<PAGE> 1
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
ENERGY VENTURES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
- --------------------------------------------------------------------------------
(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)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(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):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
N/A
- --------------------------------------------------------------------------------
[ ] 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:
N/A
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
- --------------------------------------------------------------------------------
(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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<PAGE> 2
[ENERGY VENTURES, INC. LOGO]
ENERGY VENTURES, INC.
NOTICE OF 1997
ANNUAL MEETING OF
STOCKHOLDERS
AND
PROXY STATEMENT
Annual Meeting
May 6, 1997
The Ritz-Carlton Hotel
1919 Briar Oaks
Houston, Texas 77027
<PAGE> 3
ENERGY VENTURES, INC.
5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Energy
Ventures, Inc. (the "Company") will be held at The Ritz-Carlton Hotel, 1919
Briar Oaks, Houston, Texas 77027 on Tuesday, May 6, 1997 at 11:00 a.m., Central
Daylight Savings Time, for the following purposes:
1. To vote on the election of eight directors to the Board of Directors.
2. To consider and act upon a proposal to amend the Company's Restated
Certificate of Incorporation to change the name of the Company to "EVI,
INC."
3. To effect a two-for-one split of the Company's common stock, $1.00 par
value (the "Common Stock"), through a stock dividend and a related
amendment to the Company's Restated Certificate of Incorporation that
would increase the number of authorized shares of the Company's Common
Stock, from 40,000,000 shares to 80,000,000 shares.
4. To transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
Information with respect to the above matters is set forth in the Proxy
Statement which accompanies this Notice.
The Board of Directors has fixed the close of business on April 3, 1997, as
the record date for the determination of stockholders entitled to notice of and
to vote at such meeting or any adjournment or adjournments thereof. Only
stockholders of record at the close of business on such record date are entitled
to notice of and to vote at such meeting. The transfer books will not be closed.
You are cordially invited to attend the meeting. However, to ensure your
representation at the meeting, the Company requests that you return your signed
proxy card at your earliest convenience, whether or not you plan to attend the
meeting. Your proxy will be returned to you if you should be present at the
meeting and should request such a return.
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE. THE ENCLOSED RETURN ENVELOPE MAY BE USED FOR THAT PURPOSE.
By Order of the Board of Directors
/s/ JAMES G. KILEY
James G. Kiley, Corporate Secretary
April 4, 1997
<PAGE> 4
ENERGY VENTURES, INC.
5 POST OAK PARK, SUITE 1760
HOUSTON, TEXAS 77027-3415
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1997
The accompanying proxy is solicited by the Board of Directors of Energy
Ventures, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders of the Company to be held on Tuesday, May 6, 1997 (the
"Annual Meeting"), at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting and at any adjournment or adjournments
thereof. When proxies in the accompanying form are received properly executed,
the shares will be voted by the persons named therein unless contrary
instructions are given.
Unless otherwise indicated, the proxy will be voted FOR the election of all
nominees of the Company as directors, FOR the amendment to the Company's
Restated Certificate of Incorporation to change the name of the Company to EVI,
Inc. and FOR the stock split and related amendment to the Company's Restated
Certificate of Incorporation. The proxy will not be voted for the election as
directors of any nominee if authority to do so is withheld on the proxy.
Any stockholder of the Company has the right to revoke his proxy at any
time prior to its use by submitting a written revocation to the Corporate
Secretary of the Company prior to the Annual Meeting.
Upon request, additional proxy material will be furnished without cost to
brokers and other nominees to forward to the beneficial owners of shares held in
their names. The Company will bear all costs of preparing, printing, assembling,
delivering and mailing the Notice of Annual Meeting, Proxy Statement, Proxy and
Annual Report. Copies of the Notice, Proxy Statement, Proxy and Annual Report
will be first sent or given to stockholders on or about April 7, 1997. In
addition to the use of the mail, proxies may be solicited by the directors,
officers and employees of the Company, without additional compensation, by
personal interview, telephone, telegram or otherwise.
PLEASE NOTE THAT THE COMPANY IS ALSO CURRENTLY SOLICITING PROXIES IN
CONNECTION WITH A SPECIAL MEETING OF STOCKHOLDERS OF THE COMPANY TO BE HELD ON
MAY , 1997, RELATING TO A PROPOSED ACQUISITION BY THE COMPANY OF GULFMARK
INTERNATIONAL, INC. STOCKHOLDERS WILL BE RECEIVING PROXIES WITH RESPECT TO BOTH
MEETINGS AND ARE REQUESTED TO EXECUTE AND RETURN PROXIES FOR BOTH MEETINGS.
1
<PAGE> 5
VOTING RIGHTS AND PRINCIPAL STOCKHOLDERS
The record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting is the close of business on April 3, 1997 (the
"Record Date"). As of the Record Date, there were shares of Common
Stock, $1.00 par value ("Common Stock"), of the Company issued and outstanding.
Each share of Common Stock is entitled to one vote on each matter to be acted
upon at the meeting.
The following table sets forth certain information with respect to each
person who at the Record Date was known by the Company to be the beneficial
owner of more than 5% of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF BENEFICIALLY OWNED PERCENT OF
BENEFICIAL OWNER AS OF THE RECORD DATE(1) CLASS(%)
------------------- ------------------------ ----------
<S> <C> <C>
GulfMark International, Inc.(2)............................. 2,235,572
5 Post Oak Park, Suite 1170
Houston, Texas 77027
Christiana Companies, Inc. and 1,958,731
Sheldon B. Lubar(3).........................................
777 E. Wisconsin Avenue, #3380
Milwaukee, Wisconsin 53202
John Hancock Advisors, Inc.(4).............................. 1,203,300
101 Huntington Avenue
Boston, Massachusetts 02199
</TABLE>
- ---------------
(1) Unless otherwise indicated below, the persons or group listed have sole
voting and investment power with respect to their shares of Common Stock,
and none of such shares are deemed to be owned because the holder has the
right to acquire the shares within 60 days.
(2) Lehman Brothers Holdings Inc. ("Lehman Holdings") beneficially owns 31.6% of
the common stock of GulfMark International, Inc. ("GulfMark"). Lehman
Holdings also owns directly 1,120,000 shares of Common Stock, or % of
the outstanding shares of Common Stock on the Record Date, for its own
account. The beneficial ownership of Common Stock of Lehman Holdings does
not include any of the shares of Common Stock held by GulfMark, beneficial
ownership of which is disclaimed.
(3) Includes 1,948,731 shares of Common Stock owned of record by Christiana
Companies, Inc. ("Christiana") and 10,000 shares of Common Stock subject to
an option granted to Sheldon B. Lubar and exercisable within 60 days. Mr.
Lubar is the Chairman and Chief Executive Officer of Christiana and is the
beneficial owner, through a voting trust, of 49.9% of the common stock of
Christiana.
(4) John Hancock Advisors, Inc. ("JHA") has direct beneficial ownership of the
1,203,300 shares of Common Stock. Each of John Hancock Mutual Life Insurance
Company, John Hancock Subsidiaries, Inc., John Hancock Asset Management and
The Berkeley Financial Group have indirect beneficial ownership of such
shares through their parent-subsidiary relationship with JHA and each other.
