<PAGE> 1
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 Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GREY WOLF, INC.
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: _________
2) Aggregate number of securities to which transaction applies: ____________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
---------------------
4) Proposed maximum aggregate value of transaction: $_____________
5) Total fee paid: $_____________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ________________
2) Form, Schedule or Registration Statement No.: _________________
3) Filing Party: _________________
4) Date Filed: ___________________
<PAGE> 2
GREY WOLF, INC.
10370 RICHMOND AVENUE, SUITE 600
HOUSTON, TEXAS 77042
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1998
-----------------
Notice is hereby given that the annual meeting of the holders of common
stock of Grey Wolf, Inc. a Texas corporation (the "Company"), will be held at
the Adam's Mark Hotel, 2900 Briarpark Drive, Houston, Texas, 77042 on May 5,
1998, at 8:30 a.m., Houston time, and any adjournment or postponement thereof,
for the following purposes:
1. To elect a board of eight (8) directors to serve until the next
annual meeting of shareholders or until their successors are
elected and qualified; and
2. To consider and act upon such other business as may properly be
presented to the annual meeting or any adjournments or
postponements thereof.
A record of shareholders has been taken as of the close of business on
April 7, 1998, and only those shareholders of record on that date will be
entitled to notice of and to vote at the annual meeting and any adjournments or
postponements thereof. A shareholders' list will be available commencing April
21, 1998, and may be inspected during normal business hours prior to the annual
meeting at the offices of the Company, 10370 Richmond Avenue, Suite 600,
Houston, Texas 77042.
Your vote is important. Whether or not you plan to attend the annual
meeting in person, we request that you sign, date and return the enclosed proxy
card promptly in the enclosed stamped envelope. The prompt return of proxies
will ensure a quorum and save the Company the expense of further solicitation.
By Order of the Board of Directors,
DAVID W. WEHLMANN,
Secretary
April 8, 1998
<PAGE> 3
GREY WOLF, INC.
10370 RICHMOND AVENUE, SUITE 600
HOUSTON, TEXAS 77042
PROXY STATEMENT
This proxy statement and the enclosed proxy card are being mailed to
the shareholders of Grey Wolf, Inc., a Texas corporation (the "Company"),
commencing on or about April 10, 1998, in connection with the solicitation by
the board of directors of the Company (the "Board of Directors") of proxies to
be voted at the annual meeting of shareholders to be held at the Adam's Mark
Hotel, 2900 Briarpark Drive, Houston, Texas 77042 on Tuesday, May 5, 1998, at
8:30 a.m., Houston, Texas time and at any adjournments or postponements thereof
(the "Meeting"), for the purposes set forth in the accompanying notice.
Proxies will be voted in accordance with the directions specified
thereon and otherwise in accordance with the judgment of the persons designated
as proxies. Any proxy on which no direction is specified will be voted for the
election of the nominees named herein to the Board of Directors. Abstentions
will be treated as present for purposes of determining whether a quorum is
present, but will have the same legal effect as votes against election of the
nominees. A shareholder may revoke a proxy by (i) delivering to the Company
written notice of revocation, (ii) delivering to the Company a signed proxy of a
later date, or (iii) appearing at the Meeting and voting in person. Votes will
be tabulated and the results will be certified by election inspectors who are
required to resolve impartially any interpretive questions as to the conduct of
the vote.
As of April 7, 1998, the record date for the determination of
shareholders entitled to vote at the Meeting, there were outstanding and
entitled to vote 164,897,591 shares (the "Shares") of the Company's common
stock, par value $.10 per share (the "Common Stock"). Each Share entitles the
holder to one vote on all matters presented at the Meeting. Holders of a
majority of the outstanding Shares must be present, in person or by proxy, to
constitute a quorum for the transaction of business.
If a quorum is not obtained, or if fewer Shares are voted in favor of
approval of any of the proposals than the number required for approval, the
Meeting may be adjourned for the purpose of obtaining additional proxies or
votes or for any other purpose, and, at any subsequent reconvening of the
Meeting, all proxies will be voted in the same manner as such proxies would have
been voted at the original convening of the Meeting (except for any proxies
which have theretofore been revoked).
ELECTION OF DIRECTORS
GENERAL INFORMATION
At the Meeting, eight nominees are to be elected, each director to hold
office until the next annual meeting of shareholders or until his successor is
elected and qualifies. The persons named in the accompanying proxy have been
nominated by the Board of Directors, and unless authority is withheld, proxies
will be voted for the election of the nominees named below to the Board of
Directors. All of the nominees previously have been elected directors by the
shareholders except for Messrs. Donovan and Nelson, who became directors
following the acquisition of Grey Wolf Drilling Company ("GWDC") on June 27,
1997 (the "GWDC Acquisition") and Mr. Richards who was appointed a director on
March 24, 1998 to replace Lucien Flournoy who resigned. If any nominee should
become unavailable for election, the proxy may be voted for a substitute nominee
selected by the persons named in the proxy or the Board may be reduced
accordingly; however, the Board of Directors is not aware of any circumstances
likely to render any nominee unavailable.
<PAGE> 4
APPROVAL
The eight nominees for election as directors at the Meeting who receive
the greatest number of votes cast for election by the holders of Shares entitled
to vote and present, in person or by proxy, at the Meeting will be the duly
elected directors of the Company. The Board of Directors recommends a vote FOR
all eight nominees to the Company's Board of Directors.
NOMINEES FOR DIRECTOR
The following table sets forth certain information regarding the
nominees for the Board of Directors:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
AT APRIL 7, 1998
-----------------------------------
POSITION WITH THE DIRECTOR
NAME COMPANY AGE SINCE NUMBER (1) PERCENT
- ------------------------------- --------------------------- -------- -------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Ivar Siem (2).................. Chairman of the Board 51 1995 15,495,605(3),(4) 9.4%
William R. Ziegler (5)......... Vice Chairman of the Board 55 1996 29,976,978(3),(6) 18.2%
William T. Donovan (7)......... Director 46 1997 585,938(8) *
Peter M. Holt (2), (7)......... Director 49 1996 175,000(3) *
James K. B. Nelson............. Director 70 1997 4,694,091 2.8%
Roy T. Oliver, Jr. ............ Director 45 1996 11,440,614(3),(9) 6.9%
Thomas P. Richards ............ Director, President and 54 1998 700,000(10) *
Chief Executive Officer
Steven A. Webster (2), (5)..... Director 46 1996 29,972,978(3),(11) 18.2%
</TABLE>
- ---------------------------
* Indicates less than one percent.
