<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)
XXXXXXXXXXXXXXXX
(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
[Logo]
June 12, 2000
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 Friday, July 21, 2000 at 10:00 a.m.
Pacific Time at the Ventura Beach Hotel, 2055 Harbor Boulevard, Ventura,
California. For those stockholders wishing to stay at the Ventura Beach Hotel,
there are a limited number of rooms available the night of July 20, 2000, at
significantly reduced rates. Please mention that you are a Benton stockholder
when making your reservations at 805-643-6000 or 800-252-7466.
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 the enclosed 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,
MICHAEL B. WRAY
Vice Chairman of the Board
Benton Oil and Gas Company
<PAGE> 3
2000 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
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......................................................13
FISCAL YEAR-END OPTION VALUES....................................................................................13
REPORT OF THE COMPENSATION COMMITTEE.............................................................................14
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
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 quorum 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?....................................................................17
</TABLE>
ii
<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 Friday, July 21, 2000
PLACE Ventura Beach Hotel
2055 Harbor Boulevard
Ventura, California 93001
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 Friday,
June 2, 2000.
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 June 2, 2000
will be available for inspection by our
stockholders at the Ventura Beach Hotel, 2055
Harbor Boulevard, Ventura, California during the
ten days immediately preceding the date of the
Annual Meeting.
By Order of the Board of Directors
MICHAEL B. WRAY
Vice Chairman of the Board
This proxy statement and accompanying proxy card are being distributed on or
about June 16, 2000.
<PAGE> 6
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The Board of Directors of Benton Oil and Gas Company is providing these
proxy materials to you in connection with Benton's annual meeting of
stockholders, which will take place on July 21, 2000. 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 1999 Annual Report to Stockholders was previously mailed
to you.
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 June 2, 2000, 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 third quarter of
2000.
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 June 2, 2000.
-------------------------------------------------------------------------------
AGGREGATE NUMBER PERCENT OF
OF SHARES SHARES
NAME AND ADDRESS BENEFICIALLY OWNED OUTSTANDING(1)
---------------- ------------------ --------------
Heartland Advisors, Inc. 4,185,500(2) 14.20%
789 North Water Street
Milwaukee, WI 53202
A.E. Benton 2,078,333(3) 7.01%
-------------------------------------------------------------------------------
(1) The percentage of common stock is based upon 29,661,633 shares of common
stock outstanding on June 2, 2000.
(2) This information is based upon a Schedule 13G filed with the Securities and
Exchange Commission on January 18, 2000.
(3) The information with respect to Mr. Benton's ownership is set forth in the
table below, and includes 1,478,333 shares which may be acquired by
exercise of vested options.
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 June 2, 2000.
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 August 1,
2000 (60 days after the record date of June 2, 2000) 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 (3)..................................... 600,000 Direct 7.01%
1,478,333 Vested Options
Michael B. Wray..................................... 59,300 Direct 1.27%
318,667 Vested Options
James M. Whipkey (3)................................ 73,667 Vested Options *
E. Sven Hagen....................................... 194,999 Vested Options *
David H. Pratt...................................... 80,000 Direct *
143,333 Vested Options
Chris C. Hickok..................................... 500 Direct *
66,667 Vested Options
Andrei Popov........................................ 300 Direct *
70,001 Vested Options
Bruce M. McIntyre................................... 15,900 Direct *
90,000 Vested Options
Richard W. Fetzner.................................. 1,667 Direct
90,000 Vested Options *
Garrett A. Garrettson............................... 14,000 Direct *
40,000 Vested Options
All current directors and executive officers as a
group (10) persons................................ 771,667 Direct 11.00%
2,492,000 Vested Options
-----------------------------------------------------------------------------------------------------------------
</TABLE>
* Represents less than 1% of the Company's outstanding common stock.
(1) "Vested Options" are stock options which may be exercised as of August 1,
2000.
(2) Percentages are based upon 29,661,633 shares of common stock outstanding on
June 2, 2000.
(3) Mr. Benton and Mr. Whipkey were executive officers of the Company during
1999, but neither are executive officers of the Company as of the date of
this proxy.
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 1999, its officers, directors and 10% stockholders complied with all
Section 16(a) filing requirements. 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 1999 and the function
of each committee are described below. During 1999, the Board held nine meetings
and 25 telephonic meetings. Each director attended at least 75% of all Board and
applicable committee meetings.