2
<PAGE> 6
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth, as of the Record Date, the number and
percentage of Common Stock beneficially owned by each of the Company's
directors, each executive officer named in the Summary Compensation Table
herein, and all directors and officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP(1)
------------------------------------------------
OPTIONS
VOTING AND EXERCISABLE PERCENT OF
NAME INVESTMENT POWER WITHIN 60 DAYS CLASS(%)
---- ---------------- -------------- ----------
<S> <C> <C> <C>
Bernard J. Duroc-Danner............................. 40,000 385,000
Ghazi J. Hashem..................................... -- -- *
James G. Kiley...................................... -- 22,500 *
Frances R. Powell................................... 200 10,000 *
David J. Butters.................................... 3,622 30,000 *
Uriel E. Dutton..................................... -- 30,000 *
Eliot M. Fried...................................... 10,000 20,000 *
Sheldon S. Gordon................................... 5,000 10,000 *
Sheldon B. Lubar(2)................................. 1,948,731 10,000
Robert B. Millard................................... -- 30,000 *
Robert A. Rayne..................................... -- 5,000 *
All directors and officers as a group (13
persons).......................................... 2,007,553 552,500
</TABLE>
- ---------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Unless otherwise indicated, directors and executive officers have sole
voting and investment power with respect to their shares of Common Stock.
(2) The 1,948,731 shares of Common Stock indicated as beneficially owned by Mr.
Lubar are owned directly by Christiana and are deemed to be beneficially
owned by Mr. Lubar because Mr. Lubar is the Chairman and Chief Executive
Officer of Christiana and is the beneficial owner, through a voting trust,
of 49.9% of the common stock of Christiana.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting, each to hold
office until the next Annual Meeting of Stockholders of the Company and until
his successor shall be duly elected and qualified. The persons named in the
enclosed proxy will vote the shares covered thereby in favor of the nominees
listed below unless specifically instructed to the contrary. Although the
management of the Company does not contemplate that any of the nominees will be
unable to serve, if such a situation arises prior to the Annual Meeting, the
proxies will be voted for a substitute to be named by the Board of Directors.
All of the nominees named in the following table are now serving as directors of
the Company:
<TABLE>
<CAPTION>
YEAR FIRST
BECAME
NAME AGE DIRECTOR
---- --- ----------
<S> <C> <C>
David J. Butters............................................ 56 1984
Bernard J. Duroc-Danner..................................... 43 1988
Uriel E. Dutton............................................. 66 1986
Eliot M. Fried.............................................. 64 1990
Sheldon S. Gordon........................................... 61 1995
Sheldon B. Lubar............................................ 67 1995
Robert B. Millard........................................... 46 1989
Robert A. Rayne............................................. 48 1987
</TABLE>
3
<PAGE> 7
The nominees receiving a plurality of votes cast at the Annual Meeting will
be elected as directors. Abstentions and broker non-votes will not be treated as
a vote for or against any particular director and will not affect the outcome of
the election of directors.
David J. Butters is a Managing Director of Lehman Brothers ("Lehman
Brothers"), an investment banking firm and division of Lehman Brothers Inc.,
which is a subsidiary of Lehman Holdings, where he has been employed for more
than the past five years. Mr. Butters is currently Chairman of the Board of
Directors of GulfMark, a director of Anangel-American Shipholdings, Ltd. and a
member of the Board of Advisors of Energy International, N.V. Mr. Butters is
also Chairman of the Board of Directors of the Company.
Bernard J. Duroc-Danner joined the Company in May 1987 upon inception of
the Company's strategic redeployment in the oilfield service and equipment
industry. He was elected President of the Company in January 1990 and Chief
Executive Officer in May 1990. In prior years, Mr. Duroc-Danner was with Arthur
D. Little Inc., a management consulting firm in Cambridge, Massachusetts. Mr.
Duroc-Danner holds a Ph.D. in economics from Wharton (University of
Pennsylvania). Mr. Duroc-Danner is also a director of Parker Drilling Company
and Dailey Petroleum Services Corp.
Uriel E. Dutton has been a Partner in Fulbright & Jaworski L.L.P., a law
firm, for more than the past five years.
Eliot M. Fried is a Managing Director of Lehman Brothers, where he has been
employed for more than the past five years. He is a member of the firm-wide
Investment Committee and the Investment Banking Commitment Committee of Lehman
Brothers. Mr. Fried is a director of Axsyx Technologies, Inc., Bridgeport
Machines, Inc., Lear Corporation, SunSource L.P. and Walter Industries, Inc.
Sheldon S. Gordon has served as Chairman of Union Bancaire Privee
International, Inc., a merchant bank, since May 1996. From May 1995 to May 1996,
Mr. Gordon was a Limited Partner of The Blackstone Group, L.P., an investment
banking firm. He was also a General Partner of The Blackstone Group, L.P. from
April 1991 until May 1995. Mr. Gordon is a director of AMETEK, Inc. and
Anangel-American Shipholdings Limited.
Sheldon B. Lubar has been Chairman and Chief Executive Officer of
Christiana, a diversified holding company with interests in refrigerated and dry
warehousing, transportation and logistic services, and Chairman of Lubar & Co.
Incorporated for more than the past five years. Mr. Lubar is a director of
Ameritech, Massachusetts Mutual Life Insurance Company, Firstar Corporation and
MGIC Investment Corporation. Under the terms of the agreements relating to the
Company's acquisition of Prideco, Inc. in June 1995, the Company agreed to
nominate Mr. Lubar or another acceptable nominee of Christiana for election to
the Board of Directors of the Company as long as Christiana beneficially owns 8%
or more of the outstanding shares of Common Stock of the Company.
Robert B. Millard is a Managing Director of Lehman Brothers, where he has
been employed for more than the past five years. Mr. Millard is also a director
of GulfMark.
Robert A. Rayne has been an Executive Director of London Merchant
Securities plc (property investment and development with major investments in
leisure enterprises), a United Kingdom listed public limited company, for more
than the past five years.
COMMITTEES AND MEETINGS OF DIRECTORS
Pursuant to the Company's By-laws, the Board of Directors has established
several committees, including an Audit Committee, a Compensation Committee, an
Executive Committee and a Nominating Committee. In addition, in connection with
the Company's proposed acquisition of GulfMark, the Board of Directors
established a special committee (the "Special Committee") to consider and make
recommendations with respect to that acquisition. During the year ended December
31, 1996, the Board of Directors met nine times, the Audit Committee met two
times, the Compensation Committee met two times and the Special Committee met
two times. The Executive Committee and the Nominating Committee did not meet.
Each
4
<PAGE> 8
director attended at least 75% of all meetings of the Board of Directors and
Committee meetings of which he was a member during 1996.
Messrs. Butters, Dutton, Fried, Gordon and Rayne are the current members of
the Audit Committee. The Audit Committee recommends to the Board the selection
and discharge of the Company's independent auditors, reviews the professional
services performed by the auditors, the plan and results of their auditing
engagement and the amount of fees charged for audit services by the auditors,
and evaluates the Company's system of internal accounting controls.
