1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(MARK ONE)
Annual Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
[X] For the fiscal year ended December 31, 2000 or
Transition Report Pursuant to Section 13 or 15(d)
[ ] of the Securities Act of 1934 for the
Transition Period from ____________ to ___________
COMMISSION FILE NO.: 1-10762
-----------------------
BENTON OIL AND GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 77-0196707
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
6267 CARPINTERIA AVENUE, SUITE 200
CARPINTERIA, CALIFORNIA 93013
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (805) 566-5600
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock, $.01 Par Value NYSE
Securities registered pursuant to Section 12(g) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock Purchase Warrants,
$11.00 exercise price NASDAQ
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
On March 28, 2001, the aggregate market value of the shares of voting stock of
Registrant held by non-affiliates was approximately $66,943,032 based on a
closing sales price on NYSE of $2.00
As of March 28, 2001, 33,946,919 shares of the Registrant's common stock were
outstanding.
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.[ ]
2
2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is information regarding our directors, executive officers and
certain key employees:
NAME AGE POSITION
---- --- --------
Dr. Peter J. Hill........................... 54 President, Chief Executive Officer and Director
Michael B. Wray............................. 65 Chairman of the Board and Director
Steven W. Tholen............................ 50 Senior Vice President-Finance and Administration,
Chief Financial Officer and Treasurer
Robert Stephen Molina....................... 53 Vice President, General Counsel and Secretary
Chris C. Hickok............................. 43 Vice President - Controller and Chief
Accounting Officer
Andrei E. Popov............................. 37 Vice President - Corporate Business Development
Stephen D. Chesebro'........................ 59 Director
John U. Clarke.............................. 48 Director
Byron A. Dunn............................... 43 Director
H.H. Hardee................................. 46 Director
Patrick M. Murray........................... 58 Director
DR. PETER J. HILL
Dr. Peter J. Hill has served as our President and Chief Executive Officer and a
director since July 10, 2000. From 1988 until 2000, Dr. Hill was 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 served from 1990 through 1994, as the president of BP Venezuela and Regional
Director - Central and South America. Dr. Hill holds a B.S. Degree in Geology
from Southampton University, England, and a shared Doctorate of Philosophy in
Sedimentology from Southampton University and Trinity College, Ireland.
MICHAEL B. WRAY
Michael B. Wray has served as a director since November 1988 and as Chairman of
the Board since October 2000. He was named to the Office of the Chief Executive
in August 1999 upon the resignation of Mr. A.E. Benton and was succeeded by Dr.
Hill as Chief Executive in August 2000. Mr. Wray served as Vice Chairman from
February 1998 to October 2000. From January 1996 to February 1998, Mr. Wray
served as our President. He served as our Chief Financial Officer from January
1996 to August 1997. From January 1994 through December 1995, Mr. Wray served as
a consultant to us. 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.
STEVEN W. THOLEN
Steven W. Tholen has served as our Senior Vice President of Finance and
Administration and Chief Financial Officer since January 5, 2001. From June 1995
through 2000, Mr. Tholen was Vice President and Chief Financial Officer of Penn
Virginia Corporation. From 1990 to 1995, Mr. Tholen served in various capacities
at Cabot Oil and Gas Corporation, including Treasurer. Mr. Tholen holds a B.S.
degree from St. John's University and an MBA degree from the University of
Denver.
3
3
ROBERT STEPHEN MOLINA
Robert Stephen Molina has served as Vice President, General Counsel and
Secretary since January 5, 2001. From 1981 until December 2000, Mr. Molina
served Atlantic Richfield Company in various legal capacities including Chief
Counsel of ARCO Latin America from 1997 to 2000, Special International Counsel
at ARCO International from 1994 to 1997, Vice President and General Counsel of
Vastar Resources, Inc. from 1993 to 1994, and General Attorney of ARCO Oil and
Gas Company in 1993. Mr. Molina holds a B.A. degree from University of Texas at
Austin and a Juris Doctor degree from Southern Methodist University School of
Law.
