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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
1998 FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from . . . . . to . . . . . . .
Commission File Number 1-8097
ENSCO International Incorporated
(Exact name of registrant as specified in its charter)
DELAWARE 76-0232579
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202-2792
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (214) 922-1500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, par value $.10 New York Stock Exchange
Preferred Share Purchase Right New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of February 19, 1999, 137,047,152 shares of the registrant's common stock
were outstanding. The aggregate market value of the common stock (based upon the
closing price on the New York Stock Exchange on February 19, 1999 of $9.00) of
ENSCO International Incorporated held by nonaffiliates of the registrant at that
date was approximately $976,957,741.
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<PAGE>
PART III
Item 10. Directors and Executive Officers
DIRECTORS OF REGISTRANT
The Company's Amended and Restated Certificate of Incorporation provides
that the Board of Directors of the Company is divided or "classified", with
respect to the time for which they individually hold office, into three classes
("Classes I, II and III"), with each class consisting of, as nearly as possible,
one third of the entire Board. The Company's Board of Directors is currently
fixed at eight members. Each director holds office for a term ending on the date
of the third annual meeting following the annual meeting at which such director
was elected. The current term for Class II Directors will expire at the 1999
Annual Meeting of Stockholders. The current term for Class I and Class III
Directors will expire at the 2000 and 2001 Annual Meetings of Stockholders,
respectively.
Class I Directors
- -----------------
Gerald W. Haddock; age 51; President and Chief Executive Officer, Crescent Real
Estate Equities Company and Crescent Operating, Inc.
Mr. Haddock has been a director of the Company since December 1986. He has
served as Chief Executive Officer of Crescent Real Estate Equities Company since
December 1996. He has served as director or trust manager of that company since
May 1994 and was Chief Operating Officer from May 1994 until December 1996.
Since April 1997, Mr. Haddock has served as the President and Chief Executive
Officer of Crescent Operating, Inc. He has served as a director of that company
since April 1997. Mr. Haddock holds a Bachelor of Business Administration Degree
from Baylor University, a Juris Doctorate Degree from Baylor University College
of Law and a Master of Taxation Degree from New York University. He lives in
Fort Worth, Texas. Mr. Haddock is Chairman of the Audit Committee.
Carl F. Thorne; age 58; Chairman, President and Chief Executive Officer of the
Company
Mr. Thorne has been a director of the Company since December 1986. He was
elected President and Chief Executive Officer of the Company in May 1987 and was
elected Chairman of the Board of Directors in November 1987. Mr. Thorne
presently serves as a director of Crescent Operating, Inc., where he is
currently Chairman of the Compensation Committee and a member of the Audit
Committee. Mr. Thorne holds a Bachelor of Science Degree in Petroleum
Engineering from The University of Texas and a Juris Doctorate Degree from
Baylor University College of Law. He lives in Dallas, Texas.
Class II Directors
- ------------------
Craig I. Fields; age 52; Chairman, Defense Science Board
Dr. Fields has been a director of the Company since March 1992. He assumed
his current position with The Defense Science Board in 1995. He served as Vice
Chairman with Alliance Gaming Corporation from September 1994 to June 1997. From
1990 through August 1994, Dr. Fields was Chairman and Chief Executive Officer of
Microelectronics and Computer Technology Corp. Between 1974 and 1990, Dr. Fields
served the Defense Advanced Research Projects Agency, a research division of the
office of the Secretary of Defense, as a director and currently serves as a
director of Network Solutions, Inc., Firearms Training Systems, Inc., Enso Audio
Imaging Corp., Global Integrity Corp. and Muzak, Inc. Dr. Fields holds a
Bachelor of Science Degree in Physics from the Massachusetts Institute of
Technology and a Ph.D. from Rockefeller University. He lives in Washington D.C.
Dr. Fields is a member of the Audit Committee.
Morton H. Meyerson; age 60; Chairman and Chief Executive Officer, 2M Companies,
Inc.
