<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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
DANIEL INDUSTRIES, INC.
(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)(l) 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
[DANIEL INDUSTRIES, INC. LOGO]
9753 Pine Lake Drive - Houston, Texas 77055 - (713) 467-6000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 21, 1997
Notice is hereby given that the annual meeting of stockholders of Daniel
Industries, Inc. ("Company") will be held at The Ritz Carlton Hotel, 1919 Briar
Oaks Lane, Houston, Texas at 10:00 a.m. on Friday, March 21, 1997, for the
following purposes:
1. To elect three Class I directors of the Company to hold office
until the third succeeding annual meeting of stockholders after their
election and until their respective successors shall have been elected and
qualified.
2. To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Only holders of record of shares of Common Stock of the Company at the
close of business on January 22, 1997, are entitled to notice of and to vote at
the meeting or any adjournment thereof.
All stockholders of the Company are cordially invited to attend the annual
meeting. However, the Board of Directors requests that you promptly sign, date
and mail the enclosed proxy even if you plan to be present at the meeting. Your
proxy should be returned in the enclosed envelope, which requires no postage if
mailed in the United States.
By Order of the Board of Directors,
/s/ MICHAEL R. YELLIN
MICHAEL R. YELLIN
Secretary
January 28, 1997
PLEASE DATE, SIGN AND RETURN THE
ENCLOSED PROXY WITHOUT DELAY.
<PAGE> 3
[DANIEL INDUSTRIES, INC. LOGO]
9753 Pine Lake Drive - Houston, Texas 77055 - (713) 467-6000
PROXY STATEMENT
This proxy statement and the enclosed form of proxy ("Proxy")are being
mailed or otherwise delivered on or about January 28, 1997, to record holders of
shares of Common Stock, $1.25 par value ("Common Stock"), of Daniel Industries,
Inc. ("Company") at the close of business on January 22, 1997. The Proxy is
solicited by the Board of Directors of the Company ("Board") to be used at the
annual meeting of stockholders of the Company to be held on March 21, 1997, and
at any adjournment thereof. Any stockholder who executes and returns the Proxy
may revoke it at any time before it is voted by notifying the holder thereof of
revocation or by voting in person at the meeting. Otherwise, if received in
time, it will be voted at the meeting.
Holders of record of shares of Common Stock at the close of business on
January 22, 1997, are entitled to notice of and to vote at the annual meeting.
Such holders will be entitled to cast one vote for each share so held by them on
each matter submitted to stockholders at the meeting. On the record date, there
were issued and outstanding 17,063,705 shares of Common Stock. The holders of a
majority of the total shares of Common Stock outstanding on the record date,
whether present in person or represented by Proxy, will constitute a quorum for
the transaction of business at the annual meeting. The shares held by each
stockholder who signs and returns the Proxy will be counted for purposes of
determining the presence of a quorum at the meeting. Abstentions are counted
toward the calculation of a quorum. Any unvoted position in a brokerage account
will be considered as not voted and will not be counted toward fulfillment of
quorum requirements.
The enclosed Proxy provides a means for a stockholder to vote for all of
the nominees for director listed, to withhold authority to vote for one or more
nominees, or to withhold authority to vote for all of such nominees. The
Company's by-laws provide that directors are elected by a plurality of the votes
cast. Accordingly, the withholding of authority by a stockholder will have no
effect on the results of the election.
Approval of any other matters as may properly come before the annual
meeting would require the affirmative vote of a majority of the total shares of
Common Stock present in person or represented by Proxy and entitled to vote at
the annual meeting. Abstentions have the same effect as a vote against any
proposal.
The Annual Report to Stockholders of the Company for its fiscal year ended
September 30, 1996, accompanies this proxy statement; however, the Annual Report
does not constitute a part of the Proxy solicitation material.
1
<PAGE> 4
OWNERSHIP OF COMMON STOCK
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to each
person who at January 22, 1997, was known by the Company to be the beneficial
owner at that date of more than five percent of the outstanding shares of Common
Stock. Except as otherwise set forth, such persons have sole voting and sole
investment power with respect to the shares beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER
OF SHARES
BENEFICIALLY PERCENT
OWNED(1) OF CLASS
------------ --------
<S> <C> <C>
Dimensional Fund Advisors
1299 Ocean Avenue
Santa Monica, CA 90401...................................... 875,368 5.1%
State of Wisconsin Investment Board
121 East Wilson St.
Madison, WI 53702........................................... 870,100 5.1%
W. A. Griffin(2)
9753 Pine Lake Drive
Houston, TX 77055........................................... 1,520,067 8.9%
</TABLE>
- ---------------
(1) Information with respect to beneficial ownership is based upon information
furnished by each stockholder or contained in filings made with the
Securities and Exchange Commission.
