<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
WEATHERFORD INTERNATIONAL, 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
[WEATHERFORD LOGO]
April 28, 2000
Dear Weatherford Stockholder:
You are cordially invited to join us at the 2000 Annual Meeting of
Stockholders of Weatherford International, Inc. to be held at 9:00 a.m. on June
9th in Houston, Texas. The Annual Meeting will be held at The St. Regis Hotel
located at 1919 Briar Oaks.
This year you will be asked to vote in favor of one proposal for the
election of eight directors.
Whether or not you plan to attend the Annual Meeting, we strongly encourage
you to vote your shares on the enclosed proxy card and return your signed proxy
card at your earliest convenience.
Thank you for your cooperation.
Sincerely,
[DUROC-DANNER SIGNATURE]
Bernard J. Duroc-Danner
Chairman of the Board, President and
Chief Executive Officer
- --------------------------------------------------------------------------------
Weatherford International,
Inc. www.weatherford.com
515 Post Oak Blvd., Suite 600
Houston, Texas 77027
<PAGE> 3
[WEATHERFORD LOGO]
WEATHERFORD INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: Friday, June 9, 2000
TIME: 9:00 a.m. (Houston time)
PLACE: The St. Regis Hotel
1919 Briar Oaks
Houston, Texas 77027
MATTERS TO BE VOTED ON:
1. Election of eight directors to hold office for a one-year term; and
2. Any other matters that may properly come before the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE ELECTION
OF THE EIGHT NOMINEES FOR DIRECTOR.
Your Board of Directors has set April 18, 2000, as the record date for the
Annual Meeting. Only those stockholders who are holders of record of our common
stock at the close of business on April 18, 2000, will be entitled to vote at
the Annual Meeting. A complete list of these stockholders will be available for
examination at the Annual Meeting and at our offices at 515 Post Oak Blvd.,
Suite 600, Houston, Texas for a period of ten days prior to the Annual Meeting.
You are cordially invited to join us at the Annual Meeting. However, to
ensure your representation at the Annual Meeting, we request that you return
your signed proxy card at your earliest convenience, whether or not you plan to
attend the Annual Meeting. Your proxy will be returned to you if you are present
at the Annual Meeting and request us to return your proxy card.
By Order of the Board of Directors
/s/ CURTIS W. HUFF
Curtis W. Huff
Corporate Secretary
Houston, Texas
April 28, 2000
<PAGE> 4
WEATHERFORD INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING: Date: Friday, June 9, 2000
Time: 9:00 a.m. (Houston time)
Place: The St. Regis Hotel
1919 Briar Oaks
Houston, Texas 77027
AGENDA: One proposal, numbered as Item 1 on the proxy card, for the
election of eight nominees as directors of the Company.
WHO CAN VOTE: All holders of record of our common stock at the close of
business on April 18, 2000, are entitled to vote. Holders of
the common stock are entitled to one vote per share at the
Annual Meeting. The common stock is the only class of our
securities that is entitled to vote at the Annual Meeting.
PROXIES SOLICITED BY:
Your vote and proxy is being solicited by our Board of
Directors for use at the Annual Meeting. This Proxy
Statement and enclosed proxy card is being sent on behalf of
our Board of Directors to all stockholders beginning on May
1, 2000. By completing, signing and returning your proxy
card, you will authorize the persons named on the proxy card
to vote your shares according to your instructions.
PROXIES: If you do not indicate how you wish to vote for one or more
of the nominees for director, the persons named on the proxy
card will vote FOR election of all the nominees for director
(Proposal 1). If you "withhold" your vote for any of the
nominees, this will be counted as a vote AGAINST that
nominee.
REVOKING YOUR PROXY:You can revoke your proxy by:
- writing to the Corporate Secretary (at 515 Post Oak Blvd.,
Suite 600, Houston, Texas 77027) before the Annual
Meeting;
- voting again via mail; or
- casting your vote in person at the Annual Meeting.
Your last vote will be the vote that is counted.
QUORUM: As of April 18th, there were 119,161,659 shares of common
stock issued and outstanding. The holders of the common
stock have the right to cast one vote for each share held by
them. The presence, in person or by proxy, of stockholders
entitled to cast at least 59,580,831 votes constitutes a
quorum for adopting the proposals at the Annual Meeting. If
you have properly signed and returned your proxy card by
mail, you will be considered part of the quorum, and the
persons named on the proxy card will vote your shares as you
have instructed them. If a broker holding your shares in
"street" name indicates to us on a proxy card that the
broker lacks discretionary authority to vote your shares, we
will not consider your shares as present or entitled to vote
for any purpose.
MULTIPLE PROXY CARDS:
If you receive multiple proxy cards, this indicates that
your shares are held in more than one account, such as two
brokerage accounts, and are registered in different names.
You should vote each of the proxy cards to ensure that all
of your shares are voted.
<PAGE> 5
COST OF PROXY
SOLICITATION: We have retained Georgeson Shareholder Communications Inc.
to solicit proxies from our stockholders at an estimated fee
of $6,500, plus expenses. This fee does not include the
costs of preparing, printing, assembling, delivering and
mailing the Proxy Statement. Some of our directors, officers
and employees may also solicit proxies personally, without
any additional compensation, by telephone or mail. Proxy
materials also will be furnished without cost to brokers and
other nominees to forward to the beneficial owners of shares
held in their names.
QUESTIONS: You may call Georgeson Shareholder Communications Inc. at
1-888-262-6283 if you have any questions.
PLEASE VOTE -- YOUR VOTE IS IMPORTANT
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BOARD OF DIRECTORS
ELECTION OF DIRECTORS
ITEM NO. 1 ON THE PROXY CARD
Eight directors are to be elected at the Annual Meeting. Each director
elected will hold office until the 2001 Annual Meeting. All of the nominees for
director are now serving as directors. The nominees for election as director
are:
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
- ---- --- --------------
<S> <C> <C>
Bernard J. Duroc-Danner........................... 46 1988
Philip Burguieres................................. 56 1998
David J. Butters.................................. 59 1984
Sheldon B. Lubar.................................. 70 1995
William E. Macaulay............................... 54 1998
Robert B. Millard................................. 49 1989
Robert K. Moses, Jr. ............................. 60 1998
Robert A. Rayne................................... 51 1987
</TABLE>
The persons named on the proxy card will vote for all of the nominees for
director listed unless you withhold authority to vote for one or more of the
nominees. 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 nominee and will not affect the
outcome of the election of directors.
All of our nominees have consented to serve as directors. Our Board of
Directors has no reason to believe that any of the nominees will be unable to
act as a director. However, if any director is unable to stand for re-election,
the Board will designate a substitute. If a substitute nominee is named, the
persons named on the proxy card will vote for the election of the substitute
nominee.
