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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] 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 Under Rule 14a-12
WEATHERFORD INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
N/A
(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: N/A
2. Aggregate number of securities to which transaction applies: N/A
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid: N/A
[ ] 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: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Date Filed: N/A
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[WEATHERFORD LOGO]
April 25, 2001
Dear Weatherford Stockholder:
You are cordially invited to join us at the 2001 Annual Meeting of
Stockholders of Weatherford International, Inc. to be held at 9:00 a.m. on June
5th in Houston, Texas. The Annual Meeting will be held at The St. Regis Hotel
located at 1919 Briar Oaks.
This year you will be asked to vote in favor of one proposal for the
election of eight directors. The proposal is more fully explained in the
attached proxy statement, which we encourage you to read.
Whether or not you plan to attend the Annual Meeting, we strongly encourage
you to vote your shares on the enclosed proxy card and return your signed proxy
card at your earliest convenience.
Thank you for your cooperation.
Sincerely,
/s/ Bernard J. Duroc-Danner
Bernard J. Duroc-Danner
Chairman of the Board, President and
Chief Executive Officer
- --------------------------------------------------------------------------------
Weatherford International, Inc.
www.weatherford.com
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
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[WEATHERFORD LOGO]
WEATHERFORD INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: Tuesday, June 5, 2001
TIME: 9:00 a.m. (Houston time)
PLACE: The St. Regis Hotel
1919 Briar Oaks
Houston, Texas 77027
MATTERS TO BE VOTED ON:
1. Election of eight directors to hold office for a one-year term; and
2. Any other matters that may properly come before the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE ELECTION
OF THE EIGHT NOMINEES FOR DIRECTOR.
Your Board of Directors has set April 11, 2001, as the record date for the
Annual Meeting. Only those stockholders who are holders of record of our common
stock and Series A preferred stock at the close of business on April 11, 2001,
will be entitled to vote at the Annual Meeting. A complete list of these
stockholders will be available for examination at the Annual Meeting and at our
offices at 515 Post Oak Blvd., Suite 600, Houston, Texas for a period of ten
days prior to the Annual Meeting.
You are cordially invited to join us at the Annual Meeting. However, to
ensure your representation at the Annual Meeting, we request that you return
your signed proxy card at your earliest convenience, whether or not you plan to
attend the Annual Meeting. Your proxy will be returned to you if you are present
at the Annual Meeting and request us to return your proxy card.
By Order of the Board of Directors
/s/ BURT M. MARTIN
Burt M. Martin
Corporate Secretary
Houston, Texas
April 25, 2001
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WEATHERFORD INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING: Date: Tuesday, June 5, 2001
Time: 9:00 a.m. (Houston time)
Place: The St. Regis Hotel
1919 Briar Oaks
Houston, Texas 77027
AGENDA: One proposal, numbered as Item 1 on the proxy card, for the
election of eight nominees as directors of the Company.
WHO CAN VOTE: All holders of record of our common stock at the close of
business on April 11, 2001, are entitled to vote. Holders of
the common stock are entitled to one vote per share at the
Annual Meeting.
Additionally, the holder of record of our one share of
Series A preferred stock outstanding at the close of
business on April 11, 2001, is entitled to vote. The Series
A preferred stock is held by a trustee for the benefit of
the former shareholders of Alpine Oil Services, which we
acquired in August 2000, who have not yet exchanged their
exchangeable securities for shares of common stock. The one
share of Series A preferred stock entitles the trustee to
vote, essentially as a proxy for the former Alpine
shareholders who have not yet exchanged their securities,
the same number of votes as could be voted if the former
Alpine shareholders had exchanged their exchangeable
securities for common stock. As of April 11, 2001, the
Series A preferred stockholder was entitled to 83,061 votes.
PROXIES SOLICITED BY:
Your vote and proxy is being solicited by our Board of
Directors for use at the Annual Meeting. This Proxy
Statement and enclosed proxy card are being sent on behalf
of our Board of Directors to all stockholders beginning on
or about April 30, 2001. By completing, signing and
returning your proxy card, you will authorize the persons
named on the proxy card to vote your shares according to
your instructions.
PROXIES: If you do not indicate how you wish to vote for one or more
of the nominees for director, the persons named on the proxy
card will vote FOR election of all the nominees for director
(Proposal 1). If you "withhold" your vote for any of the
nominees, this will be counted as a vote AGAINST that
nominee.
REVOKING YOUR PROXY:You can revoke your proxy by:
- writing to the Corporate Secretary (at our principal
executive offices located at 515 Post Oak Blvd., Suite
600, Houston, Texas 77027) before the Annual Meeting;
- voting again via mail; or
- casting your vote in person at the Annual Meeting
Your last vote will be the vote that is counted.
QUORUM: As of April 11th, there were 110,359,830 shares of common
stock issued and outstanding and one share of our Series A
Preferred Stock issued and outstanding. The holders of the
common stock and the Series A stockholder have the right to
cast a total of 110,442,891 votes. The presence, in person
or by proxy, of stockholders entitled to cast at least
55,221,446 votes constitutes a quorum for adopting the
proposals at the Annual Meeting. If you have properly signed
and returned your proxy card by mail, you will be considered
part of the quorum, and the persons named on the proxy card
will vote your shares as you have instructed them. If a
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broker holding your shares in "street" name indicates to us
on a proxy card that the broker lacks discretionary
authority to vote your shares, we will not consider your
shares as present or entitled to vote for any purpose.
MULTIPLE PROXY CARDS:
If you receive multiple proxy cards, this indicates that
your shares are held in more than one account, such as two
brokerage accounts, and are registered in different names.
You should vote each of the proxy cards to ensure that all
of your shares are voted.
COST OF PROXY
SOLICITATION: We have retained Georgeson Shareholder Communications Inc.
to solicit proxies from our stockholders at an estimated fee
of $6,500, plus expenses. This fee does not include the
costs of preparing, printing, assembling, delivering and
mailing the proxy materials. Some of our directors, officers
and employees may also solicit proxies personally, without
any additional compensation, by telephone or mail. Proxy
materials also will be furnished without cost to brokers and
other nominees to forward to the beneficial owners of shares
held in their names.
QUESTIONS: You may call Georgeson Shareholder Communications Inc. at
1-800-223-2064 if you have any questions.
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
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BOARD OF DIRECTORS
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting. Each director
elected will hold office until the 2002 Annual Meeting. All of the nominees for
director are now serving as directors. The nominees for election as director
are:
NAME AGE DIRECTOR SINCE
- ---- --- --------------
Bernard J. Duroc-Danner........................... 47 1988
Philip Burguieres................................. 57 1998
David J. Butters.................................. 60 1984
Sheldon B. Lubar.................................. 71 1995
William E. Macaulay............................... 55 1998
Robert B. Millard................................. 50 1989
Robert K. Moses, Jr. ............................. 61 1998
Robert A. Rayne................................... 52 1987
The persons named on the proxy card will vote for all of the nominees for
director listed unless you withhold authority to vote for one or more of the
nominees. The nominees receiving a plurality of votes cast at the Annual Meeting
will be elected as directors. Abstentions and broker non-votes will not be
treated as a vote for or against any particular nominee and will not affect the
outcome of the election of directors.
All of our nominees have consented to serve as directors. Our Board of
Directors has no reason to believe that any of the nominees will be unable to
act as a director. However, if any director is unable to stand for re-election,
the Board will designate a substitute. If a substitute nominee is named, the
persons named on the proxy card will vote for the election of the substitute
nominee.
DIRECTOR BIOGRAPHIES
BERNARD J. DUROC-DANNER joined the Company in May 1987 to initiate the
start-up of EVI, Inc.'s oilfield service and equipment business. He was elected
EVI's President in January 1990 and Chief Executive Officer in May 1990. In
connection with the merger of EVI, Inc. with Weatherford Enterra, Inc.
