-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CN8lWM/5MlsSd0pEMKeJtaUuF6qRJqwJ1E4OH4pJoEeVTwHfv7OPtm6Id4TLj/Z0 TZNYXdlkoIXiygkeDwpZKA== 0000033325-97-000005.txt : 19970416 0000033325-97-000005.hdr.sgml : 19970416 ACCESSION NUMBER: 0000033325-97-000005 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970402 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITY OIL CO CENTRAL INDEX KEY: 0000033325 STANDARD INDUSTRIAL CLASSIFICATION: 1311 IRS NUMBER: 870129795 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-00610 FILM NUMBER: 97573826 BUSINESS ADDRESS: STREET 1: 10 W THIRD S STE 806 CITY: SALT LAKE CITY STATE: UT ZIP: 84101 BUSINESS PHONE: 8015213515 MAIL ADDRESS: STREET 1: P O BOX 959 CITY: SALT LAKE CITY STATE: UT ZIP: 84110 DEF 14A 1 DEFINITIVE PROXY STATEMENT Equity Oil Company P.O. BOX 959 SALT LAKE CITY, UT 84110-0959 Notice of Annual Meeting of Stockholders May 14, 1997 Notice is hereby given that the Annual Meeting of Stockholders of Equity Oil Company will be held at the Company's executive office, Suite 806, 10 West Third South, Salt Lake City, Utah, 84101, on the 14th day of May, 1997 at 2:00 p.m., to consider and act upon the following matters: 1. To elect two directors to hold office for three years and until the Annual Meeting of Stockholders in 2000 or until their successors are duly elected and qualified. 2. To transact such other business as may properly come before the meeting or any adjournment thereof. The Board of Directors has fixed the close of business on March 25, 1997, as the record date for the determination of stockholders entitled to notice of and to vote at the meeting or any adjournment thereof. The transfer books will not be closed. You are cordially invited to attend the meeting. In the event you will be unable to attend, you are respectfully requested to sign, date and return the enclosed proxy in the return envelope at your earliest convenience. BY ORDER OF THE BOARD OF DIRECTORS CLAY NEWTON, Secretary PROXY STATEMENT This Proxy Statement is furnished to Stockholders of Equity Oil Company in connection with the solicitation of proxies by the Board of Directors of the Company to be used in voting at the Annual Meeting of Stockholders to be held May 14, 1997, at 2:00 p.m. at the Company's executive offices, Suite 806, 10 West Third South, Salt Lake City, Utah, or at any adjournment of said meeting. The Company's Annual Report is enclosed in the envelope. The approximate date on which the Proxy Statement and the form of Proxy will be first sent to Stockholders is April 1, 1997. Only holders of common stock of record at the close of business on March 25, 1997 will be entitled to vote at the Meeting of Stockholders. On that date, the Company had issued and outstanding 12,751,100 shares of common stock, par value $1.00, which is the only class of securities of the Company. All outstanding shares of said stock are entitled to vote and each shareholder of record entitled to vote shall have one vote for each share of stock standing in his name on the books of the Company. Each shareholder shall have the right to vote all such shareholders' votes for as many persons as there are directors to be elected and for whose election such shareholder has the right to vote. Cumulative voting is not allowed under the Company's Articles of Incorporation. The shares represented by valid proxies will, if received by the Company in time for the meeting, be voted as authorized by such proxies. IF NO INSTRUCTIONS ARE GIVEN, THE SHAREHOLDERS' SHARES WILL BE VOTED IN FAVOR OF THE DIRECTORS NAMED, AND UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT THEREOF. Each proxy is revocable at any time before it is voted. VOTING PROCEDURES The directors will be elected by the affimative vote of the holders of a plurality of the shares of common stock present in person or represented by proxy at the Annual Meeting, provided a quorum is present. A quorum is present if, as of the record date, the holders of at least a majority of the outstanding shares of Common Stock are present in person or represented by proxy at the Annual Meeting. Votes will be counted and certified by one or more Inspector(s) of Election who are expected to be employees of Chase Mellon Shareholder Services, the Company's transfer agent. The proxies granted by stockholders will be voted individually for the election of the nominees listed below, unless authority to vote is withheld as indicated in the proxy. 