DIRECTOR BIOGRAPHIES
BERNARD J. DUROC-DANNER joined the Company in May 1987 to initiate the
start-up of our oilfield service and equipment business through EVI, Inc. He was
elected EVI's President in January 1990 and Chief Executive Officer in May 1990.
In connection with the merger of EVI, Inc. with Weatherford Enterra, Inc.
("Weatherford Enterra") on May 27, 1998, Mr. Duroc-Danner was elected as our
Chairman of the Board, President and Chief Executive Officer. Mr. Duroc-Danner
holds a Ph.D. in economics from Wharton (University of Pennsylvania). In prior
years, Mr. Duroc-Danner held positions at Arthur D. Little and Mobil Oil Inc.
Mr. Duroc-Danner is a director of Parker Drilling Company (an oil and gas
drilling company) and Cal-Dive International, Inc. (a company engaged in subsea
services in the Gulf of Mexico). Mr. Duroc-Danner is also a director of Grant
Prideco, Inc. (a provider of drill pipe and other drill stem products). Grant
Prideco was our wholly owned subsidiary until April 14, 2000, when we
distributed all of the outstanding shares of Grant Prideco to our stockholders.
PHILIP BURGUIERES is Chief Executive Officer of EMC Holdings, LLC, a
private energy investment firm he started in 1999. He is also Vice Chairman of
Houston NFL Holdings (a National League Football team in Houston). He was
elected to the Board as Chairman Emeritus in May 1998. Mr. Burguieres served as
a director of Weatherford Enterra from April 1991 until May 1998, and as
Chairman of the Board of Weatherford Enterra from December 1992 until May 1998.
From April 1991 to October 1996, he also served as President and Chief Executive
Officer of Weatherford Enterra. Mr. Burguieres serves as a director of Denali
Incorporated (a provider of products and services for handling critical fluids),
McDermott International, Inc. (a company engaged in the fabrication of oilfield
equipment), Chase Bank of Texas, N.A. (a national banking organization) and
Newfield Exploration Company (an independent oil and gas producer).
DAVID J. BUTTERS is a Managing Director of Lehman Brothers, Inc., an
investment banking company, where he has been employed for more than the past
five years. Mr. Butters is currently Chairman of the Board of Directors of
GulfMark Offshore, Inc. (a provider of marine support and transportation
services to
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<PAGE> 7
companies involved in the exploration and production of oil and natural gas), a
director of Anangel-American Shipholdings, Ltd. (an international ship owning
and operating company) and a member of the Board of Advisors of Energy
International, N.V. (an investment fund).
SHELDON B. LUBAR has been the Chairman of Lubar & Co., a private investment
and management company, for more than the past five years. Until February 1999,
Mr. Lubar served as Chairman and Chief Executive Officer of Christiana
Companies, Inc., a diversified holding company that held shares of our common
stock and owned a company that was engaged in refrigerated and dry warehousing,
transportation and logistic services. We acquired Christiana in February 1999
and control of its warehousing, transportation and logistics business was sold
to C2, Inc. For more information about our acquisition of Christiana, see
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION on page 14. Mr.
Lubar is a director of C2, Inc. (a company engaged in refrigerated warehousing
and logistics and the manufacture of refrigerated display cases), Massachusetts
Mutual Life Insurance Company (a financial services company), Firstar
Corporation (a commercial banking company), MGIC Investment Corporation (a
mortgage insurance company), Jefferies & Company, Inc. (an investment banking
company) and Grant Prideco. Mr. Lubar was initially appointed to the Board of
Directors in connection with our acquisition of Prideco, Inc. in June 1995.
WILLIAM E. MACAULAY has been the Chief Executive Officer of First Reserve
Corporation, a Connecticut-based corporation that manages various investment
company funds, for more than the past five years and has served as Chairman of
First Reserve Corporation since June 1998. Mr. Macaulay served as a director of
Weatherford Enterra from October 1995 to May 1998. He is a director of Maverick
Tube Corporation (a manufacturer of oilfield tubulars, line pipe and structural
steel), National-Oilwell, Inc. (a company engaged in the design, manufacture and
sale of machinery and equipment and the distribution of products used in oil and
gas drilling production) and Grant Prideco.
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 Offshore, Inc. and L-3 Communications Corporation (a manufacturer of
electronic communications equipment principally for the defense industry).
ROBERT K. MOSES, JR. has been a private investor, principally in the oil
and gas exploration and oilfield services business in Houston, Texas, for more
than the past five years. He served as Chairman of the Weatherford Enterra Board
from May 1989 to December 1992. Mr. Moses is also a director of Grant Prideco.
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. Mr. Rayne is also a director of Grant Prideco.
NOMINATION AGREEMENT
In connection with the Weatherford Enterra merger, each of Messrs.
Burguieres, Macaulay and Moses were elected to the Board of Directors. Under the
terms of the merger, we agreed to submit each of Messrs. Burguieres, Macaulay
and Moses as nominees for re-election to the Board of Directors at this Annual
Meeting, subject to the fiduciary duties of our Board of Directors and the
willingness of these individuals to serve as directors.
COMMITTEES AND MEETINGS OF THE BOARD
COMMITTEES
The Board of Directors has created the following committees:
- Audit
- Compensation
- Executive
The Board of Directors does not have a standing Nominating Committee.
4
<PAGE> 8
NUMBER OF MEETINGS
During 1999, the Board of Directors met eight times, the Compensation
Committee met three times and the Audit Committee met four times. The Executive
Committee did not meet. All of the directors attended at least 75% of all Board
of Directors and Committee meetings during 1999.
AUDIT COMMITTEE
Messrs. Butters (Chair), Lubar and Rayne are the current members of the
Audit Committee. The primary functions of the Audit Committee are:
- recommending to the Board the selection and discharge of our independent
auditors;
- reviewing the professional services performed by the auditors, the plan
and results of their auditing engagement;
- reviewing the amount of fees charged for audit services by the auditors;
and
- evaluating our system of internal accounting controls.
COMPENSATION COMMITTEE
Messrs. Lubar, Moses (Chair) and Rayne are the current members of the
Compensation Committee. The primary functions of the Compensation Committee are:
- recommending to the Board the compensation to be paid to the directors,
officers and key employees; and
- subject to review and approval of certain matters by the full Board of
Directors, administering the compensation plans for the executive
officers.
EXECUTIVE COMMITTEE
Messrs. Duroc-Danner (Chair), Burguieres, Macaulay and Millard are the
current members of the Executive Committee. The primary function of the
Executive Committee is to act on behalf of the Board of Directors between
regularly scheduled meetings of the Board.
