<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 Rule 14a-11(c) or Rule 14a-12
Weatherford Enterra, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
April 8, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Weatherford Enterra, Inc. on Friday, May 17, 1996, at 9:00 a.m. at The
Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas.
The Board of Directors appreciates and encourages stockholder participation
in the Company's affairs. Whether or not you plan to attend the Annual Meeting,
it is important that your shares be represented and voted. Please mark, date,
sign and return your proxy at your earliest convenience in the envelope
provided, which requires no postage if mailed in the United States. If you have
multiple stockholder accounts and receive more than one set of these materials,
please be sure to vote each proxy and return it in the respective postage-paid
envelope provided.
Thank you for your continued interest.
Very truly yours,
PHILIP BURGUIERES
Chairman, President and
Chief Executive Officer
<PAGE> 3
WEATHERFORD ENTERRA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 1996
Notice is hereby given that the Annual Meeting of Stockholders of
Weatherford Enterra, Inc. (the "Company") will be held on Friday, May 17, 1996,
at 9:00 a.m. at The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas, for the
following purposes:
(1) To elect three directors, each for a term of three years; and
(2) To consider and act upon any other matter which may properly come
before the meeting or any adjournment thereof.
Only holders of record of the Company's Common Stock, $0.10 par value (the
"Common Stock"), at the close of business on March 29, 1996 (the "Record Date")
are entitled to notice of and to vote at the Annual Meeting or any adjournment
or postponement thereof. A list of the holders of record of Common Stock as of
the Record Date will be open to the examination of any such stockholder for any
purpose germane to the Annual Meeting after May 6, 1996 at the Company's offices
at 1360 Post Oak Boulevard, Suite 1000, Houston, Texas, during normal business
hours.
By Order of the Board of Directors,
H. SUZANNE THOMAS
Secretary
Houston, Texas
April 8, 1996
IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN IF
YOU PLAN TO BE PRESENT, PLEASE MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY AT
YOUR EARLIEST CONVENIENCE IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY YOUR PROXY.
<PAGE> 4
WEATHERFORD ENTERRA, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 1996
TIME, DATE, PLACE AND PURPOSE
This Proxy Statement is being furnished to stockholders of Weatherford
Enterra, Inc., a Delaware corporation (the "Company"), in connection with the
solicitation by the Board of Directors of proxies for use at the Annual Meeting
of Stockholders (the "Meeting") to be held on Friday, May 17, 1996, at 9:00 a.m.
at The Ritz-Carlton, 1919 Briar Oaks Lane, Houston, Texas, and at any
adjournment or postponement thereof, for the purposes set forth in the foregoing
Notice of Annual Meeting of Stockholders. This Proxy Statement and the form of
proxy are first being sent or delivered to stockholders on or about April 8,
1996. The Company's principal executive offices are located at 1360 Post Oak
Boulevard, Suite 1000, Houston, Texas 77056.
RECORD DATE AND VOTE REQUIRED
The securities of the Company entitled to vote at the Meeting consist of
shares of Common Stock, $0.10 par value (the "Common Stock"). At the close of
business on March 29, 1996 (the "Record Date"), there were outstanding and
entitled to vote 51,193,795 shares of Common Stock. The holders of record of
Common Stock on the Record Date will be entitled to one vote per share.
The holders of a majority of the total shares of Common Stock issued and
outstanding at the close of business on the Record Date, whether present in
person or represented by proxy, will constitute a quorum for the transaction of
business at the Meeting. The affirmative vote of a plurality of the total shares
of Common Stock present in person or represented by proxy and entitled to vote
at the Meeting is required for the election of directors, and 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 Meeting is required for the
approval of any other matters as may properly come before the Meeting or any
adjournment thereof.
The Annual Report to Stockholders for the year ended December 31, 1995 is
being furnished with this Proxy Statement to the holders of record of Common
Stock on the Record Date. The Annual Report to Stockholders does not constitute
a part of the proxy materials.
VOTING AND REVOCATION OF PROXIES
All properly executed proxies that are not revoked will be voted at the
Meeting in accordance with the instructions contained therein. If a holder of
Common Stock executes and returns a proxy and does not specify otherwise, the
shares represented by such proxy will be voted "for" the election of the
nominees for director named below. At the date of this Proxy Statement,
management of the Company knows of no other matters which are likely to be
brought before the Meeting. However, if any other matters should properly come
before the Meeting, the persons named in the enclosed proxy will have
discretionary authority to vote such proxy in accordance with their best
judgment on such matters. Checking the abstention box on the proxy card or
failing to return the proxy card has the same effect as voting against the
proposal. A stockholder who has executed and returned a proxy may revoke it at
any time before it is voted at the Meeting by executing and returning a proxy
bearing a later date, by filing written notice of such revocation with the
Secretary of the Company, stating that the proxy is revoked, or by attending the
Meeting and voting in person.
Under applicable stock exchange rules, brokers will not be permitted to
submit proxies authorizing a vote on a proposal in the absence of specific
instructions from beneficial owners. Broker non-votes will have the effect of
votes against a proposal. Under Delaware law, both abstentions and broker
non-votes contained on a returned proxy card will be considered present for
purposes of determining the existence of a quorum at the Meeting.
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<PAGE> 5
SOLICITATION OF PROXIES
In addition to solicitation by mail, the directors, officers and employees
of the Company may solicit proxies from stockholders by personal interview,
telephone, telegram or otherwise. The Company will bear the costs of the
solicitation of proxies from its stockholders. Arrangements will also be made
with brokerage firms and other custodians, nominees and fiduciaries who hold the
voting securities of record for the forwarding of solicitation material to the
beneficial owners thereof. The Company will reimburse such brokers, custodians,
nominees and fiduciaries for the reasonable out-of-pocket expenses incurred by
them in connection therewith. The Company has also engaged the services of
Corporate Investor Communications, Inc., a proxy solicitation firm, to
distribute proxy solicitation materials to brokers, banks and other nominees and
to assist in the solicitation of proxies from its stockholders for an
anticipated fee of $3,000, plus mailing expenses in excess of $1,000.
OWNERSHIP OF COMMON STOCK
Principal Stockholders. The following table sets forth certain information
with respect to the Common Stock beneficially owned by persons who are known to
the Company to be the beneficial owners of more than five percent of the Common
Stock as of the Record Date. For purposes of this Proxy Statement, beneficial
ownership is defined in accordance with the rules of the Securities and Exchange
Commission (the "Commission") to mean generally the power to vote or dispose of
shares, regardless of any economic interest therein. The persons listed have
sole voting power and sole dispositive power with respect to all shares set
forth in the table unless otherwise specified in the footnotes to the table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
-------------------------
SHARES OWNED
DIRECTLY
NAME AND ADDRESS OF BENEFICIAL OWNER OR INDIRECTLY PERCENT
-------------------------------------------------------------- ------------- -------
<S> <C> <C>
First Reserve Corporation(2).................................. 9,474,431 18.5
475 Steamboat Road
Greenwich, CT 06830
FMR Corp. and Edward C. Johnson 3d(3)......................... 5,859,724 11.4
82 Devonshire Street
Boston, MA 02109
</TABLE>
- ---------------
(1) Information with respect to beneficial ownership is based upon information
furnished by each stockholder or contained in filings made with the
Commission. To the Company's knowledge, none of such shares are deemed to be
beneficially owned because the holder has the right to acquire such shares
within 60 days.
(2) Based upon information contained in Amendment No. 2 to Schedule 13D dated
October 5, 1995, filed with the Commission. Represents shares owned by the
following funds (the "First Reserve Funds"), for each of which First Reserve
Corporation ("First Reserve") is the general partner: American Gas & Oil
Investors, Limited Partnership -- 1,684,532; AmGO II, Limited
Partnership -- 1,042,651; Am GO III, Limited Partnership -- 504,809; First
Reserve Secured Energy Assets Fund, Limited Partnership -- 1,963,409; First
Reserve Fund V, Limited Partnership -- 2,835,189; First Reserve Fund V-2,
Limited Partnership -- 708,470; and First Reserve Fund VI, Limited
Partnership -- 735,371. First Reserve, in its role as managing general
partner of the First Reserve Funds and acting on behalf of the First Reserve
Funds, has the power to cause each First Reserve Fund to dispose of or vote
shares of Common Stock held by it. The principal beneficial owners of the
common stock of First Reserve are its executive officers, including Messrs.