Mr. Meyerson has been a director of the Company since September 1987. Mr.
Meyerson is currently Chairman and Chief Executive Officer of 2M Companies, Inc.
2
<PAGE>
He served as Chairman of the Board of Perot Systems from September 1996 until
November 1997. In addition, from June 1992 until September 1996 and from July
1997 until November 1997, Mr. Meyerson served as Chief Executive Officer of
Perot Systems. From May 1986 until June 1992, Mr. Meyerson was a private
investor. Mr. Meyerson serves as Vice Chairman of the National Parks Foundation,
and is a director of Crescent Real Estate Equities, Inc. and Optimark
Technologies, Inc. Mr. Meyerson holds Bachelor of Arts Degrees in Economics and
Philosophy from the University of Texas. He lives in Dallas, Texas. Mr. Meyerson
is Chairman of the Nominating and Compensation Committee.
Richard A. Wilson; age 61; Senior Vice President and Chief Operating Officer of
the Company
Mr. Wilson has been a director of the Company since June 1990. Mr. Wilson
joined the Company in July 1988 and was elected President of ENSCO Drilling
Company, a wholly-owned subsidiary of the Company, in August 1988 and currently
serves as President of all ENSCO drilling subsidiaries. Mr. Wilson was elected
Senior Vice President - Operations of the Company in October 1989 and to his
present position in June 1991. Mr. Wilson holds a Bachelor of Science Degree in
Petroleum Engineering from the University of Wyoming.
Class III Directors
- -------------------
Orville D. Gaither, Sr.; age 72; Chairman , Gaither Petroleum Corporation
Mr. Gaither has been a director of the Company since March 1992. Mr.
Gaither has served as Chairman and Chief Executive Officer of Gaither Petroleum
Corporation since May 1991, and also held the position of President of that
organization from May 1991 until September 1997. Prior to May 1991, Mr. Gaither
was employed by Amoco Production Company for 42 years, most recently as
President of the Africa and Middle East Region, responsible for Amoco's
petroleum operations in 17 countries. Mr. Gaither is on the Board of Directors
of the Sam Houston Area Council of the Boy Scouts of America and a member of the
Advisory Board of Rice University's George R. Brown School of Engineering. Mr.
Gaither holds a Bachelor of Science Degree in Mechanical Engineering from Rice
University, a Master of Science Degree in Petroleum Engineering from the
University of Houston and is a graduate of the Senior Executive Program of
Stanford University. He lives in Houston, Texas. Mr. Gaither is a member of the
Nominating and Compensation Committee.
Dillard S. Hammett; age 68; Consultant
Mr. Hammett has been a director of the Company since September 1987. From
July 1987 to December 1991, Mr. Hammett was Vice President - Technical and
Marketing of the Company. In January 1992, Mr. Hammett took a leave of absence
from his Vice President position and retired from the Company in December 1992.
Mr. Hammett holds a Bachelor of Science Degree in Civil Engineering from the
University of Oklahoma. He lives in Dallas, Texas. Mr. Hammett is a member of
the Audit Committee.
Thomas L. Kelly II; age 40; General Partner of CHB Capital Partners
Mr. Kelly has been a director of the Company since September 1987. He has
been a General Partner of CHB Capital Partners since July 1994. From May 1987
through June 1994, Mr. Kelly was a private investor. Mr. Kelly holds a Bachelor
of Arts Degree in Economics and a Bachelor of Science Degree in Administrative
Science from Yale University and a Master of Business Administration Degree from
Harvard University. He lives in Denver, Colorado. Mr. Kelly is a member of the
Nominating and Compensation Committee.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the executive officers of the Company has been
presented in "Executive Officers of the Registrant" as included in "Item 1.
Business."
3
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Executive officers, directors and greater than 10%
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 upon review of the copies of such
reports furnished to the Company during the year ended December 31, 1998, no
director, officer or beneficial holder of more than 10% of any class of equity
securities of the Company failed to file on a timely basis reports required by
Section 16(a) of the Exchange Act during the most recent fiscal year.