BOARD COMPENSATION
DIRECTORS' FEES
The directors who are not employees are paid the following fees:
- $1,000 for each Board and Committee meeting attended;
- $1,500 for the Committee Chairman for each Committee meeting attended;
and
- $7,000 for each quarter of the year in which the person serves as a
director.
DEFERRAL PLAN FOR OUTSIDE DIRECTORS
Under our Non-employee Director Deferred Compensation Plan, each
non-employee director may elect to defer up to 7.5% of any fees paid by us. The
deferred fees are converted into non-monetary units representing shares of
common stock that could have been purchased with the deferred fees based on the
market price of the common stock at the time of the deferral. If a non-employee
director elects to defer at least 5% of his fees, we will make an additional
contribution to the director's account equal to the sum of (1) 7.5% of the
director's fees plus (2) the amount of fees deferred by the director. Our
directors may generally determine when the funds will be distributed from the
plan. The amount of the distribution will be equal to the number of shares in
the director's account multiplied by the market price of the common stock at the
time of distribution. Distributions are required to be made in shares of our
common stock and Grant
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<PAGE> 9
Prideco common stock. During 1999, we contributed $6,300, $6,450, $5,400, $6,075
and $6,450 to the accounts of Messrs. Butters, Lubar, Macaulay, Moses and Rayne,
respectively, which represented 199, 204, 166, 191 and 204 shares allocated to
their respective accounts.
BURGUIERES EMPLOYMENT AGREEMENT
In June 1998, we entered into an employment agreement with Mr. Burguieres,
which has a term of ten years and provides for an annual salary of $120,000.
Under the terms of his employment agreement, Mr. Burguieres will be employed as
Chairman Emeritus of the Board of Directors. However, we are not obligated to
re-elect Mr. Burguieres as Chairman Emeritus and the Board of Directors is not
required to nominate Mr. Burguieres for re-election as a director upon the
expiration of his current term. If we terminate Mr. Burguieres' employment for
any reason other than for "cause" or as a result of death or disability, Mr.
Burguieres or his estate will be entitled to receive annual salary payments
through the term of the agreement and Mr. Burguieres and his eligible dependents
will continue to receive health and medical benefits. If we terminate his
employment for "cause", Mr. Burguieres will not be entitled to any further
salary payments or health and medical benefits. Under Mr. Burguieres' employment
agreement, "cause" is generally defined as (i) an act of dishonesty which
constitutes a felony or results in personal gain or enrichment at our expense,
(ii) willful and continued failure to substantially perform his duties after
written demand is made by the Board or (iii) Mr. Burguieres' ownership,
management or employment by any business which competes, in our reasonable
judgment, with any business conducted by us.
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<PAGE> 10
STOCK OWNERSHIP
STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
This table shows the number and percentage of shares of common stock
beneficially owned by our directors and executive officers as of April 18, 2000.
Each person has sole voting and investment power for the shares shown below,
unless otherwise noted.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF SHARES
BENEFICIALLY OWNED AS OF APRIL 18, 2000
----------------------------------------------
NUMBER OF RIGHT TO PERCENT OF
NAME SHARES OWNED ACQUIRE(1) OUTSTANDING SHARES
- ---- ------------ ---------- ------------------
<S> <C> <C> <C>
Bernard J. Duroc-Danner............................. 90,412 630,000 *
Philip Burguieres(2)................................ 197,865 0 *
David J. Butters(3)................................. 101,250 10,000 *
Sheldon B. Lubar(4)................................. 646,969 30,000 *
William E. Macaulay(5).............................. 17,933 10,000 *
Robert B. Millard................................... 108,960 10,000 *
Robert K. Moses, Jr.(6)............................. 424,383 10,000 *
Robert A. Rayne(7).................................. 279 20,000 *
John C. Coble(8).................................... 0 80,400 *
Robert F. Stiles(9)................................. 23,274 160,000 *
E. Lee Colley, III(10).............................. 658 0 *
Bruce F. Longaker, Jr. ............................. 2,209 0 *
Gary L. Warren(11).................................. 5,768 2,216 *
Mark E. Hopmann..................................... 0 0 *
Curtis W. Huff(12).................................. 71,000 66,666 *
Jon R. Nicholson(13)................................ 15,577 3,800 *
Donald R. Galletly(14).............................. 5,000 0 *
Randall D. Stilley(15).............................. 36,841 100,000 *
All officers and directors as a group (18
persons).......................................... 1,748,378 1,133,082 2.4
</TABLE>
- ---------------
* Less than 1%.
(1) Shares of common stock that can be acquired through stock options
exercisable through June 18, 2000.
(2) Includes (i) 409 shares held under our Employee Stock Purchase Plan, as to
which he has sole voting and no dispositive power, (ii) 421 shares held
under our 401(k) Savings Plan, as to which he has sole voting and no
dispositive power, (iii) 950 shares held by his wife, over which he has no
voting or dispositive power, and (iv) 475 shares held by his adult son
supported by him, over which Mr. Burguieres has sole voting and dispositive
power. Mr. Burguieres disclaims beneficial ownership of the shares held by
his wife and son.
(3) Includes 14,388 shares held by his wife, over which he has no voting or
dispositive power and as to which he disclaims beneficial ownership. Also
includes 41,160 shares held in trusts for his children, of which he is the
trustee and has voting and dispositive power. Excludes 3,598,832 shares
held by Lehman Brothers, Inc.
(4) Includes 305,115 shares held by Mr. Lubar through a general partnership of
which he is a general partner. Also includes 305,114 shares held by his
wife through the general partnership, over which he has no voting or
dispositive power and as to which he disclaims beneficial ownership, and
27,342 shares held in trusts for his grandchildren through the general
partnership, of which he is the trustee and has voting and dispositive
power.
(5) Includes 6,618 shares held by his wife, over which he has no voting or
dispositive power and as to which he disclaims beneficial ownership.
Includes 3,876 shares held in the name of or in trust for his daughters.
(6) Includes an aggregate of 42,750 shares held in various trusts for Mr.
Moses' family, of which Mr. Moses is the trustee and has sole voting and
dispositive power. Excludes (i) an aggregate of 49,875 shares held
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in various trusts for Mr. Moses' children, (ii) 1,758 shares held in a
trust for Mr. Moses' son and (iii) 593 shares held by Mr. Moses' adult son
supported by him. Mr. Moses has no voting or dispositive power over these
excluded shares. Mr. Moses disclaims beneficial ownership of all of the
above-described shares.