Hill and Macaulay.
(3) Based upon information contained in a joint Schedule 13G dated February 14,
1996, filed with the Commission by Edward C. Johnson 3d and by FMR Corp., on
behalf of itself and its subsidiaries, Fidelity Management & Research
Company (beneficial owner of 4,764,015 shares of the total outstanding
Common Stock), Fidelity American Special Situations Trust (beneficial owner
of 45,500 shares of the
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<PAGE> 6
total outstanding Common Stock) and Fidelity Management Trust (beneficial
owner of 1,095,709 shares of the total outstanding Common Stock). FMR Corp.
and Mr. Johnson each has sole dispositive power with respect to 5,859,724
shares. FMR Corp. has sole voting power with respect to 1,141,209 shares,
and Mr. Johnson has sole voting power with respect to none of the shares.
Security Ownership of Management. The following table sets forth certain
information with respect to the Company's Common Stock beneficially owned by
each of its directors and nominees for director, each of its executive officers
named in the Summary Compensation Table set forth in this Proxy Statement and by
all of its directors and executive officers as a group, as of the Record Date.
Such persons have sole voting power and sole dispositive power with respect to
all shares set forth in the table unless otherwise specified in the footnotes to
the table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
------------------------
SHARES OWNED
DIRECTLY OR
NAME INDIRECTLY(2) PERCENT
--------------------------------------------------------------- ------------ -------
<S> <C> <C>
Directors and Nominees for Director
Thomas N. Amonett(3)......................................... 12,575 *
Philip Burguieres(4)......................................... 235,757 *
William E. Greehey(3)........................................ 20,588 *
John A. Hill(5).............................................. 9,474,431 18.5
John W. Johnson(3)(6)........................................ 81,171 *
William E. Macaulay(5)....................................... 9,474,431 18.5
Robert K. Moses, Jr.(3)(7)................................... 503,721 *
Robert L. Parker, Sr.(8)..................................... 43,426 *
R. Rudolph Reinfrank(8)...................................... 2,500 *
Roger M. Widmann(8).......................................... 2,500 *
Named Executive Officers
M.E. Eagles(9)............................................... 39,485 *
James R. Burke(10)........................................... 42,806 *
Norman W. Nolen(11).......................................... 41,959 *
H. Suzanne Thomas(12)........................................ 60,892 *
All Directors, Nominees and Executive Officers as a Group
(16 in number)(13)........................................... 10,603,140 20.6
</TABLE>
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* Denotes ownership of less than one percent.
(1) Information with respect to beneficial ownership is based upon information
furnished by each director or executive officer of the Company or contained
in filings made with the Commission.
(2) Includes shares held under the Company's Employee Stock Purchase Plan (the
"ESPP") in the accounts of participants, as to which shares such
participants have sole voting power and no dispositive power prior to
withdrawal of such shares from the ESPP. Shares may be withdrawn from the
ESPP by a participant on March 31 of each year upon written notice by such
participant. Also includes shares held under the Company's 401(k) savings
plans in the accounts of participants, as to which shares such participants
have sole voting power and no dispositive power. Also includes shares
subject to acquisition within 60 days after the Record Date by such person
or group.
(3) Includes 3,000 shares subject to acquisition within 60 days pursuant to the
Director Option Plan (as defined hereinafter).
(4) Also Chairman, President and Chief Executive Officer of the Company.
Includes (a) 1,000 shares held by Mr. Burguieres' wife, with respect to
which he has no voting or dispositive power and (b) 500 shares held by Mr.
Burguieres' adult son supported by him, with respect to which he has sole
voting and dispositive power; Mr. Burguieres disclaims beneficial ownership
of all such shares. Also includes (a) 21,125 shares granted to Mr.
Burguieres pursuant to the Restricted Plan (as hereinafter defined),
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<PAGE> 7
with respect to which he has sole voting power and no dispositive power,
and (b) 117,501 shares subject to acquisition by Mr. Burguieres within 60
days pursuant to an Option Plan (as hereinafter defined).
(5) This figure represents the aggregate number of shares owned beneficially by
First Reserve, of which Mr. Hill is Chairman and Mr. Macaulay is President
and Chief Executive Officer. Both Messrs. Hill and Macaulay disclaim
beneficial ownership as to all such shares.
(6) Does not include 1,124,377 shares owned by Permian Mud Service, Inc.
("Permian"). Mr. Johnson is a director, officer and substantial beneficial
shareholder of Permian and therefore may be deemed to be a beneficial owner
of the shares of the Common Stock held by Permian; Mr. Johnson disclaims
beneficial ownership of all such shares. Includes (a) 6,000 shares held by
Mr. Johnson as a trustee of various trusts for his children, with respect
to which he has sole voting and dispositive power and (b) 120 shares held
as custodian for Mr. Johnson's children, with respect to which he has sole
voting and dispositive power; Mr. Johnson disclaims beneficial ownership of
all such shares.
(7) Includes (a) 625 shares held by Mr. Moses' adult son supported by him, with
respect to which Mr. Moses has no voting or dispositive power and (b) an
aggregate of 45,000 shares held in various trusts for Mr. Moses' children,
his brother and his sister, of which Mr. Moses is the trustee, with respect
to which Mr. Moses has sole voting and dispositive power; Mr. Moses
disclaims beneficial ownership of all such shares. Does not include (a) an
aggregate of 52,500 shares held in various trusts for Mr. Moses' children,
with respect to which Mr. Moses has no voting or dispositive power or (b)
1,851 shares held in a trust for Mr. Moses' son, with respect to which he
has no voting or dispositive power; since Mr. Moses is not a trustee of
such trusts and has no voting or dispositive power, he disclaims beneficial
ownership of all such shares.
(8) Includes 2,500 shares subject to acquisition within 60 days pursuant to the
Director Option Plan.
(9) Includes (a) 8,323 shares granted to Mr. Eagles pursuant to the Restricted
Plan with respect to which he has sole voting power and no dispositive
power and (b) 17,501 shares subject to acquisition by Mr. Eagles within 60
days pursuant to an Option Plan.
(10) Includes (a) 4,907 shares granted to Mr. Burke pursuant to the Restricted
Plan with respect to which he has sole voting power and no dispositive
power and (b) 18,833 shares subject to acquisition by Mr. Burke within 60
days pursuant to an Option Plan.
(11) Includes (a) 4,532 shares granted to Mr. Nolen pursuant to the Restricted
Plan with respect to which he has sole voting power and no dispositive
power and (b) 21,750 shares subject to acquisition by Mr. Nolen within 60
days pursuant to the Option Plans.
(12) Includes (a) 4,532 shares granted to Ms. Thomas pursuant to the Restricted
Plan with respect to which she has sole voting power and no dispositive
power and (b) 22,000 shares subject to acquisition by Ms. Thomas within 60
days pursuant to the Option Plans.
(13) See footnotes (3) through (12). Also includes 26,294 shares subject to
acquisition by certain executive officers not named in the table within 60
days pursuant to the Option Plans.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Restated Certificate of Incorporation and By-Laws provide
that the Board of Directors will consist of not less than six nor more than 15
persons, the exact number to be fixed from time to time by the Board of
Directors. The Board of Directors has fixed the authorized number of directors
at ten.
Directors are divided into three classes, as nearly equal in number as
possible. Each class is elected for a term of three years, so that the term of
office of one class of directors expires at every Annual Meeting.
NOMINEES FOR DIRECTOR
The Board of Directors has nominated three persons for election as
directors in the class whose term of office will expire at the Company's 1999
Annual Meeting of Stockholders or until their respective successors
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<PAGE> 8
are elected and qualified. The nominees are Philip Burguieres, William E.
Greehey and Roger M. Widmann. Messrs. Burguieres, Greehey and Widmann are
currently directors of the Company whose terms will expire at the Meeting. It is
the intention of the persons named in the enclosed proxy to vote such proxy for
the election of such nominees.
Management of the Company does not contemplate that any of such nominees
will become unavailable for any reason, but if that should occur before the
Meeting, proxies that do not withhold authority to vote for directors will be
voted for another nominee, or other nominees, in accordance with the best
judgment of the person or persons appointed to vote the proxy.