Messrs. Butters, Dutton, Lubar and Millard are the current members of the
Compensation Committee. The Compensation Committee recommends to the Board the
compensation to be paid to the Company's directors, officers and key employees
and, subject to review and approval of certain matters by the full Board of
Directors of the Company, administers the compensation plans for the Company's
executive offices.
Messrs. Butters, Dutton and Millard are the current members of the
Executive Committee, which acts on behalf of the Board between regularly
scheduled meetings of the Board of Directors.
Messrs. Butters and Millard are the current members of the Nominating
Committee, which is empowered to propose to the Board of Directors the slate of
director nominees to be voted by the stockholders of the Company. The Committee
will consider nominees for election at the next annual meeting of stockholders
who are recommended by stockholders provided any such recommendation is in
writing and has been received by the Chairman of the Nominating Committee at the
Company's executive offices prior to December 8, 1997.
DIRECTOR COMPENSATION
Each non-employee director of the Company is paid $1,000 for each meeting
of the Board of Directors and $500 for each committee meeting of the Board of
Directors he attends. In addition, each non-employee director of the Company is
paid a retainer of $4,000 for each quarter of the year in which such director
serves as a director. Mr. Butters receives an additional retainer of $6,250 per
month for serving as Chairman of the Board. Total compensation paid to the
non-employee directors for 1996, including director fees and retainers but
excluding the deferred compensation described below, was $83,019 for Mr.
Butters, $19,425 for Mr. Dutton, $18,500 for Mr. Fried, $19,425 for Mr. Gordon,
$19,425 for Mr. Lubar, $20,000 for Mr. Millard and $19,425 for Mr. Rayne.
The Company maintains a deferred compensation plan for it non-employee
directors (the "Non-Employee Director Plan") that is intended to provide
additional long-term incentive to the directors. Under the Non-Employee Director
Plan, each non-employee director may elect to defer up to 7 1/2% of any
retainer, meeting, committee or other similar fee or compensation to which the
non-employee director is entitled for services performed for the Company. Each
election by a non-employee director to defer compensation is irrevocable and
must state the date on which distributions under the Non-Employee Director Plan
are to be made, which date may not be less than one year after the effective
date of the election. Deferred compensation under the Non-Employee Director Plan
is credited to an account for the director. In the event the director elects to
defer at least 5% of his compensation under the Non-Employee Director Plan, the
Company will make an additional allocation to the director's account equal to
the sum of (i) 7 1/2% of the director's compensation and (ii) a percentage of
the director's compensation equal to the percentage deferred by the director.
All amounts credited to the account of a director are converted into
non-monetary units equal to the number of whole shares of Common Stock that
could have been purchased by the amounts credited to the account at the market
price of the Common Stock as of the last day of the calendar month in which the
amounts are credited. The amount of funds to be paid to a director at the time
of payment will be determined by multiplying the number of units credited to the
director's account at such time multiplied by the market price of the Common
Stock on the last business day of the month preceding the date the distribution
is to commence. Distributions under the Non-Employee Director Plan commence as
of the first day of the calendar quarter coincident with or following the date
specified by the director in his election to defer compensation and
5
<PAGE> 9
may be either in the form of a lump sum or in quarterly installments not to
exceed ten years. In the event a director elects to receive deferred
compensation through installments, the unpaid amounts will accrue interest on a
quarterly basis at a rate equal to an announced prime rate. No distribution may
be made to a director with respect to units relating to amounts deferred and
additional credits made by the Company within six months prior to the proposed
date of distribution except where the distribution follows the director's death
or termination of service as a director. In such case, the director will be
entitled to receive a distribution in an amount equal to the compensation
deferred during such six-month period plus interest. During 1996, $20,194,
$4,725, $4,500, $4,725, $4,725 and $4,725 were credited under the Non-Employee
Director Plan as deferrals and Company contributions to the accounts of Messrs.
Butters, Dutton, Fried, Gordon, Lubar and Rayne, respectively, with total units
allocated to their respective accounts of 666, 153, 145, 149, 149 and 145.
Pursuant to the Company's Amended and Restated Non-Employee Director Stock
Option Plan (the "Director Plan"), each non-employee director is granted an
option to purchase 5,000 shares of Common Stock as of the date he is first
elected or is re-elected as a director of the Company. Subject to certain anti-
dilution provisions in the Director Plan, an aggregate of 500,000 shares of
Common Stock have been reserved for issuance upon the exercise of options
granted under the Director Plan. During 1996, options to purchase 5,000 shares
of Common Stock were granted to each non-employee director of the Company. In
1996, Messrs. Fried and Rayne purchased 5,000 and 25,000 shares of Common Stock,
respectively, upon the exercise of options granted under the Director Plan.
Under the Director Plan, each stock option granted to a non-employee
director is not exercisable for a period of one year from the date of grant, but
is fully exercisable following such one-year anniversary. Each option granted
under the Director Plan is exercisable at a purchase price per share of Common
Stock equal to the fair market value of the Common Stock as of the date of
grant.
Options granted to non-employee directors under the Director Plan are
exercisable for a term of ten years from the date of grant, subject to early
termination within a specified period following an event of death, disability or
retirement, resignation or termination from the Board of Directors of the
Company. This period is one year in the case of retirement. The Company does not
currently have a formal retirement policy for directors other than the Director
Plan. The Director Plan defines retirement to be the termination of service
following five years of service on the Board of Directors.
EXECUTIVE OFFICERS
In addition to Mr. Duroc-Danner, who is also a director of the Company, the
following persons are executive officers of the Company, each of whom serves at
the discretion of the Board of Directors:
<TABLE>
<CAPTION>
NAME POSITION AGE
---- -------- ---
<S> <C> <C>
John C. Coble..................... Executive Vice President and President of Grant Prideco 54
division
Ghazi J. Hashem................... Senior Vice President, Technical Operations 62
James G. Kiley.................... Vice President and Chief Financial Officer, Treasurer and 40
Secretary
Frances R. Powell................. Vice President-Accounting and Controller 42
Robert F. Stiles.................. Vice President and President of EVI Oil Tools division 39
</TABLE>
John C. Coble joined the Company in July 1981 and was elected Executive
Vice President of the Company in March 1997. Mr. Coble has served as President
of the Company's Grant Prideco tubular products division since October 1995.
From December 1991 to October 1995, he served as Chief Operating Officer of the
Company.
Ghazi J. Hashem was elected Senior Vice President, Technical Operations of
the Company in May 1994 and Vice President, Technical Operations in November
1992. Mr. Hashem previously served as Chairman of the Board of Grant Prideco,
Inc. ("Grant Prideco"), a wholly-owned subsidiary of the Company, from May 1992
to November 1992 and as President of Grant Prideco from April 1984 to May 1992.
James G. Kiley joined the Company in May 1994 and was elected Vice
President and Chief Financial Officer of the Company in May 1996 and Treasurer
and Secretary in May 1994. Mr. Kiley served as Vice
6
<PAGE> 10
President-Finance of the Company from May 1994 until May 1996. From April 1991
to April 1994, Mr. Kiley served as Treasurer of Baroid Corporation, a provider
of oilfield services. Prior to his position at Baroid, Mr. Kiley held various
positions, including Assistant Treasurer at NL Industries, Inc., a manufacturer
of titanium dioxide pigments and specialty chemicals.
