<PAGE>
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
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 Under 14a-12
ENSCO International Incorporated
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
[LOGO OF ENSCO]
CARL F. THORNE
Chairman, President and Chief Executive Officer
March 24, 2000
DEAR FELLOW STOCKHOLDER:
On behalf of our Board of Directors, I cordially invite you to attend the
2000 Annual Meeting of Stockholders of ENSCO International Incorporated (the
"Company"). The Annual Meeting will be held at 11:00 a.m. on Tuesday, May 16,
2000, at the Fairmont Hotel, 1717 N. Akard, Dallas, Texas. Your Board of
Directors and Officers look forward to greeting personally those Stockholders
able to attend.
At the Annual Meeting, Stockholders will be asked to vote on the election
of three Class I Directors and to approve the appointment of the Company's
independent accountants. Each of the matters to be considered at the Annual
Meeting is described in detail in the attached Proxy Statement for the Annual
Meeting. Your Board of Directors recommends that you vote "For" the proposals on
the agenda.
Your vote is important. Whether or not you are able to attend the Annual
Meeting, I hope you will promptly sign and date the enclosed proxy card and
return it in the enclosed postage prepaid envelope. This will save your Company
additional expenses associated with soliciting proxies, as well as ensure that
your shares are represented. Please note that you may vote in person at the
Annual Meeting even if you have previously returned the proxy.
Sincerely,
Carl F. Thorne
<PAGE>
ENSCO INTERNATIONAL INCORPORATED
2700 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202-2792
(214) 922-1500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 16, 2000
The Annual Meeting of Stockholders of ENSCO International Incorporated (the
"Company") will be held at the Fairmont Hotel, 1717 N. Akard, Dallas, Texas, at
11:00 a.m., Dallas time, on Tuesday, May 16, 2000, to consider and vote on:
1. The election of three Class I Directors, each for a three-year term;
2. The approval of the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for 2000; and
3. Such other business as may properly come before the Annual Meeting.
Stockholders of record at the close of business on March 23, 2000, are
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. A list of all Stockholders entitled to vote at the Annual Meeting is on
file at the executive offices of the Company, 2700 Fountain Place, 1445 Ross
Avenue, Dallas, Texas 75202-2792.
By Order of the Board of Directors
William S. Chadwick, Jr.
Vice President and Secretary
March 24, 2000
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY PROMPTLY.
1
<PAGE>
ENSCO INTERNATIONAL INCORPORATED
PROXY STATEMENT
The following information is submitted concerning the enclosed Proxy and
the matters to be acted upon under the authority thereof at the Annual Meeting
of Stockholders (the "Annual Meeting") of ENSCO International Incorporated (the
"Company") to be held at the Fairmont Hotel, 1717 N. Akard, Dallas, Texas, on
Tuesday, the 16th day of May, 2000, at 11:00 a.m., Dallas time, or any
adjournment thereof, pursuant to the enclosed Notice of Annual Meeting of
Stockholders. This Proxy Statement and the enclosed Proxy are first being sent
on or about March 24, 2000 to holders of the Company's shares of capital stock
entitled to vote at the Annual Meeting (the "Stockholders").
VOTING AND PROXY
The enclosed Proxy is solicited on behalf of the Board of Directors of the
Company. It may be revoked by a Stockholder at any time prior to the exercise
thereof by filing with the Secretary of the Company a written revocation or duly
executed Proxy bearing a later date. The Proxy shall also be revoked if a
Stockholder is present at the Annual Meeting and elects to vote in person.
Unless contrary instructions are indicated, all shares represented by
validly executed Proxies received pursuant to this solicitation (and which have
not been revoked before they are voted) will be voted:
1. FOR the election of the Class I nominees for Directors named herein;
2. FOR the approval of the appointment of PricewaterhouseCoopers LLP as
the Company's independent accountants for 2000; and
3. In accordance with the recommendation of management as to any other
matters which may properly come before the Annual Meeting.
