensation Table below and
the directors and executive officers of Benton as a group. Except as otherwise
indicated, all information is as of May 10, 1999.
The number of shares beneficially owned by each director or executive
officer is determined under rules of the Securities and Exchange Commission, and
the information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares as to
which the individual has the sole or shared voting power or investment power and
also any shares which the individual has the right to acquire as of July 9, 1999
(60 days after the record date of May 10, 1999) through the exercise of stock
options or other rights. Unless otherwise indicated, each person has sole
investment and voting power (or shares such powers with his spouse) with respect
to the shares set forth in the following table.
4
<PAGE> 9
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
NAME AMOUNT AND PERCENT OF
NATURE OF SHARES
BENEFICIAL OWNERSHIP (1) OUTSTANDING(2)
<S> <C> <C> <C>
A.E. Benton......................................... 600,000 Direct 6.12%
1,210,000 Vested Options
Michael B. Wray..................................... 19,300 Direct *
233,333 Vested Options
James M. Whipkey.................................... 2,500 Direct *
33,333 Vested Options
E. Sven Hagen....................................... 126,667 Vested Options *
Bruce M. McIntyre................................... 5,900 Direct *
90,000 Vested Options
Richard W. Fetzner.................................. 81,667 Vested Options *
Garrett A. Garrettson............................... 15,560 Direct *
30,000 Vested Options
Chris C. Hickok..................................... 500 Direct *
46,667 Vested Options
All current directors and executive officers as a
group (8) persons................................. 643,760 Direct 8.44%
1,851,667 Vested Options
- -----------------------------------------------------------------------------------------------------
<FN>
* Represents less than 1% of the Company's outstanding common stock.
(1) "Vested Options" are stock options which may be exercised as of July 9,
1999.
(2) Percentages are based upon 29,576,966 shares of common stock
outstanding on May 10, 1999.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and holders of more than 10% of our common stock
to file reports with the Securities and Exchange Commission regarding their
ownership and changes in ownership of our stock. Benton believes that during
fiscal 1998, its officers, directors and 10% stockholders complied with all
Section 16(a) filing requirements, except that one late report each was filed by
Messrs. Benton, Wray, McIntyre, Fetzner, Whipkey, Hagen, Hickok and Popov
covering one transaction, and one late report was filed by Dr. Garrettson
covering four transactions. In making this statement, Benton has relied upon the
written representations of its directors and officers.
5
<PAGE> 10
BOARD STRUCTURE AND COMPENSATION
Our Board has five directors and the following two committees: (1)
Audit and (2) Compensation. The membership during fiscal 1998 and the function
of each committee are described below. During 1998, the Board held eight
meetings and seven telephonic meetings and took seven actions in writing. Each
director attended at least 75% of all Board and applicable committee meetings.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
NAME OF DIRECTOR AUDIT COMPENSATION
<S> <C> <C>
Non-Employee Directors:
Richard W. Fetzner.............................. X X
Garrett A. Garrettson........................... X X
Bruce M. McIntyre .............................. X X
Employee Directors:
A.E. Benton......................................
Michael B. Wray..................................
Number of Meetings in Fiscal 1998 ............... 2 8
- ----------------------------------------------------------------------------------
</TABLE>
X = Committee member
THE AUDIT COMMITTEE
The Audit Committee reviews our auditing, accounting, financial
reporting and internal control functions and makes recommendations to the Board
for the selection of independent accountants. In discharging its duties, the
committee:
- reviews and approves the scope of the annual audit and the
independent accountants' fees;
- meets independently with independent accountants and our
senior management; and
- reviews the general scope of our accounting, financial
reporting and annual audit program, matters relating to
internal control systems and the results of the annual audit.
THE COMPENSATION COMMITTEE
The Compensation Committee determines, approves and reports to the
Board on all elements of compensation for our elected executive officers.
6
<PAGE> 11
DIRECTOR COMPENSATION ARRANGEMENTS
The following table provides information on Benton's compensation and
reimbursement practices during 1998 for directors who are not officers or
employees of Benton (Messrs. Fetzner, Garrettson and McIntyre).