CHRIS C. HICKOK
Chris C. Hickok was first appointed controller in November 1991 and has served
as Vice President - Controller and Chief Accounting Officer since 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 has served as Vice President-Corporate Business Development
since May 1998. Mr. Popov was first employed by us in May 1992 and was appointed
manager of corporate business development in 1995. 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.
STEPHEN D. CHESEBRO'
Stephen D. Chesebro' was first elected a director in October 2000. From February
1997 to December 1997 Mr. Chesebro' served as Group Vice President - Oil and Gas
and from December 1997 until December 1998 he served as President and Chief
Operating Officer of Pennzoil Company. Mr. Chesebro' served as President and
Chief Executive Officer of PennzEnergy, the independent oil and gas exploration
and production company that was formerly a business unit of Pennzoil Company,
from December 1998 until he retired in 1999. From 1993 to 1996, Mr. Chesebro'
was Chairman and Chief Executive Officer of Tenneco Energy, a $4 billion global
company with 3,000 employees. Tenneco Energy was part of Tenneco, Inc., a
worldwide corporation that owned diversified holdings in six major industries.
In 1964, Mr. Chesebro' graduated from the Colorado School of Mines. He was
awarded the school's Distinguished Achievement Medal in 1991 and received his
honorary doctorate from the institution in 1998. He currently serves on the
school's visiting committee for petroleum engineering. In 1994, Mr. Chesebro'
was the first American awarded the H.E. Jones London Medal by the Institution of
Gas Engineers, a British professional association.
JOHN U. CLARKE
John U. Clarke was first elected a director in October 2000. Mr. Clarke is
Managing Director of SCF Partners, a private equity investment company focused
on the oil and gas services and equipment sectors of the energy industry. From
1999 to 2000, Mr. Clarke was Executive Vice President of Dynegy, Inc. where he
was also an Advisory Director and member of the Office of the Chairman. He had
responsibility for Dynegy's retail business, global technology and e-commerce
initiatives, mergers, acquisitions, strategic investments, telecommunications,
and branding activities. Mr. Clarke joined Dynegy in April 1997 as Senior Vice
President and Chief Financial Officer. Prior to joining Dynegy, Mr. Clarke was a
managing director and co-head of specialty energy practice group with Simmons &
Company International, a Houston-based investment banking firm. From 1995 to
1997, he served as president of Concept Capital Group, a financial advisory firm
formed by Mr. Clarke in 1995. Mr. Clarke was Executive Vice President and Chief
Financial and Administrative Officer with Cabot Oil and Gas from 1993 to 1995.
He was with Transco Energy from 1981 to 1993, last serving as Senior Vice
President and Chief Financial Officer. Mr. Clarke began his professional career
with Tenneco in 1978. Mr. Clarke is a member of the Board of Directors of NATCO
Group, Inc., a publicly traded engineering, construction and fabrication company
serving the petroleum industry. He is also a member of the Board of Directors of
FuelQuest.com, a market service provider to petroleum marketers and Pilko &
Associates, a management consulting firm specializing in environmental health
and safety issues. He also served as director of Allwaste, Inc. Mr. Clarke
earned a Bachelor of Arts degree in Economics from the University of Texas in
1975 and a Master of Business Administration degree from Southern Methodist
University in 1977.
4
4
BYRON A. DUNN
Byron A. Dunn was first elected a director in October 2000. Mr. Dunn is an
Executive Director in the energy investment banking group of UBS Warburg LLC.
Prior to joining UBS Warburg LLC in 1996, Mr. Dunn spent two years as a Senior
Vice President specializing in energy and oilfield services with Jeffries &
Company, Inc. Mr. Dunn also has over five years of operational experience in the
oil and gas industry, serving from 1979 through 1984 in drilling, production and
reservoir assignments for Chevron USA in Texas, Louisiana and the Gulf of
Mexico. In addition, during 1991 and 1992, Mr. Dunn spent considerable time in
West Siberia, Europe and South America as manager of upstream business
development and acquisitions for Phibro Energy. Mr. Dunn earned a Bachelor of
Science degree in Chemical Engineering from the Illinois Institute of Technology
in 1979 and a Master of Business Administration degree from the University of
Chicago in 1986.