The enclosed form of proxy provides a means for the holders of Common Stock
to vote for all of the nominees listed therein, to withhold authority to vote
for one or more of such nominees or to withhold authority to vote for all of
such nominees. Each properly executed proxy received in time for the Meeting
will be voted as specified therein, or if a stockholder does not specify in his
or her executed proxy how the shares represented by his or her proxy are to be
voted, such shares shall be voted for the nominees listed therein or for other
nominees as provided above.
The following table sets forth for each nominee for election as director
all positions with the Company held by him, his age as of the Record Date and
the date on which he first became a director of the Company. Also set forth
below is information on his principal occupation. Unless otherwise indicated,
each person has held the position shown, or has been associated with the named
employer in an executive capacity, for more than five years.
<TABLE>
<CAPTION>
NAME COMPANY POSITION AGE DIRECTOR SINCE
------------------------- ------------------------------------- --- ----------------
<S> <C> <C> <C>
Philip Burguieres........ Director, Chairman, President and 52 April 23, 1991
Chief Executive Officer
William E. Greehey....... Director 59 May 25, 1984
Roger M. Widmann......... Director 56 October 5, 1995
</TABLE>
Mr. Burguieres has served as Chairman of the Board of the Company since
December 1992, and President and Chief Executive Officer and a director of the
Company since April 1991. From January 1990 to November 1990, he was Chairman of
the Board, President and Chief Executive Officer of Panhandle Eastern
Corporation, a Houston, Texas-based company that operates interstate natural gas
transmission systems. Mr. Burguieres held various positions with Cameron Iron
Works, a Houston, Texas-based company engaged in the manufacture of oilfield
equipment, from 1971 through November 1989. He served as Chairman of the Board
of Cameron from January 1987 to November 1989, Chief Executive Officer from
January 1986 to November 1989, and President and Chief Operating Officer from
April 1981 to November 1989. Mr. Burguieres has also been a director of
McDermott International, Inc., a New Orleans, Louisiana-based company engaged in
the fabrication of oilfield equipment, since March 1990; and a director of Texas
Commerce Bancshares, a Houston, Texas-based banking organization, since March
1987.
Mr. Greehey is Chairman of the Board and Chief Executive Officer of Valero
Energy Corporation, a San Antonio, Texas-based company that refines, trades and
markets oil and gas and manages natural gas transmission operations. He has also
been a director of Santa Fe Energy Resources, Inc., a Houston, Texas-based
company engaged in oil and gas exploration and production, since March 1991.
Mr. Widmann has been Senior Managing Director of Castle, Harlan & Widmann
Energy Partners, L.L.C. since September 1995. He held various senior positions
with Chemical Bank from 1986 until August 1995. He is also a director of Lydall,
Inc., a Connecticut-based corporation engaged in the manufacture of engineered
fiber materials, and previously was a member of the Board of Advisors of various
First Reserve Funds from 1981 through December 1995. Mr. Widmann was appointed
to the Company's Board of Directors on October 5, 1995, when the Company merged
with Enterra Corporation ("Enterra"). He was a director of Enterra from August
1994, when Enterra acquired Total Energy Services, Inc. ("Total"), and
previously served as a director of Total since September 1993.
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<PAGE> 9
INFORMATION CONCERNING OTHER DIRECTORS
The following table sets forth certain information for those directors
whose present terms will continue after the Meeting. Also set forth below is
information on his principal occupation. Unless otherwise indicated, each person
has held the position shown, or has been associated with the named employer in
an executive capacity, for more than five years.
<TABLE>
<CAPTION>
NAME COMPANY POSITION AGE DIRECTOR SINCE TERM EXPIRES
-------------------------- ---------------- --- ------------------ -------------
<S> <C> <C> <C> <C>
Thomas N. Amonett......... Director 52 May 27, 1974 1998
John A. Hill.............. Director 54 October 5, 1995 1997
John W. Johnson........... Director 51 November 19, 1991 1997
William E. Macaulay....... Director 50 October 5, 1995 1997
Robert K. Moses, Jr....... Director 55 May 12, 1978 1998
Robert L. Parker, Sr...... Director 72 October 5, 1995 1998
R. Rudolph Reinfrank...... Director 40 October 5, 1995 1998
</TABLE>
Mr. Amonett has served as President of Reunion Resources Company
(previously called Buttes Gas and Oil Company), a Houston, Texas-based company
primarily engaged in the manufacture of high volume, precision plastic products
and the providing of engineered plastic services and also oil and gas
exploration, development and production and wine grape vineyard development,
since July 1992. Previously he was Of Counsel with Fulbright & Jaworski L.L.P.,
Attorneys at Law, Houston, Texas, from September 1986 to July 1992. Prior
thereto, he was President and a director of Houston Oil Fields Company, an oil
and gas exploration and production company, from November 1982 to September
1986. He served as Chairman of the Board of the Company from May 1986 to May
1989. He has also served as a director of PetroCorp, Incorporated, a Houston,
Texas-based company engaged in the exploration and production of oil and natural
gas, since November 1993; and as a director of Team, Inc., a Houston,
Texas-based company engaged in environmental services, since 1994.
Mr. Hill is Chairman of the Board of First Reserve. He is a trustee of the
Putnam Funds and is a director of Snyder Oil Corporation, a Texas-based
corporation engaged in oil and gas exploration and production; Maverick Tube
Corporation, a Missouri corporation engaged in the manufacture of oilfield
tubulars, line pipe and structural steel; and PetroCorp, Incorporated, a
Houston, Texas-based corporation engaged in oil and gas exploration and
production, the last two being companies in which certain First Reserve Funds
have a substantial equity interest. Mr. Hill was appointed to the Board of
Directors on October 5, 1995, when the Company merged with Enterra. He was a
director of Enterra from August 1994, when Enterra acquired Total, and
previously served as a director of Total since June 1993.
Mr. Johnson is President and a director of Permian Mud Service, Inc., a
Houston, Texas-based company that manufactures and sells oilfield production
chemicals. He was a director of Petroleum Equipment Tools Co. ("Petco") from
March 1971 to November 1991, when Petco was acquired by merger with the Company.
He has also served as Chairman of the Board of Southwest Bank of Texas, N.A., a
Houston, Texas-based banking organization, since October 1982.
Mr. Macaulay is President and Chief Executive Officer of First Reserve. He
is a director of Maverick Tube Corporation, a Missouri corporation engaged in
the manufacture of oilfield tubulars, line pipe and structural steel; and
Hugoton Energy Corporation, a Kansas corporation engaged in oil and gas
exploration and production, each being a company in which certain First Reserve
Funds have a substantial equity interest. Mr. Macaulay was appointed to the
Company's Board of Directors on October 5, 1995, when the Company merged with
Enterra. He was appointed a director and Vice Chairman of Enterra in August
1994, when Enterra acquired Total, and previously served as a director of Total
since June 1993.
Mr. Moses is a private investor, principally in the oil and gas exploration
and oilfield services business, in Houston, Texas. He served as Chairman of the
Board of the Company from May 1989 to December 1992.
Mr. Parker is Chairman of Parker Drilling Company, a Tulsa, Oklahoma-based
contract drilling company that provides services worldwide to the oil and
natural gas industry. Previously, he also served as
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<PAGE> 10
Chief Executive Officer of that company. He is also a director of Bank of
Oklahoma Finance Corporation, Tulsa, N.A., a bank holding company; MAPCO, Inc.,
a diversified energy company; and Clayton Williams Energy, Inc., a company
engaged in exploration and production of oil and natural gas. Mr. Parker was
appointed to the Company's Board of Directors on October 5, 1995, when the
Company merged with Enterra. He served as a director of Enterra since 1980.
Mr. Reinfrank has been Managing Director of the Davis Companies and a
Managing General Partner of Davis Reinfrank Company, private investment firms,
since May 1993. From January 1988 through June 1993, Mr. Reinfrank was Executive
Vice President of Shamrock Holdings, Inc. From January 1990 through December
1992, Mr. Reinfrank also served as Managing Director of Trefoil Investors, Inc.
and Shamrock Capital Advisors, Inc. He is also a director of Parker Drilling
Company, a Tulsa, Oklahoma-based company that provides contract drilling
services worldwide to the oil and natural gas industry. Mr. Reinfrank was
appointed to the Company's Board of Directors on October 5, 1995, when the
Company merged with Enterra. He served as a director of Enterra since September
1992 and previously from 1987 through 1991.