--------------------------------------------------------------------------------
NAME OF DIRECTOR AUDIT COMPENSATION
----------------------- ----- ------------
Non-Employee Directors:
Richard W. Fetzner........................... X X
Garrett A. Garrettson........................ X X
Bruce M. McIntyre............................
Employee Directors:
A.E. Benton..................................
Michael B. Wray..............................
Number of Meetings in Fiscal 1999 ........... 2 4
--------------------------------------------------------------------------------
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 1999 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 on September 26 of each
year, the date of implementation of the Directors' Stock Option Plan.
COMPENSATION TABLE
FOR 1999
--------------------------------------------------------------------------------
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, except Dr.
Peter J. Hill who has been nominated by the Board of Directors for election at
this 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.
RICHARD W. FETZNER In September 1997, Richard W. Fetzner
Director since May 1990 retired as associate professor of business
Age 71 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.
7
<PAGE> 12
GARRETT A. GARRETTSON Garrett A. Garrettson was chief executive
Director since January 1996 officer and president of Spectrian
Age 56 Corporation, a publicly held company, from
April 1996 until April 2000 and is currently
chairman of the board of directors focusing
on strategic business development. 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
HealthHelper Corporation. Dr. Garrettson
holds B.S. and M.S. degrees in engineering
physics and a Ph.D. in mechanical
engineering from Stanford University.
PETER J. HILL Dr. Peter J. Hill was elected President and
Director since July 2000 Chief Executive Officer of the Company,
Age 52 effective July 10, 2000. Since 1998, Dr.
Hill has been Chief Operating Officer and
Executive Director of Hardy Oil & Gas in
London, U.K. From 1995 until 1998, Dr. Hill
served as Managing Director of Deminex and
was responsible for its worldwide production
and exploration activities, including
projects in Russia and Venezuela. Prior to
1995, Dr. Hill spent 22 years with British
Petroleum in a range of senior positions in
Australia, Egypt, New Zealand, the North Sea
and South America. Dr. Hill served as Chief
Geologist for the BP Group and was
appointed, from 1990 through 1994, as the
President of BP Venezuela and Regional
Director - Central and South America. Dr.
Hill holds a Bachelor of Science Degree in
Geology from Southampton University,
England, and a shared Doctorate of
Philosophy in Sedimentology from Southampton
University and Trinity College, Ireland.
BRUCE M. MCINTYRE Bruce M. McIntyre was named to the Office
Director since November 1988 of the Chief Executive in August 1999 upon
Age 72 the resignation of Mr. A.E. Benton, and is a
private investor and a consultant in the oil
and gas industry. Mr. McIntyre 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 holds a B.A.
degree from Harvard College and a M.B.A.
degree from the Harvard University Graduate
School of Business Administration.
8
<PAGE> 13
MICHAEL B. WRAY Michael B. Wray was named to the Office of
Director since November 1988 the Chief Executive in August 1999 upon the
Age 64 resignation of Mr. A.E. Benton, and was
first elected Vice Chairman in February
1998. Mr. Wray 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 L.L.B.
degree from Columbia Law School.
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, 2000.
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 2000. 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>
Michael B. Wray (1) 64 Office of the Chief Executive and Vice
Chairman of the Board
Bruce M. McIntyre (1) 72 Office of the Chief Executive
Peter J. Hill (1)(2) 52 Chief Executive Officer and President Elect
E. Sven Hagen 43 Senior Vice President - Exploration and
Production
David H. Pratt 50 Senior Vice President, Chief Financial
Officer and Treasurer
Chris C. Hickok 42 Vice President - Controller, Chief Accounting
Officer
Andrei E. Popov 36 Vice President - Corporate Business
Development
</TABLE>
-------------------
(1) See Dr. Hill's, Mr. McIntyre's and Mr. Wray's biographies on pages 8 and 9.
(2) Dr. Hill has been elected President and Chief Executive Officer of the
Company, effective July 10, 2000.
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.
David H. Pratt rejoined the Company as Senior Vice President of Finance
and Administration and Chief Financial Officer in January 2000. From July 1996
to January 2000, Mr. Pratt was a financial consultant to the Company. From
January 1996 to June 1996, Mr. Pratt was Vice President - International Finance.
From April 1989 to December 1995, Mr. Pratt served as Vice President-Finance,
Chief Financial Officer and Treasurer of the Company. From 1987 to 1989, Mr.