In the event a Stockholder specifies a different choice by means of the
enclosed Proxy, his/her shares will be voted in accordance with the
specification so made.
The cost of solicitation of proxies will be borne by the Company and, upon
request, the Company will reimburse brokers, dealers, banks and trustees, or
their nominees, for reasonable expenses incurred by them in forwarding proxy
material to and solicitation of proxies from beneficial owners of the Company's
common stock, par value $.10 per share ("Common Stock"). In addition to the use
of mail, regular employees or agents of the Company may solicit proxies by
telephone, telegram or other means of communication.
2
<PAGE>
VOTING SECURITIES OUTSTANDING
The Stockholders entitled to vote at the Annual Meeting are the holders of
record at the close of business on March 23, 2000 (the "Record Date") of
approximately 137,560,000 outstanding shares of Common Stock. Each outstanding
share of Common Stock is entitled to one vote on each matter to come before the
Annual Meeting. A list of all Stockholders entitled to vote is on file at the
executive offices of the Company, 2700 Fountain Place, 1445 Ross Avenue, Dallas,
Texas 75202-2792. Only Stockholders of record on the books of the Company on the
Record Date will be entitled to vote at the Annual Meeting.
For purposes of conducting the Annual Meeting, the holders of at least a
majority of the stock issued and outstanding and entitled to vote at the Annual
Meeting shall constitute a quorum. A holder of stock shall be treated as being
present at the Annual Meeting if the holder of such stock is (i) present in
person at the Annual Meeting or (ii) represented at the Annual Meeting by a
valid proxy, whether the instrument granting such proxy is marked as casting a
vote or abstaining, is left blank or does not empower such proxy to vote with
respect to some or all matters to be voted upon at the Annual Meeting. If a
quorum is not present or represented at the Annual Meeting, the Chairman of the
Board of Directors or the Stockholders holding a majority of the Common Stock
present at the Annual Meeting have the power to adjourn the Annual Meeting from
time to time, without notice other than an announcement at the Annual Meeting.
Each proposal being submitted to Stockholders for approval shall be approved if
the votes cast in favor of such proposal exceed the votes cast opposing such
proposal. The Company's Bylaws include provisions specifically addressing the
treatment of abstentions and non-votes by brokers. In determining the number of
votes cast, shares abstaining from voting on a matter and shares that are
indicated as not being voted on a matter by brokers due to lack of discretionary
authority will not be treated as votes cast with respect to Proposals 1 and 2.
OWNERSHIP OF VOTING SECURITIES
The following tables set forth certain information concerning the number of
shares of Common Stock owned beneficially as of February 29, 2000, by (i) each
person known to the Company to own more than five percent of the Common Stock
(the only class of voting securities outstanding); (ii) each director of the
Company, including employee directors; (iii) the Chief Executive Officer and the
four other most highly compensated executive officers of the Company; and (iv)
all directors and executive officers of the Company as a group.