1 ITEM 1. ELECTION OF DIRECTORS The Articles of Incorporation of Equity Oil Company divide the Board of Directors into three classes with staggered terms of three years. Accordingly, two directors of the Company are to be elected at the upcoming Annual Meeting, each to hold office for three (3) years or until 2000. The proxies solicited in connection with this proxy statement cannot be voted for a greater number than two directors. Mr. Forster is presently a director of the Company. Information concerning the director nominees to be elected at the Annual Meeting and the continuing directors and officers is listed below. Names, Principal Occupations During the Past Five Years, and Selected Other Information Concerning Nominees for Director Served as Director Since WILLIAM D. FORSTER Age - 50 Director 1994 President and Chief Executive Officer of Cheniere Energy, Inc. RANDOLPH G. ABOOD Age - 46 Manager and member of The Ninigret Group, L.C., a Utah limited liability company, that manages and develops Ninigret Park, an industrial and office park in Salt Lake City. He is also a principal owner of the park. Mr. Abood was an attorney with Satterlee Stephens Burke & Burke in New York from 1976 to 1996, where he served as head of its tax department. Mr. Abood also sits on the Board of Directors and Executive Committee of Royster-Clark, Inc., a Delaware corporation engaged in the distribution of fertilizer, seed, and agricultural chemicals. It is intended that the shares represented by the enclosed proxy will be voted for the election of the above named nominees, William D. Forster and Randolph G. Abood. In the event that any nominee for director should be unavailable or unable to serve, which is not anticipated, it is intended that such shares shall be voted for such substitute nominee as may be selected by the Board of Directors. 2 CONTINUING DIRECTORS AND EXECUTIVE OFFICERS Served Term Since Expires PAUL M. DOUGAN Age - 59 Director 1992 1998 President and Chief Executive Officer, Equity Oil Company 1994 President and Director, Symskaya Exploration, Inc. Mr. Dougan acted as Corporate Secretary from 1968 until his appointment as President in January, 1994. Director, Leucadia National Corporation. DOUGLAS W. BRANDRUP Age - 56 Director 1975 1998 Chairman of the Board of Directors 1995 Senior Partner,Griggs Baldwin & Baldwin Attorney at Law - New York City, New York Director, 3-D Geophysical, Inc. P.J. "JACK" BERNHISEL Age - 49 Director 1996 1999 Owner, European Marble & Granite Company. Former Senior Vice President - Law and Finance for Kennecott Corporation, 1986 - 1993, and Corporate Controller for The Standard Oil Company. Attorney and Certified Public Accountant. JOSEPH C. BENNETT Age - 64 Director 1995 1998 Self-employed. Mining and oil and gas investments. Director, Coeur d'Alene Mines Corporation and Paragon Petroleum Limited. CLAY NEWTON Age - 39 Corporate Secretary and Treasurer, Equity Oil Company 1991 Director and Treasurer, Symskaya Exploration, Inc. JAMES B. LARSON Age - 35 Vice President - Operations 1997 Mr. Larson, a registered petroleum engineer, was appointed to the office of Vice President - Operations on November 15, 1996. He has been employed by the Company for over 10 years. OTHER SIGNIFICANT EMPLOYEES DAVID M. SEERY Age - 42 Manager - Land and Denver Exploration Office Mr. Seery has served as Manager - Land since 1994, and Manager - Denver Exploration Office since the beginning of 1995. Mr. Seery has been employed by the Company for over 10 years. 3 SECURITY OWNERSHIP OF MANAGEMENT Amount and Nature of Title of Beneficial Percent Class Name Ownership of Class Common 1Paul M. Dougan 537,776 3.9 President, Chief Executive Officer and Director 2Douglas W. Brandrup 92,300 .7 Chairman of the Board of Directors and Director Joseph C. Bennett 10,000 - Director P.J. "Jack" Bernhisel 12,000 - Director William D. Forster 16,000 - Director Nominee Randolph G. Abood 10,000 - Director Nominee 3James B. Larson 50,500 .4 Vice President - Operations 4Clay Newton 55,500 .4 Corporate Secretary and Chief Financial Officer 5Total Ownership of Directors 784,076 5.7 and Executive Officers as a Group - - -------- 1The calculation of beneficial ownership includes 308,500 shares subject to outstanding options that were exercisable at the table date or within 60 days of such date; 76,676 shares owned by Mr. Dougan's wife and 31,206 shares held in a Family Limited Partnership of which Mr. Dougan is the general partner. The calculation does not include 3,470 shares for which Mr. Dougan's wife acts as trustee and 305,846 shares owned by Mr. Dougan's married daughters over which Mr. Dougan has no voting power and concerning which he is not the beneficial owner. 2The calculation of beneficial ownership includes 35,300 shares concerning which Mr. Brandrup disclaims any beneficial ownership, consisting of 18,500 shares owned by various trusts for which Mr. Brandrup acts as trustee and has shared voting and investment power, and 16,800 shares owned by Mr. Brandrup's wife and children. 