Item 11. Executive Compensation
The following table sets forth a summary of all compensation, including
cash and other forms of remuneration, paid through March 1, 1999, for services
rendered in all capacities to the Company during 1998, to the Chief Executive
Officer and the four other most highly compensated executive officers of the
Company as to whom the total cash compensation paid through such date exceeded
$100,000. The table also includes a summary of all compensation, including cash
and other forms of remuneration, paid to these named individuals for the years
1997 and 1996.
<TABLE>
Summary Compensation Table
--------------------------
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------------------
Awards Payouts
------------------- ---------
Other All
Annual Restricted Other
Compen- Stock LTIP Compen-
Name and Principal Salary Bonus sation Award Options Payouts sation
Position Year ($) ($)(1) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- -------------------------- ---- ------- ------- ------- ---------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carl F. Thorne 1998 487,500 362,268 N/A N/A N/A N/A 81,653
President and 1997 450,000 482,930 N/A N/A 200,000 N/A 74,935
Chief Executive Officer 1996 405,000 408,747 N/A N/A N/A N/A 30,521
Richard A. Wilson 1998 283,250 125,682 N/A N/A N/A N/A 48,966
Senior Vice President and 1997 250,000 207,883 N/A N/A 200,000 N/A 32,715
Chief Operating Officer 1996 211,500 188,410 N/A N/A N/A N/A 20,627
C. Christopher Gaut 1998 210,000 149,979 N/A N/A N/A N/A 29,753
Vice President-Finance and 1997 187,500 168,563 N/A N/A 150,000 N/A 21,150
Chief Financial Officer 1996 167,250 160,168 N/A N/A N/A N/A 16,837
Marshall Ballard 1998 205,000 90,892 N/A N/A N/A N/A 32,879
Vice President - 1997 190,000 133,845 N/A N/A 100,000 N/A 23,897
Business Development 1996 172,800 53,046 N/A N/A N/A N/A 18,253
William S. Chadwick, Jr. 1998 194,750 125,000 N/A N/A N/A N/A 28,222
Vice President - 1997 175,000 155,903 N/A N/A 100,000 N/A 19,508
Administration and 1996 147,250 147,152 N/A 148,125 N/A N/A 16,315
Secretary
- -----------------
N/A - Not Applicable.
</TABLE>
(1) Bonuses are awarded in February based on the Company's performance in
the previous year. Bonuses are payable as follows: 50% of the amount
awarded is paid in February of the year in which the award was made,
and the remainder is payable in two equal installments during February
of the two subsequent years, provided the officer remains employed by
the Company at such date.
(2) The aggregate amount of perquisites and other personal benefits for
any named executive does not exceed $50,000 or 10% of the total annual
salary and bonus for any such named executive and is, therefore, not
reflected in the table.
(3) The amounts disclosed in this column, if any, represent the value of
restricted stock awards on the date of grant. The restricted stock
4
<PAGE>
awards have vesting schedules of ten years and vest based on the
passage of time and the continued employment of the named executive.
The total number of shares of unvested restricted stock held as of
December 31, 1998, and the value of such shares, based on the closing
price of the Common Stock at December 31, 1998 of $10.6875, is as
follows: Mr. Thorne, 300,000 shares ($3,206,250), all of which vest at
the rate of 150,000 shares per annum; Mr. Wilson, 38,000 shares
($406,125), 24,000 of which vest at the rate of 4,000 per annum and
14,000 of which vest at the rate of 2,000 per annum; Mr. Gaut, 33,000
shares ($352,688), 7,000 of which vest at the rate of 3,500 per annum,
12,000 of which vest at the rate of 2,000 per annum and 14,000 of which
vest at the rate of 2,000 per annum; Mr. Ballard, 7,000 shares
($74,813), which vest at the rate of 1,000 per annum; Mr. Chadwick,
34,000 shares ($363,375) of which 12,000 vest at the rate of 2,000 per
annum, 14,000 of which vest at the rate of 2,000 per annum and 8,000 of
which vest at the rate of 1,000 per annum. Each of the named executive
officers are entitled to receive all dividends and other distributions
paid with respect to those shares of restricted stock held by such
executive officers.