Beneficial Owner Table
----------------------
<TABLE>
<CAPTION>
Beneficial Ownership/(1)/
Name and Address ------------------------------
of Beneficial Owner Amount Percentage
------------------- ------------------------------
<S> <C> <C>
FMR Corp. 15,742,050/(2)/ 11.5
82 Devonshire
Boston, MA 02109
Richard E. Rainwater 7,374,160/(3)/ 5.4
777 Main Street, Suite 2100
Fort Worth, TX 76102
</TABLE>
3
<PAGE>
Directors and Executive Officers:
<TABLE>
<CAPTION>
Name of Beneficial Ownership/(1)/
---------------------------------
Beneficial Owner Amount Percentage
------------------------ --------------- --------------
<S> <C> <C>
Carl F. Thorne 1,971,503/(4)/ 1.4
Chairman, President and
Chief Executive Officer
Morton H. Meyerson 435,852/(5)/ --/(6)/
Director
Richard A. Wilson 295,859/(7)/ --/(6)/
Director, Senior Vice President and
Chief Operating Officer
C. Christopher Gaut 319,513/(8)/ --/(6)/
Vice President - Finance and
Chief Financial Officer
William S. Chadwick, Jr. 256,248/(9)/ --/(6)/
Vice President - Administration and
Secretary
Dillard S. Hammett 112,790/(10)/ --/(6)/
Director
Marshall Ballard 212,114/(11)/ --/(6)/
Vice President - Business Development
Orville D. Gaither, Sr. 74,683/(12)/ --/(6)/
Director
Thomas L. Kelly II 75,126/(13)/ --/(6)/
Director
Craig I. Fields 48,948/(14)/ --/(6)/
Director
Gerald W. Haddock 26,242/(15)/ --/(6)/
Director
Paul E. Rowsey, III 139/(16)/ --/(6)/
Director
All Directors and Executive Officers 4,609,469/(17)/ 3.4
as a Group (18 persons, including those
named above)
</TABLE>
________________________
(1) At February 29, 2000, there were 137,329,250 shares of Common Stock
outstanding. Unless otherwise indicated, each person or group has sole
voting and dispositive power with respect to all shares.
4
<PAGE>
(2) Based upon information obtained from FMR Corp. as of February 29,
2000, FMR Corp. may be deemed to be the beneficial owner of 15,742,050
shares of Common Stock.
(3) 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, 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.
(4) Includes 150,000 shares of restricted stock which vest on November 19,
2000. The restricted stock grant vested over a 10-year term, which
commenced November 19, 1990 and was approved by the Stockholders at
the Annual Meeting held on June 5, 1990. Also includes 250,000 shares
immediately issuable upon exercise of options and 5,679 shares held
indirectly under the ENSCO Savings Plan and Supplemental Executive
Retirement Plan ("SERP").
(5) Includes 12,000 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.
(6) Ownership is less than one percent of the shares of Common Stock
outstanding.
(7) Includes 167,500 shares immediately issuable upon exercise of options
and 32,000 shares of restricted stock of which 20,000 vest at the rate
of 4,000 per annum and 12,000 of which vest at the rate of 2,000 per
annum. Also includes 2,932 shares held indirectly under the ENSCO
Savings Plan and SERP.
(8) Includes 137,500 shares immediately issuable upon exercise of options
and 25,500 shares of restricted stock of which 3,500 vest at the rate
of 3,500 per annum, 10,000 vest at the rate of 2,000 per annum and
12,000 vest at the rate of 2,000 per annum. Also includes 2,547 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.
(9) Includes 137,500 shares immediately issuable upon exercise of options
and 29,000 shares of restricted stock of which 10,000 vest at the rate
of 2,000 per annum, 12,000 vest at the rate of 2,000 per annum and
7,000 vest at the rate of 1,000 per annum. Also includes 5,906 shares
held indirectly under the ENSCO Saving Plan and SERP.
(10) Includes 24,000 shares immediately issuable upon exercise of options.
(11) Includes 111,250 shares immediately issuable upon exercise of options
and 6,000 shares of restricted stock which vest 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 2,496
shares held indirectly under the ENSCO Savings Plan and SERP.
(12) Includes 44,000 shares immediately issuable upon exercise of options.
(13) Includes 24,000 shares immediately issuable upon exercise of options.
(14) Includes 24,000 shares immediately issuable upon exercise of options.
(15) Includes 24,000 shares immediately issuable upon exercise of options.
(16) Mr. Rowsey joined the Board of Directors on January 1, 2000.
(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, 1,324,990 shares issuable upon exercise of options, 341,500
shares of restricted stock and 46,061 shares held indirectly under the
ENSCO Savings Plan and SERP.