Frances R. Powell was elected Vice President-Accounting of the Company in
May 1994, Controller in November 1991 and has been employed by the Company since
1990. Ms. Powell was employed with GulfMark from 1986 to 1990, where she served
as Controller from 1988 to 1990.
Robert F. Stiles joined the Company in October 1992 and was elected a Vice
President of the Company in March 1997. Mr. Stiles has been President of the
Company's EVI Oil Tools artificial lift and production equipment division since
January 1996. Prior to that time, Mr. Stiles served as President of Production
Oil Tools, Inc., a wholly owned subsidiary of the Company included in the EVI
Oil Tools division, from November 1993 to December 1995 and as Vice
President -- Manufacturing of Grant Prideco from October 1992 to November 1993.
From August 1991 to October 1992, Mr. Stiles served as Vice
President -- Research and Engineering of Baker Oil Tools, Inc., a manufacturer
of oilfield products.
PROPOSAL NO. 2: PROPOSAL TO AMEND THE RESTATED CERTIFICATE OF
INCORPORATION
CHANGE NAME OF THE COMPANY TO EVI, INC.
The Board of Directors has unanimously recommended the adoption of an
amendment to the Company's Restated Certificate of Incorporation that will
change the name of the Company from "Energy Ventures, Inc." to "EVI, Inc."
Beginning in 1990, the Company adopted the logo "EVI" and utilized this
logo in connection with its operations and the operations of its various
subsidiaries, including a subsidiary named EVI, Inc. Since that time, the name
EVI has become synonymous with Energy Ventures, Inc. and is in fact more
recognizable to the market than the name Energy Ventures. In addition, many of
the Company's subsidiaries are currently doing business utilizing the name EVI
or a derivation thereof. In recognition of the Company's historical and
continued use of the name EVI, the Company is proposing to change its name to
EVI, Inc.
The change of the Company's name will be effected through an amendment to
Article 1 of the Company's Restated Certificate of Incorporation. As amended,
such paragraph would read in its entirety as follows:
"1. The name of the corporation is EVI, Inc."
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required for approval of the proposed amendment to the
Company's Restated Certificate of Incorporation. Abstentions and broker
non-votes will not be treated as either a vote for or against the proposal.
However, because the proposal requires the affirmative vote of a majority of the
outstanding shares, abstentions and broker non-votes will have the same effect
as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO CHANGE THE
NAME OF THE COMPANY TO EVI, INC.
PROPOSAL NO. 3: PROPOSAL TO EFFECT A TWO-FOR-ONE STOCK SPLIT THROUGH A SHARE
DIVIDEND AND A RELATED AMENDMENT TO THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved a two-for-one stock split
of the Common Stock. The stock split will be effected through a stock dividend
that would be paid following the effectiveness of a proposed amendment to the
Company's Restated Certificate of Incorporation that will increase the
authorized shares of Common Stock from 40,000,000 shares to 80,000,000 shares.
Subject to the approval of this Proposal by the stockholders, the Board has
authorized the issuance to stockholders of record on May 12,
7
<PAGE> 11
1997, one additional share of Common Stock as a dividend on each issued and
outstanding share of Common Stock. The Board of Directors believes that the
stock split in the form of a stock dividend is in the best interests of the
stockholders. The stock split is intended to place the market price of the
Common Stock in a range more attractive to a wider range of investors,
particularly individuals, and may result in a broader market for the stock and
more widespread ownership of the Common Stock.
Of the 40,000,000 shares of Common Stock currently authorized, at the
Record Date there were shares of Common Stock outstanding and an
aggregate of shares of Common Stock reserved for issuance pursuant to
the Company's 1981 Employee Stock Option Plan, 1992 Employee Stock Option Plan,
Non-Employee Director Plan and restricted stock plan for foreign key employees.
Of the outstanding shares of Common Stock, shares are currently held
by an independent trustee of a "Rabbi Trust" established by the Company for the
Company's Executive Deferred Compensation Plan.
The increase in the authorized number of shares of Common Stock will be
effected through an amendment to the first paragraph of Article 4 of the
Company's Restated Certificate of Incorporation. As amended, such paragraph
would read as follows:
"4. The total number of shares of stock of all classes which the
Corporation has authority to issue is Eighty-Three Million (83,000,000)
shares of which Eighty Million (80,000,000) shares shall be Common Stock,
with a par value of one dollar ($1.00) per share ("Common Stock"), and
Three Million (3,000,000) shares shall be Preferred Stock, with a par value
of one dollar ($1.00) per share ("Preferred Stock")."
Following the adoption of the amendment to the Company's Restated
Certificate of Incorporation, the Company intends to effect a two-for-one stock
split in the form of a stock dividend and a transfer of $1 for each additional
share of Common Stock issued, or approximately $ , will be made from
the Company's additional paid-in capital account to its Common Stock account as
of May 12, 1997, the date on which stockholders of record will be entitled to
the additional shares, so that the additional shares to be issued will be fully
paid.
Following the increase of capital in the Common Stock account becoming
effective, certificates representing the additional shares will be distributed
by the Company to stockholders of record as of May 12, 1997, without any further
action by the stockholders.
The Company will list on the New York Stock Exchange the additional shares
of Common Stock to be issued. As a result of the proposed stock split, brokerage
commissions and transfer taxes on any subsequent trades of the stock may
increase.
In the opinion of counsel for the Company, the adoption of the proposed
amendment and the issuance of the additional shares in connection with the stock
split will result in no gain or loss or any other form of taxable income for
United States federal income tax purposes. The laws of jurisdictions other than
the United States may impose income taxes on the issuance of the additional
shares in connection with the stock split, and stockholders subject to those
laws are urged to consult their tax advisors.
Other than the stock split described above, the Company does not have any
current plans, proposals or understandings that would require the use of the
additional shares of Common Stock to be authorized. The Company, however,
anticipates that some portion of the additional shares would be utilized by the
Company in the future for acquisitions and stock-based employee benefit plans,
as well as for public offerings of Common Stock or securities convertible or
exchangeable into shares of Common Stock. Unless required by law, regulatory
authorities or applicable rules of the New York Stock Exchange, it is not
anticipated that any future authorization by a vote of stockholders will be
sought for the issuance of any shares of Common Stock. Stockholders of the
Company do not have any preemptive rights to purchase additional shares of
Common Stock, whether now or hereafter authorized.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required for approval of the proposed amendment to the
Company's Restated Certificate of Incorporation. Abstentions and broker
non-votes will not be treated as either a vote for or against the proposal.
However, because the
8
<PAGE> 12
proposal requires the affirmative vote of a majority of the outstanding shares,
abstentions and broker non-votes will have the same effect as a vote against the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
PROPOSED STOCK SPLIT AND RELATED AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF THE
COMPANY.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors and the Compensation Committee of the Board of
Directors of the Company (the "Committee") is pleased to present this report on
the compensation policies of the Company for its executive officers. This report
sets forth the major components of executive compensation and the basis by which
1996 compensation determinations were made by the Board of Directors and the
Committee with respect to the executive officers of the Company, including the
executive officers who are named in the compensation tables.