Benton employees do not receive any compensation for their Board activities.
In addition to the cash compensation discussed below, members of the
Board of Directors who are not Benton employees receive options to purchase
10,000 shares of common stock when first elected and upon September 26 of each
year, the date of implementation of the Directors' Stock Option Plan.
COMPENSATION TABLE
FOR 1998
- --------------------------------------------------------------------------------
Annual Director Retainer $20,000
Board Meeting Attendance Fees (per meeting) $2,000
Board Telephonic Meeting Fees (per meeting) $250
Committee Meeting Attendance Fees (per meeting) $500
Reimbursement for Expenses Attendant to Board Membership Yes
- --------------------------------------------------------------------------------
PROPOSAL NO. 1
ELECTION OF DIRECTORS
There are five nominees for election to our Board this year. All of the
nominees have served as directors since the last annual meeting. Information
regarding the business experience of each nominee is provided below. All
directors are elected annually to serve until the next annual meeting and until
their respective successor is elected.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD
OF EACH OF THE FOLLOWING NOMINEES.
A. E. BENTON Mr. Benton, founder of Benton Oil and
Director since September 1988 Gas Company, was elected President
Age 56 in February 1998, and was first
elected Chief Executive Officer and
Chairman of the Board in 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 is on the board
of directors of the Carpinteria
Education Foundation, the Eugene
O'Neill Theatre Center and the
Russian National Orchestra. Mr.
Benton has a B.S. degree in
geophysics from California State
University.
7
<PAGE> 12
MICHAEL B. WRAY Mr. Wray was first elected Vice
Director since November 1988 Chairman in February 1998. He
Age 63 served as President of Benton from
January 1996 to February 1998. He
served as Chief Financial Officer of
Benton from January 1996 to August
1997. From January 1994 through
December 1995, Mr. Wray served as a
consultant to Benton. 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 Mr. McIntyre is a private investor
Director since November 1988 and a consultant in the oil and gas
Age 71 industry. 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 In September 1997, Dr. Fetzner
Director since May 1990 retired as associate professor of
Age 70 business administration at California
Lutheran University in Thousand
Oaks, California where he had taught
since 1989. 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.
8
<PAGE> 13
GARRETT A. GARRETTSON Dr. Garrettson was elected chief
Director since January 1996 executive officer and president
Age 55 of Spectrian Corporation, a publicly
held company, in 1996. Spectrian is
a leading independent supplier of
high-power amplifiers to the
wireless communications industry.
From 1993 to 1996, Dr. Garrettson
served as president and chief
executive officer of Censtor
Corporation. From 1989 to 1993, Dr.
Garrettson served as Vice President
of Seagate Technology; and from 1986
to 1989, Dr. Garrettson served as
vice president of Imprimis
Technology, a wholly-owned
subsidiary of Control Data
Corporation. Prior to that time,
after serving in the United States
Navy and Naval Reserves, Dr.
Garrettson held various positions
with Hewlett Packard Company,
including laboratory director,
department manager, project manager,
and research engineer. Dr.
Garrettson serves on the board of
directors of Spectrian Corporation
and Redlake Imaging. Dr. Garrettson
graduated from Stanford University
with a B.S. and M.S. in engineering
physics, and a Ph.D. in mechanical
engineering.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors has appointed
PricewaterhouseCoopers LLP as Benton's independent accountants to audit Benton's
consolidated financial statements for the year ended December 31, 1999.
Representatives of PricewaterhouseCoopers LLP are expected to attend the
meeting, where they will be available to respond to questions and, if they
desire, to make a statement.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS BENTON'S INDEPENDENT ACCOUNTANTS
FOR 1999. If the appointment is not ratified, our Board will select other
independent accountants.
9
<PAGE> 14
EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following table provides information regarding each of Benton's
executive officers and certain key employees.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
A.E. Benton (1) 56 President, Chief Executive Officer
and Chairman of the Board
Michael B. Wray (1) 63 Vice Chairman of the Board
E. Sven Hagen 42 Senior Vice President - Exploration
and Production
James M. Whipkey 41 Senior Vice President, Chief
Financial Officer and Treasurer
Andrei E. Popov 35 Vice President - Business Development
Chris C. Hickok 41 Vice President - Controller, Chief
Accounting Officer
Jennifer J. Young 52 Vice President - Human Resources
<FN>
- ---------------
(1) See Mr. Benton's and Mr. Wray's biographies on pages 7 and 8.