5
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
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") consisting of, as nearly as possible, one third of the
entire Board. The Company's Board of Directors is currently fixed at nine
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 I Directors will expire at the 2000 Annual Meeting of
Stockholders. The current term for Class III and Class II Directors will expire
at the 2001 and 2002 Annual Meetings of Stockholders, respectively.
Three persons are nominated for election as Class I Directors at the Annual
Meeting. The Board of Directors urges you to vote FOR the election of the
individuals who have been nominated to serve as Class I Directors. It is
intended that each validly executed proxy solicited hereby will be voted FOR the
election of the nominees for Class I Directors listed below, unless a contrary
instruction has been indicated on such proxy. If, at the time of the Annual
Meeting, any of the nominees should be unable or decline to serve, the
discretionary authority provided in the Proxy will be used to vote for a
substitute or substitutes as may be designated by the Board of Directors. The
Board of Directors has no reason to believe that any substitute nominee or
nominees will be required.
Nominees
- --------
Class I Directors
- -----------------
Gerald W. Haddock; age 52; Private Investor
Mr. Haddock has been a Director of the Company since December 1986. He
established Haddock Investments, L.L.C. and has served as a private consultant
and investor since June 1999. He served in various capacities with Crescent Real
Estate Equities Company, including Chief Executive Officer, Chief Operating
Officer and director and trust manager between May 1994 and June 1999. Mr.
Haddock was also the President and Chief Executive Officer and a director of
Crescent Operating, Inc. from April 1997 until June 1999. 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.
Paul E. Rowsey, III; age 45; President, Eiger, Inc.
Mr. Rowsey has been a Director of the Company since January 2000. He has
served as President of Eiger, Inc., a private real estate management and
investment firm, since its formation in January 1999. Prior to forming Eiger,
Mr. Rowsey joined Rosewood Property Company in 1988 and became President of its
real estate group and a member of its Board in 1989. He currently serves as a
director of Crescent Real Estate Equities Company and of Crescent Operating Inc.
He holds a Bachelor of Arts degree in management science from Duke University
and a Juris Doctorate degree from Southern Methodist University. He lives in
Dallas, Texas.
Carl F. Thorne; age 59; 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. Mr. Thorne holds a Bachelor of
Science degree in Petroleum
6
<PAGE>
Engineering from the University of Texas and a Juris Doctorate degree from
Baylor University College of Law. He lives in Dallas, Texas.
The Board of Directors recommends that Stockholders vote
"FOR" the election of each of the nominees for Class I
Directors named above.
Continuing Directors
- --------------------
Class II Directors
- ------------------
Craig I. Fields; age 53; Chairman, Defense Science Board
Dr. Fields has been a director of the Company since March 1992. He has
served as Chairman of the Defense Science Board since 1995. He served as Vice
Chairman of 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. and Global
Integrity Corp. 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 61; Chairman and Chief Executive Officer, 2M Companies,
Inc.
Mr. Meyerson has been a director of the Company since September 1987. Mr.
Meyerson has been Chairman and Chief Executive Officer of 2M Companies, Inc.
since January 1998. He served as Chairman of the Board and Chief Executive
Officer of Perot Systems Corporation from June 1992 until August 1996, Chairman
from September 1996 until August 1997, and Chairman and Chief Executive Officer
from September 1997 until his retirement in January 1998. Mr. Meyerson is a
director of Crescent Real Estate Equities, Inc. and TeleTech Holdings, 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 62; 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 the Company's 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. He lives in Dallas,
Texas.
Class III Directors
- -------------------
Orville D. Gaither, Sr.; age 73; Chairman and CEO, 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 is 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
7
<PAGE>
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 Richmond, Texas.
Mr. Gaither is a member of the Nominating and Compensation Committee.
Dillard S. Hammett; age 69; Consultant
Mr. Hammett has been a director of the Company since September 1987. Mr.
Hammett has been a consultant to the offshore energy industry since 1992. From
July 1987 to December 1991, Mr. Hammett was Vice President - Technical and
Marketing of the Company. Mr. Hammett retired from the Company in 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 41; 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.