("Weatherford Enterra") on May 27, 1998, Mr. Duroc-Danner was elected as our
Chairman of the Board, President and Chief Executive Officer. Mr. Duroc-Danner
holds a Ph.D. in economics from Wharton (University of Pennsylvania). In prior
years, Mr. Duroc-Danner held positions at Arthur D. Little and Mobil Oil Inc.
Mr. Duroc-Danner is a director of Parker Drilling Company (an oil and gas
drilling company), Cal-Dive International, Inc. (a company engaged in subsea
services in the Gulf of Mexico), Universal Compression Holdings, Inc. (a natural
gas compression service company) and Dresser, Inc. (a provider of highly
engineered equipment and services primarily for the energy industry). Mr.
Duroc-Danner is also a director of Grant Prideco, Inc. (a provider of drill pipe
and other drill stem products). Grant Prideco was our wholly owned subsidiary
until April 14, 2000, when we distributed all of the outstanding shares of Grant
Prideco to our stockholders.
PHILIP BURGUIERES is Chief Executive Officer of EMC Holdings, LLC, a
private energy investment firm he started in 2000. He is also Vice Chairman of
Houston NFL Holdings (a National League Football team in Houston). He was
elected to the Board as Chairman Emeritus in May 1998. Mr. Burguieres served as
a director of Weatherford Enterra from April 1991 until May 1998, and as
Chairman of the Board of Weatherford Enterra from December 1992 until May 1998.
From April 1991 to October 1996, he also served as President and Chief Executive
Officer of Weatherford Enterra. Mr. Burguieres serves as a director of McDermott
International, Inc. (a company engaged in the fabrication of oilfield
equipment), Chase Bank of Texas, N.A. (a national banking organization) and
Newfield Exploration Company (an independent oil and gas producer).
DAVID J. BUTTERS is a Managing Director of Lehman Brothers, Inc., an
investment banking company, where he has been employed for more than the past
five years. Mr. Butters is currently Chairman of the Board
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of Directors of GulfMark Offshore, Inc. (a provider of marine support and
transportation services to companies involved in the exploration and production
of oil and natural gas), a director of Anangel-American Shipholdings, Ltd. (an
international ship owning and operating company) and a member of the Board of
Advisors of Energy International, N.V. (an investment fund).
SHELDON B. LUBAR has been the Chairman of Lubar & Co., a private investment
and management company, for more than the past five years. Until February 1999,
Mr. Lubar served as Chairman and Chief Executive Officer of Christiana
Companies, Inc., a diversified holding company that held shares of our common
stock and owned a company that was engaged in refrigerated and dry warehousing,
transportation and logistic services. We acquired Christiana in February 1999.
For more information about our acquisition of Christiana, see COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION on page 15. Mr. Lubar is a
director of C2, Inc. (a company engaged in refrigerated warehousing and
logistics and the manufacture of refrigerated display cases), Massachusetts
Mutual Life Insurance Company (a financial services company), US Bancorp (a
commercial banking company), MGIC Investment Corporation (a mortgage insurance
company), Jefferies & Company, Inc. (an investment banking company) and Grant
Prideco. Mr. Lubar was initially appointed to the Board of Directors in
connection with our acquisition of Prideco, Inc. in June 1995.
WILLIAM E. MACAULAY is the Chief Executive Officer of First Reserve
Corporation, a Connecticut-based private equity investment firm, and has been
the Chief Executive Officer of the firm since 1983. Mr. Macaulay served as a
director of Weatherford Enterra from October 1995 to May 1998. He is a director
of Maverick Tube Corporation (a manufacturer of oilfield tubulars, line pipe and
structural steel), National-Oilwell, Inc. (a company engaged in the design,
manufacture and sale of machinery and equipment and the distribution of products
used in oil and gas drilling production), Superior Energy Services (an oilfield
services and equipment company), Chicago Bridge and Iron Company, N.V. (a global
engineering and construction company), Pride International, Inc. (a provider of
contract drilling and related services), Dresser, Inc. (a provider of highly
engineered equipment and services primarily for the energy industry) and Grant
Prideco (a provider of drill pipe and other drill stem products).
ROBERT B. MILLARD is a Managing Director of Lehman Brothers, where he has
been employed for more than the past five years. Mr. Millard is also a director
of GulfMark Offshore, Inc. and L-3 Communications Corporation (a manufacturer of
electronic communications equipment principally for the defense industry).
ROBERT K. MOSES, JR. has been a private investor, principally in the oil
and gas exploration and oilfield services business in Houston, Texas, for more
than the past five years. He served as Chairman of the Board of Directors of
Weatherford Enterra from May 1989 to December 1992. Mr. Moses is also a director
of Grant Prideco.
ROBERT A. RAYNE has been an Executive Director of London Merchant
Securities plc (property investment and development with major investments in
leisure enterprises), a United Kingdom-listed public limited company, for more
than the past five years. Mr. Rayne is also a director of Grant Prideco.
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COMMITTEES AND MEETINGS OF THE BOARD
COMMITTEES
The Board of Directors has created the following committees:
- Audit
- Compensation
- Executive
The Board of Directors does not have a standing Nominating Committee.
NUMBER OF MEETINGS
During 2000, the Board of Directors met nine times, the Compensation
Committee met one time and the Audit Committee met six times. The Executive
Committee did not meet. All of the directors attended at least 75% of all Board
of Directors and Committee meetings during 2000.
AUDIT COMMITTEE
Messrs. Butters (Chair), Lubar and Rayne are the current members of the
Audit Committee. The Board of Directors has adopted a written charter for the
Audit Committee, a copy of which is attached to this proxy statement as Appendix
A. The primary functions of the Audit Committee are:
- recommending to the Board the selection and discharge of our independent
auditors;
- reviewing the professional services performed by the auditors, the plan
and results of their auditing engagement;
- reviewing the amount of fees charged for audit services by the auditors;
and
- evaluating our system of internal accounting controls.
All members of the Audit Committee are independent as defined by the rules
of the New York Stock Exchange, except Mr. Lubar. Until February 1999, Mr. Lubar
was Chairman and Chief Executive Officer of Christiana. We acquired Christiana
in February 1999. See COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION on page 15 for more information on our acquisition of Christiana.
As permitted by the rules of the New York Stock Exchange, the Board determined
to appoint Mr. Lubar to the Audit Committee because of his knowledge of the
Company and his financial background and experience and because the Board does
not believe he has any relationship with us that will interfere with the
exercise of his independent judgment while serving on the Audit Committee.
COMPENSATION COMMITTEE
Messrs. Lubar, Moses (Chair) and Rayne are the current members of the
Compensation Committee. The primary functions of the Compensation Committee are:
- recommending to the Board the compensation to be paid to the directors
and our chief executive officer; and
- subject to review and approval of certain matters by the full Board of
Directors, administering the compensation plans for the executive
officers.
EXECUTIVE COMMITTEE
Messrs. Duroc-Danner (Chair), Burguieres, Macaulay and Millard are the
current members of the Executive Committee. The primary function of the
Executive Committee is to act on behalf of the Board of Directors between
regularly scheduled meetings of the Board.
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AUDIT COMMITTEE REPORT
April 25, 2001
To the Board of Directors of Weatherford International, Inc.:
We have reviewed and discussed with management the Company's audited
financial statements as of and for the year ended December 31, 2000.
We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communications with Audit
Committees, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based on the reviews and discussions referred to above, we recommended to
the Board of Directors that the financial statements referred to above be
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2000.
We also have considered whether the provision by the independent auditors
of non-audit services is compatible with maintaining the auditors' independence.
David J. Butters, Chairman
Sheldon B. Lubar
Robert A. Rayne
BOARD COMPENSATION
DIRECTORS' FEES
The directors who are not employees are paid the following fees:
- $1,000 for each Board and Committee meeting attended;
- $1,500 for the Committee Chairman for each Committee meeting attended;
and
- $7,000 for each quarter of the year in which the person serves as a
director.