</TABLE>
E. Sven Hagen was first appointed gulf coast geologist in March 1990,
was elected Vice President Exploration and Development in July 1995 and was
elected Senior Vice President - Exploration and Production in October 1997. From
March 1987 to February 1990, Dr. 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, Dr. Hagen was employed by Standard
Oil Production Company as an Exploration Geologist. Dr. 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.
James M. Whipkey was first elected Senior Vice President and Chief
Financial Officer of Benton in August 1997. From 1995 to 1997, Mr. Whipkey was
employed by Lehman Brothers, Inc. as Senior Equity Analyst in the oil and gas
sector. From 1993 to 1995, he was employed by Kidder, Peabody & Co. as an
investment banker. Mr. Whipkey was an energy derivatives specialist at Phibro
Energy, Inc. from 1989 to 1992, and a futures broker and commercial lender at
First Chicago from 1985 to 1989. He was employed from 1980 to 1985 by Amoco
Production Company as a petroleum engineer. Mr. Whipkey has a B.S. degree in
petroleum and natural gas engineering from The Pennsylvania State University and
an M.B.A. from the University of Chicago.
Andrei E. Popov was employed by the Company in May 1992 and in 1995 was
appointed manager of corporate business development. In May 1998 he was elected
Vice President - Corporate Business Development. From 1986 to 1992, Mr. Popov
was employed in various managerial and professional positions in Russia, most
recently as Deputy Director General of the Russian Canadian Joint Venture EMING,
managing operations of the joint venture on behalf of the Canadian party. Prior
to that he held research positions for the Russian Oil and Gas Geophysical
Association "Neftegeophysica," one of the largest geophysical contractors in
Russia, and the Academy of Science Institute of Physics in Moscow. Mr. Popov
received his M.S. degree in physics from the Moscow Engineering Physics
Institute.
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.
10
<PAGE> 15
Jennifer J. Young was first appointed Manager of Human Resources in
October 1996 and was elected Vice President - Human Resources in October 1997.
From April 1995 to October 1996, Ms. Young was self-employed as a healthcare
insurance agent, human resources consultant, and mediator/arbitrator of business
disputes. From April 1988 to April 1995, Ms. Young was employed by West One
Bancorp, headquartered in Boise, Idaho, as Compensation and Benefits Manager.
From March 1974 to April 1988, Ms. Young was employed by InterFirst Bank Dallas.
From November 1970 to March 1974, Ms. Young was employed by Mobil Oil
Corporation in Dallas, Texas as an employee relations assistant. Ms. Young
graduated from Purdue University with a B.A.
EXECUTIVE COMPENSATION
The following table discloses compensation received by Benton's Chief
Executive Officer and its four other most highly paid executive officers for the
fiscal year ending December 31, 1998 and their compensation for each of the
other years indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------------------------------------------------- ------------
SECURITIES
UNDERLYING
OTHER ANNUAL OPTIONS/ ALL OTHER
NAME AND PRINCIPAL BONUS COMPENSATION SARS COMPENSATION
POSITION YEAR SALARY ($) ($) ($) (#) ($)
---------------- ---------- -------------- ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
A.E. Benton, 1998 $485,000 $ 50,000 (1) 90,000 $1,963(2)
President and CEO 1997 485,000 200,000 200,000 1,935
1996 425,000 100,000 125,000 1,157
Michael B. Wray, 1998 $400,000 $ 0 (1) 48,000 $3,233(2)
Vice Chairman (3) 1997 400,000 50,000 30,000 3,019
1996 380,000 50,000 200,000 2,821
E. Sven Hagen, 1998 $250,000 $ 0 (1) 20,000 $445(2)
Senior Vice President - 1997 170,000 50,000 50,000 439
Exploration and Production 1996 115,000 15,000 15,000 373
James M. Whipkey, 1998 $250,000 $ 0 (1) 20,000 $445(2)
Senior Vice President, Chief 1997 108,100 150,000 100,000 16
Financial Officer (4)
Chris C. Hickok, 1998 $150,000 $ 0 (1) 5,000 $445(2)
Vice President - Controller 1997 122,000 25,000 10,000 433
1996 100,000 10,000 5,000 152
<FN>
(1) The aggregate amount of additional compensation reported is less than
the lesser of $50,000 or 10% of the total 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 Benton with respect to term life insurance
on behalf of the named executive officers.