MEETINGS AND COMMITTEES OF THE BOARD
Board of Directors
The Board of Directors met four times during the year ended December 31,
1999 and acted three times by unanimous written consent. During 1999, each
incumbent director attended at least 75% of the meetings held by the Board and
the committees of which he was a member. The Board of Directors has two standing
committees: the Audit Committee and the Nominating and Compensation Committee.
Audit Committee
The Company's Audit Committee recommends a firm of independent accountants
to examine the consolidated financial statements of the Company, reviews the
general scope of services to be rendered by the independent accountants, reviews
the financial condition and results of operations of the Company and makes
inquiries as to the adequacy of the Company's financial and accounting controls.
The Audit Committee met three times in 1999. The Committee consists of Chairman
Gerald W. Haddock, Craig I. Fields and Dillard S. Hammett.
Nominating and Compensation Committee
The principal functions of the Nominating and Compensation Committee are to
recommend officers of the Company, to select nominees for the Board of Directors
and committees of the Board and to review and approve employee compensation
matters, including matters regarding the Company's various benefit plans. The
Nominating and Compensation Committee met three times during 1999. The Committee
consists of Chairman Morton H. Meyerson, Orville D. Gaither, Sr. and Thomas L.
Kelly II.
The names of potential director candidates are drawn from a number of
sources, including recommendations from members of the Board, management and
Stockholders. Stockholders wishing to recommend Board nominees should submit
their recommendations in writing to the Secretary of the Company, with the
submitting Stockholder's name and address and pertinent information about the
proposed nominee similar to that set forth for the nominees named herein. A
Stockholder intending to nominate an individual as a director at an annual
meeting, rather than recommend the individual to the Company for consideration
as a nominee, must comply with the advance notice requirements set forth in the
Company's Bylaws.
8
<PAGE>
Compensation of Non-Employee Directors
Each non-employee director receives annual compensation of $24,000, 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 1999 Messrs. Fields, Gaither,
Haddock, Hammett, Kelly and Meyerson each received 845 shares of Common Stock at
an average price of between $10.19 and $19.44 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 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 18, 1999 at an
exercise price of $16.4375 per share. Mr. Rowsey was granted an option to
purchase 15,000 shares on January 1, 2000 at an exercise price of $21.59375 per
share. Each of these gentlemen shall receive on May 16, 2000 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.
Haddock and Rowsey 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 a 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 $120,000 was paid in the first quarter of 1999.
EXECUTIVE COMPENSATION
The following table sets forth a summary of all compensation, including
cash and other forms of remuneration, paid through March 1, 2000, for services
rendered in all capacities to the Company during 1999, to the Chief Executive
Officer and the four other most highly compensated executive officers of the
Company. The table also includes a summary of all compensation, including cash
and other forms of remuneration, paid to these named individuals for the years
1998 and 1997.
9
<PAGE>
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Compensation
----------------------------- Long - Term
Compensation Awards
Other ------------------------ All
Annual Restricted Other
Compen- Stock Compen-
Name and Principal Salary Bonus sation Award Options sation
Position Year ($) ($)/(1)/ ($)/(2)/ ($)/(3)/ (#)/(4)/ ($)/(5)/
- --------------------------- ---- ------- ------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Carl F. Thorne 1999 500,000 13,315 N/A N/A 200,000 29,882
President and 1998 487,500 362,268 N/A N/A N/A 81,653
Chief Executive Officer 1997 450,000 482,930 N/A N/A 200,000 74,935
Richard A. Wilson 1999 291,500 6,210 N/A N/A 150,000 19,859
Senior Vice President and 1998 283,250 125,682 N/A N/A N/A 48,966
Chief Operating Officer 1997 250,000 207,883 N/A N/A 200,000 32,715
C. Christopher Gaut 1999 220,000 4,102 N/A N/A 150,000 11,195
Vice President - Finance 1998 210,000 149,979 N/A N/A N/A 29,753
and Chief Financial 1997 187,500 168,563 N/A N/A 150,000 21,150
Officer
Marshall Ballard 1999 210,000 3,356 N/A N/A 125,000 12,703
Vice President - 1998 205,000 90,892 N/A N/A N/A 32,879
Business Development 1997 190,000 133,845 N/A N/A 100,000 23,897
William S. Chadwick, Jr. 1999 199,500 3,188 N/A N/A 150,000 11,070
Vice President - 1998 194,750 125,000 N/A N/A N/A 28,222
Administration and 1997 175,000 155,903 N/A N/A 100,000 19,508
Secretary
</TABLE>
_______________
N/A - Not Applicable.