(1) Each person has sole voting and investment power with respect to the Shares
listed, except as otherwise specified.
(2) Member, compensation committee of the Board of Directors.
(3) Includes the following number of Shares which the named individual has the
right to acquire upon exercise of currently exercisable stock options: Mr.
Siem - 569,000; Mr. Holt - 75,000; Mr. Oliver - 75,000; Mr. Webster -
75,000; and Mr. Ziegler - 75,000.
(4) Includes 14,926,605 shares of Common Stock beneficially owned through Norex
Industries, Inc. ("Norex"), of which Mr. Siem is a director. He is also one
of five potential beneficiaries in a trust which controls Norex. Mr. Siem
disclaims beneficial ownership of these 14,926,605 shares.
(5) These individuals are members of the "Somerset Group" as further described
in "Other Information --Certain Shareholders."
(6) Includes 5,000 shares of Common Stock owned by Mr. Ziegler, and 29,896,978
shares of Common Stock beneficially owned through Somerset Capital
Partners, a New York general partnership ("SCP"), of which Mr. Ziegler
is a general partner.
(7) Member, audit committee of the Board of Directors.
(8) Includes 317,278 shares of Common Stock owned by Mr. Donovan and 268,660
shares of Common Stock beneficially owned through Cambridge Associates,
L.P., a Wisconsin limited partnership ("Cambridge"), of which Mr. Donovan
is a general partner. Mr. Donovan disclaims beneficial ownership of 214,056
shares owned by Cambridge.
-2-
<PAGE> 5
(9) Includes 9,377,736 shares of Common Stock owned by Mr. Oliver, 2,027,002
shares of Common Stock beneficially owned through U.S. Rig & Equipment,
Inc., an Oklahoma corporation wholly-owned and controlled by him ("USRE"),
and 35,876 shares of Common Stock beneficially owned through Mr. Oliver's
minor children. Mr. Oliver disclaims beneficial ownership of the shares of
Common Stock owned by USRE and his children.
(10) Includes 300,000 shares of Common Stock underlying currently exercisable
options owned by Mr. Richards and 400,000 shares of Common Stock owned by a
limited partnership controlled by Mr. Richards for the benefit of his
children. Mr. Richards disclaims beneficial ownership of the shares of
Common Stock owned by the limited partnership.
(11) Includes 1,000 shares of Common Stock owned by Mr. Webster, and 29,896,978
shares of Common Stock beneficially owned through SCP, of which Mr. Webster
is a general partner.
Ivar Siem has been Chairman of the Board since August 1995 and was
President and Chief Executive Officer from April 1996 through August 1996. He
has been an international consultant in energy, technology and finance since
1985. He is a member of the board of directors of several privately held and
publicly traded companies, including: Chairman of the Board of Blue Dolphin
Energy Company, an oil and gas pipeline and exploration company, since 1989;
Chairman of the Board of Directors of Seateam Technology ASA, a provider of
subsea surveys and support for the offshore oil and gas industry, since January
1997; director of Norex, a company with investments in the oil and gas, cruise
and shipping industries, since 1992; and director of DSND ASA, a Norwegian
service company that operates specialty vessels and provides subsea engineering
services, since 1993.
William R. Ziegler has been a director of the Company since August 1996 and
is currently Vice Chairman of the Board of Directors. He has been a partner of
the law firm of Parson & Brown LLP since June 1994. Prior to that time he was a
partner in the law firm of Whitman Breed Abbott & Morgan and a predecessor firm
for over five years. Mr. Ziegler is a director of R&B Falcon Corporation; a
general partner of SCP, the managing member of Somerset Drilling Associates,
L.L.C., a Delaware limited liability company ("SDA"); a director of Geokinetics,
Inc., a 3-D seismic acquisition and geophysical services provider to the oil and
gas industry; a director of Ponder Industries, Inc., an oil service and rental
tool company; and a director of Flotek Industries, Inc., an oil services
equipment supplier.
William T. Donovan became a director of the Company in 1997 following the
GWDC Acquisition. Since 1980, Mr. Donovan has been a Principal and Managing
Director of Lubar & Co., a private investment and venture capital firm. Mr.
Donovan also serves as President and Chief Financial Officer of Christiana
Companies, Inc. and as a director of various private industrial companies. Prior
to joining Lubar & Co., Mr. Donovan was an officer with Manufacturers Hanover
Trust Company from 1976 until 1980, where he specialized in merger and
acquisition financing.
Peter M. Holt has been a director of the Company since August 1996. He has
been the President, Chief Executive Officer and principal owner of Holt
Companies for over 13 years. Holt Companies is comprised of two Caterpillar
dealerships in central/south Texas and western Ohio and various other business
interests.
James K. B. Nelson became a director of the Company in 1997 following the
GWDC Acquisition. He joined GWDC in 1960 and has served as President and Chief
Executive Officer of GWDC since 1978. He began his career in the oil field
drilling industry as a roughneck in 1946.
Roy T. Oliver, Jr. has been director of the Company since April 1996. He
has been the Chairman of the Board, President and Chief Executive Officer of
U.S. Rig & Equipment, Inc., an Oklahoma corporation ("USRE"), a worldwide
supplier of drilling equipment, since its organization in 1982.