DEFERRAL PLAN FOR OUTSIDE DIRECTORS
Under our Non-employee Director Deferred Compensation Plan, each
non-employee director may elect to defer up to 7.5% of any fees paid by us. The
deferred fees are converted into non-monetary units representing shares of
common stock that could have been purchased with the deferred fees based on the
market price of the common stock at the time of the deferral. If a non-employee
director elects to defer at least 5% of his fees, we will make an additional
contribution to the director's account equal to the sum of (1) 7.5% of the
director's fees plus (2) the amount of fees deferred by the director. Our
directors may generally determine when the funds will be distributed from the
plan. The amount of the distribution will be equal to the number of shares in
the director's account multiplied by the market price of the common stock at the
time of distribution. Distributions are made in common stock. During 2000, we
contributed $6,675, $6,600, $5,550, $6,000 and $6,300 to the accounts of Messrs.
Butters, Lubar, Macaulay, Moses and Rayne, respectively, which represented 156,
153, 127, 138 and 146 shares allocated to their respective accounts.
BURGUIERES EMPLOYMENT AGREEMENT
In June 1998, we entered into an employment agreement with Mr. Burguieres,
which has a term of fifteen years and provides for an annual salary of $120,000.
Under the terms of his employment agreement,
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Mr. Burguieres will be employed as Chairman Emeritus of the Board of Directors.
However, we are not obligated to re-elect Mr. Burguieres as Chairman Emeritus
and the Board of Directors is not required to nominate Mr. Burguieres for
re-election as a director. If we terminate Mr. Burguieres' employment for any
reason other than for "cause" or if Mr. Burguieres' employment is terminated as
a result of his death or disability, Mr. Burguieres or his estate will be
entitled to receive annual salary payments through the term of the agreement and
Mr. Burguieres and his eligible dependents will continue to receive health and
medical benefits. If we terminate his employment for "cause," Mr. Burguieres
will not be entitled to any further salary payments or health and medical
benefits. Under Mr. Burguieres' employment agreement, "cause" is generally
defined as (i) an act of dishonesty which constitutes a felony or results in
personal gain or enrichment at our expense, (ii) willful and continued failure
to substantially perform his duties after written demand is made by the Board or
(iii) Mr. Burguieres' ownership, management or employment by any business which
competes, in our reasonable judgment, with any business conducted by us.
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STOCK OWNERSHIP
STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
This table shows the number and percentage of shares of common stock
beneficially owned by our directors and executive officers as of April 11, 2001.
Each person has sole voting and investment power for the shares shown below,
unless otherwise noted.
AMOUNT AND NATURE OF SHARES
BENEFICIALLY OWNED AS OF APRIL 11, 2001
----------------------------------------------
NUMBER OF RIGHT TO PERCENT OF
NAME SHARES OWNED ACQUIRE(1) OUTSTANDING SHARES
- ---- ------------ ---------- ------------------
Bernard J. Duroc-Danner............................. 90,412 630,000 *
Philip Burguieres(2)................................ 147,865 0 *
David J. Butters(3)................................. 101,250 10,000 *
Sheldon B. Lubar(4)................................. 646,966 30,000 *
William E. Macaulay(5).............................. 17,933 10,000 *
Robert B. Millard(6)................................ 108,960 10,000 *
Robert K. Moses, Jr. ............................... 300,000 10,000 *
Robert A. Rayne(7).................................. 279 20,000 *
E. Lee Colley, III(8)............................... 645 0 *
Gary L. Warren(9)................................... 5,815 3,325 *
Jon R. Nicholson(10)................................ 15,097 5,700 *
Curtis W. Huff(11).................................. 63,500 484,081 *
All officers and directors as a group (17
persons).......................................... 1,515,820 1,213,106 2.5
- ---------------
* Less than 1%.
(1) Shares of common stock that can be acquired through stock options
exercisable through June 10, 2001.
(2) Includes (i) 409 shares held under our Employee Stock Purchase Plan, as to
which Mr. Burguieres has sole voting and no dispositive power, (ii) 421
shares held under our 401(k) Savings Plan, as to which Mr. Burguieres has
sole voting and no dispositive power, (iii) 950 shares held by his wife,
over which Mr. Burguieres has no voting or dispositive power, and (iv) 475
shares held by his adult son supported by him, over which Mr. Burguieres
has sole voting and dispositive power. Mr. Burguieres disclaims beneficial
ownership of the shares held by his wife and son.
(3) Includes 14,388 shares held by Mr. Butters' wife, over which he has no
voting or dispositive power and as to which he disclaims beneficial
ownership. Also includes 41,160 shares held in trusts for Mr. Butters'
children, of which he is the trustee and has voting and dispositive power.
(4) Includes 305,115 shares held by Mr. Lubar through a general partnership of
which he is a general partner. Also includes 305,114 shares held by his
wife through the general partnership, over which he has no voting or
dispositive power and as to which he disclaims beneficial ownership, and
27,342 shares held in trusts for his grandchildren through the general
partnership, of which he is the trustee and has voting and dispositive
power. Does not include 15,380 shares held through the general partnership
by trusts for the descendants of Mr. Lubar's children over which he has no
voting or dispositive power and as to which he disclaims beneficial
ownership.
(5) Includes 6,618 shares held by Mr. Macaulay's wife, over which he has no
voting or dispositive power and as to which he disclaims beneficial
ownership. Includes 3,876 shares held in the name of or in trust for Mr.
Macaulay's daughters.
(6) Includes 26,772 shares held by a foundation over which Mr. Millard and his
wife have voting power.
(7) Excludes 500,000 shares beneficially owned by London Merchant Securities
plc, of which Mr. Rayne serves as Executive Director. Mr. Rayne disclaims
beneficial ownership of all of these shares.
(8) Shares are held under our 401(k) Savings Plan. Mr. Colley has sole voting
and no dispositive power over these shares.
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(9) Includes 939 shares held under our 401(k) Savings Plan over which Mr.
Warren has sole voting and no dispositive power.
(10) Includes (i) 356 restricted shares which are subject to a vesting
schedule, forfeiture risk and other restrictions and (ii) 1,066 shares
held under our 401(k) Savings Plan over which Mr. Nicholson has sole
voting and no dispositive power.
(11) Mr. Huff, who is serving as President and Chief Executive Office of Grant
Prideco, ceased to be an executive officer as of February 7, 2001.
STOCK OWNED BY "BENEFICIAL HOLDERS"
This table shows information for each person known by us to beneficially
own 5% or more of the outstanding shares of common stock as of April 11, 2001.
NAME AND ADDRESS OF PERCENT OF
BENEFICIAL OWNER NUMBER OF SHARES(1) OUTSTANDING SHARES
- ------------------- ------------------- ------------------
FMR Corp.(2).............................................. 13,567,969 12.3
82 Devonshire Street
Boston, Massachusetts 02109
Massachusetts Financial Services Company(3)............... 8,302,447 7.5
500 Boylston Street
Boston, Massachusetts 02116
Citigroup Inc.(4)......................................... 8,049,084 7.3
399 Park Avenue
New York, New York 10043
- ---------------
(1) This information is based on information furnished by each stockholder or
contained in filings made with the Securities and Exchange Commission. The
person listed has sole voting and dispositive power for its shares of common
stock, unless otherwise noted.