H.H. HARDEE
H.H. Hardee was first elected a director in October 2000. Mr. Hardee has been a
Senior Vice President-Investment Officer with Dain Rauscher Wessels since 1994.
From 1991 through 1994, Mr. Hardee was a Senior Vice President with Kidder
Peabody. From 1977 through 1991, Mr. Hardee was a Senior Vice President at Rotan
Mosle/Paine Webber Inc. During his tenure at Dain Rauscher, he has been in the
top 1% of his peer group and has been a member of the Chairman's Council since
joining the firm. Mr. Hardee is a registered investment advisor and has served
in various board capacities including investment policy and syndicate
underwriting. Mr. Hardee's expertise is advising high net worth individuals and
small to mid sized corporations. He currently advises/manages over $200 million
in assets. He is also a published author in the area of financial investing. Mr.
Hardee is a former director of the Bank of Almeda and Gamma Biologicals. He is
also a former limited partner and advisory director of the Houston Rockets of
the National Basketball Association and former advisory finance Chairman for the
Ft. Bend Texas Independent School District. Currently, he is an elder at
Southminster Presbyterian Church and a board member of the Southminster
Presbyterian School and Chairman of their capital campaign. He is a member of
the Ft. Bend Economic Development Council.
PATRICK M. MURRAY
Patrick M. Murray was first elected a director in October 2000. Mr. Murray
became President, Chief Executive Officer and a Director of Dresser, Inc. in
2001. From 1998 through 2001, Mr. Murray served as president of Dresser
Equipment Group Inc. From 1994 through 1998, he held positions as Senior Vice
President, Strategic Initiatives and Vice President, Operations of Dresser
Industries, Inc. Prior to joining Dresser, Mr. Murray spent nine years as
President of Sperry-Sun Drilling Services, Inc., a former subsidiary of Baroid
Corporation and a subsidiary of Dresser Industries, Inc. He joined NL
Industries, Inc. in 1973 and served in a variety of increasingly senior
management positions, including Controller. Mr. Murray has a B.S. degree and an
MBA from Seton Hall University. Mr. Murray is a member of the American Petroleum
Institute, the Society of Petroleum Engineers and is on the board of the Valve
Manufacturers Association.
5
5
ITEM 11. EXECUTIVE COMPENSATION
The following table discloses compensation received by each person who served as
our Chief Executive Officer during 2000 and our four other most highly paid
executive officers for the fiscal year ending December 31, 2000 and their
compensation for each of the years indicated.
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------
OTHER ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Peter J. Hill, 2000 $163,077 $ 0 (2) 175,000 $ 67
President and Chief Executive
Officer (1)
Michael B. Wray, 2000 $300,000 $ 0 (2) 0 $ 1,751(5)
Office of the Chief Executive (3) 1999 203,077 40,000 175,000 2,478
1998 400,000 0 48,000 3,233
Bruce M. McIntyre, 2000 $ 0 $ 0 (2) 0 $ 79,000(4)
Office of the Chief Executive (4) 1999 0 0 60,000 57,250
1998 0 0 0 10,000 38,250
E. Sven Hagen, 2000 $250,000 $ 0 (2) 0 $ 262(5)
Senior Vice President - 1999 250,000 $40,000 225,000 353
Exploration and Production (7) 1998 250,000 0 20,000 445
David H. Pratt 2000 $230,769 $0 (2) 65,000 $ 12,162(6)
Senior Vice President- 1999 0 0 60,000 130,000
Chief Financial Officer 1998 0 0 0 120,000
and Treasurer (6)
Chris C. Hickok, 2000 $180,000 $ 0 (2) 0 $ 262(5)
Vice President - Controller 1999 150,000 0 115,000 353
1998 150,000 0 5,000 445
Andrei Popov, 2000 $170,000 $ 0 (2) 0 $ 236(5)
Vice President - Business 1999 150,000 0 115,000 262
Development 1998 140,385 0 10,000 288
(1) Dr. Hill was elected as President and Chief Executive Officer on August 29,
2000.
(2) The aggregate amount of additional compensation reported is less than the
lesser of $50,000 or 10 percent 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) 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 and was succeeded by Dr. Hill as Chief
Executive on August 29, 2000. Mr. Wray was elected as Chairman of the Board
on October 5, 2000. See "Certain Relationships and Related Party
Transactions."