3 The calculation of beneficial ownership includes 48,000 shares subject to outstanding options that were exercisable at the table date or within 60 days of such date. 4 The calculation of beneficial ownership includes 53,000 shares subject to outstanding options that were exercisable at the table date or within 60 days of such date. 5The calculation of beneficial ownership includes 409,500 shares subject to outstanding options that were exercisable at the table date or within 60 days of such date. 4 COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Section 16(a) of the Securities Exchange Act of 1934 requires the Company's Directors and Executive Officers and persons who own more than ten (10%) percent of the registered class of the Company's equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, Directors and greater than ten (10%) percent shareholders are required to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required for the fiscal year ending December 31, 1996, all other Section 16(a) filing requirements applicable to its Officers, Directors and greater than ten (10%) percent beneficial owners were complied with. BOARD COMMITTEES AND MEETINGS The Board of Directors has an Audit, Compensation, and Nominating Committee. The Audit Committee reviews internal and external reporting of the Company, the scope of the independent audit and any comments by the independent auditors regarding internal controls and accounting procedures, and further considers management's response to any such comments. The Audit Committee consists of P.J. "Jack" Bernhisel, Joseph C. Bennett and William D. Forster. The Audit Committee met once in 1996 to review the work of the independent auditors. The Compensation Committee evaluates management's performance, reviews and establishes compensation levels for the Company's executive officers, administers the Company's cash bonus and incentive stock option plans, and considers other related matters concerning management motivation and compensation. The Committee consists solely of outside directors. The members of the Committee are Douglas W. Brandrup, David W. Allen, P.J. "Jack" Bernhisel, Joseph C. Bennett, and William D. Forster. The Committee met twice in 1996. The nominating committee interviews, nominates and recommends individuals for membership on the Company's board of directors. The entire Board of Directors acts as a nominating committee. By February 5 of each year, candidates are nominated for directorships to be filled. Candidates can be suggested by board members or stockholders. There is no specific procedure to be followed by security holders in submitting recommendations to the board. In selecting a candidate, consideration is given to the skills and characterisitics required of board members in the context of the current makeup of the board and business of the Company. The Board of Directors held four regular and five special meetings in 1996. No director attended less than 75% of the meetings. COMPENSATION OF DIRECTORS Non-Employee Directors were each paid a retainer fee in the amount of $4,000 on December 31, 1996. In addition, fees of $500 were paid for each of the regular meetings attended in 1996. Each non-employee director was granted 2,000 shares of the Company's common stock as additional compensation, as provided for under the 1993 Incentive Stock Option Plan. The Chairman of the Board receives additional fees of $2,000 per month. 5 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following information is furnished for the years ended December 31, 1996 1995 and 1994 respectively, for the Company's President and Chief Executive Officer and each of the other executive officers of the Company whose salary and bonus exceeded $100,000 during 1996.
Long Term Compensation Annual Compensation Awards Pay outs All other (4) Other Annual Restricted Options/ Compensation Name and Principal Position Year Salary ($) Bonus ($) Compensation Stock Awards SAR's(1) (2) - - --------------------------- ---- ---------- --------- ------------ ------------ ----- ---------- Paul M. Dougan (3) 1996 235,000 35,250 NA NA 89,500 36,934 President and 1995 200,000 80,000 NA NA 35,000 31,148 Chief Executive Officer 1994 175,000 35,000 NA NA 70,000 26,250 Clay Newton 1996 100,000 15,000 NA NA 13,000 16,684 Corporate Secretary, 1995 87,000 34,800 NA NA 9,000 14,198 Treasurer, and 1994 80,000 16,000 NA NA 18,000 12,622 Chief Financial Officer James B. Larson 1996 90,000 13,500 NA NA 13,000 15,184 Vice-President of Operations 1995 79,000 31,600 NA NA 9,000 12,998 1994 73,000 14,600 NA NA 18,000 11,572
NOTES (1) Does not include SARs as follows: (i) Mr. Dougan 70,000; (ii) Mr. Newton, 5,000(iii) Mr. Larson, 5,000; SARs are issued in tandem with non- qualified options, either of which, but not both, may be exercised. See Options Granted table for more information. (2) The amounts shown in this column for the last fiscal year include the following: (I) Mr. Dougan, $22,500 - annual Company contribution to the defined contribution plan (DCP), $12,750 - contribution to a supplemental retirement plan, $1,684 - Company paid term life insurance premiums; (ii) Mr. Newton, $15,000 - annual Company contribution to the DCP,$1,684 - Company paid term life insurance premiums. (iii) Mr. Larson, $13,500 - annual Company contribution to the DCP, $1,684-Company paid term life insurance. (3) Mr. Dougan served as Corporate Secretary until January 10, 1994, at which time he assumed the office of President and Chief Executive Officer. (4) Bonus amounts shown are those earned for the year indicated. (5) Mr. Larson was appointed Vice President of Operations on November 15, 1996. 6 OPTIONS GRANTED IN 1996 The following information is furnished for the year ended December 31, 1996 for the Company's named executive officers for stock options granted in 1996.
Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation Individual Grants for Option Term % of Total Options/SARs Granted to Options Employees in Exercise or SARs Granted Fiscal Base Price Expiration (#) Year ($/SH) Date 5% 10% Name Paul M.Dougan....... (1)19,500 8.8% $5.125 1/25/2006 $62,850 $159,275 (2)70,000 31.4% $5.125 1/25/2006 $225,616 $571,755 (3)70,000 31.4% $5.125 1/25/2006 $225,616 $571,755 Clay Newton...........(1)8,000 3.6% $5.125 1/25/2006 $29,124 $75,978 (2)5,000 2.2% $5.125 1/25/2006 $18,202 $47,486 (3)5,000 2.2% $5.125 1/25/2006 $18,202 $47,486 James B. Larson.......(1)8,000 3.6% $5.125 1/25/2006 $29,124 $75,978 (2)5,000 2.2% $5.125 1/25/2006 $18,202 $47,486 (3)5,000 2.2% $5.125 1/25/2006 $18,202 $47,486
AGGREGATED OPTION EXERCISES IN 1996 AND YEAR-END VALUES Number of Value of Unexercised Unexercised Options in the money Options Shares SARs at FY-End /SARs at FY-End Acquired on Value (#)Exercisable (#)Exercisable Name Exercise Realized($) Unexercisable Unexercisable Paul M. Dougan 20,000 38,120 219,000/89,500 - Clay Newton - - 45,000/31,000 - James B. Larson 5,000 5,625 40,000/31,000 -
NOTES (1) Options granted under the Company's Incentive Stock Option Plan. Under the terms of the Plan, options are 10 year options with vesting periods ranging from 1 to 6 years, generally terminating 3 months following an optionee's death or retirement. (2) Non-qualified stock options granted under the Company's Incentive Stock Option Plan. Under the terms of the Plan, these are 10 year options with vesting periods ranging from 1 to 6 years, generally expiring 3 years following an optionee's retirement. (3) SARs issued in tandem with non-qualified options above, either of which, but not both, may be exercised. 7 REPORT OF THE COMPENSATION COMMITTEE Compensation Philosophy and Objectives The Company is in the oil and gas exploration and production business, an industry characterized by unpredictable revenues resulting from price volatility in world oil and gas markets. Because of this unstable environment, the Company's compensation policies are not based upon short term, quarterly or even yearly financial results; rather, the policies focus on longer term objectives and achievements, calculated not only to maintain but to expand the Company's asset base through acquiring producing reserves at attractive costs, locating and exploring promising prospects, and implementing projects designed to increase reserves and production on existing properties. The philosophy upon which the development and administration of the Company's cash bonus and stock option plans are based is to directly align the interests of executive management and other key employees with those of our shareholders. The major components of this philosophy are: o Creating compensation plans which enable the Company to attract and retain officers and key employees important to the Company's success, and to provide them a compensation package reflecting the Company's performance, measured by success in achieving strategic, operating and financial objectives. o Providing meaningful cash and equity-based incentives for executives, and other key employees, to ensure they are motivated over the short and long term to respond to the Company's challenges and opportunities as owners, rather than simply as employees. o Rewarding executives and key employees for superior performance when shareholders receive an attractive return on their investment over the longer term. The Committee's objective is to set executive and other key employee base salaries at or below the average base salaries of similar companies in the energy sector, based upon industry surveys. These surveys include the registrants used by the Company in its self-constructed peer group. However, in addition to average or below average base salary levels, the Committee provides incentives through a combination of a cash bonus program, an equity-based stock option program, and a profit sharing retirement plan. Under the cash bonus program, executives and other key employees can earn additional compensation up to 50% of their base salary. In determining the size of the bonus, the key factors considered by the Committee, in order of their importance, are: (i) the year-end stock price exceeding a 3-year rolling average of year-end stock prices, (ii) reserve replacement exceeding production by a meaningful measure and (iii) finding costs. Along with these factors, the Committee subjectively considers the degree of success in meeting strategic, operating and financial objectives such as oil and gas production levels, earnings per share, operating cash flow, and developing exploration and development prospects, among other considerations. These latter measures, while not specifically weighted, are all critical to building shareholder value which is the ultimate goal of the Company and its compensation programs. The stock option program provides a method of encouraging long term results beneficial to our shareholders since the potential value of each stock option is tied to increased shareholder value. The options are always awarded at present market value, and vest in 1 to 6 years. All stock options have a duration of ten years before expiration. The Company has a policy of not repricing stock options. 