FAMILY RELATIONSHIPS
There are no family relationships between any two directors or executive
officers.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held nine meetings during 1995. The
Board of Directors has an Audit Committee, a Compensation and Stock Plans
Committee (the "Compensation Committee") and an Executive and Nominating
Committee (the "Executive Committee").
The Audit Committee reviews with the Company's independent public
accountants the plan, scope and results of their annual audit and reviews the
planned internal audits, procedures followed and results of such audits
performed by the Company's internal audit department. The Audit Committee
selects an accounting firm as the independent auditors of the Company for each
fiscal year, subject to ratification by the full Board of Directors, and
considers in general all audit and non-audit services provided by such firm to
the Company. The Audit Committee was composed of Messrs. Amonett (Chairman),
Thomas C. Brown and W. Randolph Smith prior to October 5, 1995, and of Messrs.
Amonett (Chairman), Hill and Reinfrank on and after October 5, 1995. The Audit
Committee held two meetings during 1995.
The Compensation Committee approves all executive compensation, except the
compensation of the Chief Executive Officer, which is recommended by the
Compensation Committee but approved by the Board of Directors (excluding Mr.
Burguieres). The Compensation Committee also approves employee benefit plans,
establishes directors' fees (subject to approval by the Board of Directors) and
administers the Company's various stock option plans and other stock based
plans, various plans for which certain members of management are eligible and
certain plans for which non-employee directors are eligible. The Compensation
Committee was composed of Messrs. Greehey (Chairman), Brown and Moses prior to
October 5, 1995, and of Messrs. Greehey (Chairman), Moses and Widmann on and
after October 5, 1995. The Compensation Committee held one meeting during 1995
and acted from time to time pursuant to unanimous written consent.
The Executive Committee is authorized to act on all corporate matters for
which applicable law does not require participation by the full Board of
Directors. In practice, the Executive Committee generally acts in place of the
full Board when scheduling makes it impracticable to assemble the full Board.
All actions taken by the Executive Committee must be reported at the next
meeting of the full Board of Directors. The Executive Committee also evaluates
the size and composition of the Board of Directors, makes recommendations as to
candidates for election to the Board of Directors and recommends the structuring
of various committees of the Board. The Executive Committee does not ordinarily
consider director nominees recommended by stockholders. The Executive Committee
was composed of Messrs. Moses (Chairman), Amonett, Burguieres, Greehey and
Johnson prior to October 5, 1995, and of Messrs. Moses (Co-Chairman), Macaulay
(Co-Chairman), Burguieres, Johnson and Parker on and after October 5, 1995. The
Executive Committee held one meeting during 1995.
7
<PAGE> 11
ATTENDANCE AT MEETINGS
Each of the directors of the Company attended at least 75 percent of the
aggregate of the meetings of the Board of Directors and committees of which he
was a member, except for Mr. Greehey who attended 70 percent of the meetings of
the Board of Directors and 100 percent of the meetings of the Executive
Committee and the Compensation Committee.
EXECUTIVE COMPENSATION
COMPENSATION AND STOCK PLANS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company, which
is composed of three independent outside directors, is responsible for setting
policies with respect to compensation of the Company's executive officers.
Compensation Philosophy and Overall Objectives of the Executive
Compensation Program. The Company's executive compensation program is designed
to attract, motivate and retain the executives needed to improve the Company's
performance and maximize stockholder value. Toward that end, the Compensation
Committee attempts to provide the Company's executives with a total target
compensation package (which includes base salary, annual incentive bonus,
long-term, equity-based incentive compensation and other executive benefits)
that, at expected levels of corporate performance, is competitive with packages
provided to executives of companies similar to the Company who hold comparable
positions or have similar qualifications.
The Compensation Committee determines competitive levels of compensation
for executive positions based on information obtained from compensation surveys
(general industry), proxy statements for a group of competitor companies
approved by the Compensation Committee (the "compensation peer group") and
recommendations of an independent compensation consultant retained by the
Company. Although some of the same companies are included in both groups, the
compensation peer group is not the same as the group of companies comprising the
S&P Oil Well Equipment & Services Stock Index used in the Performance Graph
included later in this Proxy Statement. In selecting the companies to survey for
compensation purposes, the Compensation Committee focused primarily on companies
with U.S. and international business operations; similar revenues, market
capitalization, employment levels and lines of business (including
manufacturing); and a management style and corporate culture similar to the
Company's.
The Company's pay-for-performance philosophy has resulted in compensation
packages that consist in large part of variable, performance-based components,
such as bonuses and stock-based awards, which can increase or decrease to
reflect changes in corporate or individual performance. Total target
compensation is slightly below the market median (50th percentile) based on
general industry data; this information is not available for the compensation
peer group. Actual total compensation is competitive with the market median
based on general industry data and below the market median for the compensation
peer group.
Executive Compensation Program Components. The Company uses cash- and
equity-based compensation to achieve its pay-for-performance philosophy and to
reward short- and long-term performance. The mix of base salary, annual
incentives and long-term incentives is reviewed periodically to ensure the
approximate mix.
Base Salary. The Compensation Committee's philosophy is to control fixed
compensation costs and to place greater emphasis on incentive compensation based
on results. The Company's base salaries are generally slightly below the market
median (50th percentile) for the general industry or marketplace salaries and
the salaries of the compensation peer group. Salaries for executives are
reviewed periodically (not more often than annually) and revised, if
appropriate, based on a variety of factors, including individual performance and
responsibility, general levels of market salary increases and the Company's
overall financial results, with emphasis on competitive salaries in the
marketplace.
Incentive Compensation. The Compensation Committee's philosophy is to use a
combination of annual and long-term compensation methods, including grants of
Common Stock under various plans. The
8
<PAGE> 12
Compensation Committee believes that key employees should have a significant
portion of their total compensation paid in shares of Common Stock, as
significant equity ownership in the Company focuses executives on managing the
Company from the long-term perspective of an owner, with emphasis on enhanced
shareholder value. Key employees are strongly encouraged to retain shares of
Common Stock granted as part of their compensation.
Annual incentive bonuses -- Annual incentive bonuses are based on the
achievement of specified corporate goals. Targeted corporate goals are
established at the outset of each fiscal year by the Company's management and
are approved by the Compensation Committee. There is no specific weighting
assigned to these goals. A range of potential annual incentive awards, based on
general industry averages, has been established for each executive officer. The
Company's target annual incentive award levels are generally consistent with or
slightly below the median marketplace awards. Annual incentive bonuses may be
paid in cash, shares of Common Stock or a combination of cash and shares of
Common Stock.
The 1995 targeted corporate goals for earnings per share, earnings before
depreciation, interest and taxes, capital spending and selling, general and
administrative expenses as a percentage of revenues were exceeded, and the
Company achieved 96 percent of the 1995 targeted operating cash flow goal. The
Compensation Committee also considered the Company's relative performance
against other companies in the oilfield services industry, noting that the
Company ranked in the top 15 percent of 26 petroleum services companies on
various performance measures, including return on total capital, return on
revenues, return on equity and earnings before depreciation, interest and taxes.
Accordingly, annual incentive awards were made to the executive officers named
in the Summary Compensation Table amounting to approximately 81 percent of the
aggregate 1995 annual base salaries of such individuals. Such bonuses were paid
in a combination of cash and shares of Common Stock, except Mr. Burguieres,
whose entire bonus was paid in shares of Common Stock.
Long-term, equity-based incentive compensation -- The Company currently
provides long-term incentive compensation to executives in two forms: stock
options and restricted stock grants. Prior to March 1992, stock appreciation
rights ("SARs") were granted in tandem with stock options under the Company's
Stock Appreciation Rights Plan (the "SAR Plan"). Each type of incentive is
intended to track the Company's performance and reward achievement of long-term
objectives through stock price appreciation. The Company's overall stock option
and restricted stock grant levels are established by considering market data on
grant levels and an appropriate overall level of shares reserved for such plans
in the market. The Compensation Committee considers stock options or restricted
stock awards previously granted, industry practices, the executive's
accountability level and an assumed potential stock value when determining the
amount of individual long-term incentive compensation.