(4) Amounts in this column represent options to acquire shares of Common
Stock. The Company does not have SARs.
(5) The Company does not maintain any long-term incentive plans.
(6) Amounts in this column for 1998 include premiums paid for group term
life insurance and contributions to various Company benefit plans,
which are as follows:
Company Contributions
---------------------
Group ENSCO Profit
Term Life Savings Sharing
Insurance Plan Plan SERP Total
--------- ------- ------- ------- -------
Carl F. Thorne $7,470 $5,600 $16,000 $52,583 $81,653
Richard A. Wilson 7,259 5,600 16,000 20,107 48,966
C. Christopher Gaut 755 5,600 16,000 7,398 29,753
Marshall Ballard 3,240 5,600 16,000 8,039 32,879
William S. Chadwick, Jr. 1,958 5,600 16,000 4,664 28,222
The following table sets forth information regarding aggregated option
exercises in 1998, the number of unexercised options segregated by those that
were exercisable and those that were unexercisable at December 31, 1998, and the
value of the in-the-money options segregated by those that were exercisable and
those that were unexercisable at December 31, 1998.
<TABLE>
Aggregated Option Exercises In Last Fiscal Year
And Fiscal Year-End Option Values
---------------------------------
<CAPTION>
Shares Number of Unexercised Options Value of Unexercised In-The-Money
Acquired on Value at December 31, 1998 Options at December 31, 1998($)
Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
------------ -------- -------------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Carl F. Thorne N/A N/A 100,000 200,000 90,625 90,625
Richard A. Wilson 12,500 96,094 71,000 165,000 39,938 27,187
Christopher Gaut 43,411 333,125 60,873 125,500 45,761 22,656
Marshall Ballard N/A N/A 49,500 85,000 45,813 18,125
William S. Chadwick, Jr. 13,000 95,875 80,500 87,500 106,219 22,656
- --------------------
N/A - Not Applicable.
</TABLE>
The Company does not maintain a long-term incentive plan based on
performance goals for executive officers. Therefore, the summary table of Long
Term Incentive Plan Awards in Last Fiscal Year as required under the executive
compensation disclosure rules of the Commission has not been included. Also, the
Company does not maintain a defined benefit or actuarial pension plan for any of
the named executive officers. Therefore, a table on Pension Plan Benefits has
not been included.
Employee Retirement Plan
Marshall Ballard was a participant in a noncontributory defined benefit
employee retirement plan previously offered to former employees of Penrod
Drilling Company (the "Penrod Plan"), which was acquired by the Company in
August 1993. The Penrod Plan was frozen effective December 31, 1990, and was
terminated in May 1998. Mr. Ballard received a lump sum distribution of $92,007
pursuant to the termination of this Plan.
5
<PAGE>
Compensation of Non-Employee Directors
Each non-employee director receives annual compensation of $24,000 per
year, payable quarterly, one-half in cash and one-half in shares of Common
Stock. Additionally, each non-employee director receives $1,000 in cash for each
Board of Directors and committee meeting attended. Any non-employee director
that serves the Company as Chairman of the Board of Directors, Chairman of the
Nominating and Compensation Committee or Chairman of the Audit Committee also
receives an additional $500 in cash for each meeting at which the director acts
as Chairman. Non-employee directors are also eligible to participate in the
Company's group medical and dental insurance plan on the same basis as full-time
Company employees. A non-employee director's contribution to group medical and
dental insurance premium costs is withheld from the quarterly payments of the
director's annual retainer. Directors who are also employees of the Company do
not receive any additional compensation for their services as directors.