(2) At January 22, 1997, W. A. Griffin, Chairman Emeritus of the Board, owned
980,792 shares of Common Stock (5.7%). Mr. Griffin is also considered to be
the beneficial owner of 534,275 shares of Common Stock (3.1%) held in his
capacity as trustee of a trust in which he has a vested beneficial interest.
Mr. Griffin also is considered to be the beneficial owner of 5,000 shares of
Common Stock that may be acquired within 60 days of January 22, 1997,
through the exercise of an outstanding option.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of January 22, 1997 (except as otherwise
noted), the shares of Common Stock beneficially owned by (i) each director and
nominee for director of the Company, (ii) each executive officer of the Company
listed in the Summary Compensation Table set forth below and (iii) all officers
and directors of the Company as a group. Except as otherwise set forth, such
persons have sole voting power and sole investment power with respect to the
shares beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER
OF SHARES
BENEFICIALLY PERCENT
OWNED OF CLASS
------------- --------
<S> <C> <C>
W. A. Griffin.............................................. 1,520,067 (1) 8.9%
Leo E. Linbeck, Jr......................................... 5,000 (2) *
Nathan M. Avery............................................ 197,150 (3) 1.2%
Gibson Gayle, Jr........................................... 15,000 (2) *
Ronald C. Lassiter......................................... 15,300 (2) *
Thomas J. Keefe............................................ 9,956 (3) *
Ralph F. Cox............................................... 10,000 (2) *
Brian E. O'Neill........................................... 15,000 (4) *
W. A. Griffin, III......................................... 78,388 (5) *
W. C. Clingman............................................. 44,327 (6) *
H. G. Schopfer, III........................................ 29,642 (7) *
T. L. Sivak................................................ 15,169 (8) *
M. R. Yellin............................................... 22,169 (9) *
All officers and directors as a group (16 persons)......... 2,063,130(10) 11.9%
</TABLE>
2
<PAGE> 5
- ---------------
* Less than 1%.
(1) For further information concerning the shares of Common Stock beneficially
owned by Mr. Griffin, see Note (2) to the table under "Principal
Stockholders."
(2) Includes 5,000 shares of Common Stock that may be acquired within 60 days
of January 22, 1997, through the exercise of an outstanding option.
(3) Includes 8,700 shares of Common Stock that may be acquired within 60 days
of January 22, 1997, through the exercise of outstanding options.
(4) Mr. O'Neill is considered to beneficially own 15,000 shares of Common Stock
that may be acquired within 60 days of January 22, 1997, through the
exercise of outstanding options.
(5) At January 24, 1997, Mr. Griffin, III owned 73,519 shares of Common Stock.
Mr. Griffin, III is also considered to beneficially own 4,869 shares which
are attributable to him through his participation in the Company's profit
sharing and savings plan.
(6) At January 22, 1997, Mr. Clingman owned 2,559 shares of Common Stock and is
considered to beneficially own 35,000 shares of Common Stock that may be
acquired within 60 days of January 22, 1997, through the exercise of
outstanding options and 6,768 shares which are attributable to him through
his participation in the Company's profit sharing and savings plan.
(7) At January 22, 1997, Mr. Schopfer owned 2,745 shares of Common Stock and is
considered to beneficially own 25,834 shares of Common Stock that may be
acquired within 60 days of January 22, 1997, through the exercise of
outstanding options and 1,063 shares of Common Stock which are attributable
to him through his participation in the Company's profit sharing and
savings plan.
(8) At January 22, 1997, Mr. Sivak owned 2,015 shares of Common Stock and is
considered to beneficially own 11,167 shares of Common Stock that may be
acquired within 60 days of January 22, 1997, through the exercise of
outstanding options and 1,987 shares of Common Stock which are attributable
to him through his participation in the Company's profit sharing and
savings plan.
(9) At January 22, 1997, Mr. Yellin owned 1,890 shares of Common Stock and is
considered to beneficially own 17,667 shares of Common Stock that may be
acquired within 60 days of January 22, 1997, through the exercise of
outstanding options and 2,612 shares of Common Stock which are attributable
to him through his participation in the Company's profit sharing and
savings plan.
(10) Of the shares of Common Stock attributable to all officers and directors of
the Company as a group, 224,628 shares of Common Stock (1.3%) are
considered to be beneficially owned by such persons because they may be
acquired by them within 60 days of January 22, 1997, through the exercise
of outstanding options and 18,451 shares of Common Stock (0.1%) are
considered to be beneficially owned by such persons because such shares are
attributable to them through their participation in the Company's profit
sharing and savings plan.
3
<PAGE> 6
ELECTION OF DIRECTORS
At the annual meeting of stockholders, three Class I directors of the
Company are to be elected. These directors will be elected to hold office until
the third succeeding annual meeting of stockholders after their election and
until their respective successors shall have been elected and qualified.
