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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 Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
EVI Weatherford, Inc.
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(Name of Registrant as Specified in its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies: N/A
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(2) Aggregate number of securities to which transaction applies: N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
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(4) Proposed maximum aggregate value of the transaction: N/A
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(5) Total fee paid: N/A
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[ ] 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
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(2) Form, Schedule or Registration Statement No.: N/A
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(3) Filing Party: N/A
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(4) Date Filed: N/A
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[EVI WEATHERFORD LOGO]
EVI WEATHERFORD, INC.
NOTICE OF 1998
ANNUAL MEETING OF
STOCKHOLDERS
AND
PROXY STATEMENT
ANNUAL MEETING
September 21, 1998
4:00 p.m. (C.D.S.T.)
The Luxury Collection Hotel of Houston
1919 Briar Oaks
Houston, Texas 77027
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EVI WEATHERFORD, INC.
5 POST OAK PARK
SUITE 1760
HOUSTON, TEXAS 77027-3415
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 21, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of EVI
Weatherford, Inc., a Delaware corporation (the "Company"), will be held at The
Luxury Collection Hotel of Houston, 1919 Briar Oaks, Houston, Texas 77027 on
Monday, September 21, 1998, at 4:00 p.m., C.D.S.T., for the following purposes:
(1) To vote on the election of eight directors to the Board of
Directors.
(2) To consider and act upon a proposal to amend the Company's Amended
and Restated Certificate of Incorporation to change the name of the Company
to "WEATHERFORD INTERNATIONAL, INC."
(3) To consider and take action upon any other matter that may
properly come before the meeting or any adjournment(s) or postponement(s)
thereof.
Information with respect to the above matters is set forth in the Proxy
Statement which accompanies this Notice.
The Board of Directors has fixed the close of business on August 14, 1998,
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting or any adjournment(s) or postponement(s)
thereof. Only stockholders of record at the close of business on such record
date are entitled to notice of and to vote at the Annual Meeting. A complete
list of such stockholders will be available for examination at the Annual
Meeting and at the Company's offices at 5 Post Oak Park, Suite 1760, Houston,
Texas for a period of ten days prior to the Annual Meeting, during ordinary
business hours, for the examination by any such stockholder for any purpose
germane to the Annual Meeting.
You are cordially invited to attend the Annual Meeting. However, to ensure
your representation at the Annual Meeting, the Company requests 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 should be
present at the Annual Meeting and should request such a return.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE. THE ENCLOSED RETURN ENVELOPE MAY BE USED FOR THAT PURPOSE.
By Order of the Board of Directors
/s/ CURTIS W. HUFF
------------------------------------
Curtis W. Huff
Corporate Secretary
Houston, Texas
August 17, 1998
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[EVI WEATHERFORD LOGO]
EVI WEATHERFORD, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 21, 1998
The accompanying proxy is solicited by the Board of Directors of EVI
Weatherford, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders of the Company to be held on Monday, September 21, 1998
(the "Annual Meeting"), at the time and place and for the purposes set forth in
the accompanying Notice of Annual Meeting and at any adjournment(s) or
postponement(s) thereof. When proxies in the accompanying form are received
properly executed, the shares will be voted by the persons named therein unless
contrary instructions are given.
The record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting is the close of business on August 14, 1998
(the "Record Date"). As of the Record Date, there were 96,598,326 shares of
common stock, $1.00 par value ("Common Stock"), of the Company issued and
outstanding. Each share of Common Stock is entitled to one vote on each matter
to be acted upon at the meeting. The Common Stock is the only class of
securities of the Company that is entitled to vote at the Annual Meeting. The
presence at the Annual Meeting, in person or by proxy, of the holders of a
majority of the shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting.
Unless otherwise indicated, the proxy will be voted FOR the election of all
nominees of the Company as directors and FOR the amendment to the Company's
Amended and Restated Certificate of Incorporation to change the name of the
Company to Weatherford International, Inc. The proxy will not be voted for the
election of any nominee as a director if authority to do so is withheld on the
proxy.
Any stockholder of the Company has the right to revoke his proxy at any
time prior to its use by submitting a written revocation to the Corporate
Secretary of the Company prior to the Annual Meeting. The mailing address of the
Company's principal executive office is 5 Post Oak Park, Suite 1760, Houston,
Texas 77027.
Upon request, additional proxy material will be furnished without cost to
brokers and other nominees to forward to the beneficial owners of shares held in
their names. The Company will bear all costs of preparing, printing, assembling,
delivering and mailing the Notice of Annual Meeting, Proxy Statement, Proxy and
Annual Report. Copies of the Notice, Proxy Statement and Proxy and Annual Report
will be first sent or given to stockholders on or about August 18, 1998. In
addition to the use of the mail, proxies may be solicited by the directors,
officers and employees of the Company, without additional compensation, by
personal interview, telephone, telegram or otherwise.
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MATTERS TO COME BEFORE THE ANNUAL MEETING
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting, each to hold
office until the next Annual Meeting of Stockholders of the Company and until
his successor shall be duly elected and qualified. The persons named in the
enclosed proxy will vote the shares covered thereby in favor of the nominees
listed below unless specifically instructed to the contrary. Although the
management of the Company does not contemplate that any of the nominees will be
unable to serve, if such a situation arises prior to the Annual Meeting, the
proxies will be voted for a substitute to be named by the Board of Directors.
All of the nominees named in the following table are now serving as directors of
the Company:
NAME AGE DIRECTOR SINCE
---- --- --------------
Bernard J. Duroc-Danner..................................... 44 1988
Philip Burguieres........................................... 54 1998
David J. Butters............................................ 57 1984
Sheldon B. Lubar............................................ 69 1995
William E. Macaulay......................................... 52 1998
Robert B. Millard........................................... 48 1989
Robert K. Moses, Jr......................................... 58 1998
Robert A. Rayne............................................. 49 1987
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 director and will not affect the outcome of
the election of directors.
On May 27, 1998, the Company completed the merger (the "Weatherford
Merger") with Weatherford Enterra, Inc. ("Weatherford"). In connection with the
Weatherford Merger, each of Messrs. Burguieres, Macaulay and Moses were elected
to the Board of Directors of the Company.
Bernard J. Duroc-Danner joined the Company in May 1987 to initiate the
start-up of the Company's oilfield service and equipment business. He was
elected President of the Company in January 1990 and Chief Executive Officer in
May 1990. In connection with the Weatherford Merger, Mr. Duroc-Danner was
elected as Chairman of the Board of the Company. Mr. Duroc-Danner holds a Ph.D.
in economics from Wharton (University of Pennsylvania). Mr. Duroc-Danner is a
director of Parker Drilling Company.
Philip Burguieres was elected to the Board as Chairman Emeritus on May 27,
1998. Mr. Burguieres served as a director of Weatherford since April 1991 and as
Chairman of the Board of Weatherford since December 1992. From April 1991 to
October 1996, he also served as President and Chief Executive Officer of
Weatherford. Mr. Burguieres serves as a director of Denali Incorporated, a
Houston, Texas-based provider of products and services for handling critical
fluids; McDermott International, Inc., a New Orleans, Louisiana-based company
engaged in the fabrication of oilfield equipment; Chase Bank of Texas, N.A., a
national banking organization, and Newfield Exploration Company, a Houston,
Texas-based independent oil and gas producer.
David J. Butters is a Managing Director of Lehman Brothers, Inc. ("Lehman
Brothers"), where he has been employed for more than the past five years. Mr.