(4) Mr. McIntyre was named to the Office of Chief Executive on August 31, 1999
and was succeeded by Dr. Hill as Chief Executive on August 29, 2000. He
received consulting fees of $23,500 and $11,000 during 2000 and 1999,
respectively, for serving in this capacity. Mr. McIntyre received directors
fees of $55,500, $46,250 and $38,250 in 2000, 1999 and 1998, respectively.
Mr. McIntyre resigned as a director on October 5, 2000 and is not an
employee.
6
6
(5) Represents premiums paid by Benton with respect to term life insurance on
behalf of the named executive officers.
(6) Mr. Pratt was elected Senior Vice President in January 2000. From July 1996
to January 2000, Mr. Pratt was a financial consultant to Benton Oil and Gas
Company. He received $11,667, $130,000 and $120,000 in 2000, 1999 and 1998,
respectively, for serving in this capacity. Additionally, premiums paid by
Benton for term life insurance on behalf of Mr. Pratt were $495 in 2000.
Mr. Pratt resigned in March 2001. In connection with his resignation, we
entered into a separation agreement with Mr. Pratt and paid him a lump sum
severance payment of $480,769 (not reflected in this table).
(7) Mr. Hagen resigned in January 2001. In connection with his resignation, we
entered into a separation agreement with Mr. Hagen and paid him a lump sum
severance payment of $375,000 (not reflected in this table).
The following table shows information concerning options to purchase Common
Stock granted to each of the named executive officers during 2000.
INDIVIDUAL GRANTS
--------------------------------------------------------------
PERCENT OF TOTAL GRANT
OPTIONS/SARS DATE
GRANTED TO EXERCISE OR PRESENT
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION VALUE
NAME GRANTED (#) (1) FISCAL YEAR (2) ($/SHARE) DATE ($) (3)
---- --------------- --------------- --------- ---- -------
Peter J. Hill 175,000 72.9% $2.125 8/29/10 $305,466
Michael B. Wray 0 -- -- -- --
Bruce M. McIntyre 0 -- -- -- --
E. Sven Hagen 0 -- -- -- --
David H. Pratt(4) 65,000 27.1% 1.875 2/2/10 $89,706
Chris C. Hickok 0 -- -- -- --
Andrei Popov 0 -- -- -- --
- -----------------
(1) The options granted in 2000 are exercisable 50% after the first year, 75%
after the second year and 100% after the third year.
(2) Benton granted options representing 240,000 shares to employees in 2000.
(3) To calculate the present value of option/SAR grants, we have 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 August 29 and February 2 are based on assumptions
that include (i) a stock price volatility of 73.83 percent, (ii) a
risk-free rate of return based on a 10-year U.S. Treasury rate at the time
of grant of 5.81 percent and 6.71 percent for Dr. Hill's grant and Mr.
Pratt's grant, 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 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. Pratt forfeited 32,500 of the options to purchase common stock granted
on February 2, 2000 when he resigned in March 2001.
7
7
The following table provides information regarding the exercise of stock options
during 2000 by each of the named executive officers and the year-end value of
unexercised options held by such officers.
AGGREGATED OPTIONS/SAR EXERCISES IN 2000 AND YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS/SARS
OPTIONS/SARS AT YEAR-END (#) AS YEAR END($)
---------------------------- --------------
NUMBER OF
SHARES VALUE
ACQUIRED REALIZED
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ --- ----------- ------------- ----------- -------------
Peter J. Hill 0 0 0 175,000 0 0
Michael B. Wray 40,000 14,400 391,167 111,833 0 0
Bruce M. McIntyre 10,000 16,725 140,000 0 0 0
E. Sven Hagen 0 0 274,166 135,834 0 0
James M. Whipkey 33,000 39,188 73,667 0 0 0
David H. Pratt 0 0 83,333 105,000 0 0
Chris C. Hickok 0 0 110,000 65,000 0 0
Andrei Popov 0 0 109,168 72,499 0 0
(1) The value of unexercised options is based upon the difference between the
exercise price and the average of the high and low market price on December
31, 2000 of $1.56.