COMPENSATION POLICY AND GUIDELINES
The Company's compensation policy and practices are intended to provide a
competitive compensation package designed to attract and retain key executive
officers and to offer compensation programs that align executive remuneration
levels both with the interests of stockholders and with overall Company
performance. The Company's programs stress stock based compensation as a means
of providing incentives to executive officers to achieve growth in value of the
Company's stock. In this regard, the Company's executive compensation program
includes a combination of reasonable base salaries and various long and
short-term incentive programs linked to the financial and stock performance of
the Company. The Committee's decisions take into account the cyclical nature of
the industry and the Company's progress toward achieving strategic objectives.
COMPENSATION PROGRAM COMPONENTS
The compensation programs of the Company are generally administered by or
under the direction of the Committee and are reviewed on an annual basis to
ensure that remuneration levels and benefits are competitive and reasonable in
light of the overall performance of the Company. Stock based compensation
decisions for the Company's executive officers, however, are approved by the
full Board of Directors of the Company following recommendations by the
Committee. The Committee reviews and recommends the specific base and bonus
compensation of the Company's President and Chief Executive Officer (the
"Principal Executive"). The Committee has delegated to the Company's Chief
Executive Officer the authority to review and adjust the base and cash bonus
compensation for the Company's other executive officers. Decisions with regard
to the granting of stock options and other long-term incentive plans are made by
the Board after consideration of the Company's results and discussion with and
recommendations from the Company's Chief Executive Officer as to the executive
officers under his supervision. The particular elements of the compensation
programs for the Principal Executive and other executive officers are explained
in more detail below.
Base Salary -- Base salary levels are primarily determined by comparisons
with companies in the same industry and of similar size and complexity as the
Company, including a number of companies in the Dow Jones Oilfield Equipment and
Services Index in the performance graph set forth herein. Salary levels are
based on individual performance and market comparisons. Adjustments were made
during 1996 to the compensation of two of the Company's three other executive
officers based on various factors, including their individual scope of
responsibility, tenure, and overall performance. The Committee believes that
base salary levels for the Company's executive officers are competitive within a
range that is considered to be reasonable.
Annual Performance Compensation -- Annual performance compensation is
provided to the Company's executive officers in the form of cash and non-cash
bonuses relating to financial and operational achievements. The amount and form
of such bonuses is determined by the Committee in the case of the Principal
Executive and the Company's Chief Financial Officer and by the Chief Executive
Officer in the case of the Company's
9
<PAGE> 13
other executive officers, subject to approval of the Board of Directors as to
grants of stock options or other non-cash bonuses. The decision to award an
annual bonus is based primarily upon a subjective analysis of the executive
officer's job performance and the specific accomplishments of the executive
officer during the preceding twelve month period after giving consideration to
other compensation received by the officer. Although the financial results of
the Company are expressly considered in connection with the decision to award an
annual bonus, no specific thresholds relating to financial performance criteria
are established. Rather, the decision to grant an annual bonus is based upon the
financial results of the Company in light of its internally projected results
and the results of its peers, market conditions and operational achievements
that are expected to affect earnings in the future. The decision making process
for the granting of bonuses has typically occurred in May of each year following
the annual meeting of stockholders and involves the consideration of the prior
year's results as well as achievements and results through such time. However,
various bonuses were paid to the Company's executive officers in the first
quarter of 1997 in recognition of those officers assistance in achieving the
Company's growth in 1996, the successful disposition by the Company of its
Mallard Bay Drilling division in November 1996 and contributing to the Company's
successful stock offering in 1996 and other factors. Other bonuses paid in 1996
were paid to the Company's executive officers based on the Company's results in
1995 and the first part of 1996. The decisions on the amounts of such bonuses
were based on subjective factors.
Deferred Compensation Plan -- The Company maintains an executive deferred
compensation plan that provides the Company's key employees with long-term
incentive compensation through benefits that are directly linked to future
increases in the value of the Common Stock and that may only be realized upon
the employee's retirement, termination or death. Under this plan, eligible
employees receive a tax deferred contribution under the plan equal to 7 1/2% of
their annual compensation through a credit to an account that is converted into
non-monetary units representing the number of shares of Common Stock that the
contributed funds could purchase in the market at the time of the contribution.
In addition, in an effort to provide incentive to the participants to invest in
the equity of the Company a portion of the compensation that they would
otherwise receive from the Company, the participating employees are offered the
opportunity to defer up to 7 1/2% of their compensation to their account under
the plan, in which case the Company will make a matching contribution equal to
the amount of the deferral by the employee. The Principal Executive and other
executive officers have all elected to defer 7 1/2% of their compensation under
the plan. The plan provides for a five year vesting period with respect to the
Company's contributions and the ultimate value of benefits under the plan to the
participant are wholly dependent upon the price of the Common Stock at the time
the employee retires, terminates his employment or dies. The Committee believes
that this plan is an important component of the Company's stock based
compensation program and provides and serves the purpose of aligning
management's interest with those of the Company's stockholders.
Stock Option Program -- The Board of Directors also believes that the use
of stock options provides incentive to its executive officers for working toward
the long-term growth of the Company by providing them with a benefit that will
increase only to the extent that the value of the Common Stock increases.
Accordingly, the Committee from time to time grants to the Company's executive
officers options to purchase shares of Common Stock. The number of shares
granted is determined based on the level and contribution of the employee and
generally takes into account stock ownership and other options held by the
employee. Stock options are generally subject to vesting over a number of years
and have exercise prices equal to the market price of the Common Stock at the
date of grant. The Committee believes that the number of stock options granted
to executive officers is consistent with industry standards and the Company's
objectives to emphasizing stock based compensation at the senior executive
officer level. In 1996, options to purchase a total of 250,000 shares of Common
Stock were granted to two of the Company's executive officers.
DISCUSSION OF 1996 COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
In fixing the compensation of Mr. Duroc-Danner for 1996, the Committee
determined that it would be appropriate to increase Mr. Duroc-Danner's base
compensation from $290,000 to $350,000 and award him a bonus of $100,000 in the
first quarter of 1996 in recognition of his past services to and accomplishments
for the Company. Mr. Duroc-Danner also received a bonus of $500,000 in the first
quarter of 1997 in recognition of
10
<PAGE> 14
his efforts to expand and grow the Company's businesses, his negotiation and
structuring of the Company's disposition of its Mallard Bay Drilling division in
November and his general accomplishments in increasing stockholder value through
revenue and income growth and increases in the market price of the Common Stock.
The increase in Mr. Duroc-Danner's base salary was intended to make his
compensation more competitive with those of similar officers in competing
companies, including a number of companies included in the Dow Jones Oilfield
Equipment and Services Index in the performance graph set forth herein. During
1996, Mr. Duroc-Danner also received options to purchase 200,000 shares of
Common Stock. The number of shares subject to such options was fixed at that
level in order to provide Mr. Duroc-Danner with material incentives to increase
the value of the Company's Common Stock in the future. In reviewing Mr. Duroc-
Danner's compensation for 1996, the Committee sought to reward Mr. Duroc-Danner
for his substantial achievements in bringing growth to the Company as well as
provide incentive for the future through stock option grants. No single factor
was considered determinative in this decision.