(3) Mr. Wray was elected President of Benton in January 1996. Mr. Wray
resigned as President of Benton and was appointed Vice Chairman of the
Board in February 1998. See "Certain Relationships and Related Party
Transactions."
(4) Mr. Whipkey was elected Senior Vice President of Benton in August 1997.
In connection with his employment with Benton, Mr. Whipkey was
reimbursed an aggregate of $5,465 for relocation expenses (not
reflected in this table). Of the 1997 bonus reported, $100,000 reflects
the signing bonus paid to Mr. Whipkey upon employment with Benton.
</TABLE>
11
<PAGE> 16
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in 1998 to
each of the named executive officers.
INDIVIDUAL GRANTS
----------------------------------------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED (1) FISCAL YEAR(2) ($/SHARE) DATE VALUE ($)(3)
- ---- ----------- -------------- --------- ----- ------------
<S> <C> <C> <C> <C> <C>
A.E. Benton 90,000 22.22 $8.72 7/14/08 $593,100
Michael B. Wray 48,000 11.85 $8.72 7/14/08 $316,320
E. Sven Hagen 20,000 4.94 $8.72 7/14/08 $131,800
James M. Whipkey 20,000 4.94 $8.72 7/14/08 $131,800
Chris C. Hickok 5,000 1.23 $8.72 7/14/08 $ 32,950
<FN>
(1) The options granted in 1998 are exercisable 33% after the first year,
66% after the second year and 100% after the third year.
(2) Benton granted options representing 405,100 shares to employees in 1998.
(3) Benton used a Black-Scholes model of option valuation to determine
grant date present value. Benton does not advocate or necessarily agree
that the Black-Scholes model can properly determine the value of an
option. Calculations for the named officers are based on a ten-year
option term. Other assumptions used for the valuations are: interest
rate of 5.49%, annual dividend yield of 0%, and volatility of 61.89%.
</TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in 1998 by
each of the named executive officers and the values of each of such officer's
unexercised options at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED OPTIONS AT MONEY OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END (1)
----------------- -------------------------
NUMBER OF
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. E. Benton 0 0 1,210,000 265,000 0 0
Michael B. Wray 0 0 233,333 134,667 $16,800 0
E. Sven Hagen 0 0 126,667 58,333 0 0
James M. Whipkey 0 0 33,333 86,667 0 0
Chris C. Hickok 0 0 46,667 13,333 0 0
<FN>
(1) The value of unexercised options is based upon the difference between
the exercise price and $2.81, the average of the high and low market
prices on December 31, 1998.
</TABLE>
12
<PAGE> 17
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain
officers and key employees of the Company (the "Employment Agreements"), which
contain severance provisions in the event of a change in control of the Company.
Pursuant to some of the Employment Agreements, in the event of a proposed change
in control (as defined in the Employment Agreements), 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. In other Employment Agreements there
is no requirement for the employee to remain with the Company for 180 days from
the occurrence of the proposed change of control. Except for the requirement for
some employees to so remain employed by the Company, as discussed above, 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 Agreements.
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 a multiple of his annual base salary at the rate in
effect prior to termination. For Mr. Benton such multiple is three times his
annual base salary and his highest bonus paid during the last three years. For
each of Messrs. Wray, Hagen and Whipkey, such multiple is three times his annual
base salary. For Mr. Hickok, such multiple is two times his annual base salary.