Options to purchase shares of Common Stock reward participants for
generating appreciation in the Company's stock price. Stock options are granted
under the Company's 1987 Stock Option Plan or the 1991 Stock Option Plan (an
"Option Plan" or, collectively, the "Option Plans") to key employees of the
Company, including the executive officers named in the Summary Compensation
Table, at the fair market value of the Common Stock on the date of grant. These
options vest in three equal installments beginning one year after the date of
grant and are exercisable for a term of five years or 10 years. The optionees
receive value from the options only if the Company's stock price appreciates
from the price on the grant date. As with options, holders of SARs (granted
prior to 1992, but still in effect) receive value only if the stock price
appreciates.
The Company's Restricted Stock Incentive Plan (the "Restricted Plan") is
designed to meet several objectives, which include increasing the actual share
ownership position of key executives, providing a strong emphasis on maintaining
and enhancing shareholder value and retaining executives during different stages
of the business cycle. Under the Restricted Plan, eligible employees are granted
shares of Common Stock that are subject to certain ownership restrictions. The
shares are non-transferable during the restricted period and are subject to
substantial risk of forfeiture if certain conditions are not met. The Restricted
Plan provides that restrictions will cease, at the Compensation Committee's
discretion, after continued employment for a specified period of time or upon
the occurrence of certain established goals. Ownership restrictions on shares
granted prior to 1993 will lapse after continued employment for a specified
period of time; for shares granted beginning in 1993, restrictions on certain
shares will lapse after continued employment for a specified period of
9
<PAGE> 13
time and restrictions will lapse on the remaining shares upon the earlier of
certain corporate performance goals being achieved or after eight years,
whichever occurs first. The restricted stock is performance sensitive, as the
value of the shares granted varies based on the Company's stock price.
Other Benefits. The Company maintains various 401(k) savings plans,
pursuant to which the Company contributes various amounts based on each
employee's base salary as a matching contribution, in cash or shares of Common
Stock. The Company contributes two percent of base salary for each of the
executive officers named in the Summary Compensation Table. The Company also has
the ability to make discretionary contributions under these plans. The Company
maintains the Pension Plan (as defined hereinafter) for certain of its
employees, including the executive officers named in the Summary Compensation
Table. The Company also maintains certain plans that provide benefits to certain
executives and other managers that are supplemental to the benefits under the
401(k) savings plans and the Pension Plan.
Discussion of 1995 Compensation for the Chief Executive Officer. As
described above, the Company determines total compensation for all executives,
including Mr. Burguieres, considering both a pay-for-performance philosophy and
market rates of compensation. In determining Mr. Burguieres' compensation for
1995, the Compensation Committee considered the Company's financial performance
and corporate accomplishments, individual performance and compensation data of
general industry companies and the compensation peer group. The Compensation
Committee also reviewed more subjective factors, such as development and
implementation of a corporate strategy to enhance shareholder value. With
respect to establishing Mr. Burguieres' 1995 salary, emphasis was placed on
competitive salaries in the market place. With respect to Mr. Burguieres' 1995
bonus, the Compensation Committee considered the achievement of the Company's
1995 targeted corporate goals and the Company's relative performance against its
peers (as described hereinabove). With respect to the stock option and
restricted share grants, the Compensation Committee placed emphasis on grant
levels of general industry and the compensation peer group. Mr. Burguieres was
also paid in 1995 a special fee of $1,200,000 related to his efforts in
connection with the October 1995 merger of Weatherford International
Incorporated and Enterra Corporation. This amount was in addition to Mr.
Burguieres' annual incentive bonus.
Mr. Burguieres received a 7.7 percent salary increase for 1995. Mr.
Burguieres' bonus for 1995 was $420,000, paid in shares of Common Stock. This
award is equal to 100 percent of his 1995 base salary. Mr. Burguieres received
in March 1995 an option under an Option Plan to purchase 55,000 shares of Common
Stock and 28,000 shares under the Restricted Plan.
Policy Regarding Section 162(m) of the Internal Revenue Code. Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), generally
limits corporate deductions to $1,000,000 for compensation paid to a person who
on the last day of any fiscal year beginning on or after January 1, 1994 is
either the Chief Executive Officer or among the four most highly compensated
executive officers other than the Chief Executive Officer, provided there is an
exception for qualified performance-based compensation. Section 162(m) became
applicable to the Company, effective January 1, 1994.
The Option Plans currently qualify as performance-based compensation under
Internal Revenue Service rules. The Company's annual incentive bonuses and
awards granted under the Restricted Plan are based on performance measures, but
do not qualify as performance-based under the tax regulations. The Compensation
Committee requested and received a review by the independent compensation
consultant retained by the Company of the Company's compensation plans and
similar plans maintained by companies in the compensation peer group as regards
Section 162(m). The Compensation Committee has determined that is likely that
only one of the Company's executive officers will receive compensation in excess
of $1,000,000 in the near future. Accordingly, the Compensation Committee will
not necessarily limit executive compensation to compensation that is deductible
under Section 162(m). The Compensation Committee will continue to evaluate this
matter and consider alternatives to preserve the deductibility of compensation
payments and benefits to the extent reasonably practicable and consistent with
the Company's compensation objectives.
10
<PAGE> 14
This Compensation Committee Report on Executive Compensation shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Statement into any filing under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
COMPENSATION AND STOCK PLANS COMMITTEE OF THE BOARD OF DIRECTORS
William E. Greehey, Chairman
Robert K. Moses, Jr.
Roger M. Widmann
SUMMARY COMPENSATION TABLE
The following table sets forth with respect to the Chief Executive Officer
and the four most highly compensated executive officers of the Company as to
whom total annual salary and bonuses for the year ended December 31, 1995
exceeded $100,000:
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ --------------------------------------------
(E) (F) (G) (H)
(A) (D) OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL (B) (C) BONUS COMPENSATION STOCK AWARDS UNDERLYING COMPENSATION
POSITION YEAR SALARY($) ($)(1) ($)(2) ($)(3) OPTIONS(#)(4) ($)(5)(6)
- ---------------------------- ---- --------- ------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip Burguieres 1995 420,000 420,000 -0- 259,000(7) 27,500 1,849,250(8)
Chairman of the 1994 390,000 312,000 -0- 246,875 27,500 9,653
Board, President and 1993 364,000 300,000 -0- 236,250 27,500 786
Chief Executive Officer
M.E. Eagles(9) 1995 245,000 180,000 -0- 101,750(11) 10,000 260,676
Senior Vice President 1994 230,000 150,000 50,638(10) 95,788 10,000 4,680
1993 183,300 120,000 -0- 157,500 7,500 -0-
James R. Burke 1995 182,000 125,000 -0- 74,000(12) 7,500 189,540
Senior Vice President 1994 168,000 100,000 -0- 53,325 6,000 4,880
1993 130,000 85,000 -0- 51,188 5,500 1,733
Norman W. Nolen 1995 155,000 108,000 -0- 55,500(13) 6,000 161,430
Senior Vice 1994 147,000 90,000 -0- 53,325 6,000 4,340
President, Chief 1993 140,000 85,000 -0- 51,188 5,500 2,800
Financial Officer and
Treasurer
H. Suzanne Thomas 1995 155,000 108,000 -0- 55,500(14) 6,000 161,435
Senior Vice 1994 147,000 90,000 -0- 53,325 5,500 4,340
President, Secretary 1993 140,000 85,000 -0- 51,188 5,500 2,800
and General Counsel
</TABLE>
- ---------------
(1) For 1995, Mr. Burguieres received 100% of his bonus in shares of Common
Stock issued under the Company's Executive Incentive Stock Bonus Plan (the
"Bonus Plan"), while other executives received 75% in cash and 25% in
shares of Common Stock. Bonuses paid for 1994 were paid in cash. For 1993,
Mr. Burguieres received 60% of his bonus in cash and 40% in shares of
Common Stock issued under the Bonus Plan, while other executives received
80% in cash and 20% in shares of Common Stock.
(2) Unless otherwise indicated, does not include the value of perquisites and
other benefits as the aggregate amount of such compensation for each named
officer does not exceed the lesser of $50,000 or 10% of that officer's
total reported annual salary and bonus.