(2) Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. ("FMR") and an investment adviser, is the beneficial
owner of 11,803,411 shares as a result of acting as investment adviser to
various registered investment companies (the "Funds"). Fidelity Management
Trust Company ("FMTC"), a wholly owned subsidiary of FMR, is the beneficial
owner of 831,568 shares as a result of serving as investment manager of
various institutional accounts. Edward C. Johnson 3d, FMR's Chairman and
principal stockholder, FMR, through its control of Fidelity, and the Funds
each has sole power to dispose of the 11,803,411 shares owned by the Funds,
and Mr. Johnson and FMR, through its control of FMTC, each has sole power to
dispose of 831,568 shares and sole power to vote or direct the voting of
634,668 shares and no power to vote or direct the voting of 196,900 shares
owned by the institutional accounts. The Funds' Board of Trustees has sole
power to vote all shares owned by the Funds. Fidelity carries out the voting
of the Funds' shares under written guidelines established by the Funds'
Board of Trustees. Members of the Edward C. Johnson 3d family are the
predominant owners of Class B shares of common stock of FMR, representing
approximately 49% of the voting power of FMR. Mr. Johnson owns 12.0% and
Abigail P. Johnson, Mr. Johnson's wife and a Director of FMR, owns 24.5% of
the voting stock of FMR. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Through their ownership of voting common stock and the
shareholders' voting agreement, members of the Johnson family may be deemed,
under the Investment Company Act of 1940, to form a controlling group with
respect to FMR. Strategic Advisers, Inc., a wholly owned subsidiary of FMR
and a registered investment adviser, provides investment advisory services
to individuals. It does not have sole power to vote or direct the voting of
shares of certain securities held for clients and has sole dispositive power
over such securities. As such, FMR's beneficial ownership may include shares
beneficially owned through Strategic Advisers, Inc. Fidelity International
Limited ("FIL") beneficially owns 932,990 shares. FIL has sole power to vote
and to dispose of such shares.
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(3) Massachusetts Financial Services Company ("MFS") is the beneficial owner of
8,302,447 shares of our common stock, of which shares are beneficially owned
by certain other non-reporting entities as well as MFS. MFS has sole
dispositive power over 8,302,447 shares and sole voting power over 8,190,057
shares.
(4) Salomon Smith Barney Holdings Inc. ("SSB") is the beneficial owner of
7,641,069 of such shares. Citigroup Inc. is the sole stockholder of SSB.
Citigroup and SSB report on behalf of subsidiaries whose individual
percentages of beneficial ownership of our common stock do not exceed 5%.
Citigroup has shared dispositive and voting power over 8,049,084 shares, and
SSB has shared dispositive and voting power over 7,641,069 shares.
EXECUTIVE OFFICERS
In addition to Mr. Duroc-Danner, whose biography is shown on page 3, the
following persons are our executive officers. None of the executive officers or
directors have any family relationships with each other.
NAME AGE POSITION
- ---- --- --------
Bernard J. Duroc-Danner.............. 47 Chairman of the Board, President and Chief Executive
Officer
E. Lee Colley, III................... 44 Senior Vice President and President -- Artificial Lift
Systems Division
Mark E. Hopmann...................... 43 Senior Vice President and President -- Completion
Systems Division
Gary L. Warren....................... 51 Senior Vice President and President -- Drilling &
Intervention Services Division
Donald R. Galletly................... 49 Senior Vice President -- Communications and Investor
Relations
Jon R. Nicholson..................... 58 Senior Vice President -- Human Resources and
Information Technology
Burt M. Martin....................... 37 Vice President -- Law and Secretary
Lisa W. Rodriguez.................... 40 Vice President -- Finance and Accounting
James N. Parmigiano.................. 43 Vice President -- Operational Controller
E. LEE COLLEY, III was elected Senior Vice President and
President -- Artificial Lift Systems Division in November 1998. Mr. Colley
joined us in March 1996 and has served in several positions including Vice
President/General Manager of the Artificial Lift Group. Prior to that time, Mr.
Colley worked for over 20 years for Halliburton Company in various
manufacturing, sales and marketing managerial positions.
MARK E. HOPMANN joined the Company in November 1998 and was elected Senior
Vice President and President -- Completion Systems Division in October 2000.
From 1980 to October 1998, Mr. Hopmann worked for Baker Oil Tools, a division of
Baker Hughes Incorporated, in various capacities, including Product Line Manager
and Chief Product Engineer.
GARY L. WARREN was elected Senior Vice President and President -- Drilling
and Intervention Services Division in October 2000. Mr. Warren has been employed
by the Company since 1992 and has served in several positions, including Vice
President -- Europe, West Africa and CIS. Mr. Warren worked for Petco Fishing
and Rental Tool from 1980 to 1992, when it was acquired by Weatherford Enterra.
DONALD R. GALLETLY was elected our Senior Vice President -- Communications
and Investor Relations in January 2000 and served as our Vice
President -- Communications and Investor Relations from June 1998 to January
2000. Prior to that time, he worked for Dresser Industries, Inc. as Vice
President of Communications and Investor Relations from October 1997 to May 1998
and as Vice President of Investor and Public Relations from February 1993 to
October 1997.
JON R. NICHOLSON was elected our Senior Vice President -- Human Resources
and Information Technology in March 2001 and served as Senior Vice
President -- Human Resources from January 2000 to March 2001 and Vice
President -- Human Resources from May 1998 to January 2000. Prior to that time,
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Mr. Nicholson worked for Weatherford Enterra as Vice President -- Human
Resources from October 1995 to May 1998 and as Director of Human Resources from
February 1993 to October 1995.
BURT M. MARTIN joined the Company as Associate General Counsel in June 1998
and was elected Vice President -- Legal in June 2000 and Vice President -- Law
and Secretary in February 2001. From 1993 to 1998, Mr. Martin was an associate
attorney with the law firm of Fulbright & Jaworski L.L.P., our counsel.
LISA W. RODRIGUEZ was elected Vice President -- Accounting and Finance in
February 2001. Ms. Rodriguez joined the Company in 1996 and has served in
several positions, including Vice President -- Accounting from June 2000 to
February 2001 and Controller from 1999 to February 2001. Prior to joining the
Company, Ms. Rodriguez worked for Landmark Graphics from 1993 to 1996.
JAMES N. PARMIGIANO joined the Company in May 1998 and was elected Vice
President -- Operational Controller in June 2000. From February 1983 to May
1998, Mr. Parmigiano worked for Dresser Industries, Inc. in various capacities,
including Financial Controller of Dresser's Sperry-Sun Drilling Services
Division.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors and the Compensation Committee of the Board of
Directors is pleased to present this report on the compensation policies for our
executive officers for 2000. This report sets forth the major components of
executive compensation and the basis by which 2000 compensation determinations
were made by the Board of Directors and the Compensation Committee for the
executive officers.
COMPENSATION POLICY AND GUIDELINES
The goal of our compensation policy and practices is to provide a
competitive compensation package designed to attract and retain key executive
officers and to offer compensation programs that align executive remuneration
levels with the interests of stockholders and with the Company's overall
performance. Our compensation programs have historically stressed stock-based
compensation as a means of providing incentives to executive officers to achieve
growth in the value of the common stock. With this objective in mind, our
executive compensation program has included a combination of reasonable base
salaries and various long and short-term incentive programs linked to the
Company's financial and stock performance. In making compensation decisions, the
Compensation Committee's decisions have typically also taken into account the
cyclical nature of the industry and the Company's progress toward achieving
strategic objectives.
COMPENSATION PROGRAM COMPONENTS
Our compensation programs are generally administered by or under the
direction of the Compensation Committee and are reviewed on an annual basis to
ensure that remuneration levels and benefits are competitive and reasonable in
light of the Company's overall performance. Our stock-based compensation
decisions for the executive officers are approved by our full Board of Directors
following recommendations by the Compensation Committee.
The Compensation Committee was charged with reviewing and recommending the
specific base and bonus compensation of the President and Chief Executive
Officer (the "Principal Executive"). The Board of Directors and Compensation
Committee has delegated to Mr. Duroc-Danner, as our Chief Executive Officer, the
authority to review and adjust the base and cash bonus compensation for the
other executive officers. His decisions are reviewed by the Compensation
Committee.
Decisions on stock options and other long-term incentive plans are made by
the Board after consideration of the Company's results and discussion with and
recommendations from Mr. Duroc-Danner as to the executive officers under his
supervision.
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The particular elements of the compensation programs for the Principal
Executive and other executive officers are explained in more detail below.
Base Salary -- Base salary levels have primarily been determined based on
market factors, including the market for similar executives and the desire by us
to recruit and retain key executive officers. Our analysis has also included
comparisons with companies in the same industry and of similar size and
complexity as the Company, including a number of companies in the Dow Jones U.S.
Oilfield Equipment and Services Index in the performance graph set forth herein.