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 (a) due to death, normal
retirement, permanent disability, or voluntary action of the employee other than
for good reason (as defined in the Employment Agreement), (b) by the Company for
cause (as defined in the Employment Agreement) or (c) if such payment is not
deductible by the Company as a result of the operation of Section 280G of the
Internal Revenue Code.
Mr. Benton entered into an employment agreement in June 1998 for a
term of three years. Pursuant to the employment agreement, Mr. Benton's annual
base salary is $485,000. In January 1999, Mr. Wray entered into an employment
agreement for a term of one year, with an annual base salary of $200,000. In
June 1998, Dr. Hagen entered into an employment agreement, which may be
terminated by either party with proper notice, with an annual base salary of
$250,000. Mr. Whipkey entered into an employment agreement for a term of three
years on August 5, 1997, at an annual base salary of $250,000. In June 1998, Mr.
Hickok entered into an employment agreement, which may be terminated by either
party with proper notice, with an annual base salary of $150,000. Salaries are
reviewed annually and bonuses are within the discretion of the Board of
Directors.
REPORT OF THE COMPENSATION COMMITTEE
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 increasing 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
13
<PAGE> 18
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 consultations with 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 1998
considered 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.
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 1998 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. The Committee considered the base salary provision set
forth in the June 1, 1998 employment agreement between the Company and Mr.
Benton. We granted Mr. Benton a bonus of $50,000 in recognition of his overall
contributions to the Company. Stock options for 90,000 shares were granted July
14, 1998 at an exercise price of $8.72 per share. The Committee has no
established measures of performance, guidelines or formula it uses when
determining the number of stock options granted to the Chief Executive Officer
and does not consider the number of options or stock held by the Chief Executive
Officer in determining the number of options to award.
GARRETT A. GARRETTSON BRUCE M. MCINTYRE RICHARD W. FETZNER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Board's Compensation Committee is or has
been an officer or employee of Benton.
14
<PAGE> 19
STOCK PERFORMANCE GRAPH
The graph below shows the cumulative total stockholder return over the
five-year period ending December 31, 1998, assuming the investment of $100 on
January 1, 1994 in each of Benton's common stock, the S&P Composite -500 Stock
Index and the Wilshire Domestic Oil Index.
[CHART]
Assumes that the value of the investment in Benton stock and each index
was $100 at January 1, 1994 and that all dividends were reinvested.
PLOT POINTS
(DECEMBER 31 OF EACH YEAR)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Benton $183 $300 $453 $259 $60
- --------------------------------------------------------------------------------------------------
S&P 500 $101 $139 $171 $228 $294
- --------------------------------------------------------------------------------------------------
Wilshire Domestic $103 $119 $165 $191 $126
Oil
- --------------------------------------------------------------------------------------------------
</TABLE>
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, 6267 Carpinteria
Avenue, Suite 200, Carpinteria, California 93013, or can be obtained upon
written request to Wilshire Associates Incorporated, 1299 Ocean Avenue, Santa
Monica, California 90401.
15
<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 31, 1993, the Company guaranteed a loan made to Mr.
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 $1,725,000, 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 a $300,000 loan guaranteed
by the Company. The Company sold the home in 1996 for $1,500,000.
During 1996, the Company loaned Mr. Benton $268,154 at an interest rate
of 6% for general purposes. During 1997, the Company loaned Mr. Benton a total
of $1,514,149 and, in 1998, an additional $3,667,766 on various dates at an
interest rate of 6% to enable him to reduce and eliminate his outstanding margin
accounts with third parties that were secured by shares of the Company's stock.
In the fourth quarter of 1998, the Company obtained from Mr. Benton as
collateral for his loans a security interest in 600,000 shares of Benton common
stock, certain personal real estate and proceeds from certain contractual and
stock option agreements. During 1998, the largest aggregate amount of
indebtedness outstanding from Mr. Benton to the Company was $5,534,616. At
December 31, 1998, the balance then owed to the Company by Mr. Benton exceeded
the value of the collateral, primarily due to the decline in the price of the
Company's stock. As a result, the Company has recorded an allowance for doubtful
accounts of $2,900,000. (Measuring the amount of the allowance requires
judgments and estimates, and the amount eventually realized may differ from the
estimate.) The recording of the allowance does not affect the actual balance
owed to the Company by Mr. Benton, which at May 10, 1999, was $5,594,093 which
is documented by promissory notes that bear interest at 6% and are payable on
November 30, 1999.