The Proxy lists three persons nominated by the Board for election at the
annual meeting of stockholders as Class I directors. Proxies may not be voted
for more than three nominees for Class I director. The Board does not
contemplate that any of its nominees will become unavailable for any reason.
However, should any nominee of the Board become unavailable, Proxies which do
not withhold authority to vote for that nominee will be voted for another
nominee to be selected by the Board.
DIRECTORS AND NOMINEES FOR DIRECTOR
The following table sets forth for each nominee listed in the Proxy and
each other person whose term of office as a director will continue after the
annual meeting: (i) the name and age of such person; (ii) the principal
occupation of such person for at least the last five years (unless otherwise
noted); and (iii) the year during which such person first became a director. The
table has been prepared from information obtained from such persons.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- --- -------------------- --------
<S> <C> <C> <C>
CLASS I -- NOMINEES FOR TERMS EXPIRING AT THE THIRD SUCCEEDING ANNUAL MEETING
Leo E. Linbeck, Jr.(1)............ 62 Chairman of the Board and Chief Executive Officer 1988
of Linbeck Corporation
Nathan M. Avery(2)................ 62 Chairman of the Board, President and Chief 1996
Executive Officer of Galveston-Houston Company
Gibson Gayle, Jr.(3).............. 70 Retired Senior Partner, Fulbright & Jaworski 1985
L.L.P., a law firm
CLASS II -- DIRECTORS WHOSE TERMS EXPIRE AT THE FIRST SUCCEEDING ANNUAL MEETING
Ronald C. Lassiter(4)............. 64 Chairman of the Board and Acting President and 1985
Chief Executive Officer of the Company and
Chairman of the Board of Directors and Chief
Executive Officer of Zapata Protein, Inc.
Thomas J. Keefe(5)................ 64 President and Chief Operating Officer of G.H. 1996
Hensley Industries, Inc.
CLASS III -- DIRECTORS WHOSE TERMS EXPIRE AT THE SECOND SUCCEEDING ANNUAL MEETING
W. A. Griffin(6).................. 81 Chairman Emeritus of the Board and Consultant to 1951
the Company
Brian E. O Neill(7)............... 61 President and Chief Executive Officer of Williams 1994
Interstate Natural Gas Systems
Ralph F. Cox(8)................... 64 Private Consultant (Petroleum Industry). Retired 1996
President and Chief Executive Officer of Greenhill
Petroleum Corporation.
</TABLE>
- ---------------
(1) Mr. Linbeck, Jr. serves as a Life Director of the Associated General
Contractors of America and as a director of GeoQuest International Holdings,
Inc., John Hancock Advisers, Inc., and PanEnergy Corp (formerly Panhandle
Eastern Corporation). He also serves as a director of The Bionomics
Institute and the Texas Council on Economic Education. He is currently
serving as Chairman, Texans for Lawsuit Reform. Mr. Linbeck is a member of
the Executive Committee and the Compensation Committee.
4
<PAGE> 7
(2) Pursuant to the merger of Bettis Corporation with a wholly-owned subsidiary
of the Company, Mr. Avery was elected on December 12, 1996, to fill the term
of Ralph H. Clemons, Jr. who retired from the Board effective that date. Mr.
Avery is a member of the Executive Committee.
(3) Mr. Gayle, Jr. was a partner in the law firm of Fulbright & Jaworski L.L.P.,
and he served as Chairman of that firm's Executive Committee from 1979 until
1992. Fulbright & Jaworski L.L.P. provides legal services to the Company on
an ongoing basis, and the Company will continue to engage the firm during
the current fiscal year. Mr. Gayle is a member of the Audit Committee.
(4) Mr. Lassiter was elected Chairman of the Board on March 6, 1996. He became
Acting President and Chief Executive Officer of the Company effective
January 24, 1997, upon the resignation of W.A. Griffin, III. The Company
intends to commence an executive search for a President and Chief Executive
Officer. Mr. Lassiter is a member of the Executive Committee.
(5) Pursuant to the merger of Bettis Corporation with a wholly-owned subsidiary
of the Company, Mr. Keefe was elected on December 12, 1996, to fill the term
of Richard L. O'Shields who retired from the Board effective that date. Mr.
Keefe is a member of the Compensation Committee and the Audit Committee.
(6) Mr. Griffin served as Chairman of the Board from 1957, and as Chief
Executive Officer of the Company from 1985, until his retirement in February
1995. He now is a consultant to the Company. Mr. Griffin is a member of the
Nominating Committee.
(7) Prior to assuming his current position in January 1994, Mr. O'Neill served
as President of Williams Natural Gas Company. Mr. O'Neill is also a director
of the Gas Research Institute and the American Gas Association. Mr. O'Neill
is a member of the Compensation Committee and the Nominating Committee.