Butters is currently Chairman of the Board of Directors of GulfMark Offshore,
Inc., a director of Anangel-American Shipholdings, Ltd. and a member of the
Board of Advisors of Energy International, N.V.
Sheldon B. Lubar has been Chairman and Chief Executive Officer of
Christiana Companies, Inc. ("Christiana"), a diversified holding company with
interests in refrigerated and dry warehousing, transportation and logistic
services, and Chairman of Lubar & Co. Incorporated for more than the past five
years. Mr. Lubar is a director of Ameritech Corporation, Massachusetts Mutual
Life Insurance Company, Firstar Corporation, MGIC Investment Corporation and
Jefferies Group Inc. Mr. Lubar was initially appointed
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to the Board of Directors of the Company in connection with the Company's
acquisition of Prideco, Inc. in June 1995.
William E. Macaulay is and has been for more than the past five years
President and Chief Executive Officer of First Reserve Corporation, a
Connecticut-based corporation that manages various funds. He is a director of
Maverick Tube Corporation, a Missouri corporation engaged in the manufacture of
oilfield tubulars, line pipe and structural steel; TransMontaigne Oil Company, a
Colorado-based company engaged in natural gas and oil products pipelines,
distribution and marketing; Patina Oil & Gas Corporation, a Colorado-based
company engaged in oil and gas exploration and production; National-Oilwell,
Inc., a Houston, Texas-based company engaged in the design, manufacture and sale
of machinery and equipment and the distribution of products used in oil and gas
drilling production; Cal-Dive International, a Houston, Texas-based corporation
engaged in subsea services in the Gulf of Mexico; and Hugoton Energy
Corporation, a Kansas corporation engaged in oil and gas exploration and
production.
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.
Robert K. Moses, Jr. is and has been for more than the past five years a
private investor, principally in the oil and gas exploration and oilfield
services business in Houston, Texas. He served as Chairman of the Weatherford
Board from May 1989 to December 1992.
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.
Additionally, pursuant to the terms of the Weatherford Merger agreement,
and subject to the fiduciary duties of the Company's Board of Directors and the
willingness of such persons to serve as directors of the Company, the Company
agreed to submit each of Messrs. Burguieres, Macaulay and Moses as nominees for
re-election to the Company's Board at the Annual Meetings of Stockholders of the
Company to be held through the year 2000.
COMMITTEES AND MEETINGS OF DIRECTORS
Pursuant to the Company's Amended and Restated By-laws, the Board of
Directors has established several committees, including an Audit Committee, a
Compensation Committee and an Executive Committee. The Board of Directors does
not have a standing Nominating Committee. In addition, in connection with the
Company's proposed acquisition of Christiana, the Board of Directors established
a special committee (the "Special Committee"), consisting of Mr. Rayne and
Sheldon Gordon, a former director of the Company, to consider and make
recommendations with respect to that acquisition. During the year ended December
31, 1997, the Board of Directors met 10 times, the Compensation Committee met
one time, the Audit Committee met one time and the Special Committee met two
times. The Executive Committee did not meet. Each current director attended at
least 75% of all meetings of the Board of Directors and Committee meetings of
which he was a member during 1997.
Messrs. Butters (Chair), Lubar and Rayne are the current members of the
Audit Committee. The Audit Committee recommends to the Board the selection and
discharge of the Company's independent auditors, reviews the professional
services performed by the auditors, the plan and results of their auditing
engagement and the amount of fees charged for audit services by the auditors,
and evaluates the Company's system of internal accounting controls.
Messrs. Lubar, Moses (Chair) and Rayne are the current members of the
Compensation Committee. The Compensation Committee recommends to the Board the
compensation to be paid to the Company's directors, officers and key employees
and, subject to review and approval of certain matters by the full Board of
Directors of the Company, administers the compensation plans for the Company's
executive officers.
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Messrs. Duroc-Danner (Chair), Burguieres, Macaulay and Millard are the
current members of the Executive Committee, which acts on behalf of the Board
between regularly scheduled meetings of the Board of Directors.
DIRECTOR COMPENSATION
Each non-employee director of the Company is paid $1,000 for each meeting
of the Board of Directors and $500 for each committee meeting of the Board of
Directors he attends. In addition, each non-employee director of the Company is
paid a retainer of $4,000 for each quarter of the year in which such director
serves as a director. Mr. Butters, who served as Chairman of the Board until May
27, 1998, received an additional retainer of $6,250 per month while serving as
Chairman. Total compensation paid to the non-employee directors for 1997,
including director fees and retainers but excluding the deferred compensation
described below, was $102,906 for Mr. Butters, $27,288 for Mr. Lubar, $29,500
for Mr. Millard and $21,738 for Mr. Rayne.
The Company maintains a deferred compensation plan for its non-employee
directors (the "Non-Employee Director Plan") that is intended to provide
additional long-term incentive to the directors. Under the Non-Employee Director
Plan, each non-employee director may elect to defer up to 7 1/2% of any
retainer, meeting, committee or other similar fee or compensation to which the
non-employee director is entitled for services performed for the Company. Each
election by a non-employee director to defer compensation is irrevocable and
must state the date on which distributions under the Non-Employee Director Plan
are to be made, which date may not be less than one year after the effective
date of the election. Deferred compensation under the Non-Employee Director Plan
is credited to an account for the director. In the event the director elects to
defer at least 5% of his compensation under the Non-Employee Director Plan, the
Company will make an additional allocation to the director's account equal to
the sum of (i) 7 1/2% of the director's compensation and (ii) a percentage of
the director's compensation equal to the percentage deferred by the director.
All amounts credited to the account of a director are converted into
non-monetary units equal to the number of whole shares of Common Stock that
could have been purchased by the amounts credited to the account at the market
price of the Common Stock as of the last day of the calendar month in which the
amounts are credited. The amount of funds to be paid to a director at the time
of payment will be determined by multiplying the number of units credited to the
director's account at such time multiplied by the market price of the Common
Stock on the last business day of the month preceding the date the distribution
is to commence. Distributions under the Non-Employee Director Plan commence as
of the first day of the calendar quarter coincident with or following the date
specified by the director in his election to defer compensation and may be
either in the form of a lump sum or in quarterly installments not to exceed ten
years. In the event a director elects to receive deferred compensation through
installments, the unpaid amounts will accrue interest on a quarterly basis at a
rate equal to an announced prime rate. No distribution may be made to a director
with respect to units relating to amounts deferred and additional credits made
by the Company within six months prior to the proposed date of distribution
except where the distribution follows the director's death or termination of
service as a director. In such case, the director will be entitled to receive a
distribution in an amount equal to the compensation deferred during such
six-month period plus interest. During 1997, $25,031, $6,638 and $5,288 were
credited under the Non-Employee Director Plan as deferrals and Company
contributions to the accounts of Messrs. Butters, Lubar and Rayne, respectively,
with total units allocated to their respective accounts of 542, 124 and 117.
Pursuant to the Company's Amended and Restated Non-Employee Director Stock
Option Plan (the "Director Plan"), each non-employee director is granted an
option to purchase 10,000 shares of Common Stock as of the date he is first
elected or is re-elected as a director of the Company. Subject to certain anti-
dilution provisions in the Director Plan, an aggregate of 1,000,000 shares of
Common Stock have been reserved for issuance upon the exercise of options
granted under the Director Plan. During 1997, options to purchase 10,000 shares
of Common Stock were granted to each non-employee director of the Company. In
1997, Messrs. Butters and Millard purchased 60,000 shares each of Common Stock
upon the exercise of
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options granted under the Director Plan. On May 27, 1998, each of Messrs.