(7) Excludes 540,000 shares beneficially owned by London Merchant Securities
plc, of which Mr. Rayne serves as Executive Director. Mr. Rayne disclaims
beneficial ownership of all of these shares.
(8) Mr. Coble, who is President and Chief Executive Officer of Grant Prideco,
ceased to be an executive officer as of the spinoff of Grant Prideco on
April 14, 2000.
(9) Mr. Stiles ceased to be an executive officer as of January 28, 2000. Does
not reflect an adjustment to be made as a result of the Grant Prideco
spinoff to an option granted in September 1998 to purchase 100,000 shares.
The adjustment will be made to both the exercise price of the option and
the number of shares subject to the option and will be based on the
relationship of the value of a share of our common stock after the spinoff
to the value of a share of our common stock before the spinoff.
(10) Shares are held under our 401(k) Savings Plan. Mr. Colley has sole voting
and no dispositive power over these shares.
(11) Includes 892 shares held under our 401(k) Savings Plan over which he has
sole voting and no dispositive power.
(12) Includes 56,250 restricted shares that vest over a three-year period
through June 2002.
(13) Includes (i) 2,137 restricted shares which are subject to a vesting
schedule, forfeiture risk and other restrictions and (ii) 987 shares held
under our 401(k) Savings Plan over which he has sole voting and no
dispositive over.
(14) Includes 1,000 shares held by his wife.
(15) Mr. Stilley ceased to be an executive officer as of October 1, 1999. Does
not reflect an adjustment to be made as a result of the Grant Prideco
spinoff to an option granted in September 1998 to purchase 100,000 shares.
The adjustment will be made to both the exercise price of the option and
the number of shares subject to the option and will be based on the
relationship of the value of a share of our common stock after the spinoff
to the value of a share of our common stock before the spinoff.
STOCK OWNED BY "BENEFICIAL HOLDERS"
This table shows information for each person known by us to beneficially
own 5% or more of the outstanding shares of common stock as of April 18, 2000.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF PERCENT OF
BENEFICIAL OWNER NUMBER OF SHARES(1) OUTSTANDING SHARES
- ------------------- ------------------- ------------------
<S> <C> <C>
FMR Corp.(2).............................. 12,276,092 10.3
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ---------------
(1) This information is based on information furnished by each stockholder or
contained in filings made with the Securities and Exchange Commission. The
person listed has sole voting and dispositive power for its shares of common
stock, unless otherwise noted.
(2) Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. ("FMR") and an investment adviser, is the beneficial
owner of 10,302,274 shares as a result of acting as investment adviser to
various registered investment companies (the "Funds"). Fidelity Management
Trust Company ("FMTC"), a wholly owned subsidiary of FMR, is the beneficial
owner of 1,973,818 shares as a result of serving as investment manager of
various institutional accounts. Edward C. Johnson 3d, FMR's Chairman and
principal stockholder, FMR, through its control of Fidelity, and the Funds
each has sole power to dispose of the 10,302,274 shares owned by the Funds,
and Mr. Johnson and FMR, through its control of FMTC, each has sole power to
dispose of 1,973,818 shares and sole power to vote or direct the voting of
1,689,218 shares and no power to vote or direct the voting of 284,600 shares
8
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owned by the institutional accounts. The Funds' Board of Trustees has sole
power to vote all shares owned by the Funds. Fidelity carries out the voting
of the Funds' shares under written guidelines established by the Funds'
Board of Trustees. Members of the Edward C. Johnson 3d family are the
predominant owners of Class B shares of common stock of FMR, representing
approximately 49% of the voting power of FMR. Mr. Johnson owns 12.0% and
Abigail P. Johnson, Mr. Johnson's wife and a Director of FMR, owns 24.5% of
the voting stock of FMR. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Through their ownership of voting common stock and the
shareholders' voting agreement, members of the Johnson family may be deemed,
under the Investment Company Act of 1940, to form a controlling group with
respect to FMR. Strategic Advisers, Inc., a wholly owned subsidiary of FMR
and a registered investment adviser, provides investment advisory services
to individuals. It does not have sole power to vote or direct the voting of
shares of certain securities held for clients and has sole dispositive power
over such securities. As such, FMR's beneficial ownership may include shares
beneficially owned through Strategic Advisers, Inc.
EXECUTIVE OFFICERS
In addition to Mr. Duroc-Danner, whose biography is shown on page 3, the
following persons are our executive officers. None of the executive officers or
directors have any family relationships with each other.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Bernard J. Duroc-Danner.............. 46 Chairman of the Board, President and Chief Executive
Officer
Curtis W. Huff....................... 42 Executive Vice President, Chief Financial Officer,
General Counsel and Secretary
E. Lee Colley, III................... 43 Senior Vice President and President -- Artificial
Lift Systems Division
Bruce F. Longaker, Jr. .............. 46 Executive Vice President and President --
Compression Services Division
Gary L. Warren....................... 50 Senior Vice President and President -- Drilling &
Intervention
Services Division
Mark E. Hopmann...................... 42 Senior Vice President and President -- Completion
Services Division
Donald R. Galletly................... 48 Senior Vice President -- Communications and
Investor Relations
Jon R. Nicholson..................... 57 Senior Vice President -- Human Resources
</TABLE>
CURTIS W. HUFF was elected Executive Vice President and Chief Financial
Officer in January 2000 and has served as our General Counsel and Secretary
since May 1998. Prior to that time, Mr. Huff was a partner with the law firm of
Fulbright & Jaworski L.L.P., our counsel, and held that position for more than
five years.
E. LEE COLLEY, III was elected Senior Vice President and
President -- Artificial Lift Systems Division in November 1998. Mr. Colley
joined us in March 1996 and has served in several positions including Vice
President/General Manager of the Artificial Lift Group. Prior to that time, Mr.
Colley worked for over 20 years for Halliburton Company in various
manufacturing, sales and marketing managerial positions.
BRUCE F. LONGAKER, JR. was elected Executive Vice President and
President -- Compression Services Division in January 2000. From April 1999 to
January 2000, Mr. Longaker was Senior Vice President and Chief Financial
Officer. Prior to that time, Mr. Longaker was employed by Camco International,
Inc. for the last 18 years, where he last served as Vice President -- Finance
and Controller since 1992.
GARY L. WARREN was elected Senior Vice President and President -- Drilling
and Intervention Services Division in October 1999. Mr. Warren has been employed
by the Company since 1992 and has served in several positions, including Vice
President -- Europe, West Africa and CIS. Mr. Warren worked for Petco Fishing
and Rental Tool from 1980 to 1992, when it was acquired by Weatherford Enterra.