(8) Mr. Cox is a consultant on international petroleum activities. He is an
independent Trustee for the Fidelity Group of Funds and a member of the
Board of Directors of CH2M Hill, Ltd., USA Waste Services, Inc., and Rio
Grand, Inc. Mr. Cox also serves on advisory Boards at Texas A&M University
and the University of Texas. Mr. Cox is a former Vice Chairman of the Board
of Atlantic Richfield Company and President and Chief Operating Officer of
Champlin Petroleum Company (Union Pacific Resources Company). Mr. Cox is a
member of the Audit Committee and the Nominating Committee.
MEETINGS AND COMMITTEES OF THE BOARD
During the fiscal year ended September 30, 1996, the Board held seven
meetings. During fiscal 1996, each member attended at least 75% of the combined
number of meetings of the Board and of the committees of the Board of which he
was a member.
The Audit Committee reviews with the Company's independent accountants the
scope and results of the annual audit of the Company's consolidated financial
statements. In addition, the Audit Committee reviews the independent
accountants' management letter containing their recommendations for improvements
to the Company's internal controls. The Audit Committee also recommends to the
Board the selection of independent accountants. The Audit Committee currently is
composed of Gibson Gayle, Jr., Ralph F. Cox and Thomas J. Keefe. During the
fiscal year ended September 30, 1996, the Audit Committee held three meetings.
The Compensation Committee advises the Board concerning the compensation
and benefits of the executive officers and certain operating officers of the
Company. The Compensation Committee currently is composed of Brian E. O Neill,
Leo E. Linbeck, Jr. and Thomas J. Keefe. During the fiscal year ended September
30, 1996, the Compensation Committee held three meetings.
On December 12, 1996, the Board named W. A. Griffin, Brian E. O'Neill and
Ralph F. Cox to serve on the Nominating Committee for the year ending December
31, 1997. The Nominating Committee will recommend to the Board the persons to
nominate for election as Class II directors at the next annual meeting of
stockholders of the Company. The Nominating Committee will not consider
proposals submitted by security holders.
5
<PAGE> 8
EXECUTIVE OFFICERS
EXECUTIVE OFFICERS OF THE COMPANY
The following table lists the name, age, current position and period of
service with the Company of each executive officer of the Company. Each
executive officer of the Company was elected by the Board and will hold office
until the next annual meeting of the Board or until his/her successor shall have
been elected and qualified.
<TABLE>
<CAPTION>
OFFICER
NAME AGE POSITION SINCE
---- --- -------- -------
<S> <C> <C> <C>
Ronald C. Lassiter................ 64 Chairman of the Board and Acting President and 1997
Chief Executive Officer
James M. Tidwell(1)............... 50 Executive Vice President and Chief Financial 1996
Officer
W. Todd Bratton(2)................ 52 Executive Vice President 1996
W. C. Clingman.................... 62 Vice President, Information Services 1977
Michael R. Yellin................. 51 Vice President, Secretary and Treasurer 1981
Thomas L. Sivak................... 54 Vice President and General Counsel 1987
Mary R. Beshears(3)............... 39 Vice President, Controller and Chief Accounting 1995
Officer
</TABLE>
- ---------------
(1) Mr. Tidwell joined the Company in August 1996, as Vice President, Finance
and Chief Financial Officer. Prior to joining the Company, Mr. Tidwell
served as Vice President of Finance of Hydril Company from August 1992
through August 1996. Prior to that, Mr. Tidwell was Vice President Finance
of ABB Vetco Gray, Inc. from 1988 until 1992 and was President of Vetco
Gray, Inc. from 1986 to 1988.
(2) Pursuant to the merger of Bettis Corporation with a wholly-owned subsidiary
of the Company, Mr. Bratton was elected an Executive Vice President of the
Company on December 12, 1996. Mr. Bratton served as President of Bettis
Corporation from 1988 and as Chief Executive Officer from May 1994 until
January 1997. Mr. Bratton served in varying capacities including Executive
Vice President, Operations of Galveston-Houston Company, Bettis
Corporation's parent company, from 1979 to May 1994.
(3) Ms. Beshears joined the Company in 1984. She served as Internal Auditor from
1987 to 1991 and served as Manager of Financial Reporting from 1991 until
1995 when she was named Controller.
6
<PAGE> 9
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE WITH RESPECT TO COMPENSATION OF EXECUTIVE
OFFICERS
The Compensation Committee is responsible for advising the Board concerning
the compensation and benefits of the executive officers of the Company. The
Company's compensation program is designed to attract, motivate and retain
management talent required to achieve corporate objectives and increase
stockholder value. The program includes base salaries and annual and long-term
incentives in the form of cash bonuses, stock awards and stock options.
Salaries for executive officers are reviewed annually and revised, if
appropriate, based on a variety of factors, including individual performance,
general levels of market salary increases and the Company's overall financial
results. The Compensation Committee's review and analysis of these matters are
subjective, and no specific weight is given to any single performance factor.