COMPENSATION DEDUCTION LIMITATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, currently
imposes a $1 million limitation on the deductibility of certain compensation
paid to the Company's five highest paid executives. Excluded from the limitation
is compensation that is "performance based". For compensation to be performance
based, it must meet certain criteria, including being based on predetermined
objective standards approved by the stockholders of the Company. The Committee
believes that maintaining the discretion to evaluate the performance of the
Company's management is an important part of its responsibilities and benefits
the Company's stockholders. The Committee intends to take into account the
potential application of Section 162(m) with respect to incentive compensation
awards and other compensation decisions made by it in the future.
SUMMARY
The Committee continues to believe that the Company's executive
compensation program is consistent with the compensation programs provided by
other companies which are comparable in size and complexity to the Company and
with which the Company competes, including many of the companies in the Dow
Jones Oilfield Equipment and Services Index in the performance graph set forth
herein. The Committee believes that the Company's compensation program is
necessary to retain the services of officers and employees who are essential to
the continued success and development of the Company and to compensate those
officers and employees for their efforts and achievements. The Committee
believes that compensation paid under the annual performance plan will be
appropriately related to corporate and individual performance, yielding awards
that are reflective of the annual financial and operational results of the
Company. The Committee also believes that the Company's deferred compensation
plan and stock option program provide significant incentives to participants to
enhance stockholder value by providing financial opportunities to them that are
consistent with and dependent upon the returns that are generated on behalf of
the Company's stockholders.
David J. Butters*
Bernard J. Duroc-Danner
Uriel E. Dutton*
Eliot M. Fried
Sheldon S. Gordon
Sheldon B. Lubar*
Robert B. Millard*
Robert A. Rayne
* Member of the Compensation Committee
11
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Butters, Dutton, Lubar and Millard are the current members of the
Compensation Committee of the Board of Directors of the Company. In addition,
the full Board of Directors of the Company currently approves all stock grants,
with Mr. Duroc-Danner, the sole employee director of the Company, abstaining
from voting with respect to such matters. Mr. Duroc-Danner, however, does make
recommendations to the Compensation Committee and the full Board of Directors in
regard to compensation and stock grants for the employees of the Company.
Mr. Dutton, a director of the Company, is a Partner of Fulbright & Jaworski
L.L.P., a law firm that the Company retained during 1996 with respect to various
legal matters and proposes to retain in 1997. Fulbright & Jaworski L.L.P.
received customary compensation in connection with its services to the Company.
Messrs. Butters and Millard, directors of the Company, are employed by
Lehman Brothers. During 1996, Lehman Brothers received usual and customary
compensation for services rendered in connection with (i) a public offering of
3,450,000 shares of the Company's Common Stock and (ii) the Company's
disposition in November 1996 of its Mallard Bay Drilling division.
On December 5, 1996, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with GulfMark pursuant to which the Company is
proposing to acquire GulfMark in a tax free merger for approximately 2.2 million
shares of Common Stock. Under the terms of the Merger Agreement and related
agreements, GulfMark will be contributing its marine transportation services
division to a newly formed entity ("Newco"), which GulfMark will spinoff to its
stockholders prior to the Merger. Following the spinoff, the assets of GulfMark
are expected to consist of approximately 2.2 million shares of Common Stock,
GulfMark's erosion control business and certain corporate and miscellaneous
assets. It is anticipated that GulfMark will have no material debt as of the
date of the consummation of the Merger.
The acquisition of GulfMark is being pursued by the Company for the
following reasons. First, the acquisition is expected to enhance the liquidity
of the Common Stock by placing the Common Stock currently held by GulfMark
directly in the hands of the GulfMark stockholders. Second, the acquisition is
expected to reduce the market overhang created by GulfMark's current ownership
of the Common Stock. Third, the acquisition will allow EVI to acquire GulfMark's
erosion control business, which has a value estimated by the Company's outside
financial advisors of between $3.6 million and $11.5 million, on terms that are
financially attractive to the Company.
As part of the proposed acquisition of GulfMark, the Company will be
indemnified by Newco for all liabilities relating to GulfMark's offshore marine
services business and all historical contingent liabilities relating to other
businesses of GulfMark and its subsidiaries. Newco is also required to indemnify
the Company for any and all tax liabilities that may arise in connection with
the transactions.
GulfMark currently owns 2,235,572 shares of EVI Common Stock and Lehman
Brothers currently owns 1,120,000 shares of Common Stock, which in aggregate
represent approximately 14.6% of the total outstanding shares of Common Stock.
In addition, Lehman Brothers currently owns 1,048,913 shares of GulfMark Common
Stock, representing approximately 31% of the total outstanding shares of
GulfMark Common Stock. Three representatives of Lehman Brothers, David Butters,
Chairman of the Board of Directors of the Company, Robert Millard and Eliot
Fried, are currently members of the Board of Directors of the Company. Messrs.
Butters and Millard are also the Chairman of the Board of Directors and a
director of GulfMark, respectively. Messrs. Butters and Millard also hold 71,400
and 81,400 shares of GulfMark's Common Stock, respectively, and options to
purchase an aggregate of 15,000 shares of GulfMark's Common Stock each.
Following the acquisition by the Company of GulfMark, Lehman Brothers will
hold directly a total of 1,822,247 shares of Common Stock or approximately 7.2%
of the total outstanding shares of Common Stock after the acquisition.
Representatives of Lehman Brothers are expected to continue to remain on the
Board of Directors of the Company following the acquisition. Such
representatives, however, will not be permitted to take any action as members of
the Board of Directors of the Company in respect of any matter relating to the
transactions, including any matter relating to claims for indemnification or
other disputes between the Company and Newco.
12
<PAGE> 16
The terms of the acquisition by the Company of GulfMark were negotiated by
the Special Committee and approved by the full Board of Directors of the Company
following the receipt of a recommendation of the Special Committee and a
fairness opinion from the Company's outside financial advisors. Messrs. Butters,
Fried and Millard abstained from voting and did not participate on behalf of the
Company in the negotiations. Messrs. Butters and Millard, however, did
participate in the negotiations on behalf of GulfMark.
The acquisition by Company of GulfMark is subject to various conditions,
including stockholder approval by both the Company and GulfMark and the receipt
of all required regulatory approvals and the expiration or termination of all
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
A SEPARATE PROXY STATEMENT IS BEING SENT TO THE STOCKHOLDERS OF THE COMPANY
IN CONNECTION WITH THE CONSIDERATION OF THE GULFMARK ACQUISITION. ADDITIONAL
INFORMATION WITH RESPECT TO THE PROPOSED ACQUISITION IS SET FORTH IN THAT PROXY
STATEMENT. STOCKHOLDERS ARE NOT BEING ASKED TO VOTE FOR OR AGAINST THE GULFMARK
ACQUISITION PURSUANT TO THIS PROXY STATEMENT.