Thomas P. Richards became a director of the Company on March 24, 1998
following the resignation of Lucien Flournoy. Mr. Richards joined the Company in
September 1996 as President and Chief Executive Officer. Mr. Richards was with
Diamond Offshore Drilling, Inc. ("Diamond Offshore") from September 1990 until
September 1996. He started as Senior Vice President of Diamond M Corporation
("Diamond M"), a subsidiary of Diamond Offshore, in 1990 and was serving as
Senior Vice President of Worldwide Operations when he left Diamond Offshore in
1996.
-3-
<PAGE> 6
Mr. Richards served as Vice President--Land for Penrod Drilling Corporation
("Penrod") from January 1989 until September 1990 when Diamond M purchased
substantially all of Penrod's land drilling assets. From February 1974 until
December 1988, Mr. Richards owned and served as President and Chief Executive
Officer of Richards Drilling Company, a land drilling contractor based in Bay
City, Texas.
Steven A. Webster has been a director of the Company since August 1996. He
was the Chairman of the Board and Chief Executive Officer of Falcon Drilling
Company, Inc., a marine oil and gas drilling contractor from 1988 until 1997. He
has been the President and Chief Executive Officer of R&B Falcon Corporation, a
marine oil and gas drilling contractor since 1998. He serves as a director of
Crown Resources Corporation (a mining company); Trust Manager of Camden Property
Trust; a general partner of SCP, the managing member of SDA; Chairman of the
Board of Carrizo Oil & Gas, Inc., an independent oil and gas exploration
company; a director of Ponder Industries, Inc., an oil service and rental tool
company; and a director of Geokinetics, Inc., a 3-D seismic acquisition and
geophysical services provider to the oil and gas industry.
BOARD AND COMMITTEE ACTIVITY, STRUCTURE AND COMPENSATION
During 1997, the Board of Directors convened on nine regularly and
specially scheduled occasions, and committees of the board held meetings as
follows: audit committee-- two meetings; and compensation committee-- two
meetings. The compensation committee administers the Company's compensation
plans and recommends officers' compensation to the Board for approval. For
information concerning the audit committee, see "Other Information--Auditors."
The Board of Directors does not presently maintain a nominating committee.
Shareholders who may wish to suggest individuals for possible future
consideration for board positions should direct recommendations to the Board of
Directors at the Company's principal offices. Each director during their tenure
attended at least 75% of the meetings held during 1997 by the board and each
committee on which he served.
Each director who is not an employee of the Company is paid an annual fee
of $10,000 plus travel expenses, if any. Directors are not compensated for
service on committees of the board. In 1995, under the 1987 Stock Option Plan
for Non-Employee Directors (the "Director Plan"), Mr. Siem was granted options
to purchase 15,000 shares of the Common Stock at an exercise price of $.875 per
share. These options may be exercised on a cumulative basis as to 20% of the
shares covered on the first through fifth anniversaries of the date of grant,
and expire ten years from the date of grant. The Board of Directors has
suspended the Director Plan, effective in August 1996. During 1997, Mr. Siem was
granted non-plan options to purchase 500,000 shares of the Common Stock at an
exercise price of $2.50. These options are all currently exercisable.
EXECUTIVE OFFICERS
The executive officers of the Company serve at the pleasure of the Board of
Directors and are subject to annual appointment by the Board of Directors at its
first meeting following the annual meeting of shareholders. In addition to
Messrs. Siem, Ziegler and Richards, who are listed in the foregoing table, the
Company's executive officers are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
-------------------------- ------ --------------------------------------------------------------
<S> <C> <C>
Forrest M. Conley, Jr. 50 Senior Vice President--International Operations
Ronnie E. McBride 48 Senior Vice President--Domestic Operations
Terrell L. Sadler 48 Senior Vice President--Domestic Operations
David W. Wehlmann 39 Senior Vice President, Chief Financial Officer and Secretary
Merrie S. Costley 38 Vice President and Controller
Donald J. Guedry, Jr. 41 Vice President and Treasurer
Gary D. Lee 52 Vice President--Human Resources
John D. Peterson, Jr. 43 Vice President--Investor Relations
</TABLE>
-4-
<PAGE> 7
Forrest M. Conley, Jr. joined the Company in September 1996 as Senior Vice
President--International Operations. Mr. Conley has twenty-six years of drilling
industry experience. From May 1993 until joining the Company, he was with Noble
Drilling Corporation--Triton Engineering where he served as Manager--Sales and
Marketing; Manager--International Marketing and most recently as the Vice
President and General Manager of Triton International. Previously, he was
General Manager of ENSCO Tool & Supply's West Africa division from December 1991
until May 1993.
Ronnie E. McBride joined the Company in September 1996 as Senior Vice
President--Domestic Operations. Mr. McBride was the Vice President of Turnkey
Services at Diamond Offshore from December 1995 until September 1996. He served
as Operational Manager of Diamond M from October 1991 until March 1993, at which
time he was promoted to Vice President--Onshore Operations and served in this
position until December 1995. Prior to October 1991, Mr. McBride was Vice
President--Operations for Harkins & Company for four years until it was acquired
by Diamond M.
Terrell L. Sadler joined the Company in 1990 as the Ark-La-Tex District
Manager. He was promoted to Vice President--Mid Continent Division in November
1994, and became Vice President--Domestic Drilling in April 1996. Mr. Sadler was
promoted to Senior Vice President--Domestic Operations in September 1996.
David W. Wehlmann joined the Company in July 1996 as Vice President and
Controller. He was promoted to Senior Vice President, Chief Financial Officer
and Secretary in February 1998. From November 1994 until he joined the Company,
Mr. Wehlmann was Vice President and Chief Accounting Officer of EnerVest
Management Company, L.C., a privately-held oil and gas property acquisition and
management company. Mr. Wehlmann was Controller of Convest Energy Corporation
from April 1991 until November 1994. Mr. Wehlmann is a certified public
accountant.
Merrie S. Costley joined the Company in January 1997 as Assistant
Controller. She was promoted to Vice President and Controller in February 1998.
She served as Financial Reporting Manager of Transworld Mortgage Corp., a
mortgage service company, from February 1996 until December 1996 and as Audit
Experienced Manager at Arthur Andersen LLP from June 1988 until February 1996.