In June 1996, the Company loaned $600,000 to Mr. Wray, a director and
then President of the Company, for the purchase of a home. The loan bore
interest at 6% and was secured by a mortgage on the home. On December 31, 1998,
Mr. Wray made an interest payment of $91,430. At May 10, 1999, the outstanding
balance owed to the Company by Mr. Wray was $612,822. On May 11, 1999 Mr. Wray
repaid the Company the entire amount of principal and interest outstanding. In
September 1997, the Company loaned $500,000 to Mr. Whipkey, the Company's Senior
Vice President and Chief Financial Officer, for the purchase of a home in
connection with his recruitment and relocation. The loan bears interest at 6%
and is secured by a mortgage on the home. On December 30, 1998, Mr. Whipkey made
an interest payment of $10,000. At May 10, 1999, the outstanding balance owed to
the Company by Mr. Whipkey was $539,315.
The Company has made loans to several of its officers, directors and
employees, with interest varying from 6% to prime plus 1%. At May 10, 1999, an
aggregate of seven officers, directors and employees (excluding those named
above) owed an aggregate balance of $416,518.
16
<PAGE> 21
ADDITIONAL QUESTIONS AND INFORMATION REGARDING
THE ANNUAL MEETING AND STOCKHOLDER PROPOSALS
Q: WHAT HAPPENS IF ADDITIONAL PROPOSALS ARE PRESENTED AT THE MEETING?
A: Other than the two proposals described in this proxy statement, we do not
expect any matters to be presented for a vote at the annual meeting. If you
grant a proxy, the persons named as proxy holders, A. E. Benton and James M.
Whipkey, will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting. If for any unforeseen
reason any of our nominees is not available as a candidate for director, the
persons named as proxy holders will vote your proxy for such other candidate
or candidates as may be nominated by the Board of Directors.
Q: WHAT CLASS OF SHARES ARE ENTITLED TO BE VOTED?
A: There is only one class of common stock. Each share of our common stock
outstanding as of the close of business on May 10, 1999, the record date, is
entitled to one vote at the annual meeting. On the record date, we had
approximately 29,576,966 shares of common stock issued and outstanding.
Q: WHAT IS THE QUORUM REQUIREMENT FOR THE MEETING?
A: The quorum requirement for holding the meeting and transacting business is a
majority of the outstanding shares entitled to be voted. The shares may be
present in person or represented by proxy at the meeting. Both abstentions
and broker non-votes are counted as present for the purpose of determining
the presence of a quorum. Generally, broker non-votes occur when shares held
by a broker for a beneficial owner are not voted with respect to a
particular proposal because (1) the broker has not received voting
instructions from the beneficial owner and (2) the broker lacks
discretionary voting power to vote such shares.
Q: WHO WILL COUNT THE VOTE?
A: A representative of Norwest Bank, Benton's transfer agent, will tabulate
the votes and act as the inspector of election.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots and voting tabulations that identify individual
stockholders are handled in a manner that protects your voting privacy. Your
vote will not be disclosed either within Benton or to third parties except
(1) as necessary to meet applicable legal requirements, (2) to allow for the
tabulation of votes and certification of the vote, or (3) to facilitate a
successful proxy solicitation by our Board. Occasionally, stockholders
provide written comments on their proxy card which are then forwarded to
Benton management.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE MEETING?
A: Benton will pay the entire cost of preparing, assembling, printing, mailing
and distributing these proxy materials, except that certain expenses for
Internet access will be incurred by you if you choose to access the proxy
materials and/or vote over the Internet. In addition to the mailing of these
proxy materials, the solicitation of proxies or votes may be made in person,
by telephone or by electronic communication by our directors, officers, and
employees, who will not receive any additional compensation for such
solicitation activities. We will reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding proxy and solicitation materials to stockholders.
17
<PAGE> 22
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING OF
STOCKHOLDERS OR NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS?