Pratt was a consultant in the accounting services and systems industry. From
1982 to 1987, Mr. Pratt was employed by May Petroleum Inc., becoming assistant
treasurer. He also served as budget and planning manager, and managed corporate
and partnership investor relations and other administrative areas. From 1974 to
1982, Mr. Pratt was employed by Arthur Andersen & Co., and he became a Certified
Public Accountant in 1975. Mr. Pratt holds B.S. and M.B.A. degrees from Texas
Christian University.
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 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.
10
<PAGE> 15
EXECUTIVE COMPENSATION
The following table discloses compensation received by Benton's Chief
Executive Officers and its four other most highly paid executive officers for
the fiscal year ending December 31, 1999 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, 1999 $485,000 $150,000 (2) 325,000 $1,545(3)
President and Chief Executive 1998 485,000 50,000 90,000 1,963
Officer (1) 1997 485,000 200,000 200,000 1,935
Michael B. Wray, 1999 $203,077 $40,000 (2) 175,000 $2,478(3)
Office of the Chief 1998 400,000 0 48,000 3,233
Executive Office (4) 1997 400,000 50,000 30,000 3,019
Bruce M. McIntyre, 1999 $ 0 $ 0 $11,000(2) 60,000 $46,250(5)
Officer of the Chief 1998 0 0 10,000 38,250
Executive Office (5) 1997 0 0 10,000 35,250
E. Sven Hagen, 1999 $250,000 $40,000 (2) 225,000 $353(3)
Senior Vice President - 1998 250,000 0 20,000 445
Exploration and Production 1997 170,000 50,000 50,000 439
James M. Whipkey, 1999 $250,000 $40,000 (2) 225,000 $353(3)
Senior Vice President, Chief 1998 250,000 0 20,000 445
Financial Officer (6) 1997 108,100 150,000 100,000 16
Chris C. Hickok, 1999 $150,000 $0 (2) 115,000 $353(3)
Vice President - Controller 1998 150,000 0 5,000 445
1997 122,000 25,000 10,000 433
Andrei Popov, 1999 $150,000 $0 (2) 115,000 $262(3)
Vice President - 1998 140,385 0 10,000 288
Corporate Business Development 1997 104,000 20,000 20,000 170
</TABLE>
(1) Mr. Benton resigned as Chairman of the Board, President and Chief Executive
Officer on August 31, 1999. In February 2000, Mr. Benton resigned as an
employee and entered into a consulting agreement with the Company. See
"Certain Relationships and Related Party Transactions".
(2) 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.
(3) Represents premiums paid by Benton with respect to term life insurance on
behalf of the named executive officers.
(4) 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. Mr. Wray was named to the Office of the Chief Executive on
August 31, 1999. See "Certain Relationships and Related Party
Transactions."
(5) Mr. McIntyre was named to the Office of the Chief Executive on August 31,
1999. He received $11,000 in consulting fees during 1999 for serving in
this capacity. Mr. McIntyre received director's fees of $46,250, $38,250
and $35,250 in 1999, 1998 and 1997, respectively. Mr. McIntyre is not an
employee.
11
<PAGE> 16
(6) 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. Mr. Whipkey resigned from Benton in
January 2000. In connection with his resignation, the company entered into
a separation agreement with Mr. Whipkey and paid him a lump sum severance
payment of $126,923 (not reflected in this table).
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in 1999 to
each of the named executive officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
NUMBER OF % OF TOTAL
SHARES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED (1) FISCAL YEAR(2) ($/SHARE) DATE VALUE ($)(3)
---- ----------- -------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
A.E. Benton 300,000 11.95% $2.750 1/13/09 $667,480
25,000 1.00% 2.125 11/12/09 43,632
Michael B. Wray 50,000 1.99% $2.750 1/13/09 $111,247
125,000 4.98% 2.125 11/12/09 218,160
Bruce M. McIntyre 10,000 (4) $2.688 9/24/09 $22,051
50,000 (4) 2.125 11/12/09 87,264
E. Sven Hagen 100,000 3.98% $2.750 1/13/09 $222,493
125,000 4.98% 2.125 11/12/09 218,160
James M. Whipkey 100,000 3.98% $2.750 1/13/09 $222,493
125,000 4.98% 2.125 11/12/09 218,160
Chris C. Hickok 35,000 1.39% $2.750 1/13/09 $ 77,873
80,000 3.19% 2.125 11/12/09 139,623
Andrei Popov 50,000 1.99% $2.750 1/13/09 $111,247
65,000 2.59% 2.125 11/12/09 113,443
</TABLE>
----------------------
(1) The options granted in January 1999 are exercisable 33% after the first
year, 66% after the second year and 100% after the third year. The options
granted in November 1999 are exercisable 50% after the first year, 75%
after the second year and 100% after the third year.