Ms. Costley is a certified public accountant.
Donald J. Guedry, Jr. has been the Company's Treasurer since October 1996
and was appointed Vice President in November 1997. During the seven years prior
to joining the Company, Mr. Guedry served in various treasury management
positions for Weatherford Enterra, Inc. and a predecessor company.
Gary D. Lee joined the Company in March 1997 as Vice President--Human
Resources. Prior to joining the Company, he was with Diamond Offshore from 1982
until 1997, where he served as Vice President--Human Resources from 1990 until
March 1997.
John D. Peterson, Jr. became Vice President of the Company in June 1997
upon the closing of the GWDC Acquisition. Mr. Peterson was Secretary-Treasurer
of GWDC from April 1990 until closing. Mr. Peterson held various positions with
GWDC from March 1982 to March 1990. Mr. Peterson is a certified public
accountant.
-5-
<PAGE> 8
MANAGEMENT SHAREHOLDINGS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock by (i) all directors of the Company, (ii) the
chief executive officer and each of the other executive officers, and (iii) all
directors and executive officers, as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
AT APRIL 7, 1998
--------------------------------
NUMBER PERCENT
----------------- ---------
<S> <C> <C>
Ivar Siem ........................................ 15,495,605(1),(2) 9.4%
William R. Ziegler ............................... 29,976,978(1),(2) 18.2%
William T. Donovan ............................... 585,938(1) *
Peter M. Holt .................................... 175,000(1),(2) *
James K. B. Nelson ............................... 4,694,091 2.8%
Roy T. Oliver, Jr ................................ 11,440,614(1),(2) 6.9%
Thomas P. Richards ............................... 700,000(1),(3),(4) *
Steven A. Webster ................................ 29,972,978(1),(2) 18.2%
Forrest M. Conley, Jr. ........................... 70,000(3) *
Ronnie E. McBride ................................ 130,000(3) *
Terrell L. Sadler ................................ 124,000(3) *
David W. Wehlmann ................................ 14,000(3) *
Merrie S. Costley ................................ 2,000(3) *
Donald J. Guedry, Jr. ............................ 8,000(3) *
Gary D. Lee ...................................... 31,000(3),(5) *
John D. Peterson, Jr. ............................ -- *
Directors and Executive Officers as a group
(16 persons named above) ......................... 63,523,226 38.1%
</TABLE>
- -----------------------
* Indicates less than one percent.
(1) For information concerning shareholdings attributed to the named
individuals, see notes 3, 4, 6, 8, 9, 10 and 11 under the caption "Election
of Directors--Nominees for Director."
(2) Includes in each case, shares of Common Stock underlying outstanding
options. See note 3 under the caption "Election of Directors--Nominees for
Director."
(3) Except as otherwise specified, represents shares of Common Stock which the
named individual has the right to acquire upon the exercise of currently
exercisable stock options.
(4) Includes 400,000 shares of Common Stock owned by a limited partnership
controlled by Mr. Richards for the benefit of his children. Mr. Richards
disclaims beneficial ownership of these shares.
(5) Includes 1,000 shares of common stock which Mr. Lee currently owns.
-6-
<PAGE> 9
OTHER INFORMATION
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table reflects the compensation
for services to the Company for the years ended December 31, 1997, 1996, and
1995 for those individuals who served as (i) the Chief Executive Officer of the
Company during 1997, or (ii) one of the four most highly compensated executive
officers of the Company who were serving as executive officers of the Company at
the end of 1997, and for T. Scott O'Keefe who would have been reported under
(ii), above, but for the fact that he was not serving as an executive officer at
the end of 1997 (the four executive officers and Mr. O'Keefe, collectively, the
"Named Executive Officers").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------------- ------------------------------------------------
AWARDS PAYOUTS
OTHER ------------------------ ---------
ANNUAL RESTRICTED
NAME AND PRINCIPAL YEAR SALARY BONUS COMPENSATION STOCK OPTIONS/ LTIP ALL OTHER($)
POSITION ($) ($) ($) AWARD(S) SARS PAYOUTS COMPENSATION(1)
- ---------------------------- -------- ----------- ---------- ------------ ---------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas P. Richards............ 1997 300,000 200,000 -- -- -- -- 8,990
President and 1996 81,140 36,500 -- -- 2,000,000(3) -- --
Chief Executive Officer(2)
Ronnie E. McBride............. 1997 162,500 80,000 -- -- -- -- 7,102
Senior Vice President-- 1996 43,980 9,900 -- -- 400,000 -- --
Domestic Operations(2)
Terrell L. Sadler............. 1997 150,000 54,000 -- -- -- -- 6,384
Senior Vice 1996 123,605 28,000 -- -- 400,000 -- 2,472
President--Domestic 1995 80,000 -- -- -- -- -- --
Operations
Forrest M. Conley, Jr......... 1997 146,250 54,000 -- -- -- -- 7,400
Senior Vice President-- 1996 34,135 7,800 -- -- 350,000 -- --
International
Operations(2)
T. Scott O'Keefe.............. 1997 162,500 -- -- -- -- -- 7,805
Former Senior Vice 1996 50,000 22,400 61,364(5) -- 400,000 -- --
President,
Chief Financial
Officer and
Secretary(2)(4)
Gary D. Lee................... 1997 107,917 47,500 -- -- 150,000 -- 3,447
Vice President--
Human Resources(2)
</TABLE>
- -----------------------
(1) Except as otherwise specified, consists of cash amounts contributed by the
Company to match a portion of the executive's contributions under the
Company's 401(k) Savings Incentive Plan, group term life insurance provided
to employees and personal use of company owned vehicle.
(2) Messrs. Richards, O'Keefe, McBride and Conley began their employment in
September 1996. Mr. O'Keefe provided consulting services from April 1996
through August 1996. Mr. Lee began his employment in March 1997.