Salary levels are based on individual skills and performance and market
comparisons. Adjustments made during 2000 to the compensation of various
officers were based on various factors, including their individual scope of
responsibility, tenure and overall performance.
Annual Performance Compensation -- Annual performance compensation has
historically been provided to the executive officers in the form of cash bonuses
relating to financial and operational achievements. The amount and form of
bonuses for 2000 for Mr. Duroc-Danner and the other executive officers were
determined by the Compensation Committee and were based upon our 2000 Variable
Compensation Plan.
The 2000 Variable Compensation Plan provided for bonus payments based upon
the attainment by the Company of pre-established financial objectives. Seventy
percent of the 2000 bonus payment was based on EBITDA and thirty percent was
based on working capital as a percentage of sales. A target award, expressed as
a percentage of salary, was established for each employee eligible to
participate in the 2000 Variable Compensation Plan. Attainment of the financial
objectives of the Plan was measured based on actual results versus Plan targets,
with performance above or below Plan targets prorated up or down to the maximum
and minimum levels established for each financial objective. The Company
exceeded its EBITDA and working capital objectives for 2000.
The decision to award an annual bonus is based upon both the objective
analysis of our financial performance described above and a subjective analysis
of the executive officer's job performance and the specific accomplishments of
the executive officer during the preceding twelve month period after giving
consideration to other compensation received by the officer.
The decision-making process for the granting of bonuses has typically
occurred in February or March of each year. Various bonuses were paid to the
executive officers in the first quarter of 2001 in recognition of those
officers' assistance in achieving the Company's growth in 2000, including
assistance in completing numerous acquisitions, such as the acquisition of
Alpine Oil Services, the Company's disposition of its Global Compression
Services Division, its private placement of $500 million zero coupon senior
convertible debentures due 2020 and other factors.
Deferred Compensation Plan -- We maintain an executive deferred
compensation plan that provides our key employees with long-term incentive
compensation through benefits that are directly linked to future increases in
the value of the common stock and that may only be realized upon the employee's
retirement, termination or death. Under this plan, eligible employees receive a
tax deferred contribution under the plan equal to 7.5% of their annual
compensation through a credit to an account that is converted into non-monetary
units representing the number of shares of common stock that the contributed
funds could purchase in the market at the time of the contribution. In addition,
in an effort to provide incentive to the participants to invest in the common
stock, a portion of the compensation that they would otherwise receive from the
Company, the participating employees are offered the opportunity to defer up to
7.5% of their compensation to their account under this plan, in which case we
will make a matching contribution equal to the amount of the deferral by the
employee. Mr. Duroc-Danner and other executive officers have all elected to
defer 7.5% of their compensation under this plan. This plan provides for a
five-year vesting period with respect to the Company's contributions and the
ultimate value of benefits under the plan to the participant are wholly
dependent upon the price of the common stock at the time the employee retires,
terminates his employment or dies. We believe that this plan is an important
component of the stock-based compensation program and provides and serves the
purpose of aligning management's interest with those of the Company's
stockholders.
Stock Option Program -- The use of stock options is considered to be an
important incentive to our executive officers for working toward the Company's
long-term growth. We believe that options provide our
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officers with a benefit that will increase only to the extent that the value of
the common stock increases. Accordingly, we have from time to time granted to
the executive officers options to purchase shares of common stock. The number of
shares granted is determined based on the level and contribution of the officer
and has generally taken into account stock ownership and other options held by
the officer. Stock options are generally subject to vesting over a number of
years and have exercise prices equal to the market price of the common stock at
the date of grant.
In 2000, options to purchase a total of 1,381,053 shares of common stock
were granted to the executive officers. These options are subject to three-year
cliff-vesting so that an officer will not be entitled to the options if he
elects to leave. We believe that this type of vesting provides strong incentives
for creating long-term value for the Company.
DISCUSSION OF 2000 COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
In establishing the compensation of Mr. Duroc-Danner for 2000, the
Compensation Committee determined that it would be appropriate to increase Mr.
Duroc-Danner's base compensation from $550,000 to $650,000 and award him a bonus
of $375,000 in the first quarter of 2000 in recognition of his past services to
and accomplishments for the Company. Mr. Duroc-Danner also received a bonus of
$1,025,316 in the first quarter of 2001 in recognition of his efforts to expand
and grow the Company's businesses and his defining and implementing the
Company's growth strategy in 2000 and his general accomplishments in increasing
stockholder value through revenue and income growth and increases in the market
price of the common stock.
The increase in Mr. Duroc-Danner's base salary was intended to make his
compensation more competitive with those of similar officers in competing
companies, including a number of companies included in the Dow Jones U.S.
Oilfield Equipment and Services Index in the performance graph set forth herein.
During 2000, Mr. Duroc-Danner also received an option to purchase 350,000 shares
of common stock. The number of shares subject to the option was fixed at that
level in order to provide Mr. Duroc Danner with material incentives to increase
the value of the common stock in the future. In reviewing Mr. Duroc-Danner's
compensation for 2000, the Compensation Committee also sought to reward Mr.
Duroc-Danner for his substantial achievements in bringing growth to the Company,
as well as provide incentive for the future through stock option grants. No
single factor was considered determinative in this decision.
COMPENSATION DEDUCTION LIMITATIONS
Section 162(m) of the Internal Revenue Code of 1986, as amended, currently
imposes a $1 million limitation on the deductibility of certain compensation
paid to five highest paid executives. Excluded from the limitation is
compensation that is "performance based." For compensation to be performance
based, it must meet certain criteria, including being based on predetermined
objective standards approved by the Company's stockholders. We believe that
maintaining the discretion to evaluate the performance of our management is an
important part of our responsibilities and benefits the Company's stockholders.
We intend to take into account the potential application of Section 162(m) on
incentive compensation awards and other compensation decisions.
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SUMMARY
We believe that the executive compensation program followed by us in 2000
was consistent with the compensation programs provided by other companies that
are comparable in size and complexity to the Company and with which the Company
competes, including many of the companies in the Dow Jones U.S. Oilfield
Equipment and Services Index. We further believe that the compensation program
is necessary to retain the services of officers and employees who are essential
to the continued success and development of the Company and to compensate those
officers and employees for their efforts and achievements. The Board and
Compensation Committee intend to review the compensation policies on an ongoing
basis to assure that compensation paid appropriately reflects corporate and
individual performance, yielding awards that are reflective of the annual
financial and operational results of the Company. Finally, we believe that the
deferred compensation plan and stock option program provide significant
incentives to our key employees to enhance stockholder value by providing
financial opportunities to them that are consistent with and dependent upon the
returns that are generated on behalf of the Company's stockholders.
Philip Burguieres
David J. Butters
Bernard J. Duroc-Danner
Sheldon B. Lubar*
William E. Macaulay
Robert B. Millard
Robert K. Moses, Jr.*
Robert A. Rayne*
* Members of the Compensation Committee
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
COMPENSATION DETERMINATIONS
The full Board of Directors currently approves all stock grants, with
Messrs. Duroc-Danner and Burguieres, both employee directors of the Company,
abstaining from voting with respect to these matters. Mr. Duroc-Danner does make
recommendations to the Compensation Committee and the full Board of Directors
for compensation and stock grants to our employees.
OTHER AFFILIATIONS
In February 1999, we acquired Christiana for approximately 4.4 million
shares of our common stock and $20.6 million cash. Prior to the merger,
Christiana transferred its warehousing, transportation and two-thirds of its
logistics business to C2. Mr. Lubar was Chairman and Chief Executive Officer of
Christiana and owned approximately 18.8% of the total outstanding shares of
Christiana common stock. Mr. Lubar also is a director of C2 and owns
approximately 21% of the total outstanding shares of C2 common stock. Under the
terms of the Christiana merger, Mr. Lubar and members of his family received a
total of approximately 2,322,340 shares of common stock and aggregate cash
consideration of approximately $10,872,000. In September 2000, we sold the
remaining one-third interest in the logistics business to C2 for $8.3 million.
The consideration received by us from C2 for our interest in the logistics
business was determined by negotiations between the parties and approved by our
Board of Directors.