(3) Dollar amount shown equals number of shares issued under the Restricted
Plan multiplied by the closing stock price on grant date. Dividends would
be paid on these shares in the event dividends are paid on the Common
Stock, which is not anticipated in the foreseeable future.
(4) Adjusted to reflect the one-for-two reverse stock split of the Common Stock
effected on October 5, 1995 (the "Split").
11
<PAGE> 15
(5) Includes the amount of the Company match and discretionary contribution for
each executive officer under the Company's 401(k) Savings Plan and the
Supplemental Savings Plan, to the extent the officer was eligible and
participated in such plans.
(6) Includes the payment made to each executive officer in exchange for the
waiver of certain rights under each officer's Severance Agreement (as
hereinafter defined) required pursuant to the terms of the merger agreement
between Weatherford International Incorporated and Enterra Corporation (the
"Merger Agreement"). See "Employment Contracts and Termination of
Employment and Change of Control Arrangements".
(7) Held an aggregate of 17,000 shares under the Restricted Plan still subject
to restrictions as of December 31, 1995 with an aggregate total value of
$312,000; restrictions have lapsed, or will lapse, on 1,875 shares on each
of March 18, 1996 and 1997; on 6,250 shares on February 6, 1996; and on
1,750 shares on each of March 16, 1996, 1997, 1998 and 1999.
(8) Includes $1.2 million paid pursuant to the terms of the Merger Agreement.
(9) Joined the Company on March 1, 1993.
(10) Includes $30,058 paid in connection with the named executive's relocation
and $20,580 reimbursement for the payment of taxes thereon.
(11) Held an aggregate of 7,650 shares under the Restricted Plan still subject
to restrictions as of December 31, 1995 with an aggregate total value of
$137,650; restrictions have lapsed, or will lapse, on 1,250 shares on each
of March 18, 1996 and 1997; on 2,400 shares on February 6, 1996; on 687
shares on each of March 16, 1996 and 1997; and on 688 shares on each of
March 16, 1998 and 1999.
(12) Held an aggregate of 4,163 shares under the Restricted Plan still subject
to restrictions as of December 31, 1995 with an aggregate total value of
$76,467; restrictions have lapsed, or will lapse, on 406 shares on March
18, 1996; on 407 shares on March 18, 1997; on 1,350 shares on February 6,
1996; and on 500 shares on each of March 16, 1996, 1997, 1998 and 1999.
(13) Held an aggregate of 3,663 shares under the Restricted Plan still subject
to restrictions as of December 31, 1995 with an aggregate total value of
$67,217; restrictions have lapsed, or will lapse, on 406 shares on March
18, 1996; on 407 shares on March 18, 1997; on 1,350 shares on February 6,
1996; and on 375 shares on each of March 16, 1996, 1997, 1998 and 1999.
(14) Held an aggregate of 3,663 shares under the Restricted Plan still subject
to restrictions as of December 31, 1995 with an aggregate total value of
$67,217; restrictions have lapsed, or will lapse, on 406 shares on March
18, 1996; on 407 shares on March 18, 1997; on 1,350 shares on February 6,
1996; and on 375 shares on each of March 16, 1996, 1997, 1998 and 1999.
STOCK OPTION PLANS AND SAR PLAN
The Company currently maintains the Option Plans, such plans having
substantially the same terms and conditions, pursuant to which options to
purchase shares of the Company's Common Stock are outstanding or available for
future grants. All options to purchase Common Stock are granted by the
Compensation Committee, except for options granted to the Chief Executive
Officer, which are recommended by the Compensation Committee and approved by the
Board of Directors (excluding Mr. Burguieres).
All stock options have a term of five or 10 years and are exercisable at a
rate of one-third each year beginning one year after the grant date. The
exercise price is payable in cash, shares of Common Stock (subject to certain
limitations), broker-financed cashless exercises or some combination of these
approaches. No employee has any rights as a stockholder of any shares subject to
an option until the exercise price has been paid and the shares issued to the
employee.
The Company maintains the SAR Plan pursuant to which the Company could,
prior to March 20, 1992, grant SARs to eligible employees of the Company. The
SAR Plan was originally implemented to allow executives and certain other stock
option plan participants to tender their options to the Company in exchange for
cash equal to the "spread" in the option (in other words, the difference between
the market value of the Common Stock on the date of grant and the market value
of the Common Stock on the date the option is
12
<PAGE> 16
exercised). Effective March 19, 1992, the SAR Plan was amended to provide that
no new awards may be made pursuant to such plan after that date. SARs awarded
under the SAR Plan prior to that date remain in effect and are not affected by
the amendment.
The following table sets forth certain information regarding stock options
granted during fiscal year 1995 to the persons named in the Summary Compensation
Table above. The hypothetical present values on the date of grant of stock
options granted in 1995 shown below are presented pursuant to the Commission's
rules and are calculated under a modified Black-Scholes Model (the "Model") for
pricing options. This hypothetical value of options trading in the stock market
bears little relationship to the compensation cost to the Company or potential
gain realized by an executive officer. The actual amount, if any, realized upon
exercise of stock options will depend upon the market price of the Company's
Common Stock relative to the exercise price per share of Common Stock at the
time the stock option is exercised. There is no assurance that the hypothetical
present value of stock options reflected in this table actually will be
realized.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANT VALUE
- ---------------------------------------------------------------------------------------------- -------------
<S> <C> <C> <C> <C> <C>
(A) (B) (C) (D) (E) (F)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS GRANTED EMPLOYEES IN BASE PRICE PRESENT VALUE
NAME (#)(1)(2) FISCAL YEAR ($/SHARE)(1)(3) EXPIRATION DATE ($)
- -------------------- --------------- ------------ --------------- --------------- -------------
Philip Burguieres... 27,500 3.8 18.50 3/15/2005 323,412
M. E. Eagles........ 10,000 1.4 18.50 3/15/2005 117,605
James R. Burke...... 7,500 1.0 18.50 3/15/2005 88,203
Norman W. Nolen..... 6,000 .8 18.50 3/15/2005 70,563
H. Suzanne Thomas... 6,000 .8 18.50 3/15/2005 70,563
</TABLE>
- ---------------
(1) Adjusted to reflect the Split.
(2) Options granted in 1995 are exercisable starting 12 months after the grant
date, with one-third of the shares covered thereby becoming exercisable at
that time and an additional one-third becoming exercisable on each
successive anniversary date, with full vesting occurring on the third
anniversary date. Under the terms of the Option Plans, the Compensation
Committee retains the discretion, subject to plan limitations, to modify the
terms of outstanding options, including the exercise price and expiration
date in certain events.
(3) The exercise price and tax withholding obligations related to the exercise
may be paid by delivery of already-owned shares of Common Stock or by
offsetting a portion of the underlying shares, subject to certain
conditions.
(4) The present values on grant date are calculated under the Model modified to
give effect to the expected dividend rate of the Common Stock and
non-transferability factors such as timing, vesting, liquidity and
freely-traded status. The Model is a mathematical formula used to value
options traded on stock exchanges. This formula considers a number of
factors to estimate the option's present value, including the Common Stock's
volatility (based on 36 months of historical stock price trading data),
dividend rate (0%), exercise period of the option (10 years), interest rate
(risk free rate of 7.37%) and vesting schedule (adjusted for risk of
forfeiture during three-year vesting period).
13
<PAGE> 17
The following table shows aggregate option and SAR exercises during fiscal
year 1995 and December 31, 1995 values for the Chief Executive Officer and the
four most highly compensated executive officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(D)
NUMBER OF SECURITIES (E)
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
(B) OPTIONS/SARS AT IN-THE-MONEY
SHARES (C) FY-END(2)(#) OPTIONS/SARS AT FY-END($)(1)
(A) ACQUIRED ON VALUE ----------------------------- --------------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------- -------------- -------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip Burguieres... 0 0 90,001/31,250 54,999/0 1,494,595/583,125 572,904/0
James R. Burke...... 0 0 12,500/5,125 13,333/0 203,893/102,807 138,370/0
M.E. Eagles......... 0 0 8,334/0 19,166/0 96,047/0 197,389/0
Norman W. Nolen..... 0 0 15,917/5,125 11,833/0 252,035/92,495 122,808/0
H. Suzanne Thomas... 0 0 16,167/7,750 11,833/0 262,691/140,465 122,808/0
</TABLE>
- ---------------
(1) Market value of underlying securities at exercise date or year-end, as
appropriate, minus the exercise or base price of "in-the-money"
options/SARs.