During the fiscal year ended September 30, 1996, the salary of the Chief
Executive Officer was increased 4.0%, and the other executive officers' salaries
were increased by an average of 9.5%.
Incentive compensation in the form of cash bonuses is generally linked to
the achievement of key financial and operational objectives for the Company, but
amounts awarded for any fiscal year are not determined by any formula. During
the fiscal year ended September 30, 1996, the Company established a Stock Award
Plan pursuant to which awards of Common Stock, with limitations on vesting and
transferability, may be awarded in lieu of a portion of the cash bonus. For the
fiscal year ended September 30, 1996, total cash bonuses approved for certain
executive officers named in the Summary Compensation Table were $35,250, and
2,611 shares of Common Stock were awarded under the Stock Award Plan to those
executive officers. The former Chief Executive Officer did not receive a bonus
for the fiscal year ended September 30, 1996.
The Compensation Committee believes that by providing those persons who
have substantial responsibility for the management and growth of the Company and
its subsidiaries with an opportunity to increase their ownership of Company
stock, the interests of stockholders and those persons will be more closely
aligned. Accordingly, officers and other key employees of the Company and its
subsidiaries are eligible to receive stock options from time to time, giving
them the right to purchase shares of Common Stock at a specified price. However,
during the year ended September 30, 1996, no options were granted to the named
executive officers.
Compensation Committee of the Board of
Directors
Brian E. O'Neill
Leo E. Linbeck, Jr.
Thomas J. Keefe
7
<PAGE> 10
CASH COMPENSATION
The following table sets forth certain information regarding cash
compensation paid for services rendered during the last three fiscal years to
each of the Company's executive officers whose total annual salary and bonus for
the last fiscal year exceeded $100,000, including the former Chief Executive
Officer, and to the Company's former Chief Financial Officer, who served for a
period in fiscal 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES RESTRICTED
-------------------- UNDERLYING ALL OTHER STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1) AWARDS($)(2)
--------------------------- ---- --------- -------- ------------ ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
W. A. Griffin, III(3), former 1996 265,900 -- -- 54,206(4) --
President and Chief Executive 1995 242,200 62,500 60,000 31,031 62,500(5)
Officer 1994 189,400 36,000 -- 7,648 --
W. C. Clingman, Vice President, 1996 129,626 13,250 -- 15,822 13,250(6)
Information Services 1995 119,525 21,000 30,000 21,226 21,000(5)
1994 115,775 13,500 -- 4,691 --
H. G. Schopfer, III(7) 1996 103,600 -- -- 8,040 --
former Vice President, Finance 1995 124,160 24,000 40,000 14,051 24,000(5)
and Chief Financial Officer 1994 103,275 9,000 -- 3,798 --
T. L. Sivak, Vice President 1996 125,350 11,000 -- 11,818 11,000(6)
and General Counsel 1995 116,035 16,500 20,000 17,231 16,500(5)
1994 101,400 6,750 -- 4,155 --
M. R. Yellin, Vice President, 1996 119,890 11,000 -- 9,320 11,000(6)
Secretary and Treasurer 1995 107,650 16,500 20,000 13,863 16,500(5)
1994 97,650 9,000 -- 4,108 --
</TABLE>
- ---------------
(1) For 1994, represents the vested amount of the Company's contribution to the
Company's profit sharing and savings plan that was allocated to each
employee's account. For 1995, includes $8,027, $5,499, $5,352, $4,924 and
$4,815, as the vested amount of the Company's contribution to the Company's
profit sharing and savings plan, and $23,004, $15,727, $8,699, $12,307 and
$9,048, as the Company's contribution to the Company's supplemental
retirement plan in each case, allocated to the accounts of Messrs. Griffin,
III; Clingman; Schopfer, III; Sivak and Yellin, respectively. For 1996,
includes $8,196, $5,750, $5,754, $5,387 and $5,416 as the vested amount of
the Company's contribution to the Company's profit sharing and savings
plan, and $11,010, $10,072, $2,286, $6,431, and $3,904 relating to the
Company's supplemental retirement plan in each case, allocated to the
accounts of Messrs. Griffin III; Clingman; Schopfer, III; Sivak and Yellin,
respectively. The amounts relating to the supplemental retirement plan
represent balances payable under such plan as of September 30, 1996, as the
plan was terminated effective that date. Amounts reported for 1995 relating
to such plan are unvested amounts which will not be paid due to the plan
termination.
(2) As of September 30, 1996, Messrs. Griffin III, Clingman, Schopfer, III,
Sivak, and Yellin held 4,545, 1,527, 1,745, 1,200 and 1,200 shares of
Common Stock, respectively, subject to restriction, having a
value of $57,949, $19,469, $22,248, $15,300 and $15,300, respectively. On
December 12, 1996, Messrs. Clingman, Sivak and Yellin were granted an
additional 981, 815 and 815 shares of Common Stock, respectively, subject
to restriction.