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SUMMARY COMPENSATION TABLE
This table shows the total compensation paid for the years ended December
31, 2000, 1999 and 1998, to Mr. Duroc-Danner and the four most highly
compensated executive officers during 2000:
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ---------------------
AWARDS
OTHER ANNUAL --------------------- ALL OTHER
NAME AND SALARY BONUS COMPENSATION RESTRICTED COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($)(2)(3) STOCK ($) OPTIONS ($)(4)
- ------------------ ---- ------- --------- ------------ ---------- ------- ------------
Bernard J. Duroc-Danner......... 2000 625,003 1,025,316 150,000 -- 350,000 10,443
Chairman of the Board,
President 1999 550,000 375,000 147,000 -- 179,463 11,808
and Chief Executive Officer 1998 525,000 430,000 183,750 -- 546,192 11,056
Jon R. Nicholson................ 2000 232,500 303,480 30,645 -- 139,013 8,678
Senior Vice President -- 1999 210,000 105,000 19,440 -- -- 1,993
Human Resources and 1998 193,335 105,000 1,575 113,813(5) 117,041 6,617
Information Technology
Gary L. Warren(6)............... 2000 225,000 396,220 27,000 -- 100,000 4,275
Senior Vice President and 1999 66,305 75,000 3,375 -- 117,041 327
President -- Drilling and 1998 -- -- -- -- -- --
Intervention Services Division
E. Lee Colley, III(7)........... 2000 244,237 265,600 59,136 -- 100,000 2,769
Senior Vice President and 1999 229,327 150,000 37,769 -- -- 2,639
President -- Artificial Lift 1998 17,308 80,000 2,077 -- 156,054 32
Systems Division
Curtis W. Huff(8)............... 2000 387,506 505,810 53,092 -- 228,027 1,913
Former Executive Vice 1999 350,000 200,000 31,932 -- -- 1,465
President, Chief Financial 1998 204,167 175,000 875 2,625,000(9) 256,054 562
Officer, General Counsel
and Secretary
- ---------------
(1) Salary and bonus compensation include amounts deferred by each executive
officer under our Executive Deferred Compensation Stock Ownership Plan
(the "Executive Deferred Plan") described in Note 2 below. The bonus
amounts were earned in the year in which they are shown in the table but
were paid in the first half of the following year.
(2) Other Annual Compensation includes (i) the vested portion of the amount
contributed by us under the Executive Deferred Plan equal to 7.5% of each
annual officer's compensation for each year, plus (ii) the vested portion
of our matching contribution under the Executive Deferred Plan equal to
100% of the amount deferred by the officer. Each officer can defer up to
7.5% of his total salary and bonus compensation each year Our
contributions vest over a five-year period on the basis of 20% per year
for each year of service by an officer with us after the later of January
1, 1993 or the date of initial participation in the Executive Deferred
Plan. Under the Executive Deferred Plan, the compensation deferred by each
officer and our contributions are converted into non-monetary units equal
to the number of shares of common stock that could have been purchased by
the amounts deferred and contributed at a market-based price.
Distributions are made under the Executive Deferred Plan after an officer
retires, terminates his employment or dies. The value of the distribution
under the Executive Deferred Plan is based on the number of vested units
in the officer's account multiplied by the market price of the common
stock at that time. Distributions under the Executive Deferred Plan are
made in stock. Our obligations with respect to the Executive Deferred Plan
are unfunded. However, we have established a grantor trust, that is
subject to the claims of our creditors, into which funds are deposited
with an independent trustee that purchases shares of common stock for the
Executive Deferred Plan. As of December 31, 2000, Messrs. Duroc-Danner,
Nicholson, Warren, Colley and Huff had 67,378; 5,158; 3,499; 7,188 and
8,961 units allocated to their respective accounts.
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(3) Excludes the total amount of all perquisites and other benefits that were
less than the lesser of $50,000 or 10% of the total of annual salary and
bonus of each executive officer.
(4) Represents matching contributions of $1,375, $4,778, $2,250, $2,423 and
$1,313 made by us in 2000 under our 401(k) Savings Plan for each of
Messrs. Duroc-Danner, Nicholson, Warren, Colley and Huff, respectively,
and life insurance premiums of $9,068, $3,900, $2,025, $346, and $600 paid
by us in 2000 for each of Messrs. Duroc-Danner, Nicholson, Warren, Colley
and Huff, respectively.
(5) Mr. Nicholson was granted 3,000 shares of restricted common stock of
Weatherford Enterra on March 16, 1998. The closing market price of
Weatherford Enterra common stock on March 16, 1998, was $37.9375 per
share. In connection with the Weatherford Enterra merger, the restricted
shares were converted into 2,850 shares of restricted common stock of our
Company. One-half of the restricted common stock vests at a rate of
one-fourth per year beginning on the first anniversary of the date of
grant, and the other one-half vested in June 2000 upon the attainment of
certain performance goals. As of December 31, 2000, Mr. Nicholson held 712
shares of restricted common stock, which had a value of $33,642 based on
the closing market price of $47.25 per share on that date.
(6) Information for Mr. Warren is not presented for periods prior to October
1, 1999 because he was not an executive officer,
(7) Information for Mr. Colley is not presented for periods prior to December
1, 1998 because he was not an executive officer.
(8) Mr. Huff ceased to be an executive officer on February 7, 2001.
(9) Mr. Huff was granted 75,000 shares of restricted common stock on June 15,
1998, as a sign-on incentive bonus in connection with his employment by
us. The closing market price of the common stock on June 15th was $35 per
share. As of December 31, 2000, Mr. Huff held 37,500 shares of restricted
common stock, which had a value of $1,771,875 based on the closing market
price of $47.25 per share on that date. All of such shares became vested
on February 7, 2001.
OPTIONS GRANTED IN 2000(1)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE PRICE GRANT DATE
NAME GRANTED 1999(%) (PER SHARE)($) EXPIRATION DATE PRESENT VALUE($)
- ---- ---------- ------------ --------------- ---------------- ----------------
Bernard J. Duroc-Danner...... 350,000(2) 5.6% 36.75 July 4, 2013 6,914,600(3)
Jon R. Nicholson............. 39,013(4) 0.6% 23.51 January 27, 2013 1,136,371(5)
100,000(2) 1.6% 36.75 July 4, 2013 1,975,600(3)
Gary L. Warren............... 100,000(2) 1.6% 36.75 July 4, 2013 1,975,600(3)
E. Lee Colley, III........... 100,000(2) 1.6% 36.75 July 4, 2013 1,975,600(3)
Curtis W. Huff............... 78,027(4) 1.2% 23.51 January 27, 2013 2,272,770(5)
150,000(2) 2.4% 36.75 July 4, 2013 2,963,400(3)
- ---------------
(1) Information is presented as of December 31, 2000.
(2) The options become fully exercisable on July 5, 2003.
(3) The calculation assumes volatility of 40.79%, a risk free rate of 6.16%, a
seven year expected life, no expected dividends and option grants at $36.75
per share. The actual value, if any, of any option will depend on the
amount, if any, by which the stock price exceeds the exercise price on the
date the option is exercised. Thus, this valuation may not be a reliable
indication as to value and there is no assurance the value realized will be
at or near the value estimated by the Black-Scholes model.
(4) The option becomes fully exercisable on January 28, 2003.
(5) The calculation assumes volatility of 43.74%, a risk free rate of 6.25%, a
seven year expected life, no expected dividends and option grants at $23.51
per share. The actual value, if any, of the option will
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depend on the amount, if any, by which the stock price exceeds the exercise
price on the date the option is exercised. Thus, this valuation may not be a
reliable indication as to value and there is no assurance the value realized
will be at or near the value estimated by the Black-Scholes model.