(2) Adjusted to reflect the Split.
DEFINED BENEFIT PLAN
The Company maintains a defined benefit plan called the Weatherford Enterra
Pension Plan (the "Pension Plan") for U.S. employees of the Company and certain
of its subsidiaries, including executive officers, which was adopted as of
January 1, 1992.
The following table sets forth the estimated annual benefit payable upon
normal retirement at age 65 as a straight-life annuity to persons in specified
remuneration and years of service classifications.
<TABLE>
<CAPTION>
PENSION PLAN TABLE(1)
- ----------------------------------------------------------------------------------------------
ASSUMED
10-YEAR YEARS OF CREDITED SERVICE
FINAL ------------------------------------------------------------
AVERAGE PAY 15 20 25 30 35
- ----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000....................... $ 13,500 $ 18,000 $ 22,500 $ 27,000 $ 31,500
200,000....................... 27,000 36,000 45,000 54,000 63,000
300,000....................... 40,500 54,000 67,500 81,000 94,500
400,000....................... 54,000 72,000 90,000 108,000 126,000
500,000....................... 67,500 90,000 112,500 135,000 157,500
600,000....................... 81,000 108,000 135,000 162,000 189,000
700,000....................... 94,500 126,000 157,500 189,000 220,500
800,000....................... 108,000 144,000 180,000 216,000 252,000
</TABLE>
- ---------------
(1) Estimated annual benefits shown above are overstated as they reflect the
higher accrual rate (.9%) based on final average pay both over and under a
participant's Covered Compensation (as defined below). Generally the accrual
rate is .45% plus an additional .45% for pay in excess of the lesser of 125%
of the participant's Covered Compensation and the current taxable wage base.
"Covered Compensation" is the average of the Social Security Wage Bases
during the 35-year period ending with the year the employee reached Social
Security Retirement Age. Benefits are not subject to deductions for Social
Security benefits or any other offset amounts. The pension limits imposed by
the Code are not reflected in this table.
The remuneration covered by the Pension Plan consists only of the salaries
paid to Pension Plan participants, as set forth in column (c) of the Summary
Compensation Table. Bonuses, including the bonuses set forth in column (d) of
that table, are excluded. Credited service for purposes of the Pension Plan is
all service with the Company after January 1, 1992. Each of Messrs. Burguieres,
Burke and Nolen and
14
<PAGE> 18
Ms. Thomas has four years of credited service under the Pension Plan, and Mr.
Eagles has three years of credited service under the Pension Plan. The Pension
Plan provides for (i) normal retirement at age 65 with an early retirement
option at age 55 for eligible employees, (ii) a vested benefit after five years
of vesting service, (iii) retirement income of approximately 32 percent of final
average earnings after 35 years of credited service and (iv) spouse and
disability benefits.
The Company also maintains the Supplemental Executive Retirement Plan (the
"SERP"), adopted January 1, 1992, to supplement the retirement benefit to be
paid pursuant to the Pension Plan to certain employees designated by the
Compensation Committee, including the executive officers named in the Summary
Compensation Table. During 1995, the Code limited the pension under the Pension
Plan to $120,000 and limited the compensation used to calculate the pension to
$150,000; these amounts are indexed annually to the changes in Social Security
benefits. If the pension to certain employees would be limited by Section 415 of
the Code or if the participant's compensation used to calculate the pension
would be limited by the Code, such amounts otherwise payable to the Pension Plan
participant pursuant to the Pension Plan would be paid directly to such
participant by the Company in full, pursuant to the provisions of the SERP. The
purpose of the SERP is to pay each employee the full retirement benefit
otherwise payable to him or her but for the benefit limitations imposed by the
Code. In addition, bonuses, including the bonuses set forth in column (d) of the
Summary Compensation Table, are included in compensation for purposes of the
SERP.
COMPENSATION OF DIRECTORS
During 1995, all members of the Board of Directors who were not employees
of the Company were paid a quarterly retainer fee of $5,000 and a fee of $1,000
for attendance at each meeting of the Board of Directors. Additionally,
committee members were paid a fee of $1,000 for attendance at each meeting of a
committee of the Board of Directors on which they served.
The Company maintains the Non-Employee Director Retirement Plan, effective
January 1, 1994, pursuant to which each non-employee director who has completed
five years or more of service at the time he ceases to be a director will
receive an annual deferred compensation benefit equal to between 50 percent and
100 percent, depending on his years of service, of his annual cash retainer fee
paid for the year in which he ceases to be a director. The benefit will be paid
for the lesser of the number of months of his service as a director or 120
months.
The Company also maintains the Deferred Compensation Plan for Non-Employee
Directors, effective December 1, 1994, pursuant to which each non-employee
director can defer all or a portion of his retainer fee or meeting fees and
receive a market rate of return on such deferred amounts.
The Company also maintains the Non-Employee Director Stock Option Plan (the
"Director Option Plan"), effective March 16, 1995, pursuant to which each
non-employee director is granted a stock option to purchase 2,500 shares of
Common Stock at the time of his election to the Company's Board of Directors and
an option to purchase 500 shares of Common Stock at each annual meeting
thereafter for so long as he serves as a non-employee director. Such options are
granted at the fair market value of the Common Stock on the date of grant, vest
100 percent six months after the grant date and are exercisable for a term of 10
years. Messrs. Hill and Macaulay have refused grants under the Director Option
Plan.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS
The Company currently has Change of Control Agreements (the "Severance
Agreements") with Messrs. Burguieres, Eagles, Burke and Nolen and Ms. Thomas.
The purpose of the Severance Agreements is to encourage the executive officers
to continue to carry out their duties with the Company in the event of a "change
of control" of the Company. Under each Severance Agreement, a change of control
of the Company is deemed to have occurred if (i) any person or group of persons
acting in concert becomes the beneficial owner of 20 percent or more of the
outstanding shares of Common Stock or the combined voting power of the Company's
voting securities, with certain exceptions; (ii) individuals who as of the date
of such agreement constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof; (iii) there occurs a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all
15
<PAGE> 19
of the Company's assets, unless after the transaction, all or substantially all
of those persons who were the beneficial owners of Common Stock prior to the
transaction beneficially own more than 60 percent of the then outstanding common
stock of the resulting corporation, no person who did not own Common Stock prior
to the transaction beneficially owns 20 percent or more of the then outstanding
common stock of the resulting corporation, and at least a majority of the Board
of Directors of the corporation resulting from such transaction were members of
the Board of Directors of the Company at the time such Severance Agreement was
approved by the Board of Directors or executed; or (iv) the stockholders of the
Company approve a complete liquidation or dissolution of the Company.
Each of the Severance Agreements provides for severance payments in the
event of termination of the executive officer's employment within a specified
period after a change of control of the Company (three years for the Chief
Executive Officer and two years for the other executive officers), unless the
executive's employment is terminated by the Company or its successor for "cause"
or "disability", because of the executive's death or "retirement" or by the
executive's voluntary termination for other than "good reason", in each case as
such terms are defined in the Severance Agreement. The benefits may consist of
the following: (a) an amount equal to three times for the Chief Executive
Officer, and two times for the other executive officers, the highest salary plus
bonus paid to such executive in any of the five years preceding the year of
termination of employment; (b) salary and bonus (prorated based on the highest
bonus earned in the preceding three years) to the date of termination; (c) an
amount equal to the amount that would be payable if all unvested retirement plan
benefits were vested; (d) an amount equal to the amount that would have been
contributed as the Company match under the Company's 401(k) Savings Plan and the
Supplemental Savings Plan for three years for the Chief Executive Officer and
two years for the other executive officers; and (e) an amount equal to the
amount the executive would have received as a car allowance for three years for
the Chief Executive Officer and two years for the other executive officers. In
addition, if an executive is terminated within a specific period after a change
of control, all outstanding stock options granted under any of the Company's
Option Plans and all outstanding SARs issued under the SAR Plan would
automatically vest and the executive would have the right to either exercise
such options and SARs for seven months after his or her date of termination (or
until the stated termination of such options and SARs, if earlier) or to
surrender for cash all such options and SARs, unless to do so would cause a
transaction otherwise eligible for pooling of interests accounting treatment
under Accounting Principles Board Opinion No. 16 to be ineligible for such
treatment, in which case the executive would receive shares of Common Stock
equal in value to the cash he or she would have received. Ownership restrictions
on shares granted under the Restricted Plan would also be terminated in the
event of an executive's termination during this period. All health and medical
benefits would also be maintained after termination, for three years for the
Chief Executive Officer and two years for the other executive officers, if the
executive makes his or her required contribution. Under the Deficit Reduction
Act of 1984, severance payments that exceed a certain amount subject both the
Company and the executive to adverse U.S. Federal income tax consequences. Each
of the Severance Agreements provides that the Company shall pay the executive a
"gross-up payment" to ensure that the executive receives the total benefit
intended thereby.