(3) Includes options to purchase 1,000,000 shares of Common Stock sold by Mr.
Richards in September 1996 to a limited partnership controlled by Mr.
Richards for the benefit of his children. Mr. Richards disclaims beneficial
ownership of these options and the shares underlying these options.
(4) Mr. O'Keefe resigned as Senior Vice President, Chief Financial Officer and
Secretary on December 22, 1997.
(5) Represents fees received for consulting services provided by the named
individual. See note 2.
-7-
<PAGE> 10
EMPLOYEE OPTIONS
Under the Company's 1982 Stock Option and Long-Term Incentive Plan for Key
Employees (the "1982 Employee Plan") and 1996 Employee Stock Option Plan (the
"1996 Employee Plan"), shares of the Common Stock may be granted to executive
officers and other employees. As of December 31, 1997, 1,895,800 shares were
reserved for outstanding options and 4,285,000 shares were reserved and remained
available for future grant pursuant to the 1982 Employee Plan and 1996 Employee
Plan. During 1997, no options to purchase shares of Common Stock were granted to
the Named Executive Officers under the 1982 Employee Plan. During 1997, options
to purchase 150,000 shares of Common Stock were granted to the Named Executive
Officers under the 1996 Employee Plan.
Option Grants Table. The following table provides information concerning
stock options granted to the Named Executive Officers during the year ended
December 31, 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
--------------------------------------------------- ----------------------------
% OF TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES
UNDERLYING IN
OPTIONS FISCAL EXERCISE EXPIRATION
GRANTED YEAR PRICE DATE 5% 10%
----------- ----------- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Gary D. Lee........ 150,000(1) 16% $ 2.8750 3-17-07 $271,213 $687,283
</TABLE>
- -----------------------
(1) These options vest on a cumulative basis as to 20% of the shares covered on
the first through fifth anniversaries of the date of grant, and expire 10
years from the date of grant.
Option Exercises and Year-End Option Values. The following table sets forth
information with respect to options exercised by the Named Executive Officers
during 1997, and with respect to unexercised options to purchase shares of
Common Stock which have been granted to the Named Executive Officers and held by
them at December 31, 1997.
<TABLE>
<CAPTION>
OPTIONS EXERCISED NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
DURING 1997 OPTIONS HELD AT YEAR END MONEY OPTIONS AT YEAR END
-------------------- -------------------------- ------------------------------
SHARES VALUE
ACQUIRED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------- ---------- ------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas P. Richards ....... 500,000(1) $2,321,582 300,000 1,200,000(2) $1,181,250 $4,725,000
Ronnie E. McBride ........ 30,000 151,950 130,000 240,000 500,625 945,000
Terrell L. Sadler ........ 52,200 247,556 124,000 246,600 490,313 974,513
Forrest M. Conley, Jr. ... 30,000 133,231 70,000 250,000 225,025 771,875
T. Scott O'Keefe ......... 100,000 343,860 300,000 -- 1,181,250 --
Gary D. Lee .............. -- -- -- 150,000 -- 384,375
</TABLE>
- -----------------------
(1) Includes 400,000 shares of Common Stock held by a limited partnership
controlled by Mr. Richards for the benefit of his children. The shares were
acquired by the limited partnership's exercise of 400,000 of the 1,000,000
options to acquire Common Stock purchased from Mr. Richards in September
1996. Mr. Richards may be deemed to have beneficial ownership of these
shares by virtue of his position as President of the corporate general
partner of the limited partnership. Mr. Richards disclaims beneficial
ownership of these shares. See note 10 under the caption "Election of
Directors--Management Shareholdings" and note 3 under the caption "Other
Information--Executive Compensation."
(2) Includes 600,000 unexercisable options owned by the limited partnership.
See note 1.
-8-
<PAGE> 11
COMPENSATION COMMITTEE REPORT
The compensation committee of the Board of Directors (the "Committee") has
furnished the following report on executive compensation for fiscal 1997:
Under the supervision of the Committee, the Company seeks to relate a
significant portion of potential total executive compensation to the
Company's financial performance. In general, executive financial rewards
may be segregated into the following significant components: base
compensation, bonus and stock-based benefits.
Base compensation for the Named Executive Officers is intended to
afford a reasonable degree of financial security and flexibility to those
individuals who were regarded by the Committee as acceptably discharging
the levels and types of responsibility implicit in the various executive
positions. Except for Mr. O'Keefe, in 1997, the base compensation level for
each Named Executive Officer was set at: Mr. Richards -- $375,000, Mr.
McBride -- $200,000, Mr. Sadler -- $180,000, Mr. Conley -- $180,000, and
Mr. Lee -- $150,000. Mr. O'Keefe's base salary was $200,000 prior to his
resignation in December 1997. Base compensation is subject to increase at
the discretion of the Board of Directors.
Except for Messrs. Sadler and Lee, all of the Named Executive Officers
joined the Company in 1996. Base pay for these Named Executive Officers, as
well as for Messrs. Sadler and Lee, was set based on arms length
negotiations of each officer's employment contract, giving consideration to
the compensation plans of executives of its competitors. The Committee
believes such base pay is reasonable in comparison with the compensation of
executive officers of other onshore drilling contractor companies. In
addition, the Committee considered the salary histories of each executive,
and his past performance, credentials and experience, as well as his
perceived future contribution to the Company.
Annual bonuses are intended to reflect a policy of requiring a minimum
level of Company financial performance before any bonuses are earned by the
Named Executive Officers, with bonuses for achieving higher levels of
performance directly tied to the level achieved as well as the committee's
subjective evaluation of the participant's job performance. On the basis of
these criteria, the following bonuses were awarded and paid subsequent to
December 31, 1997, to the Named Executive Officers for their fiscal 1997
performance: Mr. Richards -- $200,000; Mr. McBride -- $80,000; Mr. Sadler
-- $54,000; Mr. Conley -- $54,000; and Mr. Lee -- $47,500. In determining
the amount of these bonuses, the Committee, where appropriate, accounted
for the Named Executive Officer's partial tenure during 1997.