Under the ENSCO International Incorporated 1998 Incentive Plan, the number
of shares of Common Stock issued quarterly as part of the annual compensation to
each non-employee director is determined by dividing into $3,000 the average of
the high and low prices of the Common Stock on the New York Stock Exchange on
the first business day of each quarter. Thus, in 1998 Messrs. Fields, Gaither,
Haddock, Hammett, Kelly and Meyerson each received 633 shares of Common Stock at
an average price of between $11.22 and $33.09 per share.
In May 1996, the Stockholders approved the Company's 1996 Non-Employee
Directors' Stock Option Plan ("Directors' Plan") which was adopted by the Board
of Directors on February 21, 1996. Under the Directors' Plan, 600,000 shares of
Common Stock are reserved for issuance. Pursuant to the Directors' Plan,
non-employee directors are granted options to purchase shares of Common Stock as
follows: (a) each non-employee director elected after February 21, 1996 who has
not previously served as a director shall be granted an option, effective as of
the date of the annual stockholders meeting at which such director is elected to
purchase 15,000 shares of Common Stock and (b) each other non-employee director
elected at, or continuing to serve following, each annual Stockholders meeting,
commencing with the 1996 Annual Meeting, shall be granted an option to purchase
6,000 shares of Common Stock. Each of Messrs. Fields, Gaither, Haddock, Hammett,
Kelly and Meyerson was granted options to purchase 6,000 shares of Common Stock
on May 13, 1998 at an exercise price of $29.3125 per share. Each shall receive
on May 19, 1999 an option to purchase 6,000 shares at an exercise price per
share equal to the average of the high and low selling price of Common Stock on
that date. Such awards for Messrs. Fields and Meyerson are subject to their
re-election.
Apart from his duties as a director of the Company, in 1998 Mr. Hammett
provided consulting services to the Company in connection with its construction
of the semisubmersible drilling rig. Mr. Hammett was paid a discretionary bonus
of $240,000 for these services, of which $120,000 was paid in the third quarter
of 1998 and $120,000 was paid in the first quarter of 1999.
Report of the Nominating and Compensation Committee
Compensation Philosophy and Objectives
- --------------------------------------
The philosophy of the Company's compensation program is to employ, retain
and reward executives capable of leading the Company in achieving its business
objectives. These objectives include the preservation of a strong financial
posture, improvement of the size and quality of the Company's asset base, and
positioning the Company's assets and business segments in geographic and
industry markets offering long-term growth in profitability relative to the
Company's competitors. The accomplishment of these objectives is measured
against conditions characterizing the industry within which the Company
operates.
Executive Officer Compensation
- ------------------------------
The Company's executive officer compensation program is comprised of base
salary, annual cash incentive compensation and long-term incentive compensation
in the form of stock options and restricted stock. Additionally, executive
officers may participate, on the same basis as other employees, in the employer
matching and profit sharing provisions of the Company's defined contribution
retirement plans which allow all employees to save for their retirement on a tax
deferred basis. During 1998, the maximum total Company matching contribution
available to officers and other employees was 4.5% of salary, and a profit
sharing contribution of 10% of eligible compensation was distributed.