Macaulay and Moses were granted options to purchase 10,000 shares of Common
Stock upon their initial election to the Board.
Under the Director Plan, each stock option granted to a non-employee
director is not exercisable for a period of one year from the date of grant, but
is fully exercisable following such one-year anniversary. Each option granted
under the Director Plan is exercisable at a purchase price per share of Common
Stock equal to the fair market value of the Common Stock as of the date of
grant. Options granted to non-employee directors under the Director Plan are
exercisable for a term of ten years from the date of grant, subject to early
termination within a specified period following an event of death, disability or
retirement, resignation or termination from the Board of Directors of the
Company. This period is one year in the case of retirement. The Company does not
currently have a formal retirement policy for directors other than the Director
Plan. The Director Plan defines retirement to be the termination of service
following five years of service on the Board of Directors.
PROPOSAL NO. 2: PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION
The Board of Directors has unanimously recommended the adoption of an
amendment to the Company's Amended and Restated Certificate of Incorporation
that will change the name of the Company from "EVI Weatherford, Inc." to
"Weatherford International, Inc."
The proposed name change is being recommended to create a unified corporate
identity following the Company's recent merger with Weatherford. Since the
Weatherford Merger, the Company has undertaken a review of the desirability of
adopting a name that would best serve the Company as a combined entity. Although
the Company believes that both the EVI and Weatherford names carry with them
significant brand equity, the Weatherford name is utilized substantially more in
the business operations of the Company than the EVI name and was found to be
more recognizable worldwide among the Company's customers. In an effort to build
upon this name brand recognition, the Company is proposing that the Company's
name be changed to "Weatherford International, Inc." The Board of Directors
believes that the new name will provide the Company with a greater worldwide
commercial visibility for its broad group of products and services and assist in
the promotion of the Company's artificial lift and well construction products
through the international Weatherford product distribution and service
infrastructure. With the change in the Company's name, the symbol for the Common
Stock on the New York Stock Exchange will change to "WFD".
The change of the Company's name will be effected through an amendment to
Article 1 of the Company's Amended and Restated Certificate of Incorporation. As
amended, such paragraph would read in its entirety as follows:
"1. The name of the Corporation is Weatherford International, Inc."
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required for approval of the proposed amendment to the
Company's Amended and Restated Certificate of Incorporation. Abstentions and
broker non-votes will not be treated as either a vote for or against the
proposal. However, because the proposal requires the affirmative vote of a
majority of the outstanding shares, abstentions and broker non-votes will have
the same effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
PROPOSED AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO
CHANGE THE NAME OF THE COMPANY TO WEATHERFORD INTERNATIONAL, INC.
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OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to each
person who at the Record Date was known by the Company to be the beneficial
owner of more than 5% of the outstanding shares of Common Stock:
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) CLASS(%)
------------------------------------ --------------------- ----------
First Reserve Corporation(2)............................ 5,623,340 5.8
475 Steamboat Road
Greenwich, CT 06830
FMR Corp.(3)............................................ 6,181,300 6.4
82 Devonshire Street
Boston, Massachusetts 02109
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(1) Information with respect to beneficial ownership is based on information
furnished by each stockholder or contained in filings made with the
Commission. Unless otherwise indicated below, the persons or group listed
have sole voting and dispositive power with respect to their shares of
Common Stock, and none of such shares are deemed to be owned because the
holder has the right to acquire the shares within 60 days.
(2) Represents shares owned by the following funds (the "First Reserve Funds"),
for each of which First Reserve Corporation ("First Reserve") is the general
partner: American Gas & Oil Investors, Limited Partnership -- 1,292,000
shares; AmGO II, Limited Partnership -- 807,500 shares; First Reserve Fund
V, Limited Partnership -- 2,185,000 shares; First Reserve Fund V-2, Limited
Partnership -- 608,000 shares; and First Reserve Fund VI, Limited
Partnership -- 698,602 shares. First Reserve, in its role as managing
general partner of the First Reserve Funds and acting on behalf of the First
Reserve Funds, has the power to cause each First Reserve Fund to dispose of
or vote shares of Common Stock held by such First Reserve Fund. Also
includes 32,238 shares owned directly by First Reserve. The principal
beneficial owners of the common stock of First Reserve are its executive
officers, including Mr. Macaulay, President and Chief Executive Officer of
First Reserve, who is also a director of the Company.
(3) Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. ("FMR") and a registered investment adviser, is the
beneficial owner of 5,353,024 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 778,781 shares as a result of serving as investment
manager of various institutional accounts. Fidelity International Limited is
the beneficial owner of 49,495 shares and has sole voting and dispositive
power over all such shares. 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 5,353,024 shares owned by the Funds
and Mr. Johnson and FMR, through its control of FMTC, each has sole power to
vote and dispose of 709,571 shares owned by the institutional accounts;
however, Mr. Johnson and FMR have no power to vote 69,210 shares owned by
the institutional accounts. The sole power to vote all shares owned by the
Funds resides with the Funds' Boards of Trustees. Fidelity carries out the
voting of the Funds' shares under written guidelines established by the
Funds' Board of Trustees. Additionally, Mr. Johnson and FMR may be deemed to
be the beneficial owner of an additional 18,750 shares resulting from the
assumed conversion of 30,000 of the Debentures. Members of the Mr. Johnson's
family and trusts for their benefit are the predominant owners of Class B
shares of common stock 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 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.
Accordingly, through their ownership of voting common stock and the
execution of the
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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.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth, as of the Record Date, the number and
percentage of Common Stock beneficially owned by each of the Company's
directors, each executive officer named in the Summary Compensation Table
herein, and all directors and officers as a group:
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
-----------------------------------------------------
VOTING AND OPTIONS EXERCISABLE PERCENT
NAME INVESTMENT POWER WITHIN 60 DAYS OF CLASS (%)
---- ---------------- ------------------- ------------
Bernard J. Duroc-Danner........................... 0 830,000 *
James G. Kiley.................................... 0 55,000 *
John C. Coble..................................... 0 80,400 *
Randall D. Stilley................................ 4,750 19,000 *
Robert F. Stiles.................................. 200 60,000 *
Curtis W. Huff(2)................................. 76,000 0 *
Frances R. Powell................................. 953 41,000 *
Jon R. Nicholson(3)............................... 15,796 0 *
Philip Burguieres(4).............................. 197,887 0 *
David J. Butters.................................. 46,712 10,000 *
Sheldon B. Lubar(5)............................... 0 30,000 *
William E. Macaulay(6)............................ 5,632,350 0 5.8
Robert B. Millard................................. 108,960 10,000 *
Robert K. Moses, Jr.(7)........................... 424,383 0 *
Robert A. Rayne(8)................................ 0 20,000 *
All officers and directors as a group (15
persons)........................................ 6,506,952 1,155,400 6.7
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* Less than 1%.
(1) Unless otherwise indicated, directors and executive officers have sole
voting and investment power with respect to the shares they own.
(2) Includes 75,000 restricted shares that are subject to vesting over a four
year period extending through June 2002. Until vested, these shares may not
be transferred by Mr. Huff, but may be voted by him.
(3) Includes 995 shares of Common Stock held under the Company's 401(k) Savings
Plan in Mr. Nicholson's account, as to which shares Mr. Nicholson has sole
voting and no dispositive power.