(3) Mr. Griffin, III resigned as President and Chief Executive Officer effective
January 24, 1997.
(4) Includes $35,000 initiation fee for a club membership.
(5) Award was granted in fiscal 1996 in lieu of a portion of the cash bonus
earned in fiscal 1995.
(6) Award was granted in December 1996 in lieu of a portion of the cash bonus
earned in fiscal 1996.
(7) H. G. Schopfer, III served as Chief Financial Officer of the Company from
October 1, 1995 to June 18, 1996.
8
<PAGE> 11
OPTION EXERCISES
The following table sets forth the aggregate option exercises during the
fiscal year ended September 30, 1996 and the value of outstanding options at the
end of that year held by the named executive officers.
AGGREGATE OPTION EXERCISES IN FISCAL 1996 AND OPTION VALUES AT SEPTEMBER 30,
1996
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
OPTIONS IN-THE-MONEY
UNEXERCISED OPTIONS
AT YEAR END(#) AT YEAR END
-------------- -------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
W. A. Griffin, III.................. None None 95,807/40,000 $22,844/$0
W. C. Clingman...................... 3,307 $28,936 35,000/20,000 $0/$0
H. G. Schopfer, III................. None None 25,834/26,666 $0/$0
T. L. Sivak......................... None None 14,667/13,333 $20,125/$0
M. R. Yellin........................ None None 17,667/13,333 $0/$0
</TABLE>
CHANGE OF CONTROL AND OTHER AGREEMENTS
In connection with his resignation and agreement to provide reasonable
assistance to the Company with respect to unfinished business, Mr. Griffin, III
and the Company entered into an agreement whereby the Company would pay Mr.
Griffin, III a lump sum of $2,000,000, would remove the restrictions on 3,030
shares of Common Stock previously granted under the Stock Award Plan and would
pay the cost of COBRA coverage for Mr. Griffin, III under the Company's programs
for up to 18 months, but only to the extent similar benefits are not covered by
any subsequent employer's plans or programs.
Effective March 15, 1995, the Company entered into Change of Control
Agreements with the executive officers named in the summary compensation table
and certain of its operating officers. On August 23, 1996 and August 30, 1996,
the Company entered into like agreements with James M. Tidwell and Mary R.
Beshears. Each Change of Control Agreement is for a term of three years from the
later of the effective date of the agreement or the last Change in Control
(hereinafter defined) of the Company, and is automatically renewable for
successive one-year terms if notice of termination is not given by the Company.
Each Change of Control Agreement is subject to earlier termination upon (i) the
employee's death, disability or retirement or (ii) termination by the employee
or the Company of the employee's employment by the Company. Under each Change of
Control Agreement, a "change in control" of the Company shall have occurred if
(i) a report on Schedule 13D shall be filed with the Securities and Exchange
Commission disclosing that any person (or group of persons acting in concert),
other than the Company, one of its subsidiaries or any employee benefit plan of
the Company, is the beneficial owner of 20 percent of the outstanding securities
of the Company entitled to vote for directors ("Voting Stock"); (ii) any person
(or group of persons acting in concert), other than the Company, one of its
subsidiaries or any employee benefit plan of the Company, shall purchase
securities pursuant to a tender offer or exchange offer to acquire any Voting
Stock and, immediately thereafter, is the beneficial owner of 20 percent of the
Voting Stock; (iii) the stockholders of the Company shall approve (w) a merger
or consolidation of the Company with any other person, (x) any sale or other
transfer of all or substantially all the assets of the Company, (y) the
dissolution of the Company, or (z) a transaction immediately after the
consummation of which any person (or group of persons acting in concert) would
be the beneficial owner of 50 percent of the outstanding Voting Stock; or (iv)
during any 12-month period, individuals who at the beginning of that period
constituted the Board of Directors cease to constitute a majority thereof.
Under each Change of Control Agreement, in the event the employee
terminates his employment as a result of an event of termination for good reason
or is terminated by the Company other than as a result of an event of
termination for cause, in each case following a change in control, the Company
would pay such individual a cash lump sum payment equal to two and one-half
times the sum of (i) the amount of base salary the employee would have been paid
during the fiscal year of termination, (ii) the amount of any cash bonus paid or
payable to the employee for services rendered in the prior fiscal year, and
(iii) the amount of any
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income that (y) is includable in the employee's gross income for tax purposes or
(z) is attributable to the exercise of options exercised by the employee within
the one-year period prior to the termination date. Each agreement also obligates
the Company to maintain, during the three-year period following termination (or
such earlier date that the employee becomes a full-time employee of another
person), in effect other benefit plans (including life insurance, medical and
disability) for the benefit of such employee or to provide substantially similar
benefits. If all or any part of a payment under a Change of Control Agreement
would not be deductible for federal income tax purposes by the Company or one of
its tax affiliates, the amount would be reduced such that no portion of any
change of control payment to such employee (whether under the Change of Control
Agreement or otherwise) is not deductible by the Company or a tax affiliate
thereof.