A: You may submit proposals for consideration at future stockholder meetings,
including director nominations.
STOCKHOLDER PROPOSALS: In order for a stockholder proposal to be considered
for inclusion in Benton's proxy statement for next year's annual meeting,
the written proposal must be received by Benton no later than March 3, 2000.
Such proposals also will need to comply with Securities and Exchange
Commission regulations regarding the inclusion of stockholder proposals in
company-sponsored proxy materials. Similarly, in order for a stockholder
proposal to be raised from the floor during next year's annual meeting,
written notice must be received by Benton no later than April 17, 2000 and
shall contain such information as required under our Bylaws.
NOMINATION OF DIRECTOR CANDIDATES: You may propose director candidates for
consideration by our Board's Nominating Committee. In addition, our Bylaws
permit stockholders to nominate directors at a stockholder meeting. In order
to make a director nomination at next year's stockholder meeting, you must
notify Benton not fewer than 75 days in advance of the annual meeting of
stockholders. Thus, since June 30, 1999 is specified as the meeting date in
this year's proxy statement, in order for any such nomination notice to be
timely for next year's annual meeting, it must be received by Benton no
later than April 17, 2000 (i.e., 75 days prior to June 30, 2000). In
addition, the notice must meet all other requirements contained in our
Bylaws.
COPY OF BYLAW PROVISIONS: You may contact our Corporate Secretary at our
headquarters for a copy of the relevant Bylaw provisions regarding the
requirements for making stockholder proposals and nominating director
candidates.
By Order of the Board of Directors
/s/ A.E. Benton
A.E. BENTON
Chairman of the Board
May 19, 1999
18
<PAGE> 23
BENTON OIL AND GAS COMPANY
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, JUNE 30, 1999
10:00 A.M.
FOUR SEASONS BILTMORE HOTEL
1260 CHANNEL DRIVE
SANTA BARBARA, CALIFORNIA 93108
BENTON OIL AND GAS COMPANY
6267 CARPINTERIA AVENUE, SUITE 200
CARPINTERIA, CALIFORNIA 93013
PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON JUNE 30, 1999.
The shares of stock you hold in your account will be voted as you specify
below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
By signing the proxy, you revoke all prior proxies and appoint A.E. Benton and
James M. Whipkey, and each of them, with full power of substitution, to vote
your shares on the matters shown on the reverse side and any other matters which
may come before the Annual Meeting and all adjournments.
See reverse for voting instructions.
<PAGE> 24
COMPANY #
CONTROL #
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE - TOLL FREE - 1-800-240-6326 - QUICK *** EASY *** IMMEDIATE
- - Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week.
- - You will be prompted to enter your 3-digit Company Number and your
7-digit Control Number which are located above
- - Follow the simple instructions the Voice prompt provides you.
VOTE BY INTERNET - http://www.eproxy.com/bno/ ***QUICK *** EASY *** IMMEDIATE
- - Use the Internet to vote your proxy 24 hours a day, 7 days a week.
- - You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which is located above to obtain your stockholding records and
create an electronic ballot.
VOTE BY MAIL
- - Mark, sign and date your proxy card.
- - Return it in the postage-paid envelope we've provided or return it to Benton
Oil and Gas Company, c/o Shareowner Services, P.O. Box 64873, St. Paul,
MN 55164-0837.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
------
-- Please detach here --
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C>
1. Election of directors: 01 A.E. Benton 02 Richard W. Fetzner [ ] Vote FOR [ ] Vote WITHHELD
03 Garrett A. Garrettson 04 Bruce M. McIntyre all nominees from all nominees
05 Michael B. Wray
</TABLE>
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE THE NUMBER(S) OF
THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.
<TABLE>
<S> <C> <C> <C>
2. To ratify the appointment of PricewaterhouseCoopers LLP as the
independent accountants for the year ended December 31, 1999. [ ] For [ ] Against [ ] Abstain
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ]
Indicate changes below: Date________________
-----------------------------------
-----------------------------------
Signatures in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.
should include title and
authority. Corporations should
provide full name or corporation
and name of authorized officer
signing the proxy.