8 Company Performance and Chief Executive Officer Compensation The compensation of the Company's President and Chief Executive Officer is determined in the same manner as the compensation for other officers and key employees of the Company as described above. While there is no specific relationship between corporate performance and base salary, incentive compensation of the Company's President and Chief Executive Officer is largely dependent upon the overall performance of the Company. In setting Mr. Dougan's base salary, the Committee considered his contribution in developing and executing the Company's growth strategy, progress in the area of reserve replacement, and his continued high level of energy which he devoted to the Company. The Committee further reviewed his salary based on the type of industry evaluation discussed above. According to the performance criteria of the cash bonus program, which includes reserve replacement success, stock price appreciation, and finding cost performance, Mr. Dougan earned a bonus equivalent to 15% of his 1996 base salary based upon reserve replacement success, which was paid in early 1997. The Committee also determined in early 1997 to grant him 35,000 non-qualified options and SAR's. Respectfully submitted, Equity Oil Company Compensation Committee Douglas W. Brandrup, Chairman Joseph C. Bennett David W. Allen P.J. "Jack" Bernhisel William D. Forster 9 COMPARISON OF CUMULATIVE SHAREHOLDER RETURN COMPARISON OF CUMULATIVE SHAREHOLDER RETURN(1) This page is a graphical representation of the performance graph required to be filed with this proxy statement. The graph compares the return of an investment in the Company's Common Stock at December 31, 1991 with a similar investment in the stocks of the Company's selected peer group, or with that of a published industry or line-of-business index, which in this case is the Russell 2000 Small Cap index. The data points of the graph are as follows: 1991(1) 1992 1993 1994 1995 1996 Equity Oil Company 100 84.577 105.53 102.23 155.00 80.784 Peer Group(2) 100 112.080 115.15 112.00 133.30 253.462 Russell 2000 Small Cap 100 116.360 136.14 131.81 166.40 190.910 Notes: (1) Assumes that the value of the investment in the Company's common stock, and in each index, was $100 on December 31, 1991, and that all dividends were reinvested. (2) The peer group index is comprised of the following independent oil and gas companies: Berry Petroleum, Comstock Resources, Magellan Petroleum Corp., Maynard Oil Co., McFarland Energy, Inc., Swift Energy Co., and Wiser Oil Co. The index is weighted to reflect the relative market capitalization of the peer group companies. 10 VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF Information concerning beneficial owners of more than five percent of registrant's voting securities is as follows: Amount and Nature of Title of Name and Address of Beneficial Percent Class Beneficial Owner Ownership of Class Common 1J. Lynn Dougan 860,000 6.7 215 South State Street Salt Lake City, UT 84101 2Dimensional Fund 761,325 6.0 Advisors, Inc. 1299 Ocean Ave., 11th Floor Santa Monica, CA 90401 - - -------- 1The calculation of beneficial ownership includes 315,000 shares owned by the Galena Group, a limited partnership of which Mr. Dougan is the general partner and has sole voting and investment power. Mr. Dougan is the brother of Paul M. Dougan, President of the Company. 2According to a Schedule 13-G dated February 5, 1997 by Dimensional Fund Advisors, Inc. Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 761,325 shares of Equity Oil Company stock as of December 31, 1996, all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, all of which Dimensional Fund Advisors Inc. serves as investment manager. Dimensional disclaims beneficial ownership of all such shares. 