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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One) ---------------------
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED AUGUST 31, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
------------------- -------------------
COMMISSION FILE NUMBER 1-7573
PARKER DRILLING COMPANY
(Exact name of registrant as specified in its charter)
Delaware 73-0618660
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Parker Building, Eight East Third Street, Tulsa, Oklahoma 74103
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (918) 585-8221
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Securities registered pursuant
to Section 12(b) of the Act:
N/A Name of each exchange on which registered:
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(Title of class) New York Stock Exchange, Inc.
Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $.16 2/3 per share
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(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K. [ ]
As of September 30, 1995, 55,726,314 common shares were outstanding, and
the aggregate market value of the common shares (based upon the closing price
of these shares on the New York Stock Exchange) held by nonaffiliates was
$303.5 million.
Documents Incorporated by Reference
Part III, Items 10 through 13 Portions of the Company's definitive Proxy
Statement in connection with its Annual
Meeting to be held December 13, 1995
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<TABLE>
TABLE OF CONTENTS
<CAPTION>
PART I
PAGE
<S> <C> <C>
Item 1. Business 1
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters 6
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 32
PART III
Item 10. Directors and Executive Officers of the Registrant 32
Item 11. Executive Compensation 32
Item 12. Security Ownership of Certain Beneficial Owners
and Management 32
Item 13. Certain Relationships and Related Transactions 32
PART IV
Item 14. Exhibits, Financial Statement Schedule and
Reports on Form 8-K 33
Signatures 38
</TABLE>
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PART I
Item 1. BUSINESS
GENERAL DEVELOPMENT
Parker Drilling Company was incorporated in the state of Oklahoma in
1954. The Company's predecessor was a contract drilling business established
in 1934 by Gifford C. Parker. The founder was the father of Robert L. Parker,
the current chairman and a principal stockholder, and the grandfather of
Robert L. Parker Jr., president and chief executive officer. In March 1976,
the state of incorporation of the Company was changed to Delaware through the
merger of the Oklahoma corporation into its wholly owned subsidiary Parker
Drilling Company, a Delaware corporation. Unless otherwise indicated, the
term "Company" refers to Parker Drilling Company together with its
subsidiaries and "Parker Drilling" refers solely to the parent, Parker
Drilling Company.
The Company's principal business is providing land contract drilling
services on a worldwide basis to firms in the oil and gas industry.
Internationally, the Company specializes in difficult wells and drilling in
remote locations, utilizing equipment that is specially designed by the
Company to be easily transported by helicopter or other vehicles into
difficult access areas. Domestically, the Company specializes in the drilling
of deep gas wells (to 15,000 feet or deeper). The Company is also engaged in
coring and geothermal operations.
In addition to land contract drilling services, the Company also provides
drilling engineering and project management services. Project management
services include well design, training, quality control, location
construction, catering and equipment and personnel logistics management.
In 1995, Parker Drilling Investment Company, a wholly owned subsidiary,
formed a joint limited liability company, OnSite Technology L.L.C. (Trademark)
("OnSite") (Trademark), to market and operate an on-location soil and drill
cuttings remediation process worldwide. Parker Drilling Investment Company
and National Fuel and Energy, Inc. are equal owners in OnSite (Trademark).
OnSite (Trademark) will operate mobile units which clean and remediate
hydrocarbon-contaminated soil on location at oil and gas drill sites, tank
batteries, pipeline installations, refineries, oil field service and storage
facilities and service stations. The first unit has been built and is
expected to be placed into service in the first quarter of fiscal 1996.
In August 1975, the Company acquired Parker Technology, Inc. ("Partech")
(Registered Trademark) (formerly OIME, Inc.), a drilling equipment
manufacturing concern in Odessa, Texas. Partech (Registered Trademark)
designs and constructs specialized rigs and rig components to meet the unique
needs of the Company and its customers. However, with minimal demand for rig
construction during recent years, Partech (Registered Trademark) functions
primarily as a service center for the Company's drilling operations. The
scope of Partech's operations was downsized in late fiscal 1994 with a
reduction in the number of manufacturing and technical support personnel and
the sale of excess manufacturing equipment and inventories. In fiscal years
1995, 1994 and 1993, its operations accounted for less than 10 percent of the
Company's total revenue.
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Item 1. BUSINESS (continued)
Parker Kinetic Designs, Inc. ("Parker Kinetic"), formed in July 1984,
specializes in the commercialization of pulse power technologies for
industrial, scientific and military applications. Parker Kinetic is a leading
developer of pulse power applications. The Austin, Texas-based subsidiary
also provides specialized engineering services in electromagnetic accelerator
research.
CUSTOMERS
The Company's drilling customer base consists of major oil companies,
foreign national oil and gas companies, independent oil and gas companies and
industrial users. The Company's 20 largest customers accounted for
approximately 91 percent of total revenue during fiscal 1995. Two customers
accounted for approximately 22 percent and 13 percent, respectively. In
fiscal 1994, three customers accounted for approximately 14 percent, 12
percent and 11 percent, respectively. In fiscal 1993, three customers
accounted for approximately 22 percent, 14 percent and 10 percent,
respectively.
CONTRACTS
The Company generally obtains drilling contracts through competitive
bidding. Under most contracts the Company is paid a daily fee, or day rate.