(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 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, 1999, and the
value of such shares, based on the closing price of the Common Stock at
December 30, 1999 of $21.50, is as follows: Mr. Thorne, 150,000 shares
($3,225,000), all of which vest on November 19, 2000; Mr. Wilson, 32,000
shares ($688,000), 20,000 of which vest at the rate of 4,000 per annum and
12,000 of which vest at the rate of 2,000 per annum; Mr. Gaut, 25,500
shares ($548,250), 3,500 of which vest at the rate of 3,500 per annum,
10,000 of which vest at the rate of 2,000 per annum and 12,000 of which
vest at the rate of 2,000 per annum; Mr. Ballard, 6,000 shares ($129,000),
which vest at the rate of 1,000 per annum; Mr. Chadwick, 29,000 shares
($623,500) of which 10,000 vest at the rate of 2,000 per annum, 12,000 of
which vest at the rate of 2,000 per annum and 7,000 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.
10
<PAGE>
(5) Amounts in this column for 1999 include premiums paid for group term life
insurance and contributions to various Company benefit plans, which are as
follows:
<TABLE>
<CAPTION>
Company Contributions
----------------------------
Group ENSCO Profit
Term Life Savings Sharing
Insurance Plan Plan SERP Total
--------- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Carl F. Thorne $5,876 $5,600 $482 $17,924 $29,882
Richard A. Wilson 5,863 5,600 482 7,914 19,859
C. Christopher Gaut 632 5,600 482 4,481 11,195
Marshall Ballard 2,620 5,600 482 4,001 12,703
William S. Chadwick, Jr. 1,491 5,600 482 3,497 11,070
</TABLE>
The following table sets forth information regarding individual grants of
stock options made to each of the named executive officers during the year ended
December 31, 1999:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
---------------------------------
Individual Grants Potential Realizable
- -------------------------------------------------------------------------------------------------- Value at Assumed
% of Total Annual Rates of Stock
Number of Options Exercise Price Appreciation
Securities Granted to or Base for Option Term
Underlying Employees Price -------------------------
Options in Fiscal ($ per Expiration 5% 10%
Name Granted Year share) Date ($) ($)
- ------------------------ ---------- --------------- ----------- -------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Carl F. Thorne 200,000 9.2% 9.00 2/23/2004 497,307 1,098,918
Richard A. Wilson 150,000 6.9% 9.00 2/23/2004 372,980 824,189
C. Christopher Gaut 150,000 6.9% 9.00 2/23/2004 372,980 824,189
Marshall Ballard 125,000 5.7% 9.00 2/23/2004 310,817 686,824
William S. Chadwick, Jr. 150,000 6.9% 9.00 2/23/2004 372,980 824,189
</TABLE>
The following table sets forth information regarding aggregated option
exercises in 1999, the number of unexercised options segregated by those that
were exercisable and those that were unexercisable at December 31, 1999, and the
value of the in-the-money options segregated by those that were exercisable and
those that were unexercisable at December 31, 1999:
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
---------------------------------
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options Value of Unexercised In-the-Money
Shares at December 31, 1999 Options at December 31, 1999($)
Acquired on Value -------------------- -------------------------------
Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
--------------- ------------ ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Carl F. Thorne N/A N/A 200,000 300,000 1,343,750 2,518,750
Richard A. Wilson 6,000 65,625 130,000 250,000 403,125 1,889,063
Christopher Gaut 10,873 114,506 100,000 225,000 335,938 1,889,063
Marshall Ballard 4,500 52,734 80,000 175,000 403,125 1,574,219
William S. Chadwick, Jr. 18,000 203,063 100,000 200,000 671,875 1,889,063
</TABLE>
_________________________
N/A - Not Applicable.