6
<PAGE>
Base salary levels for the Company's executive officers are set relative to
the Company's competitors and reflect the Committee's assessment of the
executive's contribution in connection with financial and stock price
performance and the achievement of specified business objectives. During 1996,
the Company implemented the Key Employees' Incentive Compensation Plan (the
"Incentive Compensation Plan"), pursuant to which key employees may receive both
a cash bonus upon the achievement of predetermined performance goals, as well as
additional discretionary awards as determined by the Committee. The purpose of
the Incentive Compensation Plan is to link the cash compensation of the
Company's management directly to financial performance and certain other goals
and objectives related to enhancement of stockholder value, and to provide a
layer of variable cash compensation which enables the Company to be strongly
competitive in attracting and retaining talented personnel during periods of
high demand without creating an unduly high fixed cost overhead structure which
could be burdensome during periods of weak demand. Among the performance
measurement criteria utilized under the Incentive Compensation Plan are stock
price appreciation, return on capital employed, operating margins and general
and administrative expense levels relative to the Company's competitors, and
safety. In accordance with the terms of the Incentive Compensation Plan, the
Company paid cash bonuses to executive officers and other key management
personnel in 1999, relative to 1998 performance. Bonuses earned under the
Incentive Compensation Plan vest over three years, contingent upon continued
employment with the Company. Based upon an analysis, conducted with the
participation of an independent consultant, of data collected for comparable
positions with the Company's competitors, the Committee believes that its
executive officers' total cash compensation in 1998, which included
discretionary as well as formula generated bonus payments in recognition of the
Company's record results, was generally near the median of that paid by the
Company's competitors. The competitive peer group utilized in this analysis
consisted of seven publicly traded oil and gas drilling companies and one
publicly traded marine transportation service company which, in the opinion of
the Committee, comprise the Company's closest and most direct competitors.
An additional longstanding objective of the Committee has been to reward
executive officers with equity compensation, in keeping with the Company's
overall compensation philosophy of placing equity in the hands of its employees
in an effort to further instill stockholder considerations and values in the
actions of all employees and executive officers. Both stock options and grants
of restricted stock have historically been used to reward and provide incentives
to executive officers and to retain them through the potential of capital gains
and equity build up. Because such awards vest over a number of years and are
therefore long-term in nature, no equity awards were made to executive officers
during 1998. The Committee will continue to review, on an annual basis, the
equity participation awards outstanding to the executive officers of the
Company, and will consider additional awards from time to time, based upon the
philosophy stated above, the financial performance of the Company, and the
Committee's assessment of each executive's ability to influence the Company's
long-term growth and profitability. Because the value of stock options and
restricted stock should, over time, bear a direct relationship to the Company's
stock price, the Committee believes the award of options and grants represents
an effective incentive to create value for the stockholders.
Chief Executive Officer Compensation
- ------------------------------------
The Chief Executive Officer's ("CEO") salary is reviewed once annually,
consistent with the Company's salary administration policy for all shore based
employees. Adjustments are considered by the Committee based upon the Company's
financial and stock price performance, its progress in achieving specified
business objectives, and with regard to the salaries paid to chief executive
officers of the Company's competitors. Effective July 1, 1998, based upon the
Committee's subjective assessment of the foregoing factors, the CEO's salary was
increased from $475,000 to $500,000.
In accordance with the terms of the Incentive Compensation Plan, the CEO
was awarded an incentive bonus of $362,268 in 1999 relative to 1998 performance.
An amount of $162,268 of this bonus was determined solely by reference to the
pre-established formula under the Incentive Compensation Plan, and the
discretionary portion of this bonus was based upon the Committee's assessment of
the CEO's contribution in connection with the Company's financial performance in
achieving a record year during 1998 and the achievement of other performance
objectives, and with regard to the total compensation paid to chief executive
officers of the Company's competitors. The performance objectives established
for the CEO under the Incentive Compensation Plan include stock price
appreciation, return on capital employed, margins and general and administrative
expense levels relative to competitors and the Company's safety record. All
bonuses awarded vest over three years.
7
<PAGE>
No equity awards were granted to the CEO during 1998.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1 million paid to each of
the Company's chief executive officer and the four other most highly compensated
officers, unless such compensation meets certain specific requirements. The
compensation programs for the Company are designed generally to preserve the tax
deductibility of compensation paid to its executive officers. The Committee
will, however, take into consideration the various other factors described in
this report, together with Section 162(m) considerations, in making executive
compensation decisions, and could, in certain circumstances, pay compensation
that is not fully tax deductible, if the Committee believes such payments are in
the Company's best interest.