The Board of Directors is of the view that the periodic grant of
significant blocks of stock options to the Named Executive Officers is
calculated to align the executive's economic interests with those of
shareholders and to provide a direct and continuing focus upon the goal of
increasing shareholder value. The Company granted the options to acquire
150,000 shares of Common Stock to Mr. Lee in 1997. These options are
exercisable at a price of $2.8750 per share and expire on March 17, 2007.
Composition of the Committee. Non-management members of the Committee
owned, controlled or represented an aggregate of 44,924,583 shares, or
approximately 27.3%, of the Common Stock outstanding and, accordingly, also
maintain a substantial interest in the Company's financial performance.
THE COMPENSATION COMMITTEE
Peter M. Holt
Ivar Siem
Steven A. Webster
-9-
<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Of the members of the Committee, who are identified in the preceding
paragraph, none have ever been an employee of the Company except Ivar Siem, who
was acting President and Chief Executive Officer of the Company from April 1996
through August 1996. Mr. Siem has also served as Chairman of the Board of
Directors since August 1995. In 1997, the Company incurred management consulting
fees of $262,500 for Mr. Siem's assistance in locating and negotiating
acquisitions and related financing. He continues to regularly provide consulting
services to the Company. Effective October 1, 1997, Mr. Siem's compensation for
these services is at an annualized rate of $50,000.
EMPLOYMENT AGREEMENTS
Messrs. Richards, McBride, Sadler, Conley and Lee were employed under
agreements pursuant to which each received (i) an annual salary of $275,000,
$150,000, $140,000, $135,000 and $130,000, respectively, and (ii) a bonus at the
sole discretion of the Board of Directors. In October 1997, the Board of
Directors approved increases in the annual salaries of Messrs. Richards,
McBride, Sadler, Conley and Lee to $375,000, $200,000, $180,000, $180,000, and
$150,000, respectively. Each of these employment agreements also provided for
the grant of options to purchase Common Stock as set forth above under "--
Employee Options." The employment agreements of Messrs. Richards and McBride
expire in September 1999 and September 1998, respectively, and are cancelable
without further compensation only with cause. The employment agreements of
Messrs. Sadler, Conley and Lee were renewed by their terms for a period of one
year in September 1997, September 1997 and March 1998, respectively. Pursuant to
the employment agreements, in the event of a "Change in Control" (as defined) or
other termination if without cause, each of these executives shall be paid the
greater of (i) his annual salary and bonus for the number of months remaining
under the term of the employment agreement, and (ii) his annual salary for a
period of one year (three years in the case of Mr. Richards).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, as
amended, the Company's directors, executive officers, and shareholders who own
more than 10% of the Common Stock, are required to file reports of stock
ownership and changes in ownership with the Securities and Exchange Commission
and the American Stock Exchange, Inc. and to furnish the Company with copies of
all such reports they file. The Company believes that during 1997, all filing
requirements applicable to its directors, executive officers and greater than
10% shareholders were complied with.
-10-
<PAGE> 13
CERTAIN SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock by each person, other than Company directors or
executive officers, who is known by the Company to own beneficially more than 5%
of the outstanding Shares. See "Election of Directors--Nominees for Director"
and "Election of Directors--Management Shareholdings" for information regarding
beneficial ownership of Company directors and executive officers.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
AT APRIL 7, 1998
----------------------------------
NAME AND ADDRESS OF BENEFICIAL
OWNER, IDENTITY OF GROUP NUMBER PERCENT
- ------------------------------------------------- ------- -------
<S> <C> <C>
The Somerset Group(1)............................ 30,052,978(2),(3),(4) 18.2%
Somerset Capital Partners..................... 29,896,978(4) 18.2%
Thomas H. O'Neill, Jr. ....................... 29,896,978(4) 18.2%
Somerset Drilling Associates, L.L.C. ......... 24,435,223 14.8%
69 Delaware Avenue
Buffalo, New York 14202
Norex Drilling, Ltd. ............................ 14,926,605 9.4%
Norex Industries Inc. ........................ 14,926,605(5) 9.4%
Kristian Siem ................................ 14,926,605(5) 9.4%
Frank Capstick ............................ 14,926,605(5) 9.4%
P.O. Box HM 429
Hamilton, HM, BX, Bermuda
</TABLE>
- -----------------------
(1) Includes shares owned of record and shares underlying outstanding options
owned by Messrs. Ziegler and Webster. See notes 3, 6 and 11 under the
caption "Election of Directors--Nominees for Director."
(2) Does not include shares of Common Stock that members of the Somerset Group
may have rights to acquire upon exercise of warrants. Such rights, if any,
to acquire shares of Common Stock pursuant to such warrants are contingent
upon the occurrence of events not within the control of the members are of
the Somerset Group.
(3) Includes shares of Common Stock underlying outstanding options granted to
Company directors who are members of the named group. See note 1 above and
notes 3 and 5 under the caption "Election of Directors--Nominees for
Director."
(4) Includes 5,461,755 shares of Common Stock owned by SCP, and 24,435,223
shares of Common Stock beneficially owned through SDA of which SCP is the
managing member. Mr. O'Neill is a general partner of SCP.
(5) Each of Norex Drilling, Ltd., Norex Industries Inc., Kristian Siem, and
Frank Capstick have filed a Schedule 13D reporting shared voting and
dispositive power over the indicated shares of Common Stock. Kristian Siem
and Frank Capstick disclaim beneficial ownership of the shares of Common
Stock owned by Norex Drilling, Ltd.
-11-
<PAGE> 14
STOCK PERFORMANCE GRAPH
The following graph compares the performance of the Common Stock with the
American Stock Exchange ("AMEX") market value index and with two
Company-determined peer indices. The graph assumes that $100 was invested on
December 31, 1992, in the Common Stock and in each index and that any cash
dividends were reinvested. The Company has not declared any dividends during the
period covered by this graph.
[COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN GRAPH]
<TABLE>
<CAPTION>
December 31, December 31, December 31, December 31, December 31, December 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Grey Wolf, Inc. $100.00 $107.14 $85.71 $85.71 $321.43 $621.43
Peer Group (1) $100.00 $118.25 $102.52 $145.52 $257.20 $307.07
AMEX Market Value $100.00 $119.52 $108.63 $137.32 $146.10 $177.20
</TABLE>
(1) Consists of Nabors Industries, Inc., Parker Drilling Company, UTI Energy
Corp., Helmerich & Payne, Precision Drilling Corporation and Patterson
Energy, Inc. All of the members of the Peer Group are providers of contract
oil and gas land drilling services, with revenues comparable to the
Company.
This graph depicts the past performance of the Common Stock and in no way
should be used to predict future performance. The Company does not make or
endorse any predictions as to future share performance.
The foregoing price performance comparisons 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 under the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this graph by reference, and
shall not otherwise be deemed filed under such acts.
-12-
<PAGE> 15
CERTAIN TRANSACTIONS
Acquisitions
In January 1997, the Company acquired the operating assets of Flournoy
Drilling Company ("Flournoy") in exchange for 12,426,000 shares of Common Stock
and cash of approximately $800,000. In connection with this acquisition, Mr.
Flournoy was appointed as a Company director. Mr. Flournoy resigned from the
Board of Directors effective March 20, 1998. He was previously the President and
majority shareholder of Flournoy. The assets acquired included 13 land drilling
rigs, 17 rig hauling trucks, a yard and office facility in Alice, Texas and
various other equipment and drill pipe. With respect to one-half of the shares
to be issued in the Flournoy transaction, the Company agreed to issue additional
shares if the shareholders of Flournoy hold value less than $2.00 per share on
January 31, 1998. No such additional shares were issued to shareholders of
Flournoy. The consideration paid by the Company pursuant to the Flournoy asset
purchase agreement was based on arm's length negotiation among the parties.
In June 1997, the Company acquired all of the outstanding capital stock of
GWDC by merger in exchange for $61.6 million cash and 14,000,000 shares of
Common Stock. In connection with this acquisition, Messrs. Donovan and Nelson
were appointed as Company directors. Mr. Nelson was previously the President and
Chief Executive Officer of GWDC, and Mr. Donovan is the Managing Director of
Lubar & Company, a former shareholder of GWDC. GWDC operated a fleet of 18 large
premium drilling rigs in South Louisiana and the upper Texas Gulf Coast. The
consideration paid by the Company pursuant to the GWDC merger was based on arm's
length negotiation among the parties.
Sale of Common Stock by Certain Shareholders and Directors
In November 1997, the Company effected an underwritten public offering of
25 million shares of Common Stock (the "Offering"). Half of the shares sold in
the offering were, prior to the offering, owned by the following shareholders
and directors: Somerset Drilling Associates, L.L.C.--5,527,000; U.S. Rig &
Equipment, Inc.--633,000; Norex Drilling, Ltd.--2,759,000; Flournoy Family
Properties, Ltd.--801,000; and Roy T. Oliver, Jr.--2,780,000. All of these
shareholders are affiliates of directors or 5% beneficial owners of the Company.
Somerset Drilling Associates, L.L.C. is an affiliate of Somerset Capital
Partners and Messrs. Ziegler and Webster, who are both directors of the Company.
U.S. Rig & Equipment, Inc. is an affiliate of Mr. Oliver, who is a director of
the Company. Norex Drilling, Ltd. is an affiliate of Norex Industries, Inc. and
Ivar Siem, who is a director and Chairman of the Board of the Company. Flournoy
Family Properties, Ltd. is an affiliate of Mr. Flournoy, who was a director of
the Company at the time of the Offering.
The Company paid the registration costs associated with the Offering of
$31,582 on behalf of the above listed shareholders. In addition, the Company and
the selling shareholders entered into an underwriting agreement containing
customary indemnification provisions under which the Company is obligated to
indemnify the selling shareholders for certain liabilities, including liability
under the Securities Act of 1933, as amended (the "Securities Act"), and the
selling shareholders are obligated to indemnify the Company for certain
liabilities, including liability under the Securities Act.
Purchase of Rigs and Rig Equipment
In 1997, the Company purchased four rigs for addition to its inventory of
rigs held for refurbishment and reactivation from R.T. Oliver, Inc., a company
controlled by director Roy T. Oliver, Jr., a director of the Company. The
aggregate purchase price for rigs purchased from R.T. Oliver, Inc. was $10.6
million. The consideration paid by the Company pursuant to the purchase of the
rigs was based on arm's length negotiation among the parties.
In 1997, the Company made purchases of rig equipment from a company
controlled by one of its directors, Peter M. Holt, totaling $1,973,935. The
consideration paid by the Company pursuant to the purchase of the rig equipment
was based on arm's length negotiation among the parties.
-13-
<PAGE> 16
In 1998, the Company sold all of the rigs and drilling related equipment in
its Eastern Division located in Ohio to Union Drilling, Inc. ("Union"), an
affiliate of Messrs. Ziegler and Webster. The aggregate sales price for the rigs
and equipment sold to Union was $2.4 million. The consideration received by the
Company pursuant to the sale of such rigs and equipment was based on arm's
length negotiation among the parties.
Consulting Arrangements
The Company incurred management consulting fees of $162,500 for Mr. Siem's
services during fiscal 1997. These services included assisting Company
management in locating and negotiating acquisitions and related financing. Mr.
Siem continues to provide consulting services to the Company. Effective January
1, 1997, his compensation for these services increased to an annualized rate of
$200,000. However, effective October 1, 1997, the annualized rate was reduced to
$50,000. In addition, Mr. Siem received a lump sum payment of $100,000.
Legal Services
Mr. Ziegler is a partner at the law firm of Parson & Brown LLP. In 1997,
Parson & Brown LLP prepared Schedule 13Ds for certain shareholders of the
Company. The fees related to the preparation of these schedules were paid by the
Company.