Each of the Severance Agreements was amended in October 1995 as required by
the Merger Agreement to eliminate the executive officer's right to all
termination benefits owed thereunder, except for benefits related to his or her
outstanding stock options, SARs and shares granted under the Restricted Plan,
should the employee voluntarily terminate his or her employment without cause
during a 30-day period beginning one year after a change of control occurs. The
Company paid Messrs. Burguieres, Eagles, Burke and Nolen and Ms. Thomas, in
consideration for such amendments and the elimination of such benefits,
$630,000, $245,000, $182,000, $155,000 and $155,000, respectively.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Greehey, Brown and Moses served as members of the Compensation
Committee until October 5, 1995 and Messrs. Greehey, Moses, and Widmann served
thereafter during 1995. During 1995, no member of the Compensation Committee 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.
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<PAGE> 20
During 1995, 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Phoenix Energy Services, Inc. ("Phoenix") purchased on September 25, 1995
the assets and business of the Harrisburg-Woolley operations of Enterra for
approximately $14,500,000, subject to post-closing adjustments and the
assumption of operating liabilities. The offer to purchase the
Harrisburg-Woolley operations by Phoenix was part of a competitive bid process
conducted by Enterra. Certain First Reserve Funds own 97 percent of the
outstanding capital stock of Phoenix. First Reserve is the general partner of
each of such First Reserve Funds and has the power to cause each such First
Reserve Fund to dispose of or vote shares of Common Stock held by it. The
principal beneficial owners of the common stock of First Reserve are its
executive officers, including Messrs. Hill and Macaulay.
17
<PAGE> 21
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return on the Common Stock for a five-year period (December 31, 1990 to December
31, 1995) with the cumulative total return of the Standard & Poor's 500
Composite Stock Index (the "S&P 500 Index") and the Company's peer group. The
Company changed its peer group in fiscal 1995 to use a more readily available
and recognized published industry or line-of-business index. The 1995 peer group
consists of the 20 companies in the Standard & Poor's Oil Well Equipment &
Services Stock Index, specifically, the Company, BJ Services Company, Baker
Hughes Incorporated, Daniel Industries, Inc., Dresser Industries, Inc., Global
Marine, Inc., Halliburton Co., Helmerich & Payne, Inc., McDermott International,
Inc., Nabors Industries, Inc., Parker Drilling Co., Petroleum Geo -- Services
A/S, Production Operators Corporation, Rowan Companies, Inc., Schlumberger Ltd.,
Smith International, Inc., Sonat Offshore Drilling, Inc., Tidewater, Inc., Varco
International, Inc. and Western Atlas, Inc. (the "1995 Peer Group"). The 1994
peer group consisted of the 18 companies in the Value Line Investment Survey
Index for the Oilfield Services Group, specifically, BJ Services Company, Baker
Hughes Incorporated, Daniel Industries, Inc., Dresser Industries, Inc., Enterra
Corporation, Global Marine, Inc., Halliburton Co., Helmerich & Payne, Inc.,
McDermott International, Inc., Nabors Industries, Inc., Parker Drilling Co.,
Production Operators Corporation, Rowan Companies, Inc., Schlumberger Ltd.,
Smith International, Inc., Tidewater, Inc., Varco International, Inc. and
Western Atlas, Inc. (the "1994 Peer Group").
The graph assumes $100 was invested on December 31, 1990 in the Company's
Common Stock, the S&P 500 Index and the industry peer groups. Dividend
reinvestment has been assumed, and investment has been weighted to reflect
relative stock market capitalization.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
OF THE COMPANY'S COMMON STOCK, S&P 500 INDEX, THE 1994 PEER GROUP AND THE 1995
PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD COMPANY'S S&P 500 1995 PEER 1994 PEER
(FISCAL YEAR COVERED) COMMON STOCK INDEX GROUP GROUP
<S> <C> <C> <C> <C>
1990 $100 $100 $100 $100
1991 62 130 94 91
1992 81 140 92 92
1993 147 155 100 102
1994 134 157 92 94
1995 200 215 128 136
</TABLE>
* Prepared by Research Data Group
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 Commission or subject to
Regulations 14A and 14C promulgated under the Exchange Act, or to the
liabilities of Section 18 of the Exchange Act.
18
<PAGE> 22
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires that the Company's directors,
executive officers and persons who own more than 10 percent of a registered
class of the Company's equity securities file with the Commission and the New
York Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. In
addition, trusts in which a director, executive officer or greater than 10
percent stockholder is a trustee, and that person or a member of his or her
immediate family is a beneficiary, have a separate filing obligation even where
the individual reports in his or her own filings the trust's transactions and
holdings in equity securities of the Company. Directors, executive officers and
greater than 10 percent stockholders are required by Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of the
Section 16(a) reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 31, 1995,
all Section 16(a) filing requirements applicable to its directors, executive
officers and greater than 10 percent beneficial owners were complied with,
except that each of Philip Burguieres, M. E. Eagles, Norman W. Nolen and H.
Suzanne Thomas inadvertently filed the Form 4 due no later than November 10,
1995 on January 11, 1996.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the Company's
principal independent public accountants for the current year. Representatives
of Arthur Andersen are expected to be present at the Meeting, with the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals of holders of Common Stock intended to be presented at the
Annual Meeting of Stockholders of the Company to be held in 1997 must be
received by the Company, addressed to the Secretary of the Company at P.O. Box
27608, Houston, Texas 77227-7608, no later than December 9, 1996, to be
considered for inclusion in the Proxy Statement and form of proxy relating to
that meeting.
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<PAGE> 23
[Weatherford Logo]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
FRIDAY, MAY 17, 1996
9:00 A.M.
THE RITZ-CARLTON
1919 BRIAR OAKS LANE
HOUSTON, TEXAS
<PAGE> 24
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WEATHERFORD ENTERRA, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- MAY 17, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Stock of Weatherford Enterra,
Inc. (the "Company") hereby appoints Philip Burguieres and H.
Suzanne Thomas, or either of them, proxies of the undersigned
with full power of substitution, to vote at the Annual Meeting of
Stockholders of the Company to be held on May 17, 1996, at 9:00
a.m., Houston time, at The Ritz-Carlton, 1919 Briar Oaks Lane,
Houston, Texas, and at any adjournment thereof, the number of
votes which the undersigned would be entitled to cast if
personally present:
(1) Election of directors for a term expiring in 1999:
<TABLE>
<S> <C>
FOR / / WITHHOLD AUTHORITY / /
all nominees listed below (except as marked below) to vote for all nominees listed below
</TABLE>
Philip Burguieres William E. Greehey Roger M. Widmann
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, draw a line through or strike out that
nominee's name as set forth above.
(2) To consider and take action upon any other matter which may
properly come before the meeting or any adjournment thereof.
PLEASE MARK, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
(continued and to be signed on other side)
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P
R
O
X
Y
<PAGE> 25
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All as more particularly described in the proxy statement dated
April 8, 1996 relating to such meeting, receipt of which is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL OF THE NOMINEES LISTED IN
PROPOSAL 1.
-----------------------------
-----------------------------
Signature of Stockholder(s)
Please sign your name exactly
as it appears hereon. Joint
owners must each sign. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title as it
appears hereon.
Date _________________, 1996.
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