11
<PAGE>
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 1999, the maximum total Company matching contribution
available to officers and other employees was 4.5% of salary. Because profit
sharing contributions are closely aligned with the Company's financial
performance, and in light of depressed earnings for 1999, profit sharing
contributions to the retirement plan accounts of the executive officers and
other employees amounted to less than one-half of one percent of base salary for
the year.
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. There were no
increases in the base salaries of executive officers during 1999. 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. The total amount of the awards indicated by operation of performance
measurement formulae is limited as a function of net income. Reflecting the
financial results of the Company, bonuses paid relative to 1999 were
substantially reduced from those of the prior year. Bonuses earned under the
Incentive Compensation Plan vest over three years, contingent upon continued
employment with the Company. Based upon an analysis of the data collected for
comparable positions with the Company's competitors for prior years, the
Committee believes that its executive officers' total cash compensation in 1999
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. Such awards vest over a number of years and are therefore
long-term in nature. No equity awards were made
12
<PAGE>
to executive officers during 1998. Additional stock option awards were made to
executive officers of the Company in 1999, all vesting over four years and
exercisable at the fair market value of the stock as of the date of award. 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. Pursuant to cost containment measures
adopted throughout the Company in response to an adverse market cycle, no
increase was made to the CEO's salary in 1999.
In accordance with the terms of the Incentive Compensation Plan, the
incentive bonus payable to the CEO, like those payable to other employees, is
limited as a function of the Company's net income. Although the formulae
established to measure the achievement of performance objectives under the Plan
would otherwise yield a larger award, the above limitation resulted in an
incentive bonus award of $13,315 to the CEO for 1999. 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.
In recognition of the Company's achievement of record financial performance
during 1998, the CEO was awarded options to purchase 200,000 shares of the
Common Stock in February 1999. In determining the number of options awarded to
the CEO, the Committee considered, in addition to factors cited above, the value
of long-term incentive plan awards made to and held by the chief executive
officers of the Company's competitors. The options granted to the CEO vest over
four years, are valid for a five-year term, and are exercisable at the fair
market value of the Common Stock on the date of award.
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, Sr.
Thomas L. Kelly II
March 9, 2000
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
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,
served as President, Chief Executive Officer and director of Crescent Operating,
Inc. from April 1997 until June 1999.
PERFORMANCE GRAPH
The chart below presents a comparison of the five year cumulative total
return, assuming $100 invested on December 31, 1994 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.*
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
ENSCO INTERNATIONAL INCORPORATED
[CHART]
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
--------- -------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ENSCO International Incorporated $ 100 $ 186 $ 392 $ 543 $ 174 $ 375
S&P 500/(R)/ Index 100 138 169 226 290 351
Dow Jones Oil Drilling Index* 100 173 358 482 199 338
</TABLE>
* The Dow Jones Oil Drilling Index is comprised of the following companies:
Diamond Offshore Drilling, Inc., ENSCO International Incorporated, Global
Marine, Inc., Helmrich & Payne, Inc., Nabors Industries, Inc., Noble Drilling
Corp., R & B Falcon Corp., Rowan Companies, Inc., Transocean Sedco Forex, and
Weatherford International, Inc.
14
<PAGE>
PROPOSAL 2
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
approved the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for the year ending December 31, 2000.