Other
Lucien Flournoy, a director of the Company during 1997, is a director and
President of Flournoy Production Company. Flournoy Production Company has
participated, as a minority interest holder, in several joint ventures for the
exploration of oil and gas. Certain of these joint ventures contracted with the
Company on a negotiated, arm's length basis to drill oil and gas wells. The
amounts involved with those transactions are unknown because Flournoy Production
Company was not the operator of any of the joint ventures. The Company believes
that the terms of such drilling contracts were no less favorable than were made
available to customers not affiliated with the Company.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP, certified public accountants, have served as the
independent auditors of the Company since October 1996. It is not proposed that
any formal action be taken at the Meeting with respect to the continued
employment of KPMG Peat Marwick LLP, inasmuch as no such action is legally
required. Representatives of KPMG Peat Marwick LLP plan to attend the Meeting
and will be available to answer questions. Its representatives will also have an
opportunity to make a statement at the Meeting if they so desire, although it is
not expected that any statement will be made.
Deloitte & Touche LLP was previously the principal accountants for the
Company. On October 2, 1996, that firm's appointment as principal accountants
was terminated and KPMG Peat Marwick LLP was engaged as principal accountants.
The decision to change accountants was approved by the Board of Directors upon
recommendation of the audit committee. In connection with the audit of the
fiscal year ended December 31, 1995, and the subject interim period through June
30, 1996, there were no disagreements with Deloitte & Touche LLP on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved to the
satisfaction of Deloitte & Touche LLP would have caused it to make reference to
the subject matter of the disagreement in connection with its report. The audit
report of Deloitte & Touche LLP on the consolidated financial statements of the
Company and its subsidiaries as of and for the year ended December 31, 1995 did
not contain any adverse opinion f or disclaimer of opinion, nor was it qualified
or modified as to uncertainty, audit scope, or accounting principles. Deloitte &
Touche LLP delivered a letter to the Securities and Exchange Commission stating
that it agreed with the foregoing statements. Such letter was filed as Exhibit
16.1 to the Company's Form 8-K dated October 2, 1996.
-14-
<PAGE> 17
The audit committee assists the board in assuring that the accounting and
reporting practices of the Company are in accordance with all applicable
requirements. The committee reviews with the auditors the scope of proposed
audit work and meets with the auditors to discuss matters pertaining to the
audit and any other matters which the committee or the auditors may wish to
discuss. In addition, the audit committee would recommend the appointment of new
auditors to the board of directors in the event future circumstances were to
indicate that such action is desirable.
CHANGE OF CONTROL
Under its credit agreement with Bankers Trust Company, the Company has
pledged the stock of substantially all of its subsidiaries of which the Company
owns a majority of outstanding shares to guaranty payment of its indebtedness.
DISTRIBUTION OF ANNUAL REPORTS TO SHAREHOLDERS
The annual report to shareholders covering the year ended December 31,
1997, has been mailed to each shareholder entitled to vote at the Meeting.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal for action to be included
in the proxy statement and form of proxy relating to the Company's 1999 annual
meeting of shareholders is required to submit such proposals to the Company on
or before December 15, 1998.
COST OF SOLICITING PROXIES
The cost of soliciting proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, a number of regular employees
of the Company may, if necessary to assure the presence of a quorum, solicit
proxies in person or by telephone.
VOTING OF PROXIES
The persons designated to vote shares covered by Board of Directors'
proxies intend to exercise their judgment in voting such shares on other matters
that may properly come before the Meeting. Management does not expect that any
matters other than those referred to in this proxy statement will be presented
for action at the Meeting.
By Order of the Board of Directors,
DAVID W. WEHLMANN
Secretary
April 8, 1998
-15-
<PAGE> 18
PROXY GREY WOLF, INC. PROXY
PROXY SOLICITATION ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE 1998 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 5, 1998
The undersigned hereby appoints Ivar Siem, Thomas P. Richards, David
W. Wehlmann, or anyone or more of them, with full power of substitution, the
attorneys and proxies of the undersigned to vote the shares of common stock of
Grey Wolf, Inc., a Texas corporation (the "Company"), which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be
held at the Adam's Mark Hotel, 2900 Briarpark Drive, Houston, Texas 77042 on
May 5, 1998 at 8:30 a.m., Houston time, and at any adjournments thereof, as
follows:
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION
OF THE PERSONS SET FORTH ON THE REVERSE AS DIRECTORS.
THIS PROXY IS TO BE VOTED AS DIRECTED. IN THE ABSENCE OF SPECIFIC DIRECTION,
IT IS INTENDED TO VOTE THE SHARES REPRESENTED BY THIS PROXY FOR THE ELECTION OF
WILLIAM T. DONOVAN, PETER M. HOLT, JAMES K. B. NELSON, ROY T. OLIVER, JR.,
THOMAS P. RICHARDS, IVAR SIEM, STEVEN A. WEBSTER AND WILLIAM R. ZIEGLER AS
DIRECTORS.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
GREY WOLF, INC.
MAY 5, 1998
Please Detach and Mail in the Envelope Provided
A [X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C>
FOR (except as WITHHOLD Nominees: William T. Donovan
marked to the VOTE Peter M. Holt
contrary below) James K. B. Nelson
(1) Election of [ ] [ ] Roy T. Oliver, Jr.
Directors Thomas P. Richards
Ivar Siem
Steven A. Webster
William R. Ziegler
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name on the line below.)
________________________________________________________________________________
2. As such proxies may in their discretion determine upon such other
matters (including procedural and other matters relating to the
conduct of the meeting), as may properly come before the meeting and
any adjournment thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT FURNISHED HEREWITH.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED,
PRE-ADDRESSED STAMPED ENVELOPE.
Signature(s) of Stockholder_____________________________________ Dated this ____ day of _____________, 1998
Note: Please sign exactly as your name appears on your stock certificate.
When signing as executor, administrator, trustee or other
representative, please give your full title. All joint owners should
sign.
</TABLE>