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 Dr. Hill, such multiple is three times his annual base salary.
For Messrs. Hickok and Popov, such multiple is two times their annual base
salary, respectively. For Messrs. Tholen and Molina, such multiple is one times
their annual base salary. 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.
8
8
In June 1998, Messrs. Hickok and Popov entered into employment agreements, which
may be terminated by either party with proper notice, with a current annual base
salary of $180,000 and $170,000, respectively. In January 2000, Mr. Wray entered
into an employment agreement for a term of one year, with an annual base salary
of $300,000. Mr. Wray is currently paid $8,333 per month on a month-to-month
basis. Effective July 10, 2000, Dr. Hill entered into an employment agreement
for a term of three years with a base salary of $350,000. 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. During 2000, our former directors who were not Company officers were
paid an annual retainer of $20,000 and were 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 were reimbursed for all travel
and related expenses.
Additionally, our Director Stock Option Plan provides that each person who is
elected to serve as a non-employee director of our 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. However,
no options to purchase common stock were granted to directors in 2000. The
Director Stock Option Plan was replaced with the Non-Employee Director Stock
Purchase Plan ("the Stock Purchase Plan") in January 2001.
The Stock Purchase Plan was adopted to encourage our directors to acquire a
greater proprietary interest in our company through the ownership of our common
stock. Each non-employee director may elect once each year, prior to January 1,
to be effective for the following year and until a new election is made, to
receive shares of our common stock for all or a portion of their fee for serving
as a director. The number of shares issuable will be equal to 1.5 times the
amount of cash compensation due the director divided by the fair market value of
the common stock on the scheduled date of payment of the applicable director's
fee. The shares will have a restriction upon their sale for one year from the
date of issuance. With respect to 2001, upon election by the stockholders at the
2001 Annual Meeting, each Director that has previously elected to receive
restricted stock in lieu of fees will be issued a number of restricted shares
equal to 1.5 times cash compensation of $37,000 divided by the share price at
the closing price on the date of the Annual Meeting.
In January 2001, each non-employee member of the Board of Directors received
25,000 shares of the Company's restricted stock with respect to Directors'
service from the date of their election through the 2001 Annual Meeting.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to (i) each person that
we know to be the beneficial owner of more than five percent of the issued and
outstanding shares of our Common Stock as of April 30, 2001, (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 our 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.
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER OWNED BENEFICIALLY OWNED (1)
-------------------------------------------------------------------------------------------------------------------
Heartland Advisors, Inc. 3,416,200(2) Direct 10.06%
789 North Water Street
Milwaukee, WI 53202
Cumberland Associates LLC 3,270,000(3) Direct 9.63%
1114 Avenue of the Americas
New York, New York 10036
Dimensional Fund Advisors 2,317,100(4) Direct 6.83%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
A.E. Benton 600,000 Direct 5.55%
1,357,500 Vested Options
Peter J. Hill 50,000 Direct *
9
9
NAME AND ADDRESS OF SHARES BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER OWNED BENEFICIALLY OWNED (1)
-------------------------------------------------------------------------------------------------------------------
Michael B. Wray 59,300 Direct 1.36%
407,834 Vested Options
Bruce M. McIntyre 140,000 Vested Options *
Steven W. Tholen 125,000 Direct *
Robert Stephen Molina 0 Direct *
0 Vested Options
E. Sven Hagen **
David H. Pratt **
Chris C. Hickok 500 Direct *
121,666 Vested Options
Andrei Popov 300 Direct *
129,168 Vested Options
Steven D. Chesebro' 75,000 Direct *
John U. Clarke 47,600 Direct *
Byron A. Dunn 25,000 Direct *
H.H. Hardee 68,000 Direct *
Patrick M. Murray 25,000 Direct *
All directors and executive officers as a group 475,700 Direct 3.28%
(11 persons) 658,668 Vested Options
* Less than 1%
** Information is not available. Messrs. Hagen and Pratt resigned in 2001.
(1) The percentage of Common Stock is based upon 33,946,919 shares of Common
Stock outstanding as of April 30, 2001.