(2) Benton granted options representing 2,511,000 shares to employees in 1999.
(3) 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 January 13, September 24 and November 12
are based on assumptions that include (i) a stock price volatility of
72.71%, (ii) a risk-free rate of return based on a 10-year U.S. Treasury
rate at the time of grant of 5.13%, 6.23% and 6.31%, respectively, 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.
(4) Mr. McIntyre is not an employee and his option grants have not been
included in the percentage calculation.
12
<PAGE> 17
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises in 1999 by
each of the named executive officers and the values of each of such officer's
unexercised options at December 31, 1999.
<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 1,348,333 451,667 $ 0 $ 0
Michael B. Wray 0 0 326,000 217,000 0 0
Bruce M. McIntyre 0 0 100,000 50,000 0 0
E. Sven Hagen 0 0 155,000 255,000 0 0
James M. Whipkey 0 0 73,334 271,666 0 0
Chris C. Hickok 0 0 53,334 121,666 0 0
Andrei Popov 0 0 46,666 135,001 0 0
</TABLE>
-------------------
(1) The value of unexercised options is based upon the difference between the
exercise price and $1.84, the average of the high and low market prices on
December 31, 1999.
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 each of Messrs. Hill, Hagen and Pratt, such
multiple is three times his annual base salary. For Mr. Wray and Mr. Hickok,
such multiple is one and two times their annual base salary, respectively. Mr.
Benton has entered into a consulting agreement with the Company, which also
provides for severance payments in the event of a change in control, equal to
three times his annual consulting payments. 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), (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.
13
<PAGE> 18
In January 2000, Mr. Wray entered into an employment agreement for a
term of one year, with an annual base salary of $300,000. In January 2000, Mr.
Pratt and in February 2000, Dr. Hagen each entered into employment agreements
for three year terms, each with 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 a current annual base salary of $180,000.
Salaries are reviewed annually and bonuses are within the discretion of the
Board of Directors.
Effective July 10, 2000, the Company entered into an employment
agreement with Dr. Hill for a term of three years with a base salary of
$350,000.
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 fixed and formal 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 consider the amount of unvested options 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 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 1999 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 comparable 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.
During 1999, Mr. Benton resigned his position as chief executive
officer. Dr. Hill will assume the position of Chief Executive Officer and
President on July 10, 2000. Dr. Hill's annual compensation will be $350,000 and
in addition will be entitled to a target bonus of 50% of his base salary, based
on performance criteria that we will establish related to the Company's cash
flow and reserves. Dr. Hill will also receive stock options to purchase 175,000
shares of the Company's stock at the closing price on the effective date of this
employment.
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.
GARRETT A. GARRETTSON 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, 1999, assuming the investment of $100 on
January 1, 1995 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, 1995 and that all dividends were reinvested.
<TABLE>
<CAPTION>
PLOT POINTS
(DECEMBER 31 OF EACH YEAR)
---------------------------------------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Benton $100 $164 $248 $142 $33 $21
---------------------------------------------------------------------------------------------------------------
S&P 500 $100 $137 $169 $225 $290 $351
---------------------------------------------------------------------------------------------------------------
Wilshire Domestic $100 $116 $161 $186 $123 $145
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
The Company made certain unsecured loans to its then Chief Executive
Officer, A. E. Benton. Each of these loans was evidenced by a promissory note
bearing interest at the rate of 6% per annum. At December 31, 1999, the
aggregate outstanding amounts of the loans were $5,851,108. In August 1999, Mr.
Benton filed a Chapter 11 (reorganization) bankruptcy petition in the U.S.
Bankruptcy Court for the Central District of California, in Santa Barbara,
California. The Company has recorded $5,851,108 allowance for doubtful accounts
for the principal and accrued interest owed to the Company at December 31, 1999,
and continues to record additional allowances as interest accrues.