The day rate received is based on several factors, including: type of
equipment, services and personnel furnished; investment required to perform
the contract; location of well; term of the contract; and competitive market
forces. Meterage rate contracts are occasionally accepted in which the
Company is paid a rate per meter drilled upon reaching a specified depth. The
Company drilled several shallow (under 10,000 feet) wells under meterage
contract terms in the past fiscal year in connection with international
contracts.
The Company generally receives a lump sum fee, which in most cases
approximates the cost incurred by the Company, to move its equipment to the
drilling site. Domestic contracts are generally for one well, while
international contracts are more likely to be for multi-well programs. The
Company continues to obtain contracts under which the Company provides
drilling engineering and integrated project management services. The Company
provides drilling project services from well design and engineering expertise
to site preparation and road construction in an effort to help customers
eliminate or reduce management overhead which would otherwise be necessary to
supervise such services.
While oil and gas exploration efforts have remained stable or increased
in many areas outside the United States, domestic drilling programs have
remained relatively depressed. Day rates on domestic contracts continue to
cover cash operating costs before local overhead. International day rates and
profit margins continue to be more favorable than those for domestic
operations. Because of the difficult remote drilling sites encountered
internationally, specialized equipment is often required, sometimes resulting
in additional modification or construction costs which are generally offset by
favorable day rates for the Company. Substantially all the international
contracts provide for payment in U.S. dollars, with a minimum local currency
portion to cover local expenditures.
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COMPETITION
Significant competition remains in the drilling industry although both
the number of companies and available rigs have decreased over the last ten
years. The number of rigs continues to exceed demand, particularly in the
domestic market. A number of large and small drilling contractors provide
competition for drilling contracts in all areas the Company serves. Although
no single drilling competitor operates in all areas the Company serves,
certain competitors are present in more than one of those areas.
Historically, competition for drilling services has been based on four
factors: (1) type and condition of equipment available, (2) location of or
ability to deploy such equipment, (3) quality of service and personnel and (4)
price. In each of the first three areas, management believes that the Company
has for many years ranked at or near the top of the drilling industry. During
the past several years, the prevailing factor in obtaining contracts has been
price due to the surplus of available rigs in the drilling industry. The
Company's patented drilling equipment is a factor in obtaining certain
contracts located in remote and difficult-access locations and in drilling
certain wells requiring specialized equipment.
RESEARCH AND DEVELOPMENT
In response to customers' needs of reducing drilling costs, the Company
has developed a slim hole drilling and coring rig. The new series of lighter
electric rigs features a two-speed top drive and the Parkomatic (Registered
Trademark) automatic drilling system. Combining technology from the drilling
and mining industries, the Company pioneered continuous wireline coring in
order to allow geological assessments to be made during the drilling program.
The Company has utilized this technology in the performance of several
contracts.
Parker Kinetic engineers and manufactures high-energy pulse power
equipment. Parker Kinetic has developed the homopolar pulse generator, a
machine that stores kinetic energy in a rotor, then rapidly converts that
energy into a high-current electrical pulse. Pulse power can be used for,
among other things, high-speed solid-state welding, sintering and material
compaction, pulsed heating and powering electromagnetic launch devices.
Parker Kinetic continues to refine this technology in order to make it
practical and economically feasible for industrial, scientific and military
applications. With the recent decline in military expenditures by the United
States government, Parker Kinetic has shifted the focus of its research
activities to industrial applications and markets.
Twenty-three employees are involved in research and development. The
costs associated with the Company's research and development efforts are not
significant.
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<TABLE>
EMPLOYEES
At August 31, 1995, the Company employed 2,360 persons, up 12% from the
2,106 employed at August 31, 1994. The following table sets forth the
composition of the Company's employees:
<CAPTION>
August 31,
----------------
1995 1994
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<S> <C> <C>
International Drilling Operations 1,840 1,614
Domestic Drilling Operations 309 298
Corporate and Other Domestic 211 194
</TABLE>
RISKS AND ENVIRONMENTAL CONSIDERATIONS
Certain political and economic risks are inherent in international
operations. These risks include expropriation of equipment, currency
rate fluctuations, foreign currency conversion restrictions and local
tax regulations. The Company minimizes the potential impact of these
risks by operating in several geographical areas and by generally
entering contracts which are denominated in U.S. dollars. Additionally,
the Company seeks to obtain contractual indemnification from operators
against certain of these risks. The Company carries political risk
insurance covering its equipment in most foreign locations.
The United States and various other countries have enacted
legislation or adopted regulations controlling the discharge of
materials into the environment. Such legislation provides for the
imposition of penalties and liabilities and indemnification for clean-up
costs, regardless of fault, for hazardous waste and chemical discharges.
In certain circumstances, the Department of the Interior is authorized
to suspend operations that threaten to harm life, property or the
environment. Under most of the Company's contracts, the Company is
indemnified from environmental damages except in certain cases of
pollution that originates above the surface from equipment operation and
maintenance. The Company purchases limited pollution insurance to cover
costs associated with clean-up of sudden and accidental spills. In
those contracts where the Company accepts liability for pollution caused
by its negligence or is not covered by insurance, the amount of the
Company's financial exposure is generally restricted in the contract.
The Company believes that it substantially complies with all
environmental legislation and regulations. Compliance with such
provisions and regulations has not had a material effect upon the
Company's operations; however, the effect of any future environmental
enactments cannot be predicted.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company operates principally in one segment, contract drilling
services. Information about the Company's operations by geographic
areas for the three years ended August 31, 1995, is set forth in Note 8
of Notes to Consolidated Financial Statements.