Nominating and Compensation Committee
Morton H. Meyerson, Chairman
Orville D. Gaither
Thomas L. Kelly II
March 11, 1999
Compensation Committee Interlocks and Insider Participation
Mr. Thorne, President and Chief Executive Officer of the Company, has
served as a director and Chairman of the Compensation Committee of Crescent
Operating, Inc. since June 12, 1997. Mr. Haddock, a director of the Company, has
served as President, Chief Executive Officer and director of Crescent Operating,
Inc. since April 1997.
Performance Graph
The chart below presents a comparison of the five year cumulative total
return, assuming $100 invested on December 31, 1993 and the reinvestment of
dividends, if any, for the Common Stock, the Standard & Poor's 500 Stock Price
Index and the Dow Jones Oil Drilling Index.*
8
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
ENSCO INTERNATIONAL INCORPORATED
[GRAPHIC OMITTED]
December 31,
----------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
ENSCO International Incorporated $100 $ 92 $170 $359 $497 $160
S&P 500(R)Index 100 101 139 171 229 294
Dow Jones Oil Drilling Index* 100 85 147 304 409 169
* The Dow Jones Oil Drilling Index is comprised of the following companies:
Global Marine, Inc., Rowan Companies, Inc., Helmerich & Payne, Inc., Nabors
Industries, Inc., ENSCO International Incorporated and Parker Drilling Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information concerning the number of
shares of Common Stock owned beneficially as of February 28, 1999, by (i) each
person known to the Company to own more than 5 percent of the Common Stock (the
only class of voting securities outstanding); (ii) each director of the Company
including employee directors; (iii) the three other most highly compensated
executive officers of the Company who are not also directors and (iv) all
directors and executive officers of the Company as a group.
9
<PAGE>
Name and Address Beneficial Ownership(1)
of Beneficial Owner(2) Amount Percentage
---------------------- ------------- ----------
FMR Corp. 17,888,910(3) 13.1%
82 Devonshire
Boston, MA 02109
Richard E. Rainwater 7,374,160(4) 5.4%
777 Main Street, Suite 2100
Fort Worth, TX 76102
Carl F. Thorne 1,881,877(5) 1.4%
Chairman, President and
Chief Executive Officer
Morton H. Meyerson 433,163(6) --(7)
Director
Richard A. Wilson 197,384(8) --(7)
Director, Senior Vice President
and Chief Operating Officer
C. Christopher Gaut 238,830(9) --(7)
Vice President - Finance and
Chief Financial Officer
William S. Chadwick, Jr. 198,587(10) --(7)
Vice President - Administration
and Secretary
Dillard S. Hammett 106,101(11) --(7)
Director
Marshall Ballard 147,451(12) --(7)
Vice President - Business
Development
Orville D. Gaither, Sr. 79,259(13) --(7)
Director
Thomas L. Kelly II 68,437(14) --(7)
Director
Craig I. Fields 42,259(15) --(7)
Director
Gerald W. Haddock 19,553(16) --(7)
Director
All Directors and Executive Officers 3,660,734(17) 2.7%
as a Group (14 persons, including
those named above)
- -------------------------
(1) At February 28, 1999, there were 137,047,152 shares of Common
Stock outstanding. Unless otherwise indicated, each person or
group has sole voting and dispositive power with respect to
all shares.
(2) Princeton Services, Inc., Merrill Lynch Asset Management,
L.P., Merrill Lynch & Co., Inc. and Merrill Lynch Growth Fund
advised the Company that they divested their holdings of the
shares of Common Stock reported on Amendment No. 7 to Schedule
13G dated January 8, 1999.
(3) Based upon information obtained from FMR Corp. as of February
28, 1999, FMR Corp. may be deemed to be the beneficial owner
of 17,888,910 shares of Common Stock.