11 EXPENSES OF SOLICITATION The expense of soliciting proxies, including costs of preparing, assembling and mailing of the notice, proxy, and proxy statement will be paid by the Company. The Company has engaged D. F. King & Co., Inc., New York, to assist in the soliciting of proxies from brokerage firms and others, and for forwarding the soliciting materials to beneficial owners of stock. It is estimated that up to $5,000 will be incurred by the Company in connection with the solicitation. In addition to the use of the mails, proxies may be solicited by personal interview or by telephone by officers and directors of the Company. AUDITORS The Company's financial statements for the year ended December 31, 1996 were examined by the independent certified public accounting firm of Coopers & Lybrand L.L.P. The Board of Directors has again selected their firm to serve as the auditors for the Company for 1997. A representative of Coopers & Lybrand L.L.P. is expected to be present at the stockholders' meeting to make any statement they may desire or respond to such questions as may be appropriate. DATE FOR STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING If stockholders desire to submit proposals to be presented at the Company's 1998 Annual Meeting, the same should be sent to Equity Oil Company at its principal executive office: P.O. Box 959, Salt Lake City, Utah 84110-0959, no later than December 1, 1997; otherwise, the proposal or proposals shall not be included in the Company's proxy statement or form of proxy for the 1998 Annual Meeting. ADDITIONAL INFORMATION UPON WRITTEN REQUEST OF A BENEFICIAL OWNER OF ITS SECURITIES, ISSUER WILL SEND WITHOUT CHARGE A COPY OF ISSUER'S ANNUAL REPORT ON FORM 10-K, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR ISSUER'S MOST RECENT FISCAL YEAR, INCLUDING APPLICABLE FINANCIAL STATEMENTS AND SCHEDULES. WRITTEN REQUESTS SHOULD BE DIRECTED TO CLAY NEWTON, SECRETARY, EQUITY OIL COMPANY, P.O. BOX 959, SALT LAKE CITY, UTAH 84110-0959. DISCRETIONARY AUTHORITY The Board of Directors is not aware of any matter which may properly be presented for action at the meeting other than the matters set forth herein. Should any other matter requiring a vote of the stockholders arise, the proxies in the enclosed form confer upon the person or persons entitled to vote the shares represented by such proxies' discretionary authority to vote the same in respect of any such other matter in accordance with their best judgement in the interest of the Company. BY ORDER OF THE BOARD OF DIRECTORS CLAY NEWTON, Secretary 12 EXHIBIT "A" FORM OF PROXY Equity Oil Company P.O. BOX 959 SALT LAKE CITY, UT 84110-0959 Notice of Annual Meeting of Stockholders May 14, 1997 Notice is hereby given that the Annual Meeting of Stockholders of Equity Oil Company will be held at the Company's executive office, Suite 806, 10 West Third South, Salt Lake City, Utah, 84101, on the 14th day of May, 1997 at 2:00 p.m., to consider and act upon the following matters: 1. To elect two directors to hold office for three years and until the Annual Meeting of Stockholders in 2000 or until their successors are duly elected and qualified. 2. To transact such other business as may properly come before the meeting or any adjournment thereof. The Board of Directors has fixed the close of business on March 25, 1997, as the record date for the determination of stockholders entitled to notice of and to vote at the meeting or any adjournment thereof. The transfer books will not be closed. You are cordially invited to attend the meeting. In the event you will be unable to attend, you are respectfully requested to sign, date and return the enclosed proxy in the return envelope at your earliest convenience. BY ORDER OF THE BOARD OF DIRECTORS CLAY NEWTON, Secretary 1. To elect the following nominees as directors to hold office for three years and until the Annual Meeting of Stockholders in 2000 or until their successors are duly elected and qualified. NOMINEES: William D. Forster, Randolph G. Abood Note: to withhold authority to vote for any individual nominee, strike a line through that nominee's name. Unless authority to vote for all the foregoing nominees is withheld, this proxy will be deemed to confer authority to vote for every nominee whose name is not stricken. In the event any nominee should be unable to serve, or for good cause will not serve, it is intended that this proxy shall be voted for such substitute nominee as may be selected by the Board of Directors. 2. To transact such other business as may properly come before the meeting or any adjournment thereof. Please sign below exactly as name appears. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. 1 PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS EQUITY OIL COMPANY The undersigned, revoking all prior proxies, hereby appoints Paul M. Dougan, President, and Clay Newton, Secretary, and any one or both of them with full power of substitution, as proxy or proxies of the undersigned, to vote all shares of common stock of EQUITY OIL COMPANY of the undersigned as if the undersigned were personally present and voting at the Company's Annual Meeting, May 14, 1997, and at all adjournments thereof. 2 -----END PRIVACY-ENHANCED MESSAGE-----