EXECUTIVE COMPENSATION
The aggregate compensation paid for the years ended December 31, 1996, 1995
and 1994 to Mr. Duroc-Danner, the Company's Chief Executive Officer, and the
three most highly compensated executive officers of the Company during 1996
whose total annual salary and bonus exceeded $100,000 (hereafter referred to as
the "named executive officers") during the year ended December 31, 1996 was as
follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
SECURITIES
ANNUAL COMPENSATION OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND -------------------- COMPEN- OPTIONS COMPEN-
PRINCIPAL POSITION YEAR SALARY(1) BONUS(1) SATION(2)(3) (SHARES) SATION(4)
------------------ ---- --------- -------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Duroc-Danner......... 1996 $340,000 $100,000 $69,150 200,000 $7,322
President and 1995 280,000 50,000 41,400 25,000 7,192
Chief Executive Officer 1994 256,250 40,000 28,463 25,000 7,007
Ghazi J. Hashem................. 1996 150,000 40,000 25,950 -- 4,025
Senior Vice President, 1995 137,500 -- 13,901 -- 3,966
Technical Operations 1994 132,813 25,000 11,363 -- 2,892
James G. Kiley.................. 1996 183,333 75,000 23,250 50,000 --
Vice President and Chief
Financial 1995 145,000 25,000 10,200 25,000 --
Officer, Treasurer and Secretary 1994 82,031 -- 1,399 -- --
Frances R. Powell............... 1996 148,333 60,000 34,400 -- 3,846
Vice President-Accounting 1995 125,000 25,000 19,665 -- 2,901
and Controller 1994 99,375 20,000 12,069 10,000 2,625
</TABLE>
- ---------------
(1) Salary and bonus compensation include amounts deferred by the named
executive officer pursuant to the Energy Ventures, Inc. Executive Deferred
Compensation Stock Ownership Plan (the "Executive Deferred Plan") described
in Note 2 below. For purposes of the Executive Deferred Plan, the
compensation of a participant will be the participant's total cash
compensation as reported on his or her Form W-2 for the calendar year plus
all amounts deferred under the Executive Deferred Plan and any eligible cash
or deferred arrangement under Section 401(k) of the Internal Revenue Code,
of 1986, as amended. A participant may elect a percentage (not less than 1%
nor more than 7 1/2%) of his or her compensation to be deferred under the
Executive Deferred Plan for the following calendar year. Once an election
has been made as to the percentage to be deferred, the election is
irrevocable for the subsequent Plan year. Bonus compensation is based on the
date when paid because such compensation is not based solely on achievements
for the prior fiscal year. Bonuses are typically paid in May following the
Company's annual meeting. Subsequent to December 31, 1996, the Company paid
bonuses to its executive officers in recognition of services provided by
such officers to the Company during 1996 and the
13
<PAGE> 17
first quarter of 1997. Such bonuses included $500,000, $60,000, $150,000 and
$120,000 for Mr. Duroc-Danner, Mr. Hashem, Mr. Kiley and Ms. Powell,
respectively.
(2) Other Annual Compensation includes (i) the vested portion of the amount
accrued by the Company under the Executive Deferred Plan for the basic
benefit of each participant equal to 7 1/2% of the participant's
compensation for each calendar year, plus (ii) the vested portion of
matching contribution under the Executive Deferred Plan provided by the
Company to each participant who elects to defer a portion of his or her
compensation in an amount equal to 100% of the amount deferred by the
participant. The Company's 7 1/2% accrual under the Executive Deferred Plan
and any matching accruals made with respect to deferrals by participants,
vest generally over a five-year period on the basis of 20% per year for each
year of service by the participant with the Company or its subsidiaries
after the later of January 1, 1992 or the date one became a participant in
the Executive Deferred Plan, subject to 100% vesting upon the participant's
retirement, death or disability while in the employment of the Company or a
subsidiary, except under certain circumstances.
Under the Executive Deferred Plan, the compensation deferred by the employee
and the matching contributions provided by the Company are converted into
non-monetary units equal to the number of whole shares of Common Stock that
could have been purchased by the amounts credited to the account at a market
based price. Distributions are made to participants under the Executive
Deferred Plan following the time the employee retires, terminates his
employment or dies. The amount of the distribution under the Executive
Deferred Plan is based on the number of vested units in the employee's
account at such time multiplied by the market price of the Common Stock at
that time. Distributions under the Executive Deferred Plan may, at the
election of the Company, be made in cash, stock, or combination thereof. It
is the current intention of the Company that all distributions be made in
the form of shares of Common Stock. The obligations of the Company with
respect to the Executive Deferred Plan are unfunded. However, the Company
has established a grantor trust that is subject to the claims of creditors
of the Company to which funds are deposited with an independent trustee that
purchases shares of Common Stock for the Executive Deferred Plan. As of
December 31, 1996, Messrs. Duroc-Danner, Hashem, Kiley and Ms. Powell had
19,456, 7,390, 4,785 and 7,728 units allocated to their respective accounts.
Other Annual Compensation also includes the vested portion of the Company's
matching contribution and any refunds made pursuant to the Company's 401(k)
savings plan ("Savings Plan"). Matching contributions of $3,150 were made by
the Company during 1996 for each of Messrs. Duroc-Danner and Hashem and Ms.
Powell. All full-time employees who have at least six months of service are
eligible to participate. The Savings Plan provides for all participating
employees a 40% non-discretionary matching contribution plus a discretionary
matching contribution in an amount determined by the Company from time to
time. The Company's contributions have a five year vesting based on years of
service. All participating named executive officers are fully vested.
(3) Excludes perquisites and other benefits because the aggregate amount of such
compensation was the lesser of $50,000 or 10% of the total of annual salary
and bonus reported for the named executive officer.
(4) All Other Compensation includes the total premiums paid on a life insurance
policy provided by the Company for the benefit of the named executive
officer.
14
<PAGE> 18
PERFORMANCE GRAPH
The following performance graph sets forth the yearly cumulative return on
the Common Stock compared to the Dow Jones Equity Market Index and the Dow Jones
Oilfield Equipment and Services Index (which consists of Baker Hughes, Inc.,
Dresser Industries, Inc., Halliburton Company, McDermott International, Inc.,
Schlumberger Limited and Western Atlas Inc.) since 1989, the year in which the
Company's operations began to substantially expand. The graph assumes (i) the
reinvestment of dividends, if any, and (ii) the value of the investment in the
Company's Common Stock and each index to have been $100 at December 31, 1991.
COMPARISON OF EIGHT YEAR CUMULATIVE TOTAL RETURN
AMONG ENERGY VENTURES, INC., DOW JONES EQUITY MARKET INDEX AND
OILFIELD EQUIPMENT AND SERVICE INDEX
FISCAL YEAR ENDING DECEMBER 31ST
<TABLE>
<CAPTION>
OILFIELD
EQUIPMENT DOW JONES
MEASUREMENT PERIOD ENERGY VEN- AND SERVICE EQUITY MAR-
(FISCAL YEAR COVERED) TURES, INC. INDEX KET INDEX
<S> <C> <C> <C>
1989 52 147 358
1990 70 160 344
1991 100 100 100
1992 60 99 109
1993 76 110 119
1994 73 100 121
1995 153 143 166
1996 308 211 206
</TABLE>
EMPLOYEE STOCK OPTION PLANS
The Company has two stock option plans for the benefit of its employees,
the 1981 Employee Stock Option Plan (the "1981 Plan") and the 1992 Employee
Stock Option Plan (the "1992 Plan"). There are currently outstanding options to
purchase 100,000 shares of Common Stock under the 1981 Plan and no further
options may be granted under this plan. The 1992 Plan currently provides for the
grant of options to purchase up to 1,000,000 shares of Common Stock to key
employees. These options may be either incentive stock option or nonstatutory
stock options. There are currently 286,000 shares of Common Stock available for
future grants of options under the 1992 Plan. No options may be granted under
the 1992 Plan after March 19, 2002.