(4) Includes (i) 950 shares of Common Stock held by Mr. Burguieres' wife, with
respect to which he has no voting or dispositive power, and (ii) 475 shares
of Common Stock held by Mr. Burguieres' adult son supported by him, with
respect to which he has sole voting and dispositive power; Mr. Burguieres
disclaims beneficial ownership of all such shares. Also includes (i) 431
shares of Common Stock held under the Company's Employee Stock Purchase Plan
(the "ESPP") in the account of Mr. Burguieres, as to which he has sole
voting and no dispositive power prior to withdrawal of such shares from the
ESPP, and (ii) 421 shares of Common Stock held under the Company's 401(k)
Savings Plan (the "401(k) Plan") in Mr. Burguieres' account, as to which
shares Mr. Burguieres has sole voting and no dispositive power.
(5) Does not include 3,897,462 shares of Common Stock owned directly by
Christiana. Mr. Lubar currently beneficially owns approximately 18.8% of the
outstanding shares of common stock of Christiana. Pursuant to the Christiana
Merger (as defined hereinafter), Mr. Lubar will be entitled to receive
725,618 shares of Common Stock or approximately 0.8% of the outstanding
shares of Common Stock if the Christiana Merger is consummated. See "Other
Information -- Compensation Committee Interlocks and Insider Participation".
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(6) Includes 6,619 shares of Common Stock held by Mr. Macaulay's wife, with
respect to which he has no voting or dispositive power; Mr. Macaulay
disclaims beneficial ownership of such shares. Includes 5,623,340 shares of
Common Stock owned beneficially by First Reserve and certain affiliated
funds of which First Reserve acts as general partner. Mr. Macaulay serves as
President and Chief Executive Officer of First Reserve. However, Mr.
Macaulay disclaims beneficial ownership of the shares of Common Stock
beneficial owned by First Reserve.
(7) Includes an aggregate of 42,750 shares of Common Stock held in various
trusts for Mr. Moses' children, his brother and his sister, of which Mr.
Moses is the trustee and has sole voting and dispositive power; however, Mr.
Moses disclaims beneficial ownership of all such shares. Does not include
(i) an aggregate of 49,875 shares of Common Stock held in various trusts for
Mr. Moses children, with respect to which Mr. Moses has no voting or
dispositive power, (ii) 1,758 shares of Common Stock held in a trust for Mr.
Moses' son or (iii) 593 shares of Common Stock held by Mr. Moses' adult son
supported by him, with respect to which Mr. Moses has no voting or
dispositive power; Mr. Moses disclaims beneficial ownership of all such
shares.
(8) Excludes 400,000 shares beneficially owned by London Merchant Securities
plc, of which Mr. Rayne serves as Executive Director. Mr. Rayne disclaims
beneficial ownership of all of such shares.
EXECUTIVE OFFICERS
In addition to Mr. Duroc-Danner, who is also a director of the Company, the
following persons are executive officers of the Company, each of whom serves at
the discretion of the Board of Directors:
NAME AGE POSITION
---- --- --------
Bernard J. 44 Chairman of the Board, President and Chief Executive
Duroc-Danner...........
James G. Kiley........... 41 Chief Financial Officer, Senior Vice President and
Treasurer
John C. Coble............ 55 Senior Vice President and President -- Drilling Products
Group
Randall D. Stilley....... 44 Senior Vice President and President -- Completion &
Oilfield Services Group
Robert F. Stiles......... 41 Senior Vice President and President -- Artificial Lift
Group
Curtis W. Huff........... 40 Senior Vice President, General Counsel and Secretary
Jon R. Nicholson......... 55 Vice President, Human Resources
Frances R. Powell........ 43 Vice President, Accounting and Controller
James G. Kiley was elected Senior Vice President of the Company on May 27,
1998, Chief Financial Officer in May 1996 and Vice President, Finance and
Treasurer in May 1994 when he joined the Company. From April 1991 to April 1994,
Mr. Kiley served as Treasurer of Baroid Corporation, a provider of oilfield
services. Prior to his position at Baroid, Mr. Kiley held various positions,
including Assistant Treasurer, at NL Industries, Inc., a manufacturer of
titanium dioxide pigments and specialty chemicals.
John C. Coble was elected Senior Vice President of the Company and
President -- Drilling Products Group on May 27, 1998. Mr. Coble joined the
Company in July 1981 and was elected Executive Vice President of the Company in
March 1997. Mr. Coble has served as President of Grant Prideco, Inc. ("Grant
Prideco"), a wholly owned subsidiary of the Company included in the Drilling
Products Group, since October 1995. From December 1991 to October 1995, Mr.
Coble served as Chief Operating Officer of the Company.
Randall D. Stilley was elected Senior Vice President of the Company and
President -- Completion & Oilfield Services Group on May 27, 1998. Prior to that
time, Mr. Stilley served as Senior Vice President and President-Services of
Weatherford since January 5, 1998. Prior to joining Weatherford, Mr. Stilley
held
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various management positions with Halliburton Energy Services from 1976 until
1998, serving as Vice President -- Asia Pacific/China from 1995 until December
31, 1997.
Robert F. Stiles was elected Senior Vice President of the Company and
President -- Artificial Lift Group on May 27, 1998. Mr. Stiles joined the
Company in October 1992 and was elected a Vice President of the Company in March
1997. Mr. Stiles has been President of the Company's Artificial Lift Group since
January 1996. Prior to that time, Mr. Stiles served as President of Production
Oil Tools, Inc., a wholly owned subsidiary of the Company included in the
Artificial Lift Group, from November 1993 to December 1995 and as Vice
President, Manufacturing of Grant Prideco from October 1992 to November 1993.
Curtis W. Huff was elected Senior Vice President, General Counsel and
Secretary of the Company on May 27, 1998. Prior to that time, Mr. Huff was a
partner at the law firm of Fulbright & Jaworski L.L.P., counsel to the Company,
and held that position for more than five years. Mr. Huff continues to provide
advisory services to Fulbright & Jaworski L.L.P. The Company has retained
Fulbright & Jaworski L.L.P. with respect to various legal matters for which the
Company pays usual and customary fees.
Jon R. Nicholson was elected Vice President, Human Resources of the Company
on May 27, 1998. Prior to that time, Mr. Nicholson served as Vice
President -- Human Resources of Weatherford since October 5, 1995. Mr. Nicholson
joined Weatherford as Director of Human Resources in February 1993. From March
1992 until January 1993, he was a human resources consultant. From July 1990
until March 1992, Mr. Nicholson served as President of Atlas Bradford
Corporation, an oilfield services company.
Frances R. Powell was elected Vice President, Accounting of the Company in
May 1994, Controller in November 1991 and has been employed by the Company since
1990.
There are no family relationships between any of the directors or executive
officers.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors and the Compensation Committee of the Board of
Directors of the Company (the "Committee") is pleased to present this report on
the compensation policies of the Company for its executive officers for 1997.
This report sets forth the major components of executive compensation and the
basis by which 1997 compensation determinations were made by the Board of
Directors and the Committee with respect to the executive officers of the
Company, including the executive officers who are named in the compensation
tables.
On May 27, 1998, the Company merged with Weatherford. Following the
Weatherford Merger, a number of new officers and a new compensation committee,
consisting of Messrs. Lubar, Moses and Rayne, was appointed. The compensation
policies and programs that were maintained by the Company and Weatherford prior
to the merger are currently being reviewed by the Committee and the Committee
expects to make modifications to those policies and programs to reflect a single
program for the combined company. The following report reflects only the
compensation policies and guidelines followed in 1997 by the Company only and
does not reflect polices of Weatherford prior to the merger.
Compensation Policy and Guidelines
The goal of the Company's 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 both with the interests of stockholders and with overall Company
performance. The Company's programs have historically stressed stock-based
compensation as a means of providing incentives to executive officers to achieve
growth in the value of the Company's Common Stock. With this objective in mind,
the Company's executive compensation program has included a combination of
reasonable base salaries and various long and short-term incentive programs
linked to the financial and stock performance of the Company. In making
compensation decisions, the Company's 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.
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Compensation Program Components
The compensation programs of the Company during 1997 were generally
administered by or under the direction of the Committee and are reviewed on an
annual basis to ensure that remuneration levels and benefits are competitive and
reasonable in light of the overall performance of the Company. Stock-based
compensation decisions for the Company's executive officers, however, were
approved by the full Board of Directors of the Company following recommendations
by the Committee.
The Committee was charged with reviewing and recommending the specific base
and bonus compensation of the Company's President and Chief Executive Officer
(the "Principal Executive"). The Board of Directors and compensation committee
has delegated to the Company's Chief Executive Officer the authority to review
and adjust the base and cash bonus compensation for the Company's other
executive officers.
Decisions with regard to the granting of stock options and other long-term
incentive plans have historically been made by the Board after consideration of
the Company's results and discussion with and recommendations from the Company's
Chief Executive Officer as to the executive officers under his supervision. 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
the Company to recruit and retain key executive officers. This 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
Oilfield Equipment and Services Index in the performance graph set forth herein.
Salary levels are based on individual performance and market comparisons.
Adjustments made during 1997 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 Company's executive officers in the form of
cash and non-cash bonuses relating to financial and operational achievements.
The amount and form of such bonuses was determined in 1997 by the Committee in
the case of the Principal Executive and the Company's Chief Financial Officer
and by the Chief Executive Officer in the case of the Company's other executive
officers, subject to approval of the Board of Directors as to grants of stock
options or other non-cash bonuses.
The decision to award an annual bonus has historically been based primarily
upon 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. Although the financial results of the Company are generally expressly
considered in connection with the decision to award an annual bonus, no specific
thresholds relating to financial performance criteria are established. Rather,
the decision to grant an annual bonus has been based upon the financial results
of the Company in light of its internally projected results and the results of
its peers, market conditions and operational achievements that are expected to
affect earnings in the future.
The decision making process for the granting of bonuses has typically
occurred in May of each year following the annual meeting of stockholders and
has involved the consideration of the prior year's results as well as
achievements and results through such time. Various bonuses were paid to the
Company's executive officers in the first quarter of 1998 in recognition of
those officers assistance in achieving the Company's growth in 1997, including
assistance in completing numerous acquisitions, the finalization of all matters
relating to the Company's disposition of its contract drilling division in late
1996 and contributing to the Company's successful raising of capital in 1997 and
other factors. Other bonuses paid in 1997 were paid to the Company's executive
officers based on the Company's results in 1996 and the first part of 1997. The
decisions on the amounts of such bonuses were based on subjective factors.
Deferred Compensation Plan -- The Company maintains an executive deferred
compensation plan that provides the Company's 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
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contribution under the plan equal to 7 1/2% 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 equity of the Company 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 1/2% of
their compensation to their account under the plan, in which case the Company
will make a matching contribution equal to the amount of the deferral by the
employee. The Principal Executive and other executive officers have all elected
to defer 7 1/2% of their compensation under the plan. The 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. The Board believes that this plan is an
important component of the Company's 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 Board of Directors also believes that the use
of stock options provides incentive to its executive officers for working toward
the long-term growth of the Company by providing them with a benefit that will
increase only to the extent that the value of the Common Stock increases.
Accordingly, the Company has from time to time granted to the Company's
executive officers options to purchase shares of Common Stock. The number of
shares granted is determined based on the level and contribution of the employee
and generally takes into account stock ownership and other options held by the
employee. 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. The Board believes that the number of stock options granted to
executive officers during 1997 was consistent with industry standards and the
Company's objectives to emphasizing stock based compensation at the senior
executive officer level.
In 1997, options to purchase a total of 232,000 shares of Common Stock were
granted to five of the Company's executive officers.
Discussion of 1997 Compensation for the President and Chief Executive Officer
In fixing the compensation of Mr. Duroc-Danner for 1997, the Committee
determined that it would be appropriate to increase Mr. Duroc-Danner's base
compensation from $350,000 to $400,000 and award him a bonus of $500,000 in the
first quarter of 1997 in recognition of his past services to and accomplishments
for the Company. Mr. Duroc-Danner also received a bonus of $700,000 in the first
quarter of 1998 in recognition of his efforts to expand and grow the Company's
businesses, his defining and implementing the Company's growth strategy in 1997
and his general accomplishments in increasing stockholder value. 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 Oilfield Equipment and Services
Index in the performance graph set forth herein. During 1997, Mr. Duroc-Danner
also received options to purchase 50,000 shares of Common Stock. The number of
shares subject to such options was fixed at that level in order to provide Mr.
Duroc-Danner with material incentives to increase the value of the Company's
Common Stock in the future. In reviewing Mr. Duroc-Danner's compensation for
1997, the Committee 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 Limitation
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 the Company's 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 stockholders of the Company. The Board
believes that maintaining the discretion to evaluate the performance of the
Company's management is an important part of its responsibilities and benefits
the
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Company's stockholders. In establishing the compensation policies for the
Company following the Weatherford merger, the Committee and the Board intend to
take into account the potential application of Section 162(m) with respect to
incentive compensation awards and other compensation decisions.
Summary
The Board believes that the Company's executive compensation program for
1997 was consistent with the compensation programs provided by other companies
which are comparable in size and complexity to the Company and with which the
Company competes, including many of the companies in the Dow Jones Oilfield
Equipment and Services Index in the performance graph set forth herein. The
Board further believes that the Company's 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 Committee intend to
review the Company's 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. The Board also believes that the Company's deferred
compensation plan and stock option program provide significant incentives to
participants 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*
* Member of the Compensation Committee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Lubar, Moses and Rayne are the current members of the Compensation
Committee of the Board of Directors of the Company. In addition, the full Board
of Directors of the Company currently approves all stock grants, with Messrs.
Duroc-Danner and Burguieres, both employee directors of the Company, abstaining
from voting with respect to such matters. Mr. Duroc-Danner, however, does make
recommendations to the Compensation Committee and the full Board of Directors in
regard to compensation and stock grants for the employees of the Company.
Messrs. Butters and Millard, directors of the Company, are employed by
Lehman Brothers. During 1997, Lehman Brothers received usual and customary
compensation for services rendered in connection with (i) the cash tender
relating to the Company's 10 1/4% Senior Notes due 2004 and 10 1/4% Senior Notes
due 2004, Series B, and (ii) the private placement of $402.5 million of the
Company's 5% Convertible Subordinated Preferred Equivalent Debentures due 2027.
Additionally, Lehman Brothers received a fee of $3 million from the Company for
the assistance rendered by Lehman Brothers to the Company in connection with the
Weatherford Merger.
Mr. Lubar, director of the Company, is Chairman and Chief Executive Officer
of Christiana, a diversified holding company with interests in refrigerated and
dry warehousing, transportation and logistic services. In addition, Mr. Lubar
currently owns 968,615 shares of Christiana common stock ("Christiana Common
Stock"), representing 18.8% of the total outstanding shares of Christiana Common
Stock. In December 1997, the Company entered into an Agreement and Plan of
Merger, as amended (the "Christiana Merger Agreement"), with Christiana, and C2,
Inc., ("C2"), a Wisconsin corporation, providing for the acquisition of
Christiana by the Company pursuant to a tax free merger (the "Christiana
Merger") in which approximately 3.9 million shares of the Company's Common Stock
may be issued to the stockholders of Christiana. If the
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Christiana Merger is consummated, Mr. Lubar and members of his family will own
2,036,135 shares of Common Stock and will receive aggregate cash consideration
of $10,872,000, as well as a right to aggregate contingent cash consideration of
approximately $5,219,000.
Prior to the Christiana Merger, Christiana is required to sell two-thirds
of its interest ("Logistic Sale"), in Total Logistic Control, a wholly owned
subsidiary of Christiana ("Logistic") to C2, Inc. for consideration of
approximately $10.7 million. Following the Logistic Sale, remaining assets of
Christiana are required to consist of (i) approximately 3.9 million of Common
Stock, (ii) a one-third interest in Logistic, and (iii) cash and other assets
with a book value of approximately $10 million. It is anticipated that
Christiana will have no material debt as of the consummation of the Christiana
Merger, but will have various tax liabilities which will be paid with the
remaining cash in Christiana after the Christiana Merger.
As part of the proposed acquisition of Christiana, the Company will be
indemnified by Logistic and C2 for all liabilities relating to Christiana's,
Logistic's, and their respective subsidiaries' and predecessors' businesses and
all historical contingent liabilities relating to the businesses of Christiana,
Logistic, and their respective current and historical subsidiaries and
predecessors.
On August 17, 1998, the stockholders of the Company and the shareholders of
Christiana each approved the Christiana Merger. The consummation of the
Christiana Merger is subject to the satisfaction of various conditions
precedent, including confirmation of an opinion of Arthur Andersen LLP to the
effect that, among other things, the Christiana Merger will constitute a
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code"), and that the shareholders of Christiana will not recognize
any federal income tax as a result of their receipt in the Christiana Merger of
shares of Common Stock in exchange for their shares of Christiana Common Stock.
Under the applicable provisions of the Code, the Christiana Merger will not
qualify as a tax free reorganization under Section 368 of the Code and the
shareholders of Christiana will not be entitled to receive the shares of Common
Stock in exchange for their shares of Christiana Common Stock without the
recognition of gain or loss for federal income tax purposes unless the value of
the shares of Common Stock to be received by the shareholders of Christiana in
the Christiana Merger as of the effective time of the Christiana Merger is equal
to at least 80% of the total value of the consideration to be received by the
shareholders of Christiana in the Christiana Merger. Due to recent declines in
the market price of the Common Stock below $30.00 per share, the shares of
Common Stock that would be received by the shareholders of Christiana in the
Christiana Merger would constitute less than 80% of the total consideration
payable in the Christiana Merger.
Under the terms of the Christiana Merger Agreement, the Christiana Merger
is required to close promptly following stockholder approval and the
satisfaction of all other conditions to the Christiana Merger. In recognition of
this obligation, the Company and Christiana have agreed that, as long as all
other conditions to the Christiana Merger are satisfied as of such time, they
will close the Christiana Merger if prior to the termination of the Christiana
Merger Agreement (i) the market price for the Common Stock equals or exceeds
approximately $30.00, the price estimated by Christiana to be the price
necessary for the Christiana Merger to be tax free, and (ii) Christiana receives
an opinion of Arthur Andersen LLP at closing that the Christiana Merger will
qualify as a reorganization under Section 368 of the Code and that the
shareholders of Christiana will not recognize any gain or loss on the exchange
of their shares of Christiana Common Stock for shares of Common Stock in the
Christiana Merger.
No conditions to the Christiana Merger have been waived by the Company or
Christiana nor are currently expected to be waived. If the Christiana Merger is
not consummated by October 31, 1998, the Christiana Merger Agreement may be, but
is not required to be, terminated by either the Company or Christiana without
liability to either party other than certain continuing covenants such as
confidentiality and Christiana's obligation to reimburse the Company for various
of its costs relating to the Christiana Merger.
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EXECUTIVE COMPENSATION
The aggregate compensation paid for the years ended December 31, 1997, 1996
and 1995 to Mr. Duroc-Danner, the Company's Chief Executive Officer, and the
four most highly compensated executive officers of the Company during 1997 whose
total annual salary and bonus exceeded $100,000 (hereafter referred to as the
"named executive officers") during the year ended December 31, 1997 was as
follows:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION SHARES OF
-------------------------------- COMMON
OTHER ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($)(2)(3) OPTIONS ($)(4)
- --------------------------- ---- ------- ------- ------------ ------------ ------------
Bernard J. Duroc-Danner.... 1997 391,667 500,000 133,750 50,000 9,233
1996 340,000 100,000 66,000 400,000 10,472
1995 280,000 50,000 39,600 50,000 8,992
John C. Coble(5)........... 1997 250,000 207,200 69,660 40,000 7,241
1996 -- -- -- -- --
1995 193,333 30,000 26,800 34,000 6,914
James G. Kiley............. 1997 241,667 150,000 47,000 50,000 --
1996 183,333 75,000 23,250 100,000 --
1995 145,000 25,000 10,200 50,000 --
Robert F. Stiles(6)........ 1997 200,000 75,000 30,997 60,000 5,636
1996 -- -- -- -- --
1995 -- -- -- -- --
Frances R. Powell.......... 1997 176,667 120,000 44,500 32,000 4,821
1996 148,333 60,000 31,250 -- 6,996
1995 125,000 25,000 18,000 -- 4,566
- ---------------
(1) Salary and bonus compensation include amounts deferred by the named
executive officer pursuant to the Company's Executive Deferred Compensation
Stock Ownership Plan (the "Executive Deferred Plan") described in Note 2
below. For purposes of the Executive Deferred Plan, the compensation of a
participant will be the participant's total cash compensation as reported on
his or her Form W-2 for the calendar year plus all amounts deferred under
the Executive Deferred Plan and any eligible cash or deferred arrangement
under Section 401(k) of the Internal Revenue Code, of 1986, as amended. A
participant may elect a percentage (not less than 1% nor more than 7 1/2%)
of his or her compensation to be deferred under the Executive Deferred Plan
for the following calendar year. Once an election has been made as to the
percentage to be deferred, the election is irrevocable for the subsequent
Plan year. Bonus compensation is based on the date when paid because such
compensation is not based solely on achievements for the prior fiscal year.
Bonuses are typically paid in May following the Company's annual meeting.
Subsequent to December 31, 1997, the Company paid bonuses to its executive
officers in recognition of services provided by such officers to the Company
during 1997 and the first quarter of 1998. These bonuses included $700,000,
$308,640, $300,000 and $134,715 and $200,000 for Messrs. Duroc-Danner,
Coble, Kiley and Stiles and Ms. Powell, respectively.
(2) Other Annual Compensation includes (i) the vested portion of the amount
accrued by the Company under the Executive Deferred Plan for the basic
benefit of each participant equal to 7 1/2% of the participant's
compensation for each calendar year, plus (ii) the vested portion of
matching contribution under the Executive Deferred Plan provided by the
Company to each participant who elects to defer a portion of his or her
compensation in an amount equal to 100% of the amount deferred by the
participant. The Company's 7 1/2% accrual under the Executive Deferred Plan
and any matching accruals made with respect to deferrals by participants,
vest generally over a five-year period on the basis of 20% per year for
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each year of service by the participant with the Company or its subsidiaries
after the later of January 1, 1992 or the date one became a participant in the
Executive Deferred Plan, subject to 100% vesting upon the participant's
retirement, death or disability while in the employment of the Company or a
subsidiary, except under certain circumstances. Under the Executive
Deferred Plan, the compensation deferred by the employee and the matching
contributions provided by the Company are converted into non-monetary units
equal to the number of whole shares of Common Stock that could have been
purchased by the amounts credited to the account at a market based price.
Distributions are made to participants under the Executive Deferred Plan
following the time the employee retires, terminates his employment or dies.
The amount of the distribution under the Executive Deferred Plan is based
on the number of vested units in the employee's account at such time
multiplied by the market price of the Common Stock at that time.
Distributions under the Executive Deferred Plan may, at the election of the
Company, be made in cash, stock, or combination thereof. It is the current
intention of the Company that all distributions be made in the form of
shares of Common Stock. The obligations of the Company with respect to the
Executive Deferred Plan are unfunded. However, the Company has established
a grantor trust that is subject to the claims of creditors of the Company
to which funds are deposited with an independent trustee that purchases
shares of Common Stock for the Executive Deferred Plan. As of December 31,
1997, Messrs. Duroc-Danner, Coble, Kiley and Stiles and Ms. Powell had
45,018, 29,594, 12,092 and 15,521 and 17,386 units allocated to their
respective accounts.
(3) Excludes perquisites and other benefits because the aggregate amount of such
compensation was the lesser of $50,000 or 10% of the total of annual salary
and bonus reported for the named executive officer.
(4) Represents matching contributions of $1,920 made by the Company in 1997
under the Company's 401(k) Savings Plan for each of Messrs. Duroc-Danner,
Coble and Stiles and Ms. Powell and life insurance premiums of $7,313,
$5,321 and $3,716 and $2,901 paid by the Company in 1997 for each of Messrs.
Duroc-Danner, Coble and Stiles and Ms. Powell, respectively.
(5) Information for Mr. Coble is not presented for 1996 as he was not an
executive officer of the Company.
(6) Information for Mr. Stiles is not presented for 1996 and 1995 as he was not
an executive officer of the Company.
The following table shows, as to the named executive officers, the options
granted pursuant to the 1992 Plan during the year ended December 31, 1997:
OPTIONS GRANTED IN LAST FISCAL YEAR
NUMBER OF % OF TOTAL
SHARES OF OPTIONS
COMMON STOCK GRANTED TO GRANT DATE
UNDERLYING EMPLOYEES IN EXERCISE PRICE EXPIRATION PRESENT VALUE
NAME OPTIONS GRANTED 1997 (PER SHARE)($) DATE ($)(1)
---- --------------- ------------ -------------- ---------- -------------
Bernard J.
Duroc-Danner........... 50,000(2) 22 27.8125 5/06/2007 984,000
James G. Kiley........... 50,000(2) 22 27.8125 3/09/2007 839,000
John C. Coble............ 40,000(2) 17 27.8125 3/09/2007 671,200
Robert F. Stiles......... 60,000(2) 25 27.8125 3/09/2007 1,006,800
Frances R. Powell........ 32,000(2) 14 27.8125 3/09/2007 536,960
- ---------------
(1) Based upon Black-Scholes option valuation model. The calculation assumes
volatility of 49%, a risk free rate of 6.5%, a seven year expected life, no
expected dividends and option grants at $27.8125 per share. The actual
value, if any, which may be realized with respect to any option will depend
on the amount, if any, by which the stock price exceeds the exercise price
on the date the option is exercised. Thus, such valuation may not be a
reliable indication as to value and there is no assurance the value realized
will be at or near the value estimated by the Black-Scholes model.
(2) Options became fully exercisable on May 27, 1998.
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The following table shows, as to the named executive officers, the
aggregate option exercises during 1997 and the values of unexercised options as
of December 31, 1997:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 1997 OPTION VALUES
SHARES OF NUMBER OF SHARES OF
COMMON COMMON STOCK UNDERLYING VALUE OF UNEXERCISED
STOCK UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED DECEMBER 31, 1997 AT DECEMBER 31, 1997($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- ----------- ----------- ------------- ----------- -------------
Bernard J. Duroc-Danner...... 320,000 11,905,782 450,000 380,000 19,045,000 14,104,375
James G. Kiley............... 45,000 1,178,056 -- 155,000 -- 5,399,650
John C. Coble................ 38,136 1,204,435 -- 80,400 -- 2,716,000
Robert F. Stiles............. -- -- -- 60,000 -- 1,436,250
Frances R. Powell............ 11,000 439,529 9,000 32,000 403,875 766,000
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(1) Value based on difference in market value of the Common Stock on December
31, 1997, and the exercise price. The actual value, if any, of the
unexercised options will be dependent upon the market price of the Common
Stock at the time of exercise. The value of unexercisable options has not
been discounted to reflect present value.
EMPLOYMENT AND CHANGE OF CONTROL CONTRACTS
The Company has entered into employment agreements (each an "Employment
Agreement") with each of Messrs. Duroc-Danner, Kiley, Coble, Stiles and Huff and
Ms. Powell. Each of the Employment Agreements provides for a term of three years
and is renewable annually. Under the terms of the Employment Agreements, if the
executive's employment is terminated by the Company for any reason other than
"cause" or "disability" or by the executive for "good reason", in each case as
such terms are defined in the Employment Agreements, the executive will be
entitled to receive (i) an amount equal to three times the executive's current
base compensation plus the highest bonus paid to the executive during the three
years preceding the year of termination, (ii) any accrued salary or bonus (pro
rated to the date of termination), (iii) an amount equal to the amount that
would be payable if all retirement plans were vested, (iv) an amount equal to
the amount that would have been contributed as the Company's match under its
401(k) Savings Plan and its Executive Deferred Plan for three years and (v) an
amount equal to the amount the executive would have received as a 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 Company's Board, or the
willful engagement in illegal conduct or gross misconduct. Termination by the
executive for "good reason" is generally defined as (i) a material reduction in
title and/or responsibilities of the executive, (ii) certain relocations of the
executive or (iii) 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. Further, with respect to
options, the executive would have the right to either exercise such options for
one year after his or her date of termination or to surrender for such 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 or her
required contribution. Under the Deficit Reduction Act of 1984, certain
severance payments that exceed a certain amount could subject both the Company
and the executive to adverse U.S. federal income tax consequences. Each of the
Employment Agreements provides that the Company would be required to pay the
executive a "gross up payment" to insure that the executive receives the total
benefit intended by the Employment Agreement. In addition, in connection with
the retention of Mr. Huff as Senior Vice President, General Counsel and
Secretary of the Company, the Company granted to Mr. Huff a sign-on incentive
bonus of 75,000 shares of restricted Common Stock, subject to four year vesting
on the basis of 25% per year, and options to purchase an aggregate of 100,000
shares of Common Stock at the
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per share market price of the Common Stock on June 15, 1998, subject to vesting
over a three year period on the basis of one-third per year. The base
compensation payable to Messrs. Duroc-Danner, Kiley, Coble, Stiles and Huff and
Ms. Powell under the Employment Agreements are $550,000, $275,000, $300,000,
$270,000 and $350,000 and $200,000, respectively.
On June 15, 1998, the Company entered into a new employment agreement with
Mr. Burguieres (the "Burguieres Employment Agreement") and terminated the Mr.