In February 2000, the Company entered into a Separation Agreement and a
Consulting Agreement with Mr. Benton, pursuant to which the Company retained Mr.
Benton as an independent contractor to perform certain services for the Company.
At the same time, Mr. Benton agreed to propose a plan of reorganization in his
bankruptcy case that potentially provides for the full repayment of the
Company's loans to Mr. Benton, including all principal and accrued and accruing
interest at the rate of 6% per annum. Under the proposed plan, repayment of the
Company's loans to Mr. Benton will be achieved through Mr. Benton's liquidation
of certain real and personal property assets; a phased liquidation of Company
stock resulting from Mr. Benton's exercise of his Company stock options; and, if
necessary, from the retained interest in the portion of the Consulting
Agreement's proceeds. The amount eventually realized by the Company and the
timing of its receipt of payments will depend upon the timing and results of the
bankruptcy proceedings and liquidation of Mr. Benton's assets.
Mr. Benton's consulting services will relate principally to the
Company's Russian activities. Under the terms of the Consulting Agreement, Mr.
Benton will be paid consulting fees of $485,000 for 2000, reducing to $322,000
in 2001, $240,000 in 2002, and a declining consulting fee for the remainder of
the term which expires December 31, 2006. Mr. Benton will also be entitled to
certain additional incentive bonuses with respect to cash receipts to the
Company in connection with any dividends, operations or proceeds from farm out,
joint venture or divestiture transactions with respect to Geoilbent, Ltd. or
Arctic Gas. To the extent that Mr. Benton continues to be a consultant of the
Company, his unvested stock options will continue to vest and for a period of
twelve (12) months thereafter.
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 May 11, 1999, Mr.
Wray repaid the entire balance of principal and interest outstanding on his
loan. In September 1997, the Company loaned $500,000 to Mr. Whipkey, then 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 bore interest
at 6% and was secured by a mortgage on the home. On December 30, 1998, Mr.
Whipkey made an interest payment of $10,000. During 1999, Mr. Whipkey made
payments of principal and interest of $126,091, and on February 9, 2000, he made
a payment of principal and interest of $95,605. On April 25, 2000, Mr. Whipkey
repaid the entire balance of principal and interest outstanding on his loan.
The Company has made loans to certain of its directors and employees
with interest varying from 6% to prime plus 1%. At June 2, 2000, excluding the
loans outstanding from Mr. Benton described above, one director, one employee
and one former employee owed an aggregate balance of $70,184.
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, Michael B. Wray and
Bruce M. McIntyre, 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 June 2, 2000, the record date,
is entitled to one vote at the annual meeting. On the record date, we had
approximately 29,661,633 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.
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.
17
<PAGE> 22
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 February 17,
2001. 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 May 8, 2001 and
shall contain such information as required under our Bylaws. If the actual
date for the 2001 annual meeting is set earlier than July 21, 2001, then
the deadline for notice of shareholder proposals to be raised from the
floor will be correspondingly earlier than May 8, 2001.
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 July 21, 2000 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 May 8, 2001 (i.e., 75 days prior to July 21, 2001). In addition,
the notice must meet all other requirements contained in our Bylaws. If the
actual date for the 2001 annual meeting is set earlier than July 21, then
the deadline for director nominations will be correspondingly earlier than
May 8, 2001.
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
MICHAEL B. WRAY
Vice Chairman of the Board
June 12, 2000
18
<PAGE> 23
BENTON OIL AND GAS COMPANY
ANNUAL MEETING OF STOCKHOLDERS
WEDNESDAY, JULY 21, 2000
10:00 A.M.
VENTURA BEACH HOTEL
2055 HARBOR BOULEVARD
VENTURA, CALIFORNIA 93001
--------------------------------------------------------------------------------
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 July 21, 2000.
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 Michael B. Wray
and Bruce M. McIntyre, 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 is located above.
- Follow the simple instructions the Voice prompt provides you.
VOTE BY INTERNET - http://www.aproxy.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 records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and 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>
1. Election of directors: 01 Richard W. Fetzner [ ] Vote FOR [ ] Vote WITHHELD
02 Garrett A. Garrettson all nominees from all nominees
03 Peter J. Hill
04 Bruce M. McIntyre
05 Michael B. Wray
</TABLE>
(Instructions: 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, 2000. [ ] 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.
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Address Change? Mark Box [ ]
Indicate changes below: Date
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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.