9
<PAGE> 13
MARK E. HOPMANN joined the Company in November 1998 and was elected Senior
Vice President and President -- Completion Systems Division in October 1999.
From 1980 to October 1998, Mr. Hopmann worked for Baker Oil Tools, a division of
Baker Hughes Incorporated, in various capacities, including Product Line Manager
and Chief Product Engineer.
DONALD R. GALLETLY was elected our Senior Vice President -- Communications
and Investor Relations in January 2000 and served as our Vice
President -- Communications and Investor Relations from June 1998 to January
2000. Prior to that time, he worked for Dresser Industries, Inc. as Vice
President of Communications and Investor Relations from October 1997 to May 1998
and as Vice President of Investor and Public Relations from February 1993 to
October 1997.
JON R. NICHOLSON was elected our Senior Vice President -- Human Resources
in January 2000 and served as our Vice President -- Human Resources from May
1998 to January 2000. Prior to that time, Mr. Nicholson worked for Weatherford
Enterra as Vice President -- Human Resources from October 1995 to May 1998 and
as Director of Human Resources from February 1993 to October 1995.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors and the Compensation Committee of the Board of
Directors is pleased to present this report on the compensation policies for our
executive officers for 1999. This report sets forth the major components of
executive compensation and the basis by which 1999 compensation determinations
were made by the Board of Directors and the Compensation Committee for the
executive officers.
COMPENSATION POLICY AND GUIDELINES
The goal of our compensation policy and practices is to provide a
competitive compensation package designed to attract and retain key executive
officers and to offer compensation programs that align executive remuneration
levels with the interests of stockholders and with the Company's overall
performance. Our compensation programs have historically stressed stock-based
compensation as a means of providing incentives to executive officers to achieve
growth in the value of the common stock. With this objective in mind, our
executive compensation program has included a combination of reasonable base
salaries and various long and short-term incentive programs linked to the
Company's financial and stock performance. In making compensation decisions, the
Compensation Committee's decisions have typically also taken into account the
cyclical nature of the industry and the Company's progress toward achieving
strategic objectives.
COMPENSATION PROGRAM COMPONENTS
Our compensation programs are generally administered by or under the
direction of the Compensation Committee and are reviewed on an annual basis to
ensure that remuneration levels and benefits are competitive and reasonable in
light of the Company's overall performance. Our stock-based compensation
decisions for the executive officers are approved by our full Board of Directors
following recommendations by the Compensation Committee.
The Compensation Committee was charged with reviewing and recommending the
specific base and bonus compensation of the President and Chief Executive
Officer (the "Principal Executive"). The Board of Directors and Compensation
Committee has delegated to Mr. Duroc-Danner, as our Chief Executive Officer, the
authority to review and adjust the base and cash bonus compensation for the
other executive officers. His decisions are reviewed by the Compensation
Committee.
Decisions on 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 Mr. Duroc-Danner 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.
10
<PAGE> 14
Base Salary -- Base salary levels have primarily been determined based on
market factors, including the market for similar executives and the desire by us
to recruit and retain key executive officers. Our analysis has also included
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
Other Oilfield Equipment and Services Index in the performance graph set forth
herein. Salary levels are based on individual skills and performance and market
comparisons. Adjustments made during 1999 to the compensation of various
officers were based on various factors, including their individual scope of
responsibility, tenure, and overall performance.
Annual Performance Compensation -- Annual performance compensation has
historically been provided to the executive officers in the form of cash and
non-cash bonuses relating to financial and operational achievements. The amount
and form of bonuses for 1999 were determined by the Compensation Committee in
the case of Mr. Duroc-Danner and by Mr. Duroc-Danner in the case of the other
executive officers, subject to the review of the Compensation Committee.
The decision to award an annual bonus has historically been 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.
The decision-making process for the granting of bonuses has typically
occurred in February or March of each year and has involved the consideration of
the prior year's results as well as achievements. Various bonuses were paid to
the executive officers in the first quarter of 2000 in recognition of those
officers' assistance in achieving the Company's growth in 1999, including
assistance in completing numerous acquisitions, including the acquisitions of
Dailey International and Petroline Wellsystems Limited, and the Company's
spinoff of Grant Prideco, and other factors. The decisions on the amounts of
such bonuses were based on subjective factors.
We considered financial performance in the bonus determinations, including
whether specific targets for the equity value-added were met during the year.
Given the extreme downturns that occurred in our industry in 1999, the targets
established by the Company for 1999 were not met. We, however, did consider the
individual accomplishments of our executive officers during 1999 in
repositioning the Company for growth during the downturn and concluded cash
bonuses for their efforts were merited. We believe that the bonuses paid were
reasonable in light of the significant work performed by our officers in 1999.
Deferred Compensation Plan -- We maintain an executive deferred
compensation plan that provides our 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 7.5% 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 common
stock a portion of the compensation that they would otherwise receive from the
Company, the participating employees are offered the opportunity to defer up to
7.5% of their compensation to their account under this plan, in which case we
will make a matching contribution equal to the amount of the deferral by the
employee. Mr. Duroc-Danner and other executive officers have all elected to
defer 7.5% of their compensation under this plan. This 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. We believe that this plan is an important
component of the 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 use of stock options is considered to be an
important incentive to our executive officers for working toward the Company's
long-term growth. We believe that options provide our officers with a benefit
that will increase only to the extent that the value of the common stock
increases. Accordingly, we have from time to time granted to the executive
officers options to purchase shares of common stock. The number of shares
granted is determined based on the level and contribution of the officer and has
generally taken into account stock ownership and other options held by the
officer. Stock options are
11
<PAGE> 15
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.
In 1999, options to purchase a total of 265,000 shares of common stock were
granted to the executive officers. These options are subject to three-year
cliff-vesting so that an officer will not be entitled to the options if he
elects to leave. We believe that this type of vesting provides strong incentives
for creating long-term value for the Company.
DISCUSSION OF 1999 COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
In establishing the compensation of Mr. Duroc-Danner for 1999, the
Compensation Committee determined that it would be appropriate to increase Mr.
Duroc-Danner's base compensation from $550,000 to $650,000 and award him a bonus
of $430,000 in the first quarter of 1999 in recognition of his past services to
and accomplishments for the Company. Mr. Duroc-Danner also received a bonus of
$375,000 in the first quarter of 2000 in recognition of his efforts to expand
and grow the Company's businesses and his defining and implementing the
Company's growth strategy in 1999, including our acquisitions of Dailey
International and Petroline Wellsystems and our spinoff of Grant Prideco.
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 Other
Oilfield Equipment and Services Index in the performance graph set forth herein.