(4) Based upon information supplied by Richard E. Rainwater's
attorney, Mr. Rainwater may be deemed to be the beneficial
owner of 7,374,160 shares of Common Stock. Includes 893,600
shares held by the Richard E. Rainwater Charitable Remainder
Unitrust No. 1, of which Mr. Rainwater is sole trustee, and
also includes 16,200 shares held by Mr. Rainwater's spouse, as
to all of which Mr. Rainwater disclaims beneficial ownership.
Does not include 783,054 shares held by Mr. Rainwater's adult
children, as to all of which Mr. Rainwater disclaims
beneficial ownership.
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(5) Includes 300,000 shares of restricted stock which vest at the
rate of 150,000 shares per annum over a 10-year term, which
commenced November 19, 1990. The restricted stock grant was
approved by the Stockholders at the Annual Meeting held on
June 5, 1990. Also includes 100,000 shares immediately
issuable upon exercise of options and 4,478 shares held
indirectly under the ENSCO Savings Plan and Supplemental
Executive Retirement Plan ("SERP").
(6) Includes 6,000 shares immediately issuable upon exercise of
options and 230,000 shares of Common Stock beneficially owned
by various trusts as to all of which Mr. Meyerson disclaims
beneficial ownership.
(7) Ownership is less than one percent of the shares of Common
Stock outstanding.
(8) Includes 71,000 shares immediately issuable upon exercise
of options and 38,000 shares of restricted stock of which
24,000 vest at the rate of 4,000 per annum and 14,000 of which
vest at the rate of 2,000 per annum. Also includes 2,221
shares held indirectly under the ENSCO Savings Plan and SERP.
(9) Includes 60,873 shares immediately issuable upon exercise of
options and 33,000 shares of restricted stock of which 7,000
vest at the rate of 3,500 per annum, 12,000 vest at the rate
of 2,000 per annum and 14,000 vest at the rate of 2,000 per
annum. Also includes 2,009 shares held indirectly under the
ENSCO Savings Plan and SERP and 2,400 shares gifted under
TUGMA to minor children for which Mr. Gaut disclaims
beneficial ownership.
(10) Includes 80,500 shares immediately issuable upon exercise of
options and 34,000 shares of restricted stock of which 12,000
vest at the rate of 2,000 per annum, 14,000 vest at the rate
of 2,000 per annum and 8,000 vest at the rate of 1,000 per
annum. Also includes 3,192 shares held indirectly under the
ENSCO Savings Plan and SERP.
(11) Includes 18,000 shares immediately issuable upon exercise of
options.
(12) Includes 49,500 shares immediately issuable upon exercise of
options and 7,000 shares of restricted stock which vests at
the rate of 1,000 per annum. Also includes 3,500 shares owned
by Mr. Ballard's wife, in respect of which Mr. Ballard
disclaims beneficial ownership, and 1,982 shares held
indirectly under the ENSCO Savings Plan and SERP.
(13) Includes 63,000 shares immediately issuable upon exercise of
options.
(14) Includes 18,000 shares immediately issuable upon exercise of
options.
(15) Includes 18,000 shares immediately issuable upon exercise of
options.
(16) Includes 18,000 shares immediately issuable upon exercise of
options.
(17) Includes all shares owned individually by the Company's
executive officers and directors, including 230,000 shares
beneficially owned by various trusts established by Mr.
Meyerson, 3,500 shares owned by Mr. Ballard's wife, 2,400
shares gifted under TUGMA to minor children of Mr. Gaut,
600,619 shares issuable upon exercise of options, 455,000
shares of restricted stock, and 22,026 shares held indirectly
under the ENSCO Savings Plan and SERP.
Item 13. Certain Relationships and Related Transactions
None
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on June 25, 1999.
ENSCO International Incorporated
(Registrant)
By /s/ C. CHRISTOPHER GAUT
------------------------------------
C. Christopher Gaut
Vice President and
Chief Financial Officer
By /s/ H. E. MALONE
------------------------------------
H. E. Malone
Vice President, Controller and
Chief Accounting Officer
12