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<TABLE>
Item 2. PROPERTIES
The Company owns and occupies a ten-story building in downtown
Tulsa, Oklahoma, as its home office. The Company also owns a five-story
office building in Tulsa and currently is leasing it to third parties.
Additionally, the Company owns and leases office space and operating
facilities in various locations, but only to the extent necessary for
administrative and operational functions.
During fiscal 1995, the Company acquired one international rig,
currently under contract in New Zealand, and leased one rig, currently
under contract in Argentina. The Company sold two domestic rigs and one
international rig and also retired five international rigs from the rig
fleet. The following table shows, as of August 31, 1995, the locations
and drilling depth ratings of the Company's remaining 90 rigs:
<CAPTION>
Drilling Depth Rating in Feet
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10,000
or Over
less 15,000 17,000 20,000 25,000 30,000 30,000 TOTAL
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
DOMESTIC
Alaska 1 1
Central States 3 2 14 1 3 23
Rocky Mountains 1 3 6 2 2 14
West Coast 1 1 2
-- -- -- -- -- -- -- --
Total Domestic 1 4 5 21 1 6 2 40
-- -- -- -- -- -- -- --
INTERNATIONAL
South America 7 2 1 8 2 5 25
Africa, Middle
East and C.I.S. 3 2 1 1 7
Asia Pacific 4 2 2 7 3 18
-- -- -- -- -- -- -- ---
Total
International 14 6 4 16 5 5 - 50
-- -- -- -- -- -- -- ---
TOTAL 15 10 9 37 6 11 2 90
-- -- -- -- -- -- -- ---
-- -- -- -- -- -- -- ---
</TABLE>
The following table sets forth the utilization rates during each of the
previous three years. Rigs retired in fiscal 1995 and 1994 have been treated
as removed from the rig fleet as of the last day of each fiscal year.
Accordingly, the increase in the domestic utilization rate, from 15% in 1994
to 21% in 1995, was attributable to having fewer rigs in the fleet in 1995.
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<TABLE>
<CAPTION>
Average Utilization
for the Years Ended
August 31,
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1995 1994 1993
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<S> <C> <C> <C>
International Utilization 54% 56% 40%
Domestic Utilization 21% 15% 14%
Overall Utilization 40% 35% 26%
</TABLE>
Item 3. LEGAL PROCEEDINGS
In the opinion of Company counsel, there are no pending legal proceedings
to which the Company is a party that could have a materially adverse effect
upon its business or its financial position.
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Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to Parker Drilling Company security
holders during the fourth quarter of fiscal year 1995.
PART II
<TABLE>
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Parker Drilling Company common stock is listed for trading on the New
York Stock Exchange under the symbol PKD. At the close of business on
September 30, 1995, there were 4,198 holders of record of Parker Drilling
common stock. Prices on Parker Drilling's common stock for the fiscal years
ending August 31, 1995 and 1994, were as follows:
<CAPTION>
Fiscal Year 1995 Fiscal Year 1994
---------------- ----------------
Quarter High Low High Low
------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
First $6.250 $5.000 $7.750 $5.250
Second 5.125 4.375 6.250 4.875
Third 5.625 4.375 6.250 4.875
Fourth 5.625 4.625 6.375 5.375
</TABLE>
No dividends have been paid on common stock since February 1987.
Restrictions contained in Parker Drilling's existing credit agreement limit
the payment of cash dividends to the lesser of 40 percent of consolidated net
income for the preceding fiscal year, or $2.6 million. The Company has no
present intention to pay dividends on its common stock in the foreseeable
future because of its business plan to reinvest earnings in the Company's
operations.
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Item 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Parker Drilling Company and Subsidiaries
(In Thousands Except Per Share Data)
Years Ended August 31, 1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C>
Revenue $157,371 $152,424 $100,801 $123,332 $112,818
Income (loss)
from continuing
operations $ 3,916 $(28,806) $(10,687) $(11,166) $ 1,977
Discontinued
operations-
Gain on disposal - - - - 1,184
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Net income (loss) $ 3,916 $(28,806) $(10,687) $(11,166) $ 3,161
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Earnings (loss) per
share, primary and
fully diluted:
Income (loss) from
continuing operations $ .07 $ (.53) $ (.20) $ (.21) $ .04
Discontinued
operations-
Gain on disposal - - - - .02
-------- -------- -------- -------- --------
Net income (loss) $ .07 $ (.53) $ (.20) $ (.21) $ .06
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total assets $216,959 $209,348 $236,342 $245,869 $264,794
Long-term debt $ 1,748 $ - $ - $ 142 $ 1,907
Redeemable
preferred stock $ - $ - $ - $ 157 $ 315
</TABLE>
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1995, cash and other short-term investments increased $7.7
million. Cash generated from operations of $17.9 million and proceeds
received from the sale of property, plant and equipment of $11.7 million, less
capital expenditures of $21.5 million, were the primary reasons for the
increase.
The Company's cash generated by operating activities in fiscal 1995
exceeded fiscal 1994's total by $17.0 million. This increase is due primarily
to improved drilling margins and a smaller increase in working capital
requirements in fiscal 1995. Proceeds from the sale of property, plant and
equipment included $3.6 million from the sale of one international and two
domestic rigs and $1.9 million from the sale of two airplanes. In addition,
many of the assets written down to net realizable value in fiscal 1994, as
discussed in Note 2 of Notes to Consolidated Financial Statements, were
disposed of during fiscal 1995.