The 1981 Plan and 1992 Plan are administered by the Compensation Committee
of the Board of Directors of the Company, which consists of three members of the
Board of Directors who are neither employees of the Company nor eligible to
participate in either the 1981 Plan or the 1992 Plan. Each option granted under
the 1981 Plan and 1992 Plan may be exercised from time to time with respect to
the number of shares of Common Stock as to which it is then exercisable in
accordance with the terms of the 1981 Plan and 1992 Plan, respectively, and an
option agreement setting forth the specific terms thereof.
15
<PAGE> 19
The price at which shares of Common Stock may be purchased upon the
exercise of an option is determined by the Committee at the time the option is
granted. The purchase price per share under the 1981 Plan may not be less than
the greater of (i) 50% of the fair market value as determined by the Committee
of the Common Stock and (ii) the par value of share of Common Stock. The
purchase price per share under the 1992 Plan may not be less than the fair
market value of the shares of Common Stock on the date the option is granted.
The following table shows, as to the named executive officers, the options
granted pursuant to the 1992 Plan during the year ended December 31, 1996:
OPTIONS GRANTED IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS GRANTED EMPLOYEES IN EXERCISE PRICE EXPIRATION PRESENT
NAME (SHARES) 1995 (PER SHARE) DATE VALUE(1)
---- --------------- ------------ -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Bernard J. Duroc-Danner........ 200,000(2) 80% $26.125 3/25/2006 $
Ghazi J. Hashem................ -- -- -- -- --
James G. Kiley................. 50,000(2) 20% 26.125 3/25/2006
Frances R. Powell.............. -- -- -- -- --
</TABLE>
- ---------------
(1) Based upon Black-Scholes option valuation model. The calculation assumes
volatility of 48%, a risk free rate of 6.6%, a ten year option term, and
option grants at $26.125 per share. The actual value, if any, which may be
realized with respect to any option will depend on the amount, if any, by
which the stock price exceeds the exercise price on the date the option is
exercised. Thus, such valuation may not be a reliable indication as to value
and there is no assurance the value realized will be at or near the value
estimated by the Black-Scholes model.
(2) Options become fully exercisable on March 26, 2000.
The following table shows, as to the named executive officers, the
aggregate option exercises during 1996 and the values of unexercised options as
of December 31, 1996:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND DECEMBER 31, 1996 OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS
AT DECEMBER 31, 1996 VALUE OF UNEXERCISED
SHARES --------------------------- IN-THE-MONEY OPTIONS
ACQUIRED ON AT DECEMBER 31, 1996(1)
EXERCISE VALUE EXERCISABLE UNEXERCISABLE ---------------------------
NAME (NUMBER) REALIZED (SHARES) (SHARES) EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Duroc-Danner....... -- N/A 321,666 228,334 $12,126,850 $5,941,900
Ghazi J. Hashem............... -- N/A -- -- -- --
James G. Kiley................ -- N/A 5,000 70,000 170,625 1,920,000
Frances R. Powell............. -- N/A 6,666 3,334 247,475 123,775
</TABLE>
- ---------------
(1) Value based on difference in market value of Common Stock on December 31,
1996, and exercise price. The actual value, if any, of the unexercised
options will be dependent upon the market price of the Common Stock at the
time of exercise. The value of unexercisable options has not been discounted
to reflect present value.
16
<PAGE> 20
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants, served as
the Company's auditors for the fiscal year ending December 31, 1996, and has
served as the Company's auditors since its inception in 1972. A representative
of Arthur Andersen LLP will be present at the Annual Meeting to respond to
appropriate questions and will be afforded an opportunity to make a statement if
he or she so desires.
PROPOSALS BY STOCKHOLDERS
Any stockholder wishing to present a proposal for consideration at the next
Annual Meeting of Stockholders, anticipated to be held in May 1998, must submit
the proposal in sufficient time so that it may be received by the Company at its
principal executive offices at the address set forth on the cover of this Proxy
Statement on or before December 8, 1997, in order to be included in the proxy
statement and form of proxy relating to that meeting. Such proposal must also
comply with the requirements as to form and substance established by applicable
laws and regulations in order to be included in the proxy statement.
OTHER BUSINESS
The Company's management knows of no other business that will be brought
before the meeting. If, however, any other matters are properly presented, it is
the intention of the persons named in the accompanying form of proxy to vote the
shares covered thereby as in their discretion they may deem advisable.
By Order of the Board of Directors
/s/ JAMES G. KILEY
James G. Kiley, Corporate Secretary
Houston, Texas
April 4, 1997
17
<PAGE> 21
ENERGY VENTURES, INC.
PROXY FOR ANNUAL MEETING
May 6, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Energy Ventures, Inc. (the "Company")
hereby appoints BERNARD J. DUROC-DANNER and JAMES G. KILEY as Proxies, each
with power to act without the other and with full power of substitution, for the
undersigned to vote all shares of Common Stock of the Company of the
undersigned at the Annual Meeting of Stockholders of the Company to be held on
May 6, 1997, or at any adjournment(s) thereof, on the following matters more
particularly described in the Proxy Statement dated April 4, 1997.
(Continued and to be signed on other side)
<PAGE> 22
/X/ Please mark your
votes as in this
example.
FOR All nominees listed WITHHOLD
at right (except as marked All Nominees
to the contrary below) listed at right
1. ELECTION OF / / / /
THE FOLLOWING
NOMINEES, AS
SET FORTH IN
THE PROXY STATEMENT:
Nominees: DAVID J. BUTTERS
BERNARD J. DUROC-DANNER
URIEL E. DUTTON
ELIOT M. FRIED
SHELDON S. GORDON
SHELDON B. LUBAR
ROBERT B. MILLARD
ROBERT A. RAYNE
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
__________________________________________________________
FOR AGAINST ABSTAIN
2. Proposal to amend the Company's Restated / / / / / /
Certificate of Incorporation to change the
Company's name to "EVI, Inc."
3. Proposal to effect a two-for-one stock split / / / / / /
and related amendment to the Company's
Restated Certificate of Incorporation to
increase the number of authorized shares of
the Company's Common Stock from 40,000,000
shares to 80,000,000 shares.
4. In their disrection, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL OF
THE NOMINEES LISTED AT LEFT AND FOR APPROVAL OF PROPOSALS 2 AND 3.
Receipt is hereby acknowledged of the Notice of Annual Meeting of Stockholders
and Proxy Statement, each dated April 4, 1997, and the Annual Report of Energy
Ventures, Inc. for the year ended December 31, 1996.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
SIGNATURE:__________________________________________ Dated:_____________, 1997
SIGNATURE:__________________________________________ Dated:_____________, 1997
(SIGNATURE IF HELD JOINTLY)
(NOTE: Please sign as your name appears hereon. Executors, administrators,
trustees, etc. should so indicate when signing, giving full title as
such. If signer is a corporation, execute in full corporate name by
authorized officer. If shares are held in the name of two or more
persons, all should sign.)