During 1999, Mr. Duroc-Danner also received options to purchase 115,000 shares
of common stock. The number of shares subject to the options was fixed at that
level in order to provide Mr. Duroc-Danner with material incentives to increase
the value of the common stock in the future. In reviewing Mr. Duroc-Danner's
compensation for 1999, the Compensation Committee also 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 LIMITATIONS
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 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 Company's stockholders. We believe that
maintaining the discretion to evaluate the performance of our management is an
important part of our responsibilities and benefits the Company's stockholders.
We intend to take into account the potential application of Section 162(m) on
incentive compensation awards and other compensation decisions.
12
<PAGE> 16
SUMMARY
We believe that the executive compensation program followed by us in 1999
was consistent with the compensation programs provided by other companies that
are comparable in size and complexity to the Company and with which the Company
competes, including many of the companies in the Dow Jones Other Oilfield
Equipment and Services Index. We further believe that the 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 Board and
Compensation Committee intend to review the compensation policies on an ongoing
basis to assure that compensation paid appropriately reflects corporate and
individual performance, yielding awards that are reflective of the annual
financial and operational results of the Company. Finally, we believe that the
deferred compensation plan and stock option program provide significant
incentives to our key employees 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.
Philip Burguieres
David J. Butters
Bernard J. Duroc-Danner
Sheldon B. Lubar*
William E. Macaulay
Robert B. Millard
Robert K. Moses, Jr.*
Robert A. Rayne*
* Members of the Compensation Committee
13
<PAGE> 17
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
COMPENSATION DETERMINATIONS
The full Board of Directors currently approves all stock grants, with
Messrs. Duroc-Danner and Burguieres, both employee directors of the Company,
abstaining from voting with respect to these matters. Mr. Duroc-Danner does make
recommendations to the Compensation Committee and the full Board of Directors
for compensation and stock grants to our employees.
OTHER AFFILIATIONS
In February 1999, we completed a tax-free merger with Christiana and C2,
Inc., under which approximately 4.4 million shares of our common stock were
issued to the stockholders of Christiana. Prior to the merger, Christiana
transferred its warehousing, transportation and logistics business to C2. Mr.
Lubar was Chairman and Chief Executive Officer of Christiana and owned
approximately 18.8% of the total outstanding shares of Christiana common stock.
Under the terms of the Christiana merger, Mr. Lubar and members of his family
received a total of approximately 2,322,340 shares of common stock and aggregate
cash consideration of approximately $10,872,000.
14
<PAGE> 18
SUMMARY COMPENSATION TABLE
This table shows the total compensation paid for the years ended December
31, 1999, 1998 and 1997, to Mr. Duroc-Danner and the four most highly
compensated executive officers during 1999 and one former officer who would have
been one of our most highly compensated officers if he had been with us on
December 31, 1999:
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------- ---------------------
AWARDS
OTHER ANNUAL --------------------- ALL OTHER
NAME AND SALARY BONUS COMPENSATION RESTRICTED COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($)(2)(3) STOCK ($) OPTIONS ($)(4)
- ------------------ ---- ------- ------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bernard J. Duroc-Danner........... 1999 550,000 375,000 147,000 -- 115,000 11,808
Chairman of the Board, President 1998 525,000 430,000 183,750 -- 350,000 11,056
and Chief Executive Officer 1997 391,667 700,000 133,750 -- 50,000 9,233
Curtis W. Huff(5)................. 1999 350,000 200,000 31,932 -- -- 1,465
Executive Vice President, 1998 204,167 175,000 875 2,625,000(6) 200,000 562
Chief Financial Officer, 1997 -- -- -- -- -- --
General Counsel and Secretary
E. Lee Colley, III (7)............ 1999 229,327 150,000 37,769 -- -- 2,639
Senior Vice President and 1998 17,308 80,000 2,077 -- 100,000 32
President -- Artificial Lift 1997 -- -- -- -- -- --
Systems
John C. Coble (8)................. 1999 300,000 100,000 67,500 -- -- 10,279
Former Senior Vice 1998 296,108 150,000 103,366 -- 100,000 9,413
President and President -- 1997 250,000 385,800 69,660 -- 40,000 7,241
Drilling Products
Robert F. Stiles (9).............. 1999 275,192 147,740 61,529 -- -- 5,392
Former Senior Vice 1998 260,339 135,000 59,258 -- 100,000 6,399
President and President -- 1997 200,000 134,750 30,997 -- 60,000 5,636
Compression Services
Randall D. Stilley (10)........... 1999 243,461 -- 67,532 -- -- 2,135,251
Former Senior Vice 1998 175,000 200,000 2,294 -- 100,000 1,150
President and President -- 1997 -- -- -- -- -- --
Completion and Oilfield Services
</TABLE>
- ---------------
(1) Salary and bonus compensation include amounts deferred by each executive
officer under our Executive Deferred Compensation Stock Ownership Plan (the
"Executive Deferred Plan") described in Note 2 below. The bonus amounts
were earned in the year in which they are shown in the table but were paid
in the first half of the following year.
(2) Other Annual Compensation includes (i) the vested portion of the amount
contributed by us under the Executive Deferred Plan equal to 7.5% of each
annual officer's compensation for each year, plus (ii) the vested portion
of our matching contribution under the Executive Deferred Plan equal to
100% of the amount deferred by the officer. Each officer can defer up to
7.5% of his total salary and bonus compensation each year. Our
contributions vest over a five-year period on the basis of 20% per year for
each year of service by an officer with us after the later of January 1,
1993 or the date of initial participation in the Executive Deferred Plan.
Under the Executive Deferred Plan, the compensation deferred by each
officer and our contributions are converted into non-monetary units equal
to the number of shares of common stock that could have been purchased by
the amounts deferred and contributed at a market-based price. Distributions
are made under the Executive Deferred Plan after an officer 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
officer's account multiplied by the market price of the common stock at
that time. Distributions under the Executive Deferred Plan are required to
be made in shares of our common stock and Grant Prideco common stock. Our
obligations with respect to the Executive Deferred Plan are unfunded.
However, we have established a grantor trust, that is
15
<PAGE> 19
subject to the claims of our creditors, into which funds are deposited with
an independent trustee that purchases shares of common stock for the
Executive Deferred Plan. As of December 31, 1999, Messrs. Duroc-Danner,
Huff, Colley, Coble and Stiles had 61,982, 5,784, 5,059, 37,975 and 21,923
units allocated to their respective accounts.
(3) Excludes the total amount of all perquisites and other benefits that were
less than the lesser of $50,000 or 10% of the total of annual salary and
bonus of each executive officer.