(2) This information is based upon a Schedule 13G filed with the Securities and
Exchange Commission on January 16, 2001.
(3) This information is base upon a Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2001.
(4) This information is base upon a Schedule 13G filed with the Securities and
Exchange Commission on February 2, 2001.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires our officers and
directors, and persons who own more than ten percent of a registered class of
our 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 us with copies of all Section 16(a) forms they file.
We believe that during fiscal 2000, our officers, directors and 10% stockholders
complied with all Section 16(a) filing requirements. In making this statement,
we have relied upon the written representations of our directors and officers.
10
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From 1996 through 1998, we made unsecured loans to our then Chief Executive
Officer, A. E. Benton. Each of these loans was evidenced by a promissory note
bearing interest at the rate of 6 percent per annum. At December 31, 2000, the
aggregate outstanding amounts of the loans were $6,181,722 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. We have recorded a $6,181,722 allowance for doubtful accounts for
the principal and accrued interest owed to us as of December 31, 2000, and
continue to record additional allowances as interest accrues.
In February 2000, we entered into a Separation Agreement and a Consulting
Agreement with Mr. Benton, pursuant to which we retained Mr. Benton as an
independent contractor to perform certain services for us. Mr. Benton agreed to
propose a plan of reorganization in his bankruptcy case that provides for the
repayment of our loans to him. Under the proposed plan, which we anticipate will
be submitted to the bankruptcy court in the first half of 2001, we will retain
our security interest in Mr. Benton's 600,000 shares of our stock and in his
stock options, and in a portion of certain proceeds of his Consulting Agreement.
Repayment of our loans to Mr. Benton may be achieved through Mr. Benton's
liquidation of certain real and personal property assets; a phased liquidation
of stock in our company resulting from Mr. Benton's exercise of his stock
options; and, if necessary, from the retained interest in the portion of the
Consulting Agreement's proceeds. The amount that we eventually realize and the
timing of receipt of payments will depend upon the timing and results of the
liquidation of Mr. Benton's assets, including Benton Oil and Gas Company stock.
Mr. Benton's consulting services will relate principally to our Russian
activities. Under the terms of the Consulting Agreement, Mr. Benton will be paid
consulting fees of $322,000 for 2001, reducing to $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 we receive in connection with
the operations or divestiture of Geoilbent and Arctic Gas. To the extent that
Mr. Benton continues to be a consultant to our company, his unvested stock
options will continue to vest and for a period of twelve (12) months thereafter.
From February 2000 through December 31, 2000, we paid Mr. Benton $419,712 under
the Consulting Agreement.
In September 1997, we loaned $500,000 to Mr. Whipkey, our then 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.
At April 30, 2001, excluding the loans outstanding from Mr. Benton described
above, one former employee owed a balance of $33,732 on a loan bearing interest
at 6 percent per annum.
11
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, in the City of
Carpinteria, State of California, on the 30th day of April, 2001.
BENTON OIL AND GAS COMPANY
--------------------------
(Registrant)
Date: April 30, 2001 By: /s/Peter J. Hill
--------------------------- --------------------------
Peter J. Hill
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed by the following persons on the 30th day of April,
2001, on behalf of the Registrant in the capacities indicated:
Signature Title
- --------- ----
/s/ Peter J. Hill Director, President and Chief Executive Officer
- --------------------------------------
Peter J. Hill
/s/ Steven W. Tholen Senior Vice President, Chief Financial
- -------------------------------------- Officer and Treasurer
Steven W. Tholen
(Principal Financial Officer)
/s/ Chris C. Hickok Vice President-Controller
- --------------------------------------
Chris C. Hickok
(Principal Accounting Officer)
/s/ Michael B. Wray Chairman of the Board and Director
- --------------------------------------
Michael B. Wray
/s/ Stephen D. Chesebro' Director
- --------------------------------------
Stephen D. Chesebro'
/s/ John U. Clarke Director
- --------------------------------------
John U. Clarke
/s/ Byron A. Dunn Director
- --------------------------------------
Byron A. Dunn
/s/ H.H. Hardee Director
- --------------------------------------
H.H. Hardee
/s/ Patrick M. Murray Director
- --------------------------------------
Patrick M. Murray