AGGREGATED OPTION EXERCISES IN 2000
AND DECEMBER 31, 2000 OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 2000 DECEMBER 31, 2000 ($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ------------ ----------- ------------- ----------- -------------
Bernard J. Duroc-Danner....... -- -- 630,000 1,075,655 24,799,430 27,363,111
Jon R. Nicholson.............. -- -- 3,800 257,954 80,305 6,187,077
Gary L. Warren................ -- -- 2,216 257,163 46,831 5,753,219
E. Lee Colley, III............ -- -- -- 256,054 -- 6,610,984
Curtis W. Huff................ -- -- 66,667 417,414 1,526,674 9,751,671
- ---------------
(1) The value is based on difference in the closing market price of the common
stock on December 31, 2000 ($47.25), and the exercise price of the options.
The actual value, if any, of the unexercised options will depend on the
market price of the common stock at the time of exercise of the options.
EMPLOYMENT CONTRACTS
We have entered into employment agreements with Messrs. Duroc-Danner,
Colley, Nicholson, and Warren. The employment agreements with Messrs.
Duroc-Danner, Colley and Nicholson provide for a term of three years and are
renewable annually. Under the terms of the employment agreements, if we
terminate an executive's employment for any reason other than "cause," death or
"disability" or if the executive terminates his employment for "good reason," as
defined in the employment agreements, the executive will be entitled to receive
(1) an amount equal to three times the executive's current base compensation
plus the highest bonus paid to the executive during the three years prior the
year of termination, (2) any accrued salary or bonus (pro-rated to the date of
termination), (3) an amount payable if all retirement plans were vested, (4) the
amount that would have been contributed as our match under the 401(k) Savings
Plan and the Executive Deferred Plan for three years and (5) the executive's car
allowance for three years. Under the employment agreements, "cause" is defined
as the willful and continued failure to perform the executive's job, after
written demand is made by the Chief Executive Officer or the Board, or the
willful engagement in illegal conduct or gross misconduct. Termination by the
executive for "good reason" is generally defined as (1) a material reduction in
title and/or responsibilities of the executive, (2) certain relocations of the
executive or (3) any material reduction in the executive's benefits. In
addition, under such circumstances, all stock options and restricted stock
granted to the executive will automatically vest. The executive also would have
the right to surrender for cash all such options unless to do so would cause a
transaction otherwise eligible for pooling of interests accounting treatment
under Accounting Principles Board Opinion No. 16 to be ineligible for such
treatment, in which case the executive would receive shares of common stock
equal in value to the cash he or she would have received. All health and medical
benefits would also be maintained after termination for a period of three years
provided the executive makes his required contribution. The base compensation
currently payable to Messrs. Duroc-Danner, Nicholson and Colley under the
employment agreements is $825,000, $275,000 and $300,000, respectively.
The employment agreement with Mr. Warren provides for a term of two years
and will be extended for an additional two years in the event of a "change of
control," as defined in the employment agreement, of the Company during the term
of the employment agreement. Under the terms of the employment agreement, if, in
the absence of a change of control of the Company, we terminate Mr. Warren's
employment for any reason other than "cause," death or "disability," as defined
in the employment agreement, he will be entitled to continue to receive his then
current base compensation through the end of the term of the employment
agreement and all stock options not fully vested would vest on a pro-rata basis.
If, in the event of a change of
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control of the Company, we terminate Mr. Warren's employment for any reason
other than cause, death or disability or if he terminates his employment for
"good reason," as defined in the employment agreement, he will be entitled to
receive (1) an amount equal to two times his current base compensation plus the
highest bonus paid to the executive during the three years prior to the year of
termination, (2) any accrued salary and bonus (pro-rated to the date of
termination) and (3) the amount that would have been contributed as our match
under the 401(k) Savings Plan and the Executive Deferred Plan for the year in
which employment was terminated (pro-rated to the date of termination). In
addition, under such circumstances, all stock options and benefits under the
401(k) Savings Plan and Executive Deferred Plan would automatically vest, and
all health and medical benefits would be maintained after termination through
the expiration of the then scheduled expiration of the employment term provided
he makes his required contribution. The base compensation currently payable to
Mr. Warren under his employment agreement is $300,000.
Under the Deficit Reduction Act of 1984, certain severance payments that
exceed a certain amount could subject both us and the executive to adverse U.S.
federal income tax consequences. Each of the employment agreements provides that
we would be required to pay the executive a "gross up payment" to ensure that
the executive receives the total benefit intended by his agreement with us.
FIVE-YEAR PERFORMANCE GRAPH
This graph compares the yearly cumulative return on the common stock with
the cumulative return on the Dow Jones U.S. Oilfield Equipment and Services
Index and the Dow Jones U.S. Total Market Index for the last five years. The
graph assumes the value of the investment in the common stock and each index was
$100 on December 31, 1995, and that all dividends are reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
- ----------------------------------------------------------------------------------------------------------------
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
- ----------------------------------------------------------------------------------------------------------------
Weatherford...................... 100 201 410 153 316 374
Dow Jones U.S. Oilfield Equipment
and Services Index............... 100 140 218 118 164 233
Dow Jones U.S. Total Market
Index............................ 100 122 161 201 247 224
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OTHER INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants, served as
our auditors for the fiscal year ended December 31, 2000 and has been selected
as our auditors for the fiscal year ending December 31, 2001. Arthur Andersen
LLP has served as our auditors since our inception in 1972. A representative of
Arthur Andersen LLP will be present at the Annual Meeting to respond to any
stockholder questions and will be given an opportunity to make a statement if he
or she so desires.
Following is a summary of Arthur Andersen LLP's fees for (i) services
rendered for the audit of our 2000 annual financial statements and reviews of
our 2000 quarterly financial statements, (ii) financial information and systems
design and implementation services rendered in 2000 and (iii) all other services
rendered in 2000.
Audit Fees............................................... $1,050,000
Financial Information Systems Design and Implementation
Fees................................................... --
All Other Fees........................................... $ 594,350
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
All of our executive officers and directors are required to file initial
reports of stock ownership and reports of changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange pursuant to
Section 16(a) of the Securities Exchange Act of 1934.
We have reviewed these reports, including any amendments, and written
representations from the current executive officers and directors of the
Company. Based on this review, we believe that, except as set forth below, all
filing requirements were met during 2000. Mr. Hopmann was required to report in
his Form 5 for the year ended December 31, 2000 the acquisition of shares of our
common stock by him in under our 401(k) Savings Plan. An amended Form 5
reporting the acquisition was filed on March 27, 2001.
PROPOSALS BY STOCKHOLDERS
Stockholder proposals to be included in the proxy materials for our Annual
Meeting to be held in 2002 must be received by us by December 27, 2001, and must
otherwise comply with the rules promulgated by the Securities and Exchange
Commission to be considered for inclusion in our proxy statement for that year.
If a stockholder desires to bring business before the meeting which is not the
subject of a proposal meeting the SEC proxy rule requirements for inclusion in
the proxy statement, the proposal must be received by us by March 17, 2002.
Any stockholder proposal, whether or not to be included in our proxy
materials, must be sent to our Corporate Secretary at 515 Post Oak Boulevard,
Suite 600, Houston, Texas 77027.
OTHER BUSINESS
We know of no other business that will be brought before our Annual
Meeting. If any other matters are properly presented, the persons named on the
enclosed proxy card will vote the proxies as they deem advisable.
20
24
ADDITIONAL INFORMATION AVAILABLE
We have filed an Annual Report on Form 10-K for 2000 with the Securities
and Exchange Commission. A complete copy of our Annual Report on Form 10-K is
available on the SEC's website at www.sec.gov. We also will provide to any
stockholder a copy of our Annual Report on 10-K without charge upon written
request. Copies of any exhibits to our Annual Report on 10-K also are available
upon written request subject to a charge for copying and mailing. If you wish to
obtain a paper copy of our Annual Report on Form 10-K or have any other
questions about us, please contact our Investor Relations Department in writing
(515 Post Oak Blvd., Suite 600, Houston, Texas 77027) or by telephone ((713)
693-4000) or visit our website at www.weatherford.com.