(4) Represents matching contributions of $1,993 made by us in 1999 under our
401(k) Savings Plan for each of Messrs. Duroc-Danner, Colley, Coble and
Stilley and $875 and $853 for Messrs. Huff and Stiles, respectively, and
life insurance premiums of $9,815, $590, $646, $9,049, $4,539 and $795 paid
by us in 1999 for each of Messrs. Duroc-Danner, Huff, Colley, Coble, Stiles
and Stilley, respectively. Includes severance payment for Mr. Stilley of
$2,132,463 paid in accordance with a change of control agreement.
(5) Mr. Huff joined us in June 1998.
(6) Mr. Huff was granted 75,000 shares of restricted common stock on June 15,
1998, as a sign-on incentive bonus in connection with his employment by us.
The closing market price of the common stock on June 15th was $35 per
share. The restricted shares vest at 25% per year over a four-year period
as long as we employ Mr. Huff. Mr. Huff may vote the restricted shares and
receive dividends. As of December 31, 1999, Mr. Huff held 56,250 shares of
restricted common stock, which had a value of $2,246,485 based on the
closing market price of $39.9375 per share on that date.
(7) Information for Mr. Colley is not presented for periods prior to December
1, 1998 because he was not an executive officer.
(8) Mr. Coble, who is the President and Chief Executive Officer of Grant
Prideco, ceased to be an executive officer upon the spinoff of Grant
Prideco on April 14, 2000.
(9) Mr. Stiles ceased to be an executive officer on January 28, 2000.
(10) Mr. Stilley was an executive officer from May 28, 1998 through October 1,
1999. Information is not presented for periods in which he was not an
executive officer.
OPTIONS GRANTED IN 1999
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE PRICE GRANT DATE
NAME GRANTED 1999(%) (PER SHARE)($) EXPIRATION DATE PRESENT VALUE($)
- ---- --------- ------------ --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Bernard J. Duroc-Danner..... 115,000(1) 5 37 December 2, 2012 2,714,345(2)
</TABLE>
- ---------------
(1) The options become fully exercisable on December 3, 2002.
(2) The calculation assumes volatility of 56%, a risk free rate of 6.3%, a seven
year expected life, no expected dividends and option grants at $37 per
share. The actual value, if any, of any option will depend on the amount, if
any, by which the stock price exceeds the exercise price on the date the
option is exercised. Thus, this valuation may not be a reliable indication
as to value and there is no assurance the value realized will be at or near
the value estimated by the Black-Scholes model.
16
<PAGE> 20
AGGREGATED OPTION EXERCISES IN 1999
AND DECEMBER 31, 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 1999 DECEMBER 31, 1999 ($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Duroc-Danner...... 200,000 6,250,000 630,000 465,000 17,407,235 7,972,188
Curtis W. Huff............... -- -- 33,333 166,667 64,583 2,310,417
E. Lee Colley, III........... -- -- -- 100,000 -- 2,181,250
John C. Coble................ -- -- 80,400 100,000 1,766,345 2,181,250
Robert F. Stiles............. -- -- 60,000 100,000 727,470 2,181,250
Randall D. Stilley........... -- -- 130,400 -- 2,181,250 --
</TABLE>
- ---------------
(1) The value is based on difference in the closing market price of the common
stock on December 31, 1999 ($39.9375), and the exercise price of the
options. The actual value, if any, of the unexercised options will depend on
the market price of the common stock at the time of exercise of the options.
EMPLOYMENT CONTRACTS
We have entered into employment agreements with each of our executive
officers. The employment agreements with Messrs. Duroc-Danner, Huff, Longaker,
Colley, Nicholson and Galletly provide for a term of three years and are
renewable annually. Under the terms of the employment agreements, if we
terminate an executive's employment for any reason other than "cause" or
"disability" or if the executive terminates his employment for "good reason", as
defined in the employment agreements, the executive will be entitled to receive
(1) an amount equal to three times the executive's current base compensation
plus the highest bonus paid to the executive during the three years prior the
year of termination, (2) any accrued salary or bonus (pro-rated to the date of
termination), (3) an amount payable if all retirement plans were vested, (4) the
amount that would have been contributed as our match under the 401(k) Savings
Plan and the Executive Deferred Plan for three years and (5) the executive's car
allowance for three years. Under the employment agreements, "cause" is defined
as the willful and continued failure to perform the executive's job, after
written demand is made by the Chief Executive Officer or the Board, or the
willful engagement in illegal conduct or gross misconduct. Termination by the
executive for "good reason" is generally defined as (1) a material reduction in
title and/or responsibilities of the executive, (2) certain relocations of the
executive or (3) any material reduction in the executive's benefits. In
addition, under such circumstances, all stock options and restricted stock
granted to the executive will automatically vest. The executive also would have
the right to surrender for cash all such options unless to do so would cause a
transaction otherwise eligible for pooling of interests accounting treatment
under Accounting Principles Board Opinion No. 16 to be ineligible for such
treatment, in which case the executive would receive shares of common stock
equal in value to the cash he or she would have received. All health and medical
benefits would also be maintained after termination for a period of three years
provided the executive makes his or her required contribution. Under the Deficit
Reduction Act of 1984, certain severance payments that exceed a certain amount
could subject both us and the executive to adverse U.S. federal income tax
consequences. Each of the employment agreements provides that we would be
required to pay the executive a "gross up payment" to insure that the executive
receives the total benefit intended by the employment agreement. The base
compensation currently payable to Messrs. Duroc-Danner, Huff and Colley under
the employment agreements is $650,000, $400,000 and $250,000, respectively.
In connection with the retention of Mr. Huff, we granted to Mr. Huff a
sign-on incentive bonus of 75,000 shares of restricted common stock and an
option to purchase 100,000 shares of common stock.
The employment agreements with Messrs. Warren and Hopmann provide for a
term of two years and will be extended for an additional two years in the event
of a "change of control", as defined in the employment agreements, of the
Company during the term of the employment agreements. Under the terms of the
employment agreements, if, in the absence of a change of control of the Company,
we terminate an executive's employment for any reason other than "cause" or
"disability", as defined in the employment agreements, the
17
<PAGE> 21
executive will be entitled to continue to receive his then current base
compensation through the end of the term of the employment agreement or for one
year, whichever is greater. If, in the event of a change of control of the
Company, we terminate the executive's employment for any reason other than cause
or disability or if the executive terminates his employment for "good reason",
as defined in the employment agreements, the executive will be entitled to
receive (1) an amount equal to two times the executive's current base
compensation plus the highest bonus paid to the executive during the three years
prior to the year of termination, (2) any accrued salary or bonus (pro-rated to
the date of termination) and (3) the amount that would have been contributed as
our match under the 401(k) Savings Plan and the Executive Deferred Plan for the
year in which employment was terminated (pro-rated to the date of termination).