Representatives of PricewaterhouseCoopers LLP will attend the Annual
Meeting and will be provided with the opportunity to make a statement if they so
desire and to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" approval of the appointment of
PricewaterhouseCoopers LLP as independent accountants.
GENERAL AND OTHER MATTERS
The Company believes that Proposals 1 and 2 are the only matters that will
be brought before the Annual Meeting. However, if other matters are properly
presented at the Annual Meeting, it is intended that the persons named in the
accompanying Proxy will vote in accordance with their best judgment on such
matters.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, 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, 1999, 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, with the
following exception: a Form 4 filing by Morton H. Meyerson for July 1998 failed
to include a purchase of 6,800 shares during that month. A corrected Form 4 was
filed in February 2000.
INFORMATION CONCERNING STOCKHOLDER PROPOSALS
A holder of the Company's securities intending to present a proposal at the
2001 Annual Meeting must deliver such proposal, in writing, to the Company's
principal executive offices no later than November 24, 2000 for inclusion in the
proxy statement related to that meeting. The proposal should be delivered to
the Company by certified mail, return receipt requested. A holder of the
Company's securities whose proposal is not included in the proxy statement
related to the 2001 Annual Meeting, but who still intends to submit a proposal
at that meeting, is required to deliver such proposal, in writing, to the
Secretary of the Company at the Company's principal executive offices, and to
provide certain other information not less than 50 days, nor more than 75 days,
prior to the meeting, in accordance with the Company's Bylaws. Any such
proposal must also comply with the other provisions contained in the Company's
Bylaws relating to Stockholder proposals.
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1999 is being mailed to Stockholders with this Proxy Statement.
The Annual Report to Stockholders does not constitute a part of the proxy
soliciting material.
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your Proxy promptly. If you are present at the Annual Meeting
and wish to vote your stock in person, your Proxy shall, at your request, be
returned to you at the Annual Meeting.
15
<PAGE>
PROXY
ENSCO INTERNATIONAL INCORPORATED
Board of Directors Proxy for the Annual Meeting
of Stockholders at 11:00 a.m., Tuesday, May 16, 2000
Fairmont Hotel, 1717 N. Akard
Dallas, Texas 75201
The undersigned stockholder of ENSCO International Incorporated (the
"Company") hereby appoints Carl F. Thorne and C. Christopher Gault or either of
them, each with full power of substitution, to vote the shares of the
undersigned at the above-stated Annual Meeting and any adjournment(s) thereof:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE HEREIN. IF A CHOICE IS NOT
INDICATED WITH RESPECT TO ITEMS (1) AND (2), THIS PROXY WILL BE VOTED "FOR" SUCH
ITEMS. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTER REFERRED
TO IN ITEM (3). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS EXERCISED.
(Please sign on the reverse side)
Please Detach and Mail In the Envelope Provided
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
A [ X ] Please mark your
--- votes as in this
example.
<S> <C> <C> <C> <C> <C> <C> <C>
FOR all nominees
listed at right (except
as indicated to the
contrary below) WITHHOLD FOR AGAINST ABSTAIN
1. Election Nomminees: Gerald W. Haddock 2. Approval of the appointment
OF Class 1 Paul E. Rowsey, III of PricewaterhouseCoopers
Directors [__] [__] Carl F. Thorne LLP as independent
accountants for 2000. [__] [__] [__]
(INSTRUCTIONS: To vote against any individual
nominee, strike a line through the nominee's 3. On any other business that may properly come before
name in the list at right.) the Annual Meeting, in the discretion of the
proxies, hereby revoking any proxy or proxies
heretofore given by the undersigned.
PLEASE SIGN, DATE AND MAIL TODAY.
Change of Address/Comments
------------------------------------
------------------------------------
------------------------------------
Signature of Stockholder(s) Date: 2000
--------------------------------------- --------------------------------- ----------------
(SIGNATURE IF HELD JOINTLY)
</TABLE>
Note: Please sign exactly as your name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