Capital expenditures decreased $13.2 million to a total of $21.5 million
in fiscal 1995. Significant expenditures included $15.1 million to modify and
upgrade various international rigs. The decrease in capital spending is
primarily the result of spending $19.3 million in fiscal 1994 for the
acquisition and modification of seven rigs. Capital expenditures in fiscal
1996, relating primarily to international contract opportunities, are
currently forecasted to be $32.0 million. In the event the Company obtains
additional contracts that require the purchase or construction of new or
specialized rigs, or significant modifications to existing rigs, capital
expenditures could increase further. Any significant increase in capital
expenditures would be subject to any restrictions imposed on the Company as
specified below.
The Company has a credit agreement ("Agreement") with a bank which
provides a $7.5 million revolving credit facility through March 1, 1996. The
credit agreement was subsequently amended in the fourth quarter of fiscal 1995
to extend the expiration date to May 31, 1996. All of the credit facility was
available for drawdown as of August 31, 1995. The Agreement contains
restrictions on annual capital expenditures and certain senior and
subordinated indebtedness which can be incurred by Parker Drilling Company and
certain subsidiaries designated in the Agreement. These designated
subsidiaries comprise the operating subsidiaries through which the Company
performs the majority of its drilling operations. The credit facility also
limits payment of dividends on the Company's common stock to the lesser of 40
percent of consolidated net income for the preceding fiscal year, or $2.6
million. The remaining subsidiaries of the Company are not a party to the
credit facility and are able to make capital expenditures and obtain
independent financing from lenders that have no recourse to Parker Drilling
Company and the designated subsidiaries, subject only to an overall limitation
of indebtedness.
The restrictions in the Agreement are not anticipated to restrict growth
or investment opportunities in the foreseeable future.
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LIQUIDITY AND CAPITAL RESOURCES (continued)
Management believes that the current level of cash and short-term
investments, together with cash generated from operations, should be
sufficient to meet the Company's immediate capital needs. However, in the
event the Company obtains additional contracts requiring further significant
capital expenditures or acquires equipment or companies in the drilling
service industry, management believes the Company would likely meet both
short-term and long-term capital needs through a combination of cash generated
from operations, borrowings under the bank credit agreement and either equity
or long-term debt financing.
RESULTS OF OPERATIONS 1995 VS. 1994
The fiscal 1995 net income of $3.9 million was an improvement of $32.7
million over the net loss of $28.8 million recorded in fiscal 1994. Excluding
a $19.7 million provision for reduction in carrying value of certain assets
from fiscal 1994's net loss, fiscal 1995's net income was an improvement of
$13.0 million over fiscal 1994. The primary reasons for the improvement in
fiscal 1995 were an increase in drilling margins of $7.2 million and an
increase in other income of $6.7 million.
Drilling contract revenue increased $5.6 million to $153.1 million in
fiscal 1995 even though international and domestic operating days were nearly
the same as the previous year. An increase in the utilization of larger rigs
in northern Argentina and Colombia more than offset decreased utilization of
smaller rigs in southern Argentina. Although operating days were nearly the
same, the domestic utilization rate increased from 15% to 21% due to the
retirement/disposal of 16 domestic rigs in 1994. (Rigs retired, disposed of
or reclassified as assets held for sale in fiscal 1995 and 1994 have been
treated as removed from the rig fleet as of the last day of each fiscal year.)
Western Hemisphere international drilling revenue increased $23.4 million
in fiscal 1995 when compared with fiscal 1994. In the country of Colombia,
revenue increased $13.9 million due primarily to revenue earned by one rig
relocated from Indonesia during the year and from a full year of operations by
one rig which was added to the rig fleet in fiscal 1994. In addition, several
rigs which were either on a standby or stacked status in fiscal 1994 operated
all of fiscal 1995. In Argentina, drilling revenue increased $12.6 million as
two additional deep rigs, one relocated from the Congo in fiscal 1994 and one
relocated from Yemen in fiscal 1995, operated much of the year. Additionally,
one rig added to the rig fleet in fiscal 1994 operated all of fiscal 1995 and
one rig leased by the Company commenced operations in the fourth quarter of
fiscal 1995. During fiscal 1995 and 1994, a number of shallow depth capacity
rigs (10,000 feet or less) have operated in southern Argentina, many of them
operating on a meterage basis. Two of these rigs have been relocated to mid-
Argentina as the Company focuses its marketing efforts on regions of the
country where operations are generally conducted on a daywork basis. At
fiscal year-end, the remaining rigs in southern Argentina were on a stacked
status. Management anticipates a slight decline in revenue from South
American operations in fiscal 1996 due to a further reduction of operations in
southern Argentina. Drilling revenue declined $4.8 million in Ecuador where
two rigs located in that country did not operate in fiscal 1995 and were
retired from the rig fleet at the end of the fiscal year.
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RESULTS OF OPERATIONS 1995 VS. 1994 (continued)
Operations in Asia and the Pacific resulted in an increase in drilling
revenue of $1.5 million in fiscal 1995. Increased utilization in New Zealand
and revenue earned from a labor contract in China more than offset a decline
in revenue in Papua New Guinea and Indonesia due to lower utilization in those
countries. It is anticipated that revenue from this region will remain
relatively constant in fiscal 1996.