In addition, under such circumstances, all stock options and benefits under the
401(k) Savings Plan and Executive Deferred Plan would automatically vest, and
all health and medical benefits would be maintained after termination through
the expiration of the then scheduled expiration of the employment term provided
the executive makes his required contribution. Under the Deficit Reduction Act
of 1984, certain severance payments that exceed a certain amount could subject
both us and the executive to adverse U.S. federal income tax consequences. Each
of the employment agreements provides that we would be required to pay the
executive a "gross up payment" to ensure that the executive receives the total
benefit intended by the employment agreement.
FIVE-YEAR PERFORMANCE GRAPH
This graph compares the yearly cumulative return on the common stock with
the cumulative return on the Dow Jones Global-U.S. Equity Index and the Dow
Jones Other Oilfield Equipment & Services Index (which consists of Baker Hughes
Incorporated, Halliburton Company, McDermott International, Inc. and
Schlumberger Limited) for the last five years. The graph assumes the value of
the investment in the common stock and each index was $100 on December 31, 1994,
and that all dividends are reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Weatherford...................... 100 208 420 854 320 659
Dow Jones Global-US Equity
Index............................ 100 138 169 227 292 351
Dow Jones Other Oilfield
Equipment & Services............. 100 139 192 300 175 232
</TABLE>
18
<PAGE> 22
OTHER INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants, served as
our auditors for the fiscal year ended December 31, 1999. Arthur Andersen LLP
has served as our auditors since our inception in 1972. A representative of
Arthur Andersen LLP will be present at the Annual Meeting to respond to any
stockholder questions and will be given an opportunity to make a statement if he
or she so desires.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
All of our executive officers and directors are required to file initial
reports of stock ownership and reports of changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange pursuant to
Section 16(a) of the Securities Exchange Act of 1934.
We have reviewed these reports, including any amendments, and written
representations from the current executive officers and directors of the
Company. Based on this review, we believe that, except as set forth below, all
filing requirements were met during 1999. A Form 4 reporting option exercises by
Mr. Duroc-Danner, the shares acquired upon exercise of the options and the sale
of a portion of those shares to us was required to be filed by December 10,
1999. The Form 4 was filed on December 16, 1999. Mr. Lubar was required to
report in his Form 5 for the year ended December 31, 1999 the acquisition of
shares of our common stock by him in the Christiana acquisition. An amended Form
5 reporting the acquisition was filed on April 19, 2000.
PROPOSALS BY STOCKHOLDERS
Stockholder proposals for our Annual Meeting to be held in 2001 must be
received by us by December 29, 2000, and must otherwise comply with the rules
promulgated by the Securities and Exchange Commission to be considered for
inclusion in our proxy statement for that year. If a stockholder desires to
bring business before the meeting which is not the subject of a proposal meeting
the SEC proxy rule requirements for inclusion in the proxy statement, the
proposal must be received by us by March 19, 2001.
Any stockholder proposal, whether or not to be included in our proxy
materials, must be sent to our Corporate Secretary at 515 Post Oak Boulevard,
Suite 600, Houston, Texas 77027.
OTHER BUSINESS
We know of no other business that will be brought before our Annual
Meeting. If any other matters are properly presented, the persons named on the
enclosed proxy card will vote the proxies as they deem advisable.
19
<PAGE> 23
ADDITIONAL INFORMATION AVAILABLE
We have filed an Annual Report on Form 10-K for 1999 with the Securities
and Exchange Commission. A complete copy of our Annual Report on Form 10-K is
available on the SEC's website at www.sec.gov. We also will provide to any
stockholder a copy of our Annual Report on 10-K without charge upon written
request. Copies of any exhibits to our Annual Report on 10-K also are available
upon written request subject to a charge for copying and mailing. If you wish to
obtain a paper copy of our Annual Report on Form 10-K or have any other
questions about us, please contact our Investor Relations Department in writing
(515 Post Oak Blvd., Suite 600, Houston, Texas 77027) or by telephone ((713)
693-4000) or visit our website at www.weatherford.com.
By Order of the Board of Directors
/s/ CURTIS W. HUFF
Curtis W. Huff
Corporate Secretary
Houston, Texas
April 28, 2000
20
<PAGE> 24
[WEATHERFORD LOGO]
WEATHERFORD INTERNATIONAL, INC.
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
JUNE 9, 2000
9:00 A.M. (HOUSTON TIME)
THE ST. REGIS HOTEL
1919 BRIAR OAKS
HOUSTON, TEXAS 77027
<PAGE> 25
WEATHERFORD INTERNATIONAL, INC.
PROXY FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 9, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder of Weatherford International, Inc. ("Weatherford")
hereby appoints Bernard J. Duroc- Danner and Curtis W. Huff, or either of them,
as proxies, each with power to act without the other and with full power of
substitution, for the undersigned to vote the number of shares of common stock
of Weatherford that the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders of Weatherford to be held on June
9, 2000, at 9:00 a.m., Houston time, at The St. Regis Hotel, 1919 Briar Oaks,
Houston, Texas, and at any adjournment or postponement thereof, on the following
matters that are more particularly described in the Proxy Statement dated April
28, 2000:
(1) Election of the following Nominees as Directors, as set forth in the
Proxy Statement:
Philip Burguieres, David J. Butters, Bernard J. Duroc-Danner, Sheldon B.
Lubar, William E. Macaulay, Robert B. Millard, Robert K. Moses, Jr. and
Robert A. Rayne
FOR All Nominees listed WITHHOLD
at right (except as marked All Nominees
to the contrary below) listed at right
[ ] [ ]
INSTRUCTION: To withhold authority to vote for any Nominee, write that
Nominee's name in the space provided below
___________________________________________________________________________
(2) To consider and take action upon any other matter which may properly come
before the meeting or any adjournment(s) or postponement(s) thereof.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
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<PAGE> 26
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" ALL OF THE NOMINEES FOR DIRECTOR LISTED AT LEFT UNDER PROPOSAL 1.
Receipt of the Proxy Statement dated April 28, 2000, and the Annual Report of
Weatherford for the year ended December 31, 1999, is hereby acknowledged.
________________________________________________________________________________
______________________________________________
______________________________________________
Signature of Stockholder(s)
NOTE: Please sign your name exactly as it
appears hereon. Joint owners must each sign.
When signing as attorney, executor,
administrator, trustee or guardian, please
give your full title as it appears thereon. If
signer is a corporation, execute in full
corporate name by authorized officer.
Date: _______________________________, 2000.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
================================================================================