By Order of the Board of Directors
/s/ BURT M. MARTIN
Burt M. Martin
Corporate Secretary
Houston, Texas
April 25, 2001
21
25
APPENDIX A
WEATHERFORD INTERNATIONAL, INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE PURPOSE:
The Audit Committee (the "Committee") of the Board of Directors (the
"Board") of Weatherford International, Inc., a Delaware corporation (the
"Company"), has been established by the Board. The Committee's primary purposes
are to:
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
- Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
- Provide an open avenue of communication among the independent auditors,
management, the internal auditing department and the Board.
The Committee has the authority to conduct any investigation appropriate to
fulfilling its responsibilities, and it has direct access to the independent
auditors as well as anyone in the Company. The Committee has the ability to
retain, at the Company's expense, such special legal, accounting or other
consultants or experts as it deems necessary in the performance of its duties.
The independent auditors of the Company shall be ultimately accountable to the
Committee and the Board.
AUDIT COMMITTEE COMPOSITION AND MEETINGS:
The Committee shall consist of at least three directors, as determined by
the Board. Committee members shall meet the requirements established by the New
York Stock Exchange. The Committee shall be composed of directors who are
independent of the Company's management and free of any relationship that, in
the opinion of the Board, would interfere with their exercise of independent
judgment as a Committee member. Each Committee member must be financially
literate, and at least one member must have accounting or related financial
management expertise. The qualifications of financial literacy and expertise
shall be determined and confirmed by the Board.
Committee members shall be appointed by the Board. If a Committee Chair is
not designated or present at any meeting of the Committee, the members of the
Committee may designate a Chair by majority vote of the Committee members.
The Committee shall meet at least two times annually, or more frequently as
circumstances require.
AUDIT COMMITTEE RESPONSIBILITIES:
In carrying out its responsibilities, the Committee believes its policies
and procedures should remain flexible in order to effectively react to changing
conditions and to ensure to the Board and the stockholders that the corporate
accounting and reporting practices of the Company are in accordance with all
requirements and are of the highest quality.
The Committee shall:
1. Review and update this Charter annually and submit this Charter to
the Board for approval upon its initial adoption and upon adoption of any
amendments hereto.
2. Recommend to the Board the selection, evaluation and, when
appropriate, replacement of the independent auditors.
A-1
26
3. Ensure that the independent auditors submit on a periodic basis to
the Committee a formal written statement delineating all relationships
between the auditors and the Company, actively engage in a dialogue with
the independent auditors with respect to any relationships disclosed in the
report that may impact the objectivity and independence of the independent
auditors, and recommend that the Board take appropriate action in response
to the independent auditors' report to satisfy itself of the independence
of the auditors.
4. Provide in the Company's annual proxy statement a report of the
Committee's findings that result from its financial reporting oversight
responsibilities.
5. Conduct discussions and consultations with the independent auditors
on an annual basis, or more frequently as the Committee deems appropriate.
6. Perform any other activities consistent with this Charter, the
Company's by-laws and governing law, as the Committee or the Board deems
appropriate.
A-2
27
[WEATHERFORD LOGO]
WEATHERFORD INTERNATIONAL, INC.
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
JUNE 5, 2001
9:00 A.M. (HOUSTON TIME)
THE ST. REGIS HOTEL
1919 BRIAR OAKS
HOUSTON, TEXAS 77027
28
WEATHERFORD INTERNATIONAL, INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 5, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder of Weatherford International, Inc. ("Weatherford")
hereby appoints Bernard J. Duroc- Danner and Burt M. Martin, or either of them,
as proxies, each with power to act without the other and with full power of
substitution, for the undersigned to vote the number of shares of common stock
or Series A preferred stock of Weatherford that the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
Weatherford to be held on June 5, 2001, at 9:00 a.m., Houston time, at The St.
Regis Hotel, 1919 Briar Oaks, Houston, Texas, and at any adjournment or
postponement thereof, on the following matters that are more particularly
described in the Proxy Statement dated April 25, 2001:
(1) Election of the following Nominees as Directors, as set forth in the Proxy
Statement:
Philip Burguieres, David J. Butters, Bernard J. Duroc-Danner, Sheldon B.
Lubar, William E. Macaulay, Robert B. Millard, Robert K. Moses, Jr. and
Robert A. Rayne
FOR All Nominees listed WITHHOLD
above (except as marked All Nominees
to the contrary below) listed above
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any Nominee, write that
Nominee's name in the space provided below
---------------------------------------------------------------------------
(2) To consider and take action upon any other matter which may properly come
before the meeting or any adjournment(s) or postponement(s) thereof.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
29
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ALL OF THE NOMINEES FOR DIRECTOR LISTED ON THE OTHER SIDE HEREOF
UNDER PROPOSAL 1.
Receipt of the Proxy Statement dated April 25, 2001, and the Annual Report of
Weatherford for the year ended December 31, 2000, is hereby acknowledged.
- --------------------------------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Signature of Stockholder(s)
Please sign your name exactly as it appears hereon. Joint
owners must each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full
title as it appears thereon. If signer is a corporation,
execute in full corporate name by authorized officer.
Date: , 2001.
------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
30
WEATHERFORD INTERNATIONAL, INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 5, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Computershare Trust Company of Canada (the
"Trustee"), and, unless you withhold authority by checking the following box
[ ], authorizes the Trustee to appoint Bernard J. Duroc-Danner and
Burt M. Martin, or either of them, as proxies, each with power to act without
the other and with full power of substitution, to attend the Annual Meeting of
Stockholders of Weatherford International, Inc. to be held on June 5, 2001, at
9:00 a.m., Houston time, at The St. Regis Hotel, 1919 Briar Oaks, Houston,
Texas, and at any adjournment or postponement thereof, and to vote all Series 1
Exchangeable Shares of Weatherford Oil Services, Inc. that the signer is
entitled to vote as indicated on the reverse side hereof on the matters set
forth herein that are more particularly described in the Proxy Statement dated
April 25, 2001.
IN THE EVENT YOU WISH TO ATTEND THE ANNUAL MEETING IN PERSON AND VOTE YOUR
SHARES DIRECTLY, PLEASE CHECK THE FOLLOWING BOX [ ], IN WHICH CASE THE TRUSTEE
WILL ISSUE A PROXY TO YOU FOR YOUR SHARES AT THE ANNUAL MEETING; HOWEVER, THE
TRUSTEE ACCEPTS NO RESPONSIBILITY FOR TIMELY FORWARDING A PROXY TO VOTE YOUR
SHARES DIRECTLY IF SUCH INSTRUCTION IS NOT RECEIVED BY 4:30 P.M. (CALGARY TIME)
ON JUNE 4, 2001. IN ALL EVENTS, THE RISK OF DELIVERY OF SUCH A PROXY REMAINS
WITH THE HOLDERS OF SERIES 1 EXCHANGEABLE SHARES.
(1) Election of the following Nominees as Directors, as set forth in the Proxy
Statement:
Philip Burguieres, David J. Butters, Bernard J. Duroc-Danner, Sheldon B.
Lubar, William E. Macaulay, Robert B. Millard, Robert K. Moses, Jr. and
Robert A. Rayne
FOR All Nominees listed WITHHOLD
above (except as marked All Nominees
to the contrary below) listed above
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any Nominee, write that
Nominee's name in the space provided below
---------------------------------------------------------------------------
(2) To consider and take action upon any other matter which may properly come
before the meeting or any adjournment(s) or postponement(s) thereof.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
31
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder only if this proxy is completed, returned to and
received not later than 4:30 p.m. (Calgary time) on Monday, June 4, 2001 by
Computershare Trust Company of Canada, 600, 530 - 8th Avenue S.W., Calgary,
Alberta T2P 3S8. Proxies may be mailed in the return envelope provided or faxed
to 403-267-6529.
Receipt of the Proxy Statement dated April 25, 2001, and the Annual Report of
Weatherford for the year ended December 31, 2000, is hereby acknowledged.
- --------------------------------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Signature of Stockholder(s)
Please sign your name exactly as it appears hereon. Joint
owners must each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full
title as it appears thereon. If signer is a corporation,
execute in full corporate name by authorized officer.
Date: , 2001.
------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY.