<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
IRI INTERNATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
------------------------------------------------------------------------
(3) Filing party:
------------------------------------------------------------------------
(4) Date filed:
------------------------------------------------------------------------
<PAGE> 2
IRI INTERNATIONAL CORPORATION
1000 LOUISIANA
SUITE 5900
HOUSTON, TEXAS 77002
May 13, 1999
Dear IRI Stockholder:
You are cordially invited to attend an Annual Meeting of Stockholders of
IRI International Corporation, a Delaware corporation ("IRI" or the "Company"),
to be held at 1000 Louisiana, Suite 5900, Houston, Texas 77002, on June 14,
1999, at 10:00 a.m., local time (including any adjournment or postponement
thereof, the "Annual Meeting"). At the Annual Meeting, you will be asked to
consider and to vote upon proposals with respect to (i) the election of 15
directors to the IRI Board of Directors to hold office until their successors
are duly elected and qualified; (ii) the ratification of appointment of KPMG
Peat Marwick LLP as the Company's independent auditors for its fiscal year
ending December 31, 1999, and (iii) any such other business as may properly come
before the Annual Meeting or any adjournments or postponements thereof.
YOUR BOARD OF DIRECTORS BELIEVES THAT THE ABOVE MENTIONED PROPOSALS ARE IN
THE BEST INTERESTS OF IRI AND ITS STOCKHOLDERS, AND RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF EACH OF THEM.
YOUR VOTE IS VERY IMPORTANT. The presence at the Annual Meeting in person
or by proxy of the holders of a majority of the outstanding shares of Common
Stock of the Company entitled to vote is required to constitute a quorum for the
transaction of business. We hope you will find it convenient to attend the
Annual Meeting in person. Whether or not you plan to attend, please complete,
date, sign and mail promptly the enclosed proxy in the return envelope provided.
If you attend the Annual Meeting you may revoke your proxy and vote your shares
in person, if you so desire.
Sincerely,
/s/ Hushang Ansary
--------------------------------------
Hushang Ansary
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
IRI INTERNATIONAL CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 1999
To the Stockholders of
IRI International Corporation
NOTICE IS HEREBY GIVEN THAT an Annual Meeting of Stockholders of IRI
International Corporation, a Delaware corporation ("IRI" or the "Company"), will
be held at 1000 Louisiana, Suite 5900, Houston, Texas 77002, on June 14, 1999,
at 10:00 a.m., local time (the "Annual Meeting"), for the following purposes:
(1) To consider and vote on the election of 15 directors to the IRI
Board of Directors to hold office until their successors are duly elected
and qualified.
(2) To consider and vote on the ratification of appointment of KPMG
Peat Marwick LLP as IRI's independent auditors for its fiscal year ending
December 31, 1999.
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on May 12, 1999 as
the record date for holders of Common Stock of the Company entitled to notice
of, and to vote at, the Annual Meeting and any adjournment or postponement
thereof. Stockholders who execute proxies solicited by the Board of Directors of
IRI retain the right to revoke them at any time prior to the meeting; unless so
revoked, the shares of Common Stock of the Company represented by such proxies
will be voted at the Annual Meeting in accordance with the directions given
therein. If a stockholder does not specify a choice on such stockholder's proxy,
the proxy will be voted in favor of the approval of the foregoing proposals. The
proxy is solicited by and on behalf of the Board of Directors of IRI.
In the event that there are not sufficient votes to approve the proposals,
it is expected that the Annual Meeting will be postponed or adjourned in order
to permit further solicitation of proxies by the Company.
Further information regarding the Annual Meeting and each of the proposals
is set forth in the attached Proxy Statement and the attachments thereto. Please
read them carefully.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, WE ASK THAT YOU PLEASE
COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED
POSTPAID ENVELOPE.
THE BOARD OF DIRECTORS OF IRI RECOMMENDS THAT IRI STOCKHOLDERS VOTE TO
APPROVE THE ABOVEMENTIONED PROPOSALS.
By Order of the Board of Directors
/s/ Abdallah A. Andrawos
--------------------------------------
Abdallah A. Andrawos
Secretary
May 13, 1999
1000 Louisiana
Suite 5900
Houston, Texas 77002
<PAGE> 4
IRI INTERNATIONAL CORPORATION
1000 LOUISIANA
SUITE 5900
HOUSTON, TEXAS 77002
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 14, 1999
SOLICITATION OF PROXY
The accompanying proxy is solicited on behalf of the Board of Directors of
IRI International Corporation, a Delaware corporation ("IRI" or the "Company"),
for use at the Annual Meeting of Stockholders of the Company to be held at 1000
Louisiana, Suite 5900, Houston, Texas 77002 on June 14, 1999 at 10:00 a.m., and
at any adjournment or adjournments thereof (the "Annual Meeting"). In addition
to solicitation of proxies by mail, proxies may be solicited by personal
interview, telephone or facsimile by officers, directors and other employees of
the Company, who will not receive additional compensation for such services. The
Company may also request brokerage houses, nominees, custodians and fiduciaries
to forward the soliciting material to the beneficial owners of Common Stock held
of record and it will reimburse such persons for forwarding such material at the
rates suggested by the New York Stock Exchange ("NYSE"). The Company will bear
the cost of this solicitation of proxies. Such costs are expected to be nominal.
Proxy solicitation will commence with the mailing of this Proxy Statement and
accompanying form of proxy on or about May 13, 1999.
Any stockholder giving a proxy has the power to revoke the same at any time
prior to its exercise by executing a subsequent proxy or by written notice to
the Secretary of the Company or by attending the Annual Meeting and withdrawing
the proxy.
PURPOSE OF MEETING
As stated in the Notice of Annual Meeting of Stockholders accompanying this
Proxy Statement, the business to be conducted and the matters to be considered
and acted upon at the Annual Meeting are as follows:
1. To elect 15 directors to hold office until their successors are
duly elected and qualified;
2. To ratify the appointment of KPMG Peat Marwick LLP as IRI's
independent auditors for its fiscal year ending December 31, 1999; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
VOTING AT MEETING
The voting securities of the Company consist solely of common stock, par
value $0.01 per share ("Common Stock").
The record date for stockholders entitled to notice of and to vote at the
Annual Meeting is the close of business on May 12, 1999 (the "Record Date"), at
which time the Company had issued and outstanding and entitled to vote at the
Annual Meeting 39,900,000 shares of Common Stock. Stockholders are entitled to
one vote, in person or by proxy, for each share of Common Stock held in their
names on the Record Date.
Stockholders representing a majority of the shares of Common Stock issued
and outstanding and entitled to vote thereat must be present or represented by
proxy to constitute a quorum for the Annual Meeting.
<PAGE> 5
Neither abstentions nor broker non-votes are counted as votes cast on any
matter to which they relate. All shares represented in person or by proxy,
including abstentions and broker non-votes, are considered in determining
whether a quorum has been reached on a particular matter. A broker non-vote will
occur when a broker who holds shares in nominee form, or "street name," for a
customer does not have the authority under the rules of the NYSE to cast a vote
on a particular matter because the matter is deemed by the NYSE to be
non-discretionary and the broker's customer has not furnished voting
instructions.
The election of directors will require the affirmative vote of a plurality
of the Common Stock present or represented by proxy at the Annual Meeting and
voting thereon. Cumulative voting for directors is not authorized. The
ratification of the appointment of KPMG Peat Marwick LLP as IRI's independent
auditors will require the affirmative vote of a majority of the Common Stock
present or represented by proxy at the Annual Meeting and voting thereon.
SUBMISSION OF PROPOSALS BY STOCKHOLDERS
In order to be eligible for inclusion in the Company's proxy statement and
form of proxy for the 2000 Annual Meeting of Stockholders, any proposal of a
stockholder must be received by the Company at its principal executive offices
in Houston, Texas by January 12, 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of May 12, 1999 by (i) each person that owns
beneficially more than 5% of the Common Stock, (ii) each director and Named
Executive Officer (as defined) and (iii) all directors and executive officers of
the Company as a group. For purposes of the table, a person or group of persons
is deemed to have "beneficial ownership" of any shares as of a given date on
which such person has the right to acquire such shares within 60 days after such
given date.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
DIRECTORS AND EXECUTIVE OFFICERS SHARES OWNED(1) SHARES OWNED(1)
- -------------------------------- --------------- ---------------
<S> <C> <C>
Hushang Ansary.............................................. 23,659,333(2)(3) 57.90%
Daniel G. Moriarty.......................................... 78,700(3) *
Abdallah A. Andrawos........................................ 43,333(3) *
Nina Ansary................................................. 3,008,333(3) 7.36%
Frank C. Carlucci........................................... 1,052,333(3) 2.57%
Dr. Philip David............................................ 1,858,333(3)(4) 4.55%
Munawar H. Hidayatallah..................................... 175,166(3) *
Richard D. Higginbotham..................................... 8,666(3) *
John D. Macomber............................................ 8,333(3) *
Edward L. Palmer............................................ 8,333(3) *
Stephen J. Solarz........................................... 8,333(3) *
Gary W. Stratulate.......................................... 84,000(3) *
Arthur C. Teichgraeber...................................... 15,000(3) *
Alexander B. Trowbridge..................................... 8,333(3) *
J. Robinson West............................................ 8,333(3) *
All directors and executive officers as a group (15
persons).................................................. 27,016,529(2)(3) 66.11%
CERTAIN OTHER HOLDERS
Nader Ansary................................................ 3,000,000(2) 7.34%
The Ansary Family Trust..................................... 1,702,000(2) 4.17%
</TABLE>
- ---------------
* Less than 1%.
(1) Assumes exercise of vested options.
2
<PAGE> 6
(2) Mr. Ansary, The Ansary Family Trust, a trust controlled by Mr. Ansary for
the benefit, inter alia, of members of his immediate family, and a private
charitable foundation controlled by Mr. Ansary directly own in the aggregate
17,251,000 shares of Common Stock. Includes 6,008,333 shares of Common Stock
owned by Nina Ansary and Nader Ansary (Mr. Ansary's daughter and son), of
which Mr. Ansary disclaims beneficial ownership.
(3) Including, in the case of Mr. Ansary, Ms. Ansary, Mr. Carlucci and Mr.
David, Mr. Hidayatallah, Mr. Higginbotham, Mr. Moriarty and Mr. Stratulate,
and otherwise consisting of, options to purchase shares of Common Stock
granted pursuant to the Incentive Plan (as defined).
(4) Includes 500,000 shares of Common Stock owned by Dr. David's spouse, of
which he disclaims beneficial ownership.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company pursuant to Rule 16a-3 under the Exchange Act during
its most recent fiscal year and Form 5 and amendments thereto furnished to the
Company with respect to its most recent fiscal year, the Company believes that
the following directors and officers failed to file in a timely manner one of
their reports required under Section 16(a):
- Hushang Ansary filed a Form 4 on October 15, 1998 reporting transactions
that occurred on September 30, 1998 and June 26, 1998 and filed his Form
5 for 1998 on March 4, 1999;
- Philip David filed a Form 4 on October 19, 1998 for a transaction that
occurred on September 30, 1998;
- Arthur C. Teichgraeber filed a Form 4 on January 13, 1999 for
transactions that occurred on December 31, 1998 and July 17, 1998;
- Gary Stratulate disclosed on his Form 5 a transaction that occurred on
December 30, 1998.
- Daniel Moriarty disclosed on his Form 5 a transaction that occurred on
December 21, 1998.
Other than as noted above, the Company believes that during such fiscal year no
other director, officer, beneficial owner of more than ten percent of any class
of equity securities of the Company failed to file on a timely basis, as
disclosed in the above Forms, reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years.
ELECTION OF DIRECTORS
The Board of Directors has nominated the following 15 persons to be elected
at the Annual Meeting to serve until the next annual meeting of stockholders and
until their respective successors shall have been duly elected and qualified:
Hushang Ansary, Daniel G. Moriarty, Abdallah A. Andrawos, Nina Ansary, Frank C.
Carlucci, Dr. Philip David, Munawar H. Hidayatallah, Richard D. Higginbotham,
John D. Macomber, Edward L. Palmer, Stephen J. Solarz, Gary W. Stratulate,
Arthur C. Teichgraeber, Alexander B. Trowbridge and J. Robinson West. All such
persons are presently directors of the Company and are nominees for re-
election.
Information regarding persons nominated for election as directors at the
Annual Meeting is set forth below. A plurality of all votes cast at the Annual
Meeting or any adjournment or postponement thereof is required to elect each of
the nominees as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF EACH OF THE NOMINEES IDENTIFIED BELOW. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE SO VOTED EXCEPT WHERE AUTHORITY HAS BEEN WITHHELD.
3
<PAGE> 7
It is presently anticipated that at the first meeting of the Board of
Directors following the Annual Meeting, Mr. Ansary will be re-elected Chairman
of the Board (in addition to being the Company's Chief Executive Officer).
The directors and executive officers of the Company, and their ages and
positions with the Company as of the date of May 12, 1999, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Hushang Ansary....................... 71 Chairman of the Board and Chief Executive Officer
Daniel G. Moriarty................... 64 Vice-Chairman of the Board
Abdallah A. Andrawos................. 42 Director and Secretary
Nina Ansary.......................... 32 Director
Frank C. Carlucci.................... 68 Director
Dr. Philip David..................... 67 Director
Munawar H. Hidayatallah.............. 55 Director, Executive Vice President and Chief Financial
Officer
Richard D. Higginbotham.............. 61 Director
John D. Macomber..................... 70 Director
Edward L. Palmer..................... 81 Director
Stephen J. Solarz.................... 58 Director
Gary W. Stratulate................... 42 Director, Executive Vice President -- President of the
Downhole Products Group
Arthur C. Teichgraeber............... 42 Director, Executive Vice President -- President of the
Oilfield Equipment Group
Alexander B. Trowbridge.............. 69 Director
J. Robinson West..................... 52 Director
</TABLE>
All executive officers of the Company serve at the pleasure of the Board of
Directors (the "IRI Board"). Directors are elected at the Company's annual
meeting of stockholders and serve for a one-year term or until their successors
are elected and qualified or until their earlier resignation or removal in
accordance with the Company's Restated Certificate of Incorporation and the
Company's Amended and Restated Bylaws (the "Company Bylaws").
HUSHANG ANSARY is an international entrepreneur, investor and
industrialist. He has served as Chairman of the Board of the Company since
September 1994 and was elected to the additional position of Chief Executive
Officer of the Company in March 1997. He has served as Chairman of SunResorts,
Ltd. N.V., a resort company, since 1986 and of Parman Capital Investments Ltd.,
a private investment company, since 1982.
DANIEL G. MORIARTY has been a director of the Company since 1994 and served
as Chief Executive Officer of the Company from 1994 to April 1997, when he was
elected Vice-Chairman of the Board. He served as President of Cooper
Manufacturing, a rig manufacturing division of Allied Production Corp. from 1992
to 1994 and of Smith Energy Services, an oil field services division of Allied
Production Corp., from 1987 to 1992. From 1982 to 1987, Mr. Moriarty served as
the President and Chief Executive Officer of Leamco Services, Inc. From 1960 to
1982, Mr. Moriarty held various positions with Halliburton Company, rising from
engineer to Vice President of the Central Region.
ABDALLAH A. ANDRAWOS has been Secretary of the Company since 1994 and a
director of the Company since April 1997. Since 1989 Mr. Andrawos has served as
Secretary and Chief Financial Officer of SunResorts, Ltd. N.V.
NINA ANSARY has served as a director of the Company since April 1997. Ms.
Ansary has been a Vice President of Parman Capital Investments Ltd., a private
investment company, since 1994. Prior to 1994, Ms. Ansary was a student. Ms.
Ansary is the daughter of Hushang Ansary and holds a masters degree in political
science from Columbia University.
4
<PAGE> 8
FRANK C. CARLUCCI has been a director of the Company since 1994. Since
1993, Mr. Carlucci has served as Chairman and partner of The Carlyle Group, a
Washington, D.C. based merchant bank and from 1989 to 1993 served as
Vice-Chairman and partner. Mr. Carlucci serves on the following corporate
boards: BDM International, Mass Mutual Life Insurance Company, Kaman
Corporation, Neurogen Corporation, Northern Telecom Ltd., Quaker Oats Company,
SunResorts, Ltd. N.V., Texas Biotechnology Corporation, Pharmacia & Upjohn Inc.
and Ashland Inc. He is also a Trustee of the Rand Corporation.
DR. PHILIP DAVID has been a director of the Company since 1994. Dr. David
was a consultant to Fairchild Corporation from January 1988 to June 1993 and was
a Professor of Urban Studies and Planning at the Massachusetts Institute of
Technology from 1971 until June 1987. Dr. David is a director of Fairchild
Corporation.
MUNAWAR H. HIDAYATALLAH has been a director since 1994 and the Company's
Chief Financial Officer since April 1997. From 1994 to April 1997, he served as
and Executive Vice President -- Corporate Development of the Company. From 1982
to 1994, Mr. Hidayatallah served as President and Chief Executive Officer of
Crescott Inc., a holding company with interests in financial services, food
processing and franchising, and from 1992 to 1994 he served as President and
Chief Executive Officer of its subsidiary, Beverly Hills Securities Company.
RICHARD D. HIGGINBOTHAM has been a director of the Company since April
1997. Since September 1988 he has served as a consultant to the Company's
Downhole Products Group. He also served as Executive Vice President -- President
of the Downhole Products Group from April 1997 to September 1998. From 1988
until its acquisition by Company, Mr. Higginbotham served as President of Bowen
Tools, Inc.
JOHN D. MACOMBER has been a director of the Company since 1994. Mr.
Macomber has been a principal of JDM Investment Group, a private investment
company, since 1992. From 1988 to 1992, he was Chairman and President of the
Export-Import Bank of the United States, from 1973 to 1986 he was Chairman of
the Board and Chief Executive Officer of Celanese Corp. and from 1954 to 1973 he
was a managing partner of McKinsey & Co. He is also a director of The Brown
Group, Lehman Brothers Holdings Inc., Pilkington Ltd., and Textron Inc. He is
also a director and Vice-Chairman of The Atlantic Council of the United States
and a director of the French American Foundation and the National Executive
Services Corp. Mr. Macomber is a trustee of The Folger Library and a member of
the Council on Foreign Relations and the Bretton Woods Committee. Mr. Macomber
is Chairman of the Council for Excellence in Government and a trustee of the
Carnegie Institute of Washington.
EDWARD L. PALMER has been a director of the Company since June 1997. Mr.
Palmer has been President of the Mill Neck Group Inc., a management consulting
firm, since 1982, and prior thereto he served as Chairman of the Executive
Committee and a director of Citicorp and Citibank, N.A. He is also a director of
Commodore Applied Technologies, Inc. and SunResorts, Ltd. N.V.
STEPHEN J. SOLARZ has been a director of the Company since 1994. Mr. Solarz
has been President of Solarz Associates, an international consulting firm, since
1993. From 1975 to 1993, he was a member of the U.S. House of Representatives,
where he served on the Foreign Affairs, the Merchant Marine and Fisheries, the
Intelligence and the Joint Economic Committees. He is also a director of
Samsonite Corp., Geophone Company, L.L.C. and First Philippine Fund Inc.
GARY W. STRATULATE has been a director of the Company since April 1997. He
has served as Executive Vice President -- President of the Downhole Products
Group since September 1998. From April 1997 to September 1998, he served as the
President of the Oilfield Equipment Group and from December 1994 to April 1997
as Executive Vice President of the International Division of the Company. From
June 1991 to May 1994, Mr. Stratulate was the Chief Operating Officer of Dreco
Energy Services Ltd., a manufacturer of oil field equipment.
ARTHUR C. TEICHGRAEBER has been a director of the Company since April 1997
and Executive Vice President -- President of the Oilfield Equipment Group since
September 1998. Prior to its acquisition by the Company, Mr. Teichgraeber held
various positions at Cardwell International, Ltd., rising from sales engineer to
President. He is also a director of the Trinity Energy Resources, Inc.
5
<PAGE> 9
ALEXANDER B. TROWBRIDGE has been a director of the Company since 1994.
Since 1990, Mr. Trowbridge has been the President of Trowbridge Partners, Inc.,
a management consulting firm. He was President of the National Association of
Manufacturers from 1980 through 1989. He is also a director of The Gillette
Company, New England Life Insurance Company, E.M. Warburg-Pincus Counsellors
Fund, Rouse Company, Sun Company, Harris Corporation, ICOS Corporation Sunoco,
Inc. and SunResorts, Ltd. N.V. He is a charter trustee of Phillips Academy,
Andover.
J. ROBINSON WEST has been a director of the Company since 1994. Mr. West is
Chairman of The Petroleum Finance Company, Ltd., a petroleum industry consulting
firm, and served as its President from 1984 to 1996.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The management of the Company is under the direction of the Board of
Directors. The Board of Directors held six meetings during the Company's fiscal
year ended December 31, 1998. Each director (other than Mr. West, who was absent
from two meetings) attended at least 75% of the meetings of the Board of
Directors held while he or she was a director, and each director appointed to
serve on one or more committees of the Board of Directors attended 100% of the
meetings of such committee or committees held while he or she was a member
thereof.
The following are the standing committees of the Board of Directors:
Executive Committee. The Executive Committee consists of Messrs.
Ansary, Carlucci, Palmer, Solarz and Moriarty, with Mr. Ansary serving as
Chairman. The Executive Committee has full power and authority to exercise
all the powers of the IRI Board in the management of the business except
the power to fill vacancies on the IRI Board and the power to amend the
Company Bylaws and except as provided by law.
Audit Committee. The Audit Committee consists of Mr. Macomber and Dr.
David, with Mr. Macomber serving as Chairman. The Audit Committee has
responsibility for, among other things, (i) recommending the selection of
the Company's independent accountants, (ii) reviewing and approving the
scope of the independent accountants' audit activity and extent of
non-audit services, (iii) reviewing with management and the independent
accountants the adequacy of the Company's basic accounting systems and the
effectiveness of the Company's internal audit plan and activities,
(iv) reviewing with management and the independent accountants the
Company's financial statements and exercising general oversight of the
Company's financial reporting process, (v) reviewing the Company's
litigation and other legal matters that may affect the Company's financial
condition and (vi) monitoring compliance with the Company's business ethics
and other policies.
Compensation Committee. The Compensation Committee consists of Dr.
David and Mr. West, with Dr. David serving as Chairman. The Compensation
Committee has responsibility for (i) reviewing and approving the
recommendations of the Chief Executive Officer as to appropriate
compensation of the Company's principal executive officers, (ii) examining
periodically the general compensation structure of the Company and
(iii) supervising the welfare, pension and compensation plans of the
Company.
Nominating Committee. The Nominating Committee consists of Mr.
Ansary, Dr. David and Mr. Carlucci, with Mr. Ansary serving as Chairman.
The Nominating Committee has responsibility for nominating candidates for
election to the Board of Directors.
RATIFICATION OF APPOINTMENT OF THE COMPANY'S INDEPENDENT AUDITORS
The Company is submitting for approval by its stockholders the Board's
selection of KPMG Peat Marwick LLP ("KPMG") as independent auditors to examine
the consolidated financial statements of IRI for the fiscal year ending December
31, 1999. The Audit Committee concurs in this recommendation. KPMG has served as
IRI's independent auditors since September 20, 1994.
6
<PAGE> 10
If the stockholders do not approve the selection of KPMG to serve as its
independent auditors, the Directors will, under authority of the IRI Bylaws,
appoint other auditors.
Representatives of KPMG will be present at the Annual Meeting. They will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from the Company's stockholders.
The approval of the ratification of the appointment of KPMG as IRI's
independent auditors for 1999 requires the vote of a majority of Company's
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF KPMG AS IRI'S INDEPENDENT AUDITORS FOR ITS FISCAL YEAR ENDING
DECEMBER 31, 1999.
OTHER BUSINESS
The Board of Directors does not know of any business to be presented for
consideration at the Annual Meeting or any adjournment or postponement thereof
other than as stated in the Notice of Annual Meeting. The affirmative vote of
the holders of a majority of the issued and outstanding shares of Common Stock
would be required with respect to any such other matter that is properly
presented and brought to a stockholder vote.
7
<PAGE> 11
EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
Directors who are not also officers or employees of the Company are paid
annual fees equal to $30,000 plus $1,000 for each Board of Directors meeting
(but not committee meeting) attended.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the
compensation paid by the Company to Hushang Ansary, Chairman and Chief Executive
Officer, and each of the five other most highly compensated executive officers
of the Company for the 12 months ended December 31, 1998 (collectively, the
"Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) COMPENSATION
- --------------------------- ---- -------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Hushang Ansary........................... 1998 $900,000 -- -- --
Chairman and Chief Executive Officer 1997 -- -- 17,000 --
1996 -- -- 39,000 --
Daniel G. Moriarty....................... 1998 $204,346 $100,000 -- --
Vice-Chairman of the Board 1997 202,516 25,000 17,000 --
1996 145,254 106,504 39,000 --
Munawar H. Hidayatallah.................. 1998 $318,450 $200,000 -- --
Executive Vice President and Chief 1997 316,088 100,000 17,000 --
Financial Officer 1996 186,750 121,324 39,000 --
Richard D. Higginbotham.................. 1998 $232,535 $ 75,000 $17,000 --
Executive Vice President -- President 1997 224,559 25,000 8,500 --
of Downhole Products Group(2) 1996 135,000 60,000 -- --
Gary W. Stratulate....................... 1998 $248,442 $200,000 -- --
Executive Vice President -- President 1997 246,087 125,000 8,500 --
of Downhole Products Group 1996 186,750 137,500 -- --
Arthur C. Teichgraeber................... 1998 $272,759 $100,000 $45,750(4) --
Executive Vice President -- President 1997 207,564 50,000 8,500 --
of Oilfield Equipment Group 1996 102,870 -- -- 498,110(3)
</TABLE>
- ---------------
(1) Unless otherwise noted, consists of directors' fees received by the Named
Executive Officers prior to the Company's initial public offering in
November 1997 and, in the case of Mr. Higginbotham's other annual
compensation for 1998, directors' fees received since September 1998.
(2) Mr. Higginbotham retired in September 1998.
(3) Consists of license fees paid by Cardwell to Mr. Teichgraeber and to certain
entities directly or indirectly owned by Mr. Teichgraeber.
(4) Consists of educational assistance in the amount of $18,750 and housing
reimbursement in the amount of $27,500.
8
<PAGE> 12
Shown below is further information with respect to grants of stock options
during 1998 to the Named Executive Officers:
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES PRICE OR BASE ---------------------------
NAME GRANTED(1) IN 1998(2) PRICE EXPIRATION 5% ($) 10% ($)
- ---- ---------- ---------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Hushang Ansary............ 1,200,000 72.95 $3.5625 Dec. 14, 2008 $2,688,525 $6,813,249
Daniel G. Moriarty........ 60,000 3.65 $3.5625 Dec. 14, 2008 134,426 340,662
Munawar H. Hidayatallah... 50,000 3.04 $3.5625 Dec. 14, 2008 112,022 283,885
Richard D. Higginbotham... 20,000 1.22 $3.5625 Dec. 14, 2008 44,809 113,554
Gary W. Stratulate........ 45,000 2.74 $3.5625 Dec. 14, 2008 100,820 255,497
Arthur C. Teichgraeber.... 45,000 2.74 $3.5625 Dec. 14, 2008 100,820 255,497
</TABLE>
- ---------------
(1) Options become exercisable in three equal annual installments beginning on
December 14, 1998.
(2) Calculated on the basis of an aggregate grant of 1,645,000 options to
purchase shares of Common Stock to Named Executive Officers and directors of
the Company.
The following table sets forth information regarding the value of the stock
options granted on December 14, 1998 to the Named Executive Officers (no stock
options were exercised by any of the Named Executive Officers in 1998):
OPTION VALUES AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
NAME DECEMBER 31, 1998 AT DECEMBER 31, 1998(1)
- ---- ---------------------- -----------------------
<S> <C> <C>
Hushang Ansary...................................... 1,200,000 525,000
Daniel G. Moriarty.................................. 60,000 26,250
Munawar H. Hidayatallah............................. 50,000 21,875
Richard D. Higginbotham............................. 20,000 8,750
Gary W. Stratulate.................................. 45,000 19,688
Arthur C. Teichgraeber.............................. 45,000 19,688
</TABLE>
- ---------------
(1) Market price has been determined based on the NYSE closing price of the
Common Stock on December 31, 1998.
STOCK OPTIONS
Pursuant to an equity incentive plan (the "Incentive Plan"), the Company
has granted to its directors and certain of its officers and employees an
aggregate of 2,388,500 stock options to purchase shares of Common Stock. Such
stock options and the terms thereof are described in the following paragraphs.
On October 2, 1998, the Company canceled all options then outstanding.
On December 14, 1998, the Company granted options to purchase 25,000 shares
of Common Stock to each of the directors not employed by the Company (the
"Outside Directors"). The options were granted pursuant to the Incentive Plan
and are not intended to qualify as "incentive stock options". The options have
an exercise price per share equal to the closing price of the stock on December
14, 1998 and generally have a
9
<PAGE> 13
ten year term. The options are exercisable (i) cumulatively to the extent of
one-third of the shares on December 14, 1998 and (ii) cumulatively to the extent
of one-third of the shares after each of December 14, 1999 and 2000 for so long
as the Outside Director remains in continuous service with the Company. In
addition, the options become immediately exercisable upon an Outside Director's
death or disability.
On December 14, 1998, the Compensation Committee also granted certain stock
options to the Named Executive Officers as described in the preceding tables and
the following discussion.
All of the stock options granted to the Named Executive Officers in 1998
were granted pursuant to the Incentive Plan. The stock options have a ten-year
term and are not intended to qualify as "incentive stock options". The stock
options granted to each Named Executive Officer are exercisable (i) cumulatively
to the extent of one-third of the shares on December 14, 1998 and
(ii) cumulatively to the extent of one-third of the shares after each of
December 14, 1999 and 2000, for so long as the Named Executive Officer remains
in continuous employment with the Company or one of its affiliates. In addition,
the stock options become immediately exercisable upon the Named Executive
Officer's death or disability. Once exercisable, the stock options have an
exercise price equal to the closing price of the Common Stock on December 14,
1998 and generally have a ten year term.
On March 17, 1999, the Company granted to Mr. Hidayatallah, Mr. Moriarty,
Mr. Stratulate and Mr. Andrawos stock options to purchase an aggregate of
251,000 shares of Common Stock. These stock options were granted pursuant to the
Incentive Plan and are not intended to qualify as "incentive stock options".
These stock options are immediately exercisable, have an exercise price equal to
the closing price of the Common Stock on March 17, 1999 and generally have a ten
year term. Also on March 17, 1999, the Company granted to certain other
employees stock options to purchase an aggregate of 492,500 shares of Common
Stock. These stock options were granted pursuant to the Incentive Plan and are
not intended to qualify as "incentive stock options". These stock options are
exercisable (i) cumulatively to the extent of one-third of the shares on March
17, 1999, and (ii) cumulatively to the extent of one-third of the shares after
each of March 17, 2000 and March 17, 2001 for so long as the employee remains in
continuous employment with the Company or one of its affiliates. The stock
options become immediately exercisable on the grantee's death or disability.
Once exercisable, the stock options have an exercise price equal to the closing
price of the Common Stock on March 17, 1999 and generally have a ten year term.
Compensation of Named Executive Officers -- In General
The compensation of the Named Executive Officers is approved by the
Compensation Committee upon the recommendation of the Chief Executive Officer.
The Incentive Plan
On June 17, 1997, the Company adopted the Incentive Plan to attract and
retain qualified officers, directors and other key employees of, and consultants
to, the Company.
Shares Available Under the Incentive Plan. Subject to adjustment as
provided in the Incentive Plan, the number of shares of Common Stock that may be
issued or transferred and covered by outstanding awards granted under the
Incentive Plan will not exceed 4,000,000, which may be shares of original
issuance or treasury shares or a combination thereof. Officers, directors and
other key employees of and consultants to the Company ("Participants") may be
selected by the Compensation Committee to receive benefits under the Incentive
Plan.
Options. The Compensation Committee may authorize the grant of rights that
entitle the optionee to purchase Common Stock ("Option Rights") at a price equal
to or greater or less than market value on the date of grant. Subject to
adjustment as provided in the Incentive Plan, no participant will be granted
Option Rights, in the aggregate, for more than 3,000,000 shares during any three
consecutive calendar years. The Compensation Committee may provide that the
option price is payable at the time of exercise (i) in cash, (ii) by the
transfer to the Company of nonforfeitable, unrestricted shares of Common Stock,
(iii) with any other legal consideration the Compensation Committee may deem
appropriate, or (iv) by any combination of
10
<PAGE> 14
the foregoing methods of payment. A grant may provide for deferred payment of
the option price from the proceeds of sale through a broker on the date of
exercise of some or all of the shares of Common Stock to which the exercise
relates if there is then a public market for the Common Stock. A grant may
provide for automatic grant of reload option rights upon the exercise of Option
Rights, including reload option rights, for shares of Common Stock or any other
noncash consideration authorized under the Incentive Plan, except that the term
of any reload option right may not extend beyond the term of the Option Right
originally exercised. The Compensation Committee has the authority to specify at
the time Option Rights are granted that shares of Common Stock will not be
accepted in payment of the option price until they have been owned by the
optionee for a specified period; however, the Incentive Plan does not require
any such holding period and would permit immediate sequential exchanges of
shares of Common Stock at the time of exercise of Option Rights.
Option Rights granted under the Incentive Plan may be Option Rights that
are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Code, or Option Rights that are not intended to so qualify.
Any grant may provide for the payment of dividend equivalents to the optionee on
a current, deferred or contingent basis or may provide that dividend equivalents
be credited against the option price.
No Option Right may be exercised more than ten years from the date of
grant. Each grant must specify the period of continuous employment with, or
continuous engagement of consulting services by, the Company that is necessary
before the Option Rights will become exercisable and may provide for the earlier
exercise of the Option Rights in the event of a change of control of the Company
or other similar transaction or event. Successive grants may be made to the same
optionee regardless of whether Option Rights previously granted to him or her
remain unexercised.
Transferability. No Option Right is transferable by a participant except
by will or the laws of descent and distribution. Option Rights may not be
exercised during a participant's lifetime except by the participant or, in the
event of the participant's incapacity, by the participant's guardian or legal
representative acting in a fiduciary capacity on behalf of the participant under
state law and court supervision. Notwithstanding the foregoing, the Compensation
Committee, in its sole discretion, may provide for the transferability of
particular awards under the Incentive Plan.
The Compensation Committee may specify at the date of grant that all or any
part of shares of Common Stock that is to be issued or transferred by the
Company upon the exercise of Option Rights shall be subject to further
restrictions on transfer.
Adjustments. The maximum number of shares that may be issued or
transferred under the Incentive Plan, the number of shares covered by
outstanding Option Rights and the option prices or base prices per share
applicable thereto are subject to adjustment in the event of stock dividends,
stock splits, combinations of shares, recapitalizations, mergers,
consolidations, spinoffs, reorganizations, liquidations, issuances of rights or
warrants and similar transactions or events. In the event of any such
transaction or event, the Compensation Committee may in its discretion provide
in substitution for any or all outstanding awards under the Incentive Plan such
alternative consideration as it may in good faith determine to be equitable in
the circumstances and may require the surrender of all awards so replaced. The
Compensation Committee may also, as it determines to be appropriate in order to
reflect any such transaction or event, make or provide for such adjustments in
the number of shares that may be issued or transferred and covered by
outstanding awards granted under the Incentive Plan and the number of shares
permitted to be covered by awards granted under the plan to any one participant
during any calendar year.
Administration and Amendments. The Incentive Plan will be administered by
the Compensation Committee of the Board (such committee is referred to in this
description of the Incentive Plan as the "Committee"). The Committee must
consist of not less than two members who are "non-employee directors" within the
meaning of Rule 16b-3 and "outside directors" within the meaning of Section
162(m) of the Code. In connection with its administration of the Incentive Plan,
the Committee is authorized to interpret the Incentive Plan and related
agreements and other documents. The Committee may make grants to participants
under any or a combination of all of the various categories of awards that are
authorized under the Incentive
11
<PAGE> 15
Plan and may condition the grant of awards on the surrender or deferral by the
participant of the participant's right to receive a cash bonus or other
compensation otherwise payable by the Company to the participant.
The Incentive Plan may be amended from time to time by the Committee, but
without further approval by the stockholders of the Company no such amendment
may cause the Incentive Plan to cease to satisfy any applicable condition of
Rule 16b-3 or cause any award under the Incentive Plan to cease to qualify for
any applicable exception to Section 162(m) of the Code.
Federal Income Tax Consequences. The following is a brief summary of
certain of the federal income tax consequences of certain transactions under the
Incentive Plan based on federal income tax laws in effect on the date of the
Company's initial public offering. This summary is not intended to be exhaustive
and does not describe state or local tax consequences.
In general, (i) no income will be recognized by an optionee at the time a
nonqualified Option Right is granted, (ii) at the time of exercise of a
nonqualified Option Right, ordinary income will be recognized by the optionee in
an amount equal to the difference between the option price paid for the shares
and the fair market value of the shares if they are nonrestricted on the date of
exercise and (iii) at the time of sale of shares acquired pursuant to the
exercise of a nonqualified Option Right, any appreciation (or depreciation) in
the value of the shares after the date of exercise will be treated as either
short-term or long-term capital gain (or loss) depending on how long the shares
have been held.
No income generally will be recognized by an optionee upon the grant or
exercise of an incentive stock option. If shares of Common Stock are issued to
an optionee pursuant to the exercise of an incentive stock option and no
disqualifying disposition of the shares is made by the optionee within two years
after the date of grant or within one year after the transfer of the shares to
the optionee, then upon the sale of the shares any amount realized in excess of
the option price will be taxed to the optionee as long-term capital gain and any
loss sustained will be a long-term capital loss. If shares of Common Stock
acquired upon the exercise of an incentive stock option are disposed of prior to
the expiration of either holding period described above, the optionee generally
will recognize ordinary income in the year of disposition in an amount equal to
any excess of the fair market value of the shares at the time of exercise (or,
if less, the amount realized on the disposition of the shares in a sale or
exchange) over the option price paid for the shares. Any further gain (or loss)
realized by the optionee generally will be taxed as short-term or long-term gain
(or loss) depending on the holding period.
In limited circumstances where the sale of stock that is received as the
result of a grant of an award could subject an officer or director to suit under
Section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), the
tax consequences to the officer or director may differ from the tax consequences
described above. In these circumstances, unless a special election has been
made, the principal difference usually will be to postpone valuation and
taxation of the stock received so long as the sale of the stock received could
subject the officer or director to suit under Section 16(b) of the Exchange Act,
but not longer than six months.
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company will be entitled to a corresponding
deduction provided that, among other things, (i) the income meets the test of
reasonableness, is an ordinary and necessary business expense and is not an
"excess parachute payment" within the meaning of Section 280G of the Code and is
not disallowed by the Section 162(m) $1.0 million limitation on certain
executive compensation and (ii) any applicable reporting obligations are
satisfied.
Other Compensation Plans or Programs
The Company does not maintain any other compensation plans or programs that
apply to the Named Executive Officers, other than 401(k) plans and the Incentive
Plan described above.
12
<PAGE> 16
EMPLOYMENT AGREEMENTS, SEVERANCE AGREEMENTS AND CHANGE-IN-CONTROL AGREEMENTS
No Named Executive Officer has an employment agreement, severance agreement
or change-in-control agreement with the Company or any affiliate.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
This report of the Compensation Committee (defined as the "Committee" for
purposes of this discussion) is required by the Commission and shall not be
deemed to be incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act or under
the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
soliciting material or filed under such acts.
THE COMMITTEE'S FUNCTION
The Committee has responsibility for: (i) reviewing and approving
recommendations of the Chairman of the Board as to appropriate compensation of
the Company's principal executive officers, including the Named Executive
Officers, (ii) examining periodically the general compensation structure of the
Company and (iii) supervising the welfare, pension and compensation plans of the
Company. The Committee consists of Dr. David, the Committee's Chairman, and Mr.
West, each of whom are independent, non-employee directors of the Company.
1998 EXECUTIVE COMPENSATION
The Company's executive compensation program is designed with the goal of
fairly compensating executives for their performance and contribution to the
Company's financial results, as well as providing incentives to attract and
retain key executives, instill a long-term commitment to the Company and develop
a pride and sense of ownership, all in a manner consistent with stockholder
interests. The compensation of each executive is generally comprised of three
elements: (i) base salary, (ii) annual bonus, and (iii) stock options granted
pursuant to the Incentive Plan. Each of the foregoing three elements is reviewed
annually and adjusted in light of the Company's financial and operational
performance for the year, including the attainment of a pre-determined financial
plan and the individual executive's contribution to that performance. In
addition, the compensation practices and performances of other corporations
which are most likely to compete with the Company for services of executive
officers are considered.
The Company's executive compensation program for the Chairman and Chief
Executive Officer and the other five most highly compensated executive officers
in fiscal 1998 is shown in the Summary Compensation Table and a summary of the
terms of the Incentive Plan is provided under the heading "Executive
Compensation -- Stock Options -- The Incentive Plan."
During fiscal 1998, Mr. Ansary, in his capacity as Chairman and Chief
Executive Officer, received a salary of $900,000. In setting the salary of the
Chairman and Chief Executive Officer for 1998, the Compensation Committee
considered the goals and criteria described above. The Chairman and Chief
Executive Officer did not receive a bonus in 1998.
On December 14, 1998, under the Incentive Plan, the Committee granted
1,645,000 stock options to the directors and officers of the Company. The stock
options granted to each such director and executive are exercisable cumulatively
to the extent of one-third of the shares of Common Stock covered thereby on
December 14, 1998, one-third of the shares of Common Stock covered thereby on
December 14, 1999 and one-third of the shares of Common Stock covered thereby on
December 14, 2000, for so long as the executive or director remains in
continuous employment with or service to the Company or one of its affiliates.
The options become immediately exercisable upon the executive's or director's
death or disability. All of the stock
13
<PAGE> 17
options granted to each executive or director also become immediately
exercisable upon a change in control of the Company. Generally, a change in
control is defined in the Incentive Plan to mean the acquisition by any "person"
or "group", as defined in Sections 13(d) or 14(d) of the Exchange Act, of 20% or
more of the outstanding Common Stock, if as a result such person or group
becomes the Company's largest shareholder. The stock options have a ten year
term and have an exercise price equal to the closing price of the Common Stock
on December 14, 1998.
1999 EXECUTIVE COMPENSATION
During 1999, the Company's executive compensation program will be similar
to its 1998 executive compensation, with similar goals to be attained and
procedures to be utilized by the Committee in the determination of such
compensation. In fiscal 1999, Mr. Ansary, in his capacity as Chairman and Chief
Executive Officer, will receive a salary of $900,000. He is eligible to receive
a cash bonus and additional stock options. In deciding upon Mr. Ansary's total
compensation for fiscal 1999, the Committee may consider, among other factors,
(i) Mr. Ansary's continued leadership during a period of decline in the oil
services industry and (ii) his continuing efforts to mitigate the effects of
prevailing industry conditions on the Company's financial and operating results.
There have been no changes in the salaries of the Named Executive Officers
in 1999. As in 1998, cash bonuses may be paid and additional stock options may
be awarded to the Named Executive Officers upon the recommendation of the
Chairman and Chief Executive Officer and upon approval thereof by the Committee.
On March 17, 1999, under the Incentive Plan, the Board, acting on the
recommendation of the Compensation Committee, granted options to purchase an
aggregate of 251,000 shares of Common Stock to certain executive officers of the
Company. The stock options granted to each such executive are immediately
exercisable, have a ten year term and have an exercise price equal to the
closing price of the Common Stock on March 17, 1999.
The executive compensation program for fiscal 1999 is subject to amendment
or modification by the Company during fiscal 1999 as the Committee considers
reasonable and appropriate.
POLICY WITH RESPECT TO SECTION 162(m)
Section 162(m) of the Internal Revenue Code limits the tax deduction that
the Company or its subsidiaries can take with respect to the compensation of
certain executive officers, unless the compensation is "performance based." For
compensation to be performance based, it must meet certain criteria, including
being based on pre-determined objective standards approved by the stockholders
of the Company. The Committee intends to take into account the potential
application of Section 162(m) with respect to incentive compensation awards and
other compensation decisions made by it in the future. The Committee has been
advised that none of the Company's executive officers, have received
compensation in fiscal 1998 that will result in the loss of a corporate federal
income tax deduction under Section 162(m). In connection with future executive
compensation determinations, including those for fiscal 1999, the Company
intends to take into account the extent to which such compensation will be
deductible for federal income tax purposes, together with such other factors as
may be deemed pertinent under the circumstances.
COMPENSATION COMMITTEE
Dr. Philip David
J. Robinson West
14
<PAGE> 18
SHARE PERFORMANCE GRAPH
The following line graph shows the cumulative total stockholder return on
the Common Stock from November 14, 1997, the first trading day after the date it
was registered under the Exchange Act, to December 31, 1998, and compares it
with the cumulative total return over the same period of the S & P 500 Index and
to a self-constructed peer group of similar companies in the oilfield service
industry (which includes Cooper Cameron Corporation, National-Oilwell, Inc.,
Tesco Corporation, Tuboscope Inc. and Varco International, Inc.). The graph
assumes a $100 investment in Common Stock based on the initial per share price
to the public of $18.00 and in each index at November 14, 1997, and that all
dividends were reinvested. Peer group returns are based on the market
capitalization of each individual company within the peer group at the beginning
of the comparison period.
[SHARE PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
IRI INTERNATIONAL
CORPORATION S & P 500 GROUP PEER GROUP
----------------- --------------- ----------
<S> <C> <C> <C>
November 14, 1997 100 100 100
December 31, 1997 78 105 86
December 31, 1998 22 132 31
</TABLE>
CERTAIN FORWARD LOOKING STATEMENTS
This Proxy Statement (including the documents incorporated by reference
herein) contains certain forward-looking statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995) and information relating
to the Company that are based on the beliefs of the management of the Company,
as well as assumptions made by and information currently available to the
management of the Company. When used in this Proxy Statement, the words
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to the Company or its management, identify forward looking
statements. Such statements reflect the current views of the Company or its
management with respect to future events and are subject to certain risks,
uncertainties and assumptions relating to the operations and results of
operations of the Company and the success of the Company's business plan;
including as a result of the availability, terms and cost of capital resources;
competitive factors and pricing pressures; general economic conditions; the
failure of market demand for the types of entertainment opportunities the
Company provides or plans to provide in the future and for family entertainment
in general to the commensurate with management's expectations or past experience
impact of present and future laws; ongoing need for capital improvements;
changes in operating expenses; adverse changes in governmental rules or
policies; changes in demographics and other factors. Should one or more of these
assumptions prove incorrect, actual results for outcomes may vary materially
from those described herein as anticipated, believed, estimated, expected or
intended. Accordingly, stockholders are cautioned not to place undue reliance on
such forward-looking statements.
15
<PAGE> 19
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file with the
Commission periodic reports and other information relating to its business,
financial condition and other matters. The Company is required to disclose in
such reports certain information, as of particular dates, concerning the
Company's operating results and financial condition, its officers and directors,
the principal holders of the Company's securities, any material interests of
such persons in transactions with the Company and other matters. These reports
and other informational filings required by the Exchange Act should be available
for inspection at the public reference facilities maintained by the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and also should be available for inspection and copying at the regional offices
of the Commission located at Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60611 and 7 World Trade Center, 13th Floor, New York, New York 10048.
The Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Such reports, proxy and information statements and other
information may be found on the Commission's Web site address,
http://www.sec.gov. Copies of such material may be obtained by mail, upon
payment of the Commission's customary fees, from the Commission's principal
office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Common Stock is listed on the NYSE under the symbol "IIR," and such reports,
proxy statements and other information concerning the Company are available for
inspection at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
A COPY OF THE COMPANY'S 1998 FORM 10-K ANNUAL REPORT, AS AMENDED, IS
AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER OF
CAPITAL STOCK OF THE COMPANY, TO WHOM THIS PROXY STATEMENT IS DELIVERED UPON
WRITTEN OR ORAL REQUEST TO IRI INTERNATIONAL CORPORATION, 1000 LOUISIANA, SUITE
5900, HOUSTON, TEXAS, 77002, ATTENTION: SECRETARY (TELEPHONE NUMBER (713)
651-8002). IN ORDER TO ENSURE DELIVERY OF THE DOCUMENTS PRIOR TO THE ANNUAL
MEETING, REQUESTS SHOULD BE RECEIVED BY JUNE 1, 1999.
May 13, 1999
16
<PAGE> 20
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- JUNE 14, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints, as proxies for the undersigned, HUSHANG
ANSARY and ABDALLAH ANDRAWOS, or any one of them, with full power of
substitution, to vote all shares of the capital stock of IRI International
Corporation (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company to be held at 1000 Louisiana,
Suite 5900, Houston, Texas 77002, on June 14, 1999, at 10:00 a.m., local time,
and at any adjournments or postponements thereof, receipt of Notice of which
meeting and the Proxy Statement accompanying the same being hereby acknowledged
by the undersigned, upon the matters described in the Notice of Meeting and
Proxy Statement and upon such other business as may properly come before the
meeting and any adjournments or postponements thereof, hereby revoking any
proxies heretofore given.
EACH PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE BELOW AND ON THE REVERSE SIDE HEREOF. IF NO SPECIFICATIONS
ARE MADE, THE PROXIES WILL BE VOTED FOR EACH LISTED NOMINEE TO SERVE AS A
DIRECTOR AND FOR PROPOSAL 2.
A VOTE FOR EACH NOMINEE AND FOR PROPOSAL 2 IS RECOMMENDED BY THE BOARD OF
DIRECTORS.
1. Election of Directors: (check one box only)
[ ] FOR EACH NOMINEE LISTED BELOW [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below): to vote for all nominees
listed below
HUSHANG ANSARY, DANIEL G. MORIARTY, ABDALLAH ANDRAWOS, NINA ANSARY, FRANK C.
CARLUCCI, DR. PHILIP DAVID, MUNAWAR H. HIDAYATALLAH, RICHARD D. HIGGINBOTHAM,
JOHN D. MACOMBER, EDWARD L. PALMER, STEPHEN J. SOLARZ, GARY W. STRATULATE,
ARTHUR C. TEICHGRAEBER, ALEXANDER B. TROWBRIDGE and J. ROBINSON WEST
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE, CIRCLE THAT
NOMINEE'S NAME IN THE ABOVE LIST)
(continued and to be signed on reverse side)
<PAGE> 21
2. To ratify the selection of KPMG Peat Marwick LLP as independent auditors for
the Company for the fiscal year ending December 31, 1999.
<TABLE>
<S> <C> <C>
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
</TABLE>
Dated: , 1999
---------------------------------------------
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(SIGNATURE OF STOCKHOLDER)
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(SIGNATURE OF STOCKHOLDER)
NOTE: Please sign your name or names
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Proxies executed by corporations
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PLEASE DATE AND SIGN THIS PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