Each Change of Control Agreement provides generally that an event of
termination for good reason shall have occurred if the Company shall (i) assign
the employee duties inconsistent with his or her position in effect immediately
prior to the first Change in Control of the Company; (ii) remove or fail to
re-elect or re-appoint the employee to any position with the Company held
immediately prior to the first Change in Control; (iii) take any other action
that results in a material diminution in such position, authority, duties or
responsibilities; (iv) reduce the employee's annual base salary as in effect
immediately prior to the first Change in Control of the Company or as may be
increased thereafter; (v) relocate the employee's principal office outside of
Houston, Texas; (vi) fail to continue his or her participation, on substantially
the same basis, in any benefit plan in which the employee participated prior to
the first Change in Control, unless an equitable arrangement shall have been
made; (vii) materially reduce any other benefits that were provided to the
employee by the Company prior to the first Change in Control, including any
material fringe benefits, or (viii) reduce the employee's number of paid
vacation days. An event of termination for cause shall have occurred if the
employee willfully and continuously fails to substantially perform his or her
duties or willfully engages in conduct known to be injurious to the Company.
On July 30, 1996 and August 30, 1996, the Company entered into severance
agreements with James M. Tidwell and Mary R. Beshears providing for payment of
one year's net salary if either is terminated other than for defined cause. Ms.
Beshear's compensation would be reduced in the event she gains other employment.
Effective July 1, 1996, the Company entered into a Limited Employment Agreement
with Henry G. Schopfer, III, who resigned as Vice President and Chief Financial
Officer. The agreement provides for among other things, six quarterly payments
of $37,500 less applicable taxes. The payments will be reduced by the gross
amount of Mr. Schopfer's wages from other employment.
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company do not receive fees for
attending meetings of the Board. Each non-employee director of the Company
receives fees of (i)$1,000 for each meeting of the Board and for each committee
meeting thereof that he attends, subject to a maximum daily fee of $1,000, and
(ii) a quarterly fee of $3,000 for each quarter he serves as a director.
In addition, pursuant to the Company's 1995 Non-Employee Directors' Stock
Option Plan ("Plan"), on February 1, 1996, each non-employee director received
an option to purchase 15,000 shares of Common Stock. The options become
exercisable with respect to one third of the shares on the first through third
anniversaries of the date of grant. The exercise price is the closing price of
the Common Stock on February 1, 1996, the date of the grant. So long as shares
remain available under the Plan, each person elected a director who is not an
employee of the Company will receive a similar option.
Mr. Lassiter has a deferred compensation agreement with the Company
pursuant to which he will receive $100,000, inclusive of standard director's
fees, for services performed as Chairman of the Board from March through
December 1996. In connection with an option for 10,000 shares of Common Stock
granted on August 22, 1989, Mr. Linbeck was paid a lump sum of $45,000 in
January 1997 to compensate him for the difference between $12.75, the exercise
price of the option (equal to the market price of the Common Stock on the date
of grant), and $8.375, the price at which the option would have been exercisable
had it been granted to him on the day Mr. Linbeck became a director of the
Company, as was intended and agreed and as was customary for similar options
granted to other new directors of the Company. The option has since expired.
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<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
With the exception of Ralph H. Clemons, Jr., no member of the Compensation
Committee of the Board during the fiscal year ended September 30, 1996, was an
officer or employee of the Company or any of its subsidiaries, or was formerly
an officer of the Company or any of its subsidiaries.
During the fiscal year ended September 30, 1996, no executive officer of
the Company served as (i) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served on the Compensation Committee, (ii) a director of
another entity, one of whose executive officers served on the Compensation
Committee, or (iii) a member of the compensation committee (or other board
committee performing equivalent functions) of another entity, one of whose
executive officers served as a director of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that the Company's directors, executive officers and 10% stockholders
report to the Securities and Exchange Commission certain transactions involving
Common Stock. Based solely upon a review of Forms 3, 4 and 5 furnished to the
Company and representations received from persons subject to such reporting
requirements, all filings were timely during the fiscal year ended September 30,
1996.