International drilling revenue from operations in Africa, the Middle East
and C.I.S. declined $17.4 million in fiscal 1995. Utilization declined due to
the completion of contracts in Chad, the Congo, the Russian Republic, and
Yemen. The rigs which operated in the Congo and Yemen in fiscal 1994 have
both been redeployed to Argentina where they are currently operating. In
Kazakhstan, a reduction in revenue from a labor contract in that country was
partially offset by operations from one rig which has been relocated from the
Russian Republic. Management anticipates revenue from this region to increase
in fiscal 1996 primarily due to the commencement of a one-rig contract in the
first quarter of the year in the Russian Republic.
Domestic drilling revenue declined $2.3 million due to fewer operating
days in the Rocky Mountain states and Alaska. Management anticipates revenue
from its domestic drilling operations will be slightly higher in fiscal 1996.
Drilling margins (drilling revenue less drilling expense) increased $7.2
million in fiscal 1995 versus fiscal 1994. Margins improved in the Company's
South American operations, including both the countries of Colombia and
Argentina. Margins had been negatively impacted in fiscal 1994 in Colombia
due to increased operating expenses and costs associated with the start-up of
two rigs. In fiscal 1995, these two rigs operated for the full year with
improved margins when compared with the previous fiscal year. In Argentina,
margins also improved as two additional deep capacity rigs began operating in
the northern region of the country and two rigs operated during the year in
the country's middle region. In the Company's other operating regions, both
internationally and domestically, drilling margins as a percentage of drilling
revenue in fiscal 1995 remained relatively consistent with fiscal 1994.
Depreciation expense, which declined $.3 million in fiscal 1995, is
expected to increase in fiscal 1996 due to the level of capital expenditures
forecasted. General and administrative expense increased $.9 million in
fiscal 1995 due to increased amortization of deferred compensation and legal
expenses.
Other income (expense) increased $6.7 million in fiscal 1995 when
compared to fiscal 1994. Gains of $6.4 million were recognized in fiscal 1995
from the disposition of property, plant and equipment as the Company continued
its efforts to sell assets that are no longer a part of its current marketing
strategy. In addition, the reversal of a prior year foreign currency accrual
of $1.5 million was recorded in fiscal 1995. Fiscal 1994 other income
included $2.1 million from gains associated with the disposition of property,
plant and equipment, a $1.5 million gain from the reversal of a prior year
foreign payroll tax accrual and a $2.6 million charge for the settlement of
litigation (see Note 9 of the Notes to Consolidated Financial Statements).
The $1.3 million increase in income tax expense was primarily attributable to
the reversal in 1994 of an accrued foreign tax.
<PAGE>
<PAGE>
RESULTS OF OPERATIONS 1994 VS. 1993
The fiscal 1994 net loss of $28.8 million represents an increase in net
loss of $18.1 million from fiscal 1993. However, excluding the provision for
reduction in carrying value of certain assets of $19.7 million recognized in
fiscal 1994, the net loss improved $1.6 million from fiscal 1993 to fiscal
1994. The primary reasons for the improvement were an increase in drilling
margins of $5.3 million, partially offset by increases in depreciation expense
of $1.6 million and income tax expense of $2.2 million.
During the fourth quarter of fiscal 1994, management analyzed its
domestic operations and made the strategic decision to reorganize certain of
these operations and sell certain of these assets. The Company reduced the
carrying value of certain assets in Alaska, including rigs, spare parts and
property to be sold. The Company wrote down to net realizable value certain
of its Partech (Registered Trademark) manufacturing operations' drilling
equipment, property and inventories that were to be disposed. In the lower 48
divisions, the Company wrote down to net realizable value a number of
mechanical rigs and certain rig equipment that were to be disposed. Write-
offs relating to the lower 48 and Alaska rigs resulted in the removal of 16
rigs from Parker's fleet. Aggregating the items described above, the Company
recorded a $19.7 million provision during the fourth quarter of fiscal 1994.
Drilling revenue increased by $50.8 million as utilization of the
Company's international rig fleet increased from 40% in fiscal 1993 to 56% in
fiscal 1994. Domestic rig utilization increased slightly from 14% to 15%.
Western Hemisphere international drilling revenue increased $21.1 million
from fiscal 1993 to fiscal 1994. Revenue from the country of Argentina
increased $18.5 million as the Company re-entered the Argentina drilling
market during the fourth quarter of fiscal 1993. In Colombia, revenue
increased $2.7 million in fiscal 1994 as the Company engaged in more deep
drilling at higher day rates when compared to fiscal 1993.
International drilling revenue from operations in Asia and the Pacific
increased $20.9 million in fiscal 1994. The primary reasons for the increase
were the resumption of operations in Pakistan during the first quarter of
fiscal 1994, and the operation of two geothermal rigs in the Philippines, a
new market for the Company in fiscal 1994. Also contributing to the increase
in drilling revenue was an increase in utilization in Papua New Guinea during
fiscal 1994.
Drilling revenue from operations in Africa, the Middle East and the
C.I.S. increased $9.6 million in fiscal 1994. During the fourth quarter of
fiscal 1993, the Company began operating in the republic of Kazakhstan under a
labor contract for a major customer. Revenue from operations in Kazakhstan
increased $6.8 million in fiscal 1994. In the Russian Republic an increase in
operating days for two workover rigs generated an additional $2.3 million in
revenue in fiscal 1994 versus fiscal 1993. In Africa, a decline in revenue
from decreased utilization in Chad was offset by revenue from a one-rig
contract in the Congo.
Domestic drilling revenue declined slightly in fiscal 1994 compared to
fiscal 1993. An increase in utilization in the continental United States
could not completely offset the loss of revenue from the Company's specialized
Arctic drilling rig, which was released late in the third quarter of fiscal
1994.
<PAGE>
<PAGE>
RESULTS OF OPERATIONS 1994 VS. 1993 (continued)
Although drilling revenue increased $50.8 million in fiscal 1994 versus
fiscal 1993, drilling margins (drilling revenue less drilling expense) did not
increase proportionately. Drilling margins in Colombia declined due to
increased operating expenses and costs associated with the start-up of two
rigs. In Argentina, the initial start-up costs of entering a new market and
putting ten newly acquired rigs to work negatively impacted drilling margins.
Additionally, during this transition period, the Company encountered drilling
problems which resulted in slower-than-expected drilling progress on some of
the meterage rate contracts.
Depreciation expense increased $1.6 million in fiscal 1994, the result of
an increase in capital spending during 1994. Other income (expense) increased
$.6 million in fiscal 1994 compared to fiscal 1993. Interest income, net of
interest expense, decreased $.5 million due to the decline in cash and short-
term investments during fiscal 1994. Other income in fiscal 1994 included a
$1.0 million gain recognized when proceeds from an insurance settlement
exceeded the book value of equipment damaged in connection with a blowout on
an international rig. Fiscal 1994 other income also included the reversal of
a prior year foreign payroll tax accrual totalling $1.5 million. Offsetting
this income in fiscal 1994, was a $2.6 million charge for the settlement of
litigation. (See Note 9 of the Notes to Consolidated Financial Statements.)
Fiscal 1993 other expense included a $.9 million adjustment of a prior year's
workers' compensation liability. Income tax expense increased $2.2 million
primarily because of an increase in international drilling activity, which
resulted in an increase in current tax expense.
OTHER MATTERS
Internationally, the Company specializes in drilling in remote locations
and under difficult geological or operating conditions. The Company's
international services are primarily utilized by international and national
oil companies in the exploration and development of reserves of oil.
Domestically, the Company specializes in drilling deep wells in search of
natural gas. Business activity is dependent on the exploration and
development activities of the major, independent and national oil and gas
companies that make up the Company's customer base. Generally, temporary
fluctuations in oil and gas prices do not materially affect these companies'
exploration and development activities, and consequently do not materially
affect the operations of the Company. However, sustained increases or
decreases in oil and natural gas prices could have an impact on customers'
long-term exploration and development activities which in turn could
materially affect the Company's operations. Generally, a sustained change in
the price of oil would have a greater impact on the Company's international
operations while a sustained change in the price of natural gas would have a
greater effect on domestic operations. Weak prices for natural gas have
resulted in depressed markets for domestic drilling services over the past
decade.
Historically, due to the importance of oil revenue to most of the
countries in which the Company operates, the Company's operations generally
have not been negatively impacted by adverse economic and political
conditions. However, there can be no assurances that such conditions could
not have a material adverse effect in the future.
<PAGE>
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Parker Drilling Company
We have audited the consolidated financial statements and financial
statement schedule of Parker Drilling Company and subsidiaries as listed in
Item 14(a)(1) and (2) of the Form 10-K. These financial statements and
financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Parker Drilling Company and subsidiaries as of August 31, 1995 and 1994, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended August 31, 1995, in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
October 17, 1995
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands Except Earnings (Loss) Per Share
and Weighted Average Shares Outstanding)
<CAPTION>
For the Years Ended August 31, 1995 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue:
Drilling contracts $153,075 $147,480 $ 96,719
Other 4,296 4,944 4,082
-------- -------- --------
157,371 152,424 100,801
-------- -------- --------
Operating expense:
Drilling 113,132 114,732 69,237
Other 4,928 6,563 5,951
Depreciation, depletion
and amortization 21,643 21,950 20,400
General and administrative 19,165 18,314 17,593
Provision for reduction in carrying
value of certain assets (Note 2) - 19,718 -
-------- -------- --------
158,868 181,277 113,181
-------- -------- --------
Operating income (loss) (1,497) (28,853) (12,380)
-------- -------- --------
Other income and (expense):
Interest expense (88) (11) (53)
Interest income 1,272 1,161 1,729
Minority interest (227) (135) 149
Other 7,640 919 (469)
-------- -------- --------
8,597 1,934 1,356
-------- -------- --------
Income (loss) before income taxes 7,100 (26,919) (11,024)
-------- -------- --------