Burguieres' existing agreement. The Burguieres Employment Agreement has a term
of ten years and provides for an annual salary of $120,000. Under the terms of
the Burguieres Employment Agreement, Mr. Burguieres will be employed as Chairman
Emeritus of the Board of Directors of the Company; provided, however, the
Company is not obligated to re-elect Mr. Burguieres as Chairman Emeritus at any
time in the future nor is the Board of Directors of the Company required to
nominate Mr. Burguieres for re-election as a director upon the expiration of his
current term. If Burguieres' employment is terminated by the Company for any
reason other "cause" or as a result of death or "disability" (as defined in the
Burguieres Employment Agreement), Burguieres or his estate will be entitled to
receive annual salary payments through the scheduled term of the agreement and
Burguieres and his eligible dependents will be entitled to continue to receive
the health and medical benefits provided under the agreement through the
scheduled term of the agreement. If the Company terminates the Burguieres
Employment Agreement for "cause", Mr. Burguieres will not be entitled to any
further salary payments or health and medical benefits. Under the Burguieres
Employment Agreement, "cause" is defined as (i) an act or acts of dishonesty by
Mr. Burguieres which constitute a felony or result in personal gain or
enrichment at the expense of the Company, (ii) willful and continued failure of
Mr. Burguieres to substantially perform his duties with the Company after
written demand is made by the Company's Board, or (iii) Mr. Burguieres'
ownership, management, operation, control, or employment by, participation in or
connection in any manner with the ownership, management, operation or control of
any business which competes, in the Company's reasonable judgment, with any
business conducted by the Company or any of its subsidiaries or affiliates in
any area where such business is being conducted.
Additionally, change of control agreements exist between the Company and
Messrs. Nicholson and Stilley (the "Change of Control Agreements"). The Change
of Control Agreements provide that, in the event of a Change of Control (as
defined therein) of the Company, which occurred as a result of the Weatherford
Merger, the following provisions apply: (i) the executive's base salary will not
decrease unless there is a company-wide salary reduction; (ii) the executive's
annual bonus may not be less than the highest bonus paid to him in the three
years immediately preceding the Change of Control; (iii) the executive will be
entitled to the most favorable incentive, savings, retirement and welfare plans,
expense reimbursement, fringe benefits and vacation policies in effect 120 days
prior to the Change of Control and at anytime thereafter; (iv) the executive's
job title and responsibilities may not be materially reduced and (v) the
executive cannot be forced to move more than 35 miles. If the executive is
terminated other than for cause ("Executive Cause") or if the executive
terminates his employment for good reason ("Executive Good Reason"), in either
case within three years after the Weaherford Merger, the executive will be
entitled to the following: (i) salary plus pro rata bonus owed through date of
termination; (ii) three times annual salary and bonus; (iii) all amounts that
would otherwise have been owed to that executive under all retirement and
savings plans during the next three years; (iv) welfare plan coverage for three
years (if the executive pays the required premium); (v) outplacement services;
(vi) at the executive's option, to be exercised within 60 days after
termination, payment of the unrecognized appreciation on all outstanding options
and stock appreciation rights within 30 days after the date of the executive's
election (regardless of whether vested at termination), 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 would have received, or all outstanding options
and stock appreciation rights vest upon, and survive and will be exercisable
for, seven months after termination; (vii) all club memberships will be
transferred to the executive; (viii) the executive's company car will be
transferred to him, if applicable, or the executive will be paid three times his
annual car allowance; (ix) all benefits under all retirement and savings plans
will vest; and (x) in the event any such payments trigger excise taxes, the
amounts paid will be grossed up to pay this obligation of the executive.
"Executive Cause" is defined as willful and continued failure of the executive
to perform his or her job, after written demand is made by the Chief
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Executive Officer or the Board of Directors, or the executive's willful
engagement in illegal conduct or gross misconduct. "Executive Good Reason" is
defined as (i) a material reduction in title and/or responsibilities of the
executive, (ii) a required move of more than 35 miles or (iii) any material
reductions in benefits.
PERFORMANCE GRAPH
The following performance graph sets forth the yearly cumulative return on
the Common Stock compared to the Dow Jones Global U.S. Index and the Dow Jones
Oilfield Equipment & Services Index (which consists of Baker Hughes, Inc.,
Dresser Industries, Inc., Halliburton Company, McDermott International, Inc.,
Schlumberger Limited and Western Atlas Inc.) since December 31, 1992. The graph
assumes (i) the reinvestment of dividends, if any, and (ii) the value of the
investment in the Company's Common Stock and each index to have been $100 at
December 31, 1992.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG EVI WEATHERFORD, INC., DOW JONES GLOBAL U.S. INDEX AND
DOW JONES OILFIELD EQUIPMENT AND SERVICE INDEX
FISCAL YEAR ENDING DECEMBER 31ST
DOW JONES
OILFIELD
EVI DOW JONES EQUIPMENT &
MEASUREMENT PERIOD WEATHERFORD, GLOBAL US SERVICES
(FISCAL YEAR COVERED) INC. INDEX INDEX
12/31/92 100 100 100
12/31/93 127 110 108
12/31/94 123 111 99
12/29/95 256 152 138
12/31/96 515 188 191
12/31/97 1048 251 298
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants, served as
the Company's auditors for the fiscal year ended December 31, 1998, and has
served as the Company's auditors since its inception in 1972. A representative
of Arthur Andersen LLP will be present at the Annual Meeting to respond to
appropriate questions and will be afforded an opportunity to make a statement if
he or she so desires.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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, during fiscal year 1997 all Section 16(a) filing
requirements were complied with.
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PROPOSALS BY STOCKHOLDERS
Any stockholder wishing to present a proposal for consideration at the next
Annual Meeting of Stockholders, anticipated to be held in May 1999, must submit
the proposal in sufficient time so that it may be received by the Company at its
principal executive offices at the address set forth on the cover of this Proxy
Statement on or before January 15, 1998, in order to be included in the proxy
statement and form of proxy relating to that meeting. Such proposal must also
comply with the requirements as to form and substance established by applicable
laws and regulations in order to be included in the proxy statement.
OTHER BUSINESS
The Company's management knows of no other business that will be brought
before the meeting. If, however, any other matters are properly presented, it is
the intention of the persons named in the accompanying form of proxy to vote the
shares covered thereby as in their discretion they may deem advisable.
By Order of the Board of Directors
/s/ CURTIS W. HUFF
------------------------------------
Curtis W. Huff
Corporate Secretary
Houston, Texas
August 17, 1998
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EVI WEATHERFORD, INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 21, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
stockholder of EVI Weatherford, Inc. (the "Company") hereby appoints Bernard J.
Duroc-Danner and Curtis W. Huff, 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 of the Company that
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held on September 21, 1998, at
4:00 p.m., C.D.S.T., at The Luxury Collection Hotel of Houston, Houston,
Texas, and at any adjournment or postponement thereof, on the following matters
that are more particularly described in the Proxy Statement dated August 17,
1998:
(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 listed
to the contrary below) above
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any Nominee, write that
Nominee's name in the space provided below
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(2) Proposal to amend the Company's Amended and Restated Certificate of
Incorporation to change the Company's name to "Weatherford International,
Inc."
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(3) 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)
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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 AND "FOR" APPROVAL OF PROPOSAL 2.
Receipt of the Proxy Statement dated August 17, 1998, and the Annual Report of
the Company for the year ended December 31, 1997, is hereby acknowledged.
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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: ______________, 1998.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
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