<PAGE> 1
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FORM 10-K/A
AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to ___________
Commission file number 1-10762
BENTON OIL AND GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 77-0196707
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
6267 CARPINTERIA AVENUE, SUITE 200, CARPINTERIA, CA 93013
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (805) 566-5600
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<S> <C>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
COMMON STOCK, $.01 PAR VALUE NYSE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK PURCHASE WARRANTS, $11.00 EXERCISE PRICE.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Approximate aggregate market value of common stock held by
non-affiliates of the registrant: $104,882,872, computed on the basis of $3.63
per share, closing price of the common stock on the NYSE on March 24, 1999.
There were 29,576,966 shares of the registrant's Common Stock, $.01
par value, outstanding as of March 24, 1999.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information regarding the Company's directors, executive
officers and certain key employees:
<TABLE>
<CAPTION>
NAME AGE POSITION
------------------------ --- -------------------------------------------------------------------
<S> <C> <C>
A.E. Benton 56 President, Chairman of the Board, Chief Executive Officer, Director
Michael B. Wray 63 Vice Chairman of the Board, Director
E. Sven Hagen 42 Senior Vice President - Exploration and Production
James M. Whipkey 41 Senior Vice President, Chief Financial Officer and Treasurer
Chris C. Hickok 41 Vice President - Controller, Chief Accounting Officer
Andrei E. Popov 35 Vice President - Business Development
Jennifer J. Young 52 Vice President - Human Resources
Bruce M. McIntyre 71 Director
Richard W. Fetzner 70 Director
Garrett A. Garrettson 55 Director
</TABLE>
A. E. BENTON
A. E. Benton, founder of the Company, was elected President of the Company in
February 1998, and 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 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.
MICHAEL B. WRAY
Michael B. Wray was first elected Vice Chairman of the Company in February 1998.
He served as President of the Company from January 1996 to February 1998. He
served as Chief Financial Officer of the Company from January 1996 to August
1997. He has served as director of the Company since November 1988. 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.
E. SVEN HAGEN
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.
2
<PAGE> 3
JAMES M. WHIPKEY
James M. Whipkey was first elected Senior Vice President and Chief Financial
Officer of the Company 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.
CHRIS C. HICKOK
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.
ANDREI E. POPOV
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.
JENNIFER J. YOUNG
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.
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. 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. In
September 1997, Dr. Fetzner retired as associate professor of 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.
3
<PAGE> 4
GARRETT A. GARRETTSON
Garrett A. Garrettson has served as director of the Company since January 1996.
Dr. Garrettson was elected chief executive officer and president 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.
4
<PAGE> 5
ITEM II. EXECUTIVE COMPENSATION
<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, 1998 $485,000 $ 50,000 (1) 90,000 $1,963(2)
President and Chief Executive 1997 485,000 200,000 200,000 1,935
Officer 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 - 1997 108,100 150,000 100,000 16
Chief Financial Officer
and Treasurer (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
</TABLE>
(1) The aggregate amount of additional compensation to be reported 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 Benton 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 and resigned
as President of the Company in February 1998.
(4) Mr. Whipkey was elected Senior Vice President and Chief Financial Officer
of the Company in August 1997. In connection with his employment with the
Company, Mr. Whipkey was reimbursed an aggregate of $5,465 for relocation
expenses (not reflected in table). Of the 1997 bonus reported, $100,000
reflects the signing bonus paid to Mr. Whipkey upon employment with the
Company.
5
<PAGE> 6
The following table shows information concerning options to purchase Common
Stock granted to certain individuals during 1998.
<TABLE>
<CAPTION>
% OF TOTAL GRANT
OPTIONS/SARS DATE
GRANTED TO EXERCISE OR PRESENT
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION VALUE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE ($) (1)
---------------------- ------------ ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
A.E. Benton 90,000 22.22% $8.72 7/14/08 $593,100
Michael B. Wray 48,000 11.85% 8.72 7/14/08 316,320
E. Sven Hagen 20,000 4.94% 8.72 7/14/08 131,800
James M. Whipkey 20,000 4.94% 8.72 7/14/08 131,800
Chris C. Hickok 5,000 1.23% 8.72 7/14/08 32,950
</TABLE>
(1) To calculate the present value of option/SAR grants, the Company has used
the Black-Scholes option pricing model. The actual value, if any, an executive
may realize will depend on the excess of the stock price over the exercise price
on the date the option is exercised, so that there is no assurance the value
realized by an executive will be at or near the value estimated by the
Black-Scholes model. The estimated values under that model for the stock options
granted on July 14, 1998 are based on assumptions that include (i) a stock price
volatility of 61.89%, (ii) a risk-free rate of return based on a 10-year U.S.