Income tax expense (benefit) 3,184 1,887 (337)
-------- -------- --------
Net income (loss) $ 3,916 $(28,806) $(10,687)
-------- -------- --------
-------- -------- --------
Earnings (loss) per share,
primary and fully diluted $ .07 $ (.53) $ (.20)
-------- -------- --------
-------- -------- --------
Weighted average shares
outstanding (fully diluted) 55,332,541 54,247,664 53,082,078
---------- ---------- ----------
---------- ---------- ----------
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<CAPTION>
August 31, 1995 1994
- -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 20,752 $ 10,660
Other short-term investments 1,372 3,811
Accounts and notes receivable, net of
allowance for bad debts of $726 in
1995 and $826 in 1994 39,578 34,675
Rig materials and supplies 11,532 9,117
Other current assets 5,146 4,029
-------- --------
Total current assets 78,380 62,292
-------- --------
Property, plant and equipment, at cost:
Drilling equipment 506,130 538,025
Buildings, land and improvements 13,259 14,270
Other 20,470 24,399
Construction in progress 14,759 5,247
-------- --------
554,618 581,941
Less accumulated depreciation, depletion
and amortization 432,360 454,763
-------- --------
Net property, plant and equipment 122,258 127,178
-------- --------
Rig materials and supplies 6,895 9,127
-------- --------
Deferred charges and other assets:
Assets held for disposition (Note 2) 2,486 3,518
Notes receivable, net of allowance of
$70 in 1995 and $224 in 1994 1,817 2,871
Other 5,123 4,362
-------- --------
Total deferred charges and other assets 9,426 10,751
-------- --------
Total assets $216,959 $209,348
-------- --------
-------- --------
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<CAPTION>
August 31, 1995 1994
- -----------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 289 $ -
Accounts payable 9,539 9,233
Accrued liabilities 7,401 7,336
Accrued income taxes 5,109 5,053
-------- --------
Total current liabilities 22,338 21,622
-------- --------
Long-term debt (Note 3) 1,748 -
-------- --------
Deferred income tax (Note 4) - 294
-------- --------
Other long-term liabilities 5,953 3,596
-------- --------
Minority interest - 3,253
-------- --------
Commitments and contingencies (Note 9)
Preferred stock, $1 par value, 1,942,000
shares authorized, no shares outstanding - -
-------- --------
Stockholders' equity:
Common stock, $.16 2/3 par value,
authorized 70,000,000 shares, issued
and outstanding 55,722,183 shares
(55,112,749 shares in 1994) 9,287 9,185
Capital in excess of par value 205,310 202,403
Retained earnings (accumulated deficit) (24,391) (28,307)
Other (3,286) (2,698)
-------- --------
Total stockholders' equity 186,920 180,583
-------- --------
Total liabilities and stockholders' equity $216,959 $209,348
-------- --------
-------- --------
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<CAPTION>
For the Years Ended August 31, 1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,916 $(28,806) $(10,687)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion and
amortization 21,643 21,950 20,400
Loss (gain) on disposition of
property, plant and equipment (6,395) (2,083) (852)
Provision for reduction in carrying
value of certain assets - 19,718 -
Deferred tax expense (benefit) (294) (904) (1,431)
Amortization of deferred compensation
and other 1,820 2,490 5,197
Change in assets and liabilities:
Accounts and notes receivable (4,105) (10,889) 2,305
Rig materials and supplies (627) (313) 1,696
Other current assets (1,364) (1,356) (1,934)
Accounts payable and accrued
liabilities 3,319 1,109 573
Accrued income taxes 56 (238) (1,349)
Minority interest 227 135 (149)
Other assets (260) 137 (48)
-------- -------- --------
Net cash provided by operating
activities 17,936 950 13,721
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property,
plant and equipment 11,711 4,740 7,150
Capital expenditures (21,540) (34,764) (18,717)
Proceeds from sale of a subsidiary - - 2,353
Investments in affiliates (501) (140) (177)
Decrease (increase) in other short-term
and long-term investments 2,439 27,608 (7,388)
Other 121 - -
-------- -------- --------
Net cash provided by (used in)
investing activities (7,770) (2,556) (16,779)
-------- -------- --------
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(continued)
(Dollars in Thousands)
<CAPTION>
For the Years Ended August 31, 1995 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt $ 187 $ - $ -
Principal payments under debt
obligations - - (777)
Repurchase of common stock (277) (304) (384)
Proceeds from exercise of stock warrant - - 4,320
Other 16 - (819)
-------- -------- --------
Net cash provided (used) by financing
activities (74) (304) 2,340
-------- -------- --------
Net increase (decrease) in cash and
cash equivalents 10,092 (1,910) (718)
Cash and cash equivalents at beginning
of year 10,660 12,570 13,288
-------- -------- --------
Cash and cash equivalents at
end of year $ 20,752 $ 10,660 $ 12,570
-------- -------- --------
-------- -------- --------
Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest $ 2 $ 11 $ 47
Income taxes $ 3,422 $ 3,029 $ 2,361
Supplemental noncash financing activity:
In November 1994, the Company acquired a limited partner's ownership
interest in two consolidated partnerships in exchange for a promissory note
in the amount of $1,850,000.
In May 1995, the Company received rig materials and supplies valued at
$556,000 in lieu of payment on a note due the Company.