PERFORMANCE GRAPH
The following graph compares, as of each of the dates indicated, the
performance of the Common Stock to the Standard & Poor's 500 Stock Index ("S&P
500") and the Standard & Poor's Oil Composite Index ("S&P Oil Composite") for
the Company's last five fiscal years. The graph assumes that the value of the
investment in the Common Stock and each index was $100 at September 30, 1991,
and that all dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE RETURN
<TABLE>
<S> <C> <C> <C>
S&P OIL
SEPTEMBER 30 DANIEL INDUSTRIES S&P 500 COMPOSITE
1991 100.00 100.00 100.00
1992 71.27 111.05 106.64
1993 90.12 125.49 123.38
1994 68.81 130.11 121.58
1995 91.14 168.82 145.09
1996 79.16 203.14 182.48
</TABLE>
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The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission or subject to Regulations 14A and 14C under the Exchange Act or to
the liabilities of Section 18 under the Exchange Act.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective February 3, 1995, W. A. Griffin entered into a two-year
Consulting Agreement with the Company under which he provides services and
counsel on business matters as requested by the Chief Executive Officer. Under
the Consulting Agreement, the Company will pay Mr. Griffin a fee of $135,000 per
year for those services and will reimburse him for certain expenses.
INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has selected Price Waterhouse LLP, to audit the consolidated
financial statements of the Company and its subsidiaries for the year ending
December 31, 1997. Price Waterhouse LLP has served as the Company's independent
accountants for the past 40 years. Neither Price Waterhouse LLP nor any of its
partners has any financial interest in or any connection with the Company, other
than as independent accountants. Representatives of Price Waterhouse LLP are
expected to be available at the annual meeting of stockholders to respond to
appropriate questions, and they will be permitted to make a statement if they so
desire.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of holders of shares of Common Stock intended to be presented
at the annual meeting of stockholders of the Company to be held in 1998 must be
received by the Company at its principal executive offices, 9753 Pine Lake
Drive, Houston, Texas 77055, no later than September 30, 1997 in order to be
considered for inclusion in the proxy statement and Proxy relating to that
meeting.
OTHER INFORMATION
At the date of this proxy statement, the Board knows of no other matters to
be presented for consideration at the annual meeting. However, if any other
matters should properly come before the meeting or any adjournment thereof, the
persons named in the Proxy will have discretionary authority to vote the shares
of Common Stock represented by the Proxy with respect to such matters. The
shares represented by the Proxy will also be voted with respect to matters
incident to the conduct of the meeting.
The cost of solicitation of the Proxies will be borne by the Company.
Certain officers and regular employees of the Company may solicit the return of
Proxies by telephone, telegram or personal interview. In addition, the Company
has employed Morrow & Co. to assist in the solicitation of Proxies. The fees and
expenses of that firm in connection with such solicitation are not expected to
exceed $10,000.
By Order of the Board of Directors,
/s/ MICHAEL R. YELLIN
MICHAEL R. YELLIN
Secretary
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DANIEL INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 21, 1997
The undersigned stockholder of Daniel Industries, Inc. (the "Company") hereby
appoints James M. Tidwell and Michael R. Yellin, or either of them, attorneys
and proxies of the undersigned, with full power of substitution, to vote, as
designated below, the number of votes which the undersigned would be entitled
to cast if personally present at the Annual Meeting of Stockholders of the
Company to be held at The Ritz Carlton Hotel, 1919 Briar Oaks Lane, Houston,
Texas, at 10:00 a.m. on Friday, March 21, 1997, and at any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. IF YOU EXECUTE AND RETURN THIS PROXY BUT
DO DOT SPECIFY OTHERWISE, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES
LISTED HEREIN OR IF ANY ONE OR MORE OF THE NOMINEES BECOMES UNAVAILABLE, FOR
ANOTHER NOMINEE OR OTHER NOMINEES TO BE SELECTED BY THE BOARD OF DIRECTORS.
<PAGE> 16
<TABLE>
<S> <S>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. FOR all of the nominees for Class I director listed below.
WITHHOLD AUTHORITY to vote for election of directors. For With- For All
_____________________________ FOR ALL EXCEPT any nominee whose name is listed on hold Except
the line below.
DANIEL INDUSTRIES INC. / / / / / /
_____________________________ Nominees:
LEO E. LINBECK, JR.
NATHAN M. AVERY
GIBSON GAYLE, JR.
___________________________________________________________________________________
RECORD DATE SHARES: INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE
"FOR ALL EXCEPT" BOX AND WRITE THAT PERSON'S NAME IN THE SPACE PROVIDED ABOVE.
2. In their discretion, the above-named proxies are authorized to vote upon such
other matters as may properly come before the meeting or at any adjournment
thereof and upon matters incident to the conduct of the meeting.
Your signature should correspond with your name as it appears hereon. Joint
________________ owners should each sign. When signing as attorney, executor, administrator,
Date trustee or guardian, please set forth your full title as it appears hereon. PLEASE
______________________________________ MARK, SIGN, DATE AND RETURN IMMEDIATELY. PLEASE NOTE ANY CHANGE OF ADDRESS.
______Signature of Stockholder(s)_____
DETACH CARD DETACH CARD
</TABLE>