Treasury rate at the time of grant of 5.49%, and (iii) an option exercise term
of ten years. No adjustments were made for the non-transferability of the
options or to reflect any risk of forfeiture prior to vesting. The Securities
and Exchange Commission requires disclosure of the potential realizable value or
present value of each grant. The Company's use of the Black-Scholes model to
indicate the present value of each grant is not an endorsement of this
valuation, which is based on certain assumptions, including the assumption that
the option will be held for the full ten-year term prior to exercise.
The following table provides information regarding the exercise of stock
options during 1998 by certain individuals and the year-end value of unexercised
options for certain individuals.
AGGREGATED OPTIONS/SAR EXERCISES IN 1998 AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY
YEAR-END (#) OPTIONS/SARS ($)
--------------------- ---------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) 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
</TABLE>
6
<PAGE> 7
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 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. 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 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 Agreement.
In the event of a change in control, the term of the Employment Agreement 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 and, for Messrs. Wray,
Whipkey and Hagen, such multiple is three times his annual base salary and 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 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.
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.
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 September 26 of each year.
7
<PAGE> 8
ITEM 12. 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 shares of Common Stock of the Company as of April 30,
1999, (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. No schedules 13D were filed with the Securities and Exchange
Commission reporting ownership of 5% or more as of December 31, 1998.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER OWNED BENEFICIALLY OWNED (1)
------------------------------------------------ ----------------------------------- ----------------------------
<S> <C> <C>
Heartland Advisors 1,878,600(2) Direct 6.35%
790 North Milwaukee Street
Milwaukee, WI 53202
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 *
Chris C. Hickok 500 Direct *
46,667 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
All directors and executive officers as a 643,760 Direct 8.44%
group
(8 persons) 1,851,667 Vested Options
</TABLE>
*Less than 1%
(1) The percentage of Common Stock is based upon 29,576,966 shares of
Common Stock outstanding as of April 30, 1999.
(2) This information is based upon a Schedule 13D filed with the
Securities and Exchange Commission on January 13,1999.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
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 New York 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.
8
<PAGE> 9
The Company 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 Mr. Benton, Mr. Wray, Mr. McIntyre, Dr.
Fetzner, Mr. Whipkey, Dr. Hagen, Mr. Hickok and Mr. 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.
ITEM 13. 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 $1.73 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 a $300,000 loan guaranteed
by the Company. The Company sold the home in 1996 for $1.5 million.
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 April 30, 1999, was $5,585,134 and
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 of the
Company, for the purchase of a home. The loan bears interest at 6% and is
secured by a mortgage on his home. On December 31, 1998, Mr. Wray made an
interest payment of $91,430. At April 30, 1999, the outstanding balance owed to
the Company by Mr. Wray was $611,836. 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 his
home. On December 31, 1998, Mr. Whipkey made an interest payment of $10,000. At
April 30, 1999, the outstanding balance owed to the Company by Mr.
Whipkey was $538,493.
The Company has made loans to several of its officers, directors and employees,
with interest varying from 6% to prime plus 1%. At April 30, 1999, an aggregate
of seven officers, directors and employees (excluding those named above) owed an
aggregate balance of $416,518.
9
<PAGE> 10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
BENTON OIL AND GAS COMPANY
(Registrant)
Date: May 1, 1999 By: /s/ A. E. Benton
-----------------------------
A.E. Benton
Principal Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C>
/S/ A. E. BENTON May 1, 1999
- --------------------------------------------------------------
A.E. Benton,
Principal Executive Officer and Director
/S/ JAMES M. WHIPKEY May 1, 1999
- -----------------------------------------------------
James M. Whipkey,
Principal Financial Officer
/S/ CHRIS C. HICKOK May 1, 1999
- --------------------------------------------------------------
Chris C. Hickok,
Principal Accounting Officer
/S/ MICHAEL B. WRAY May 1, 1999
- --------------------------------------------------------------
Michael B. Wray, Director
/S/ BRUCE M. MCINTYRE May 1, 1999
- --------------------------------------------------------------
Bruce M. McIntyre, Director
/S/ RICHARD W. FETZNER May 1, 1999
- --------------------------------------------------------------
Richard W. Fetzner, Director
/S/ GARRETT A. GARRETTSON May 1, 1999
- --------------------------------------------------------------
Garrett A. Garrettson, Director
</TABLE>
10