The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity
(Dollars in Thousands)
Other
---------------------------
Redeemable Capital Retained Unearned
preferred in excess earnings Currency restricted
stock Common of par (accumulated translation stock plan
Series C stock value deficit) adjustment compensation
--------- ------ ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balances, August 31, 1992 $ 157 $9,005 $197,467 $11,192 $(739) $(6,744)
Redemption of preferred stock (157)
Activity in employees' stock plans 16 524 2,976
Acquisition of stock from certain
employees (11) (373)
Issuance of 925,000 common shares
upon exercise of a warrant
at $4.67 per share 154 4,166
Net income (loss) (10,687)
Cash dividends on preferred stock -
$.75 per share (6)
Currency translation adjustments associ-
ated with assets of subsidiary sold 866
Cumulative foreign exchange
translation adjustments (127)
----- ------ -------- -------- ----- -------
Balances, August 31, 1993 - 9,164 201,784 499 - (3,768)
Activity in employees' stock plans 28 916 1,070
Acquisition of stock from certain
employees (7) (297)
Net income (loss) (28,806)
----- ------ -------- -------- ----- -------
Balances, August 31, 1994 - 9,185 202,403 (28,307) - (2,698)
Activity in employees' stock plans 111 3,175 (588)
Acquisition of stock from certain
employees (9) (268)
Net income 3,916
----- ------ -------- -------- ----- -------
Balances, August 31, 1995 $ - $9,287 $205,310 $(24,391) $ - $(3,286)
----- ------ -------- -------- ----- -------
----- ------ -------- -------- ----- -------
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Consolidation - The consolidated financial statements include the
accounts of Parker Drilling Company ("Parker Drilling") and all of its
majority-owned subsidiaries (collectively, the "Company").
Drilling Contracts - The Company recognizes revenue and expenses on day
rate contracts as the drilling progresses (percentage-of-completion method)
because the Company does not bear the risk of completion of the well. For
meterage contracts, the Company recognizes the revenue and expenses upon
completion of the well (completed-contract method).
Cash and Cash Equivalents - For purposes of the balance sheet and the
statement of cash flows, the Company considers cash equivalents to be all
highly liquid debt instruments that had a remaining maturity of three months
or less at the date of purchase.
Other Short-term Investments - Other short-term investments include
primarily certificates of deposit, U.S. government securities and commercial
paper having remaining maturities of greater than three months at the date of
purchase and are stated at the lower of cost or market.
Property, Plant and Equipment - The Company provides for depreciation of
property, plant and equipment primarily on the straight-line method over the
estimated useful lives of the assets after provision for salvage value. When
properties are retired or otherwise disposed of, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
included in operations. Management periodically evaluates the Company's
assets to determine if they are not in excess of their net realizable value.
Management considers a number of factors such as estimated future cash flows,
appraisals and current market value analysis in determining net realizable
value. Assets are written down to reflect any decrease in net realizable
value below their net carrying value (see Note 2).
Rig Materials and Supplies - Since the Company's foreign drilling
generally occurs in remote locations, making timely outside delivery of spare
parts unlikely, a complement of parts and supplies is maintained for each rig
either at the drilling site or in warehouses close to the operations. During
periods of high rig utilization, these parts are generally consumed and
replenished within a one-year period. During a period of lower rig
utilization in a particular location, the parts, like the related idle rigs,
are generally not transferred to other foreign locations until new contracts
are obtained because of the significant transportation costs which would
result from such transfers. The Company classifies those parts which are not
expected to be utilized in the following year as long-term assets.
Income Taxes and Change in Accounting Policy - During fiscal 1993, the
Company adopted Statement of Financial Accounting Standards (SFAS) No. 109:
Accounting for Income Taxes. Prior to the change the Company followed SFAS
No. 96: Accounting for Income Taxes. Similar to SFAS No. 96, SFAS No. 109
utilizes the liability method and deferred income taxes (assets) are recorded
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 1 - Summary of Significant Accounting Policies (continued)
to reflect the expected tax consequences in future years of differences
between the tax basis of assets and liabilities and their financial reporting
amounts at each year end. The change in this accounting policy had no effect
upon net income for the year ended August 31, 1993.
Earnings (Loss) Per Share - Earnings (loss) per share is computed by
dividing net income (loss), as adjusted for dividends on preferred stock, by
the weighted average number of common shares outstanding during the period.
Common shares issued under the 1969 Key Employees Stock Grant Plan, 1980
Incentive Career Stock Plan and the 1991 Stock Grant Plan are issued and
outstanding and are only considered in the computation of weighted average
shares outstanding when their effect on earnings per share is dilutive.
Concentrations of Credit Risk - Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of
trade receivables with a variety of national and international oil and natural
gas companies. The Company generally does not require collateral on its trade
receivables. Such credit risk is considered by management to be limited due
to the large number of customers comprising the Company's customer base. The
Company places substantially all its interest-bearing investments with major
financial institutions and, by policy, limits the amount of credit exposure to
any one financial institution. At August 31, 1995, the Company had deposits
in domestic banks in excess of federally insured limits of approximately $.3
million. In addition, the Company had deposits in foreign banks of $6.2
million which are not federally insured.
Fair Market Value of Financial Instruments - The carrying amount of the
Company's cash and short-term investments and short-term and long-term debt
had fair values that approximated their carrying amounts.
Note 2 - Provision for Reduction in Carrying Value of Certain Assets
During the fourth quarter of fiscal 1994, management analyzed its
domestic operations and made the strategic decision to reorganize certain of
these operations and sell certain of these assets. In Alaska, the Company
decided to reduce operating and administrative costs and to look for
opportunities to joint venture or combine operations with other drilling
companies. As a result, the Company reduced the carrying value of certain
assets in Alaska, including rigs, spare parts and property that were to be
sold. The Company's Partech (Registered Trademark) manufacturing operations
were downsized by the sale of land, buildings, equipment and excess
inventories, and accordingly, the Company wrote down to net realizable value
certain drilling equipment, property and inventories that were sold. In the
lower 48 divisions, the Company disposed of a number of mechanical rigs and
certain rig equipment which also were written down to net realizable value.
Write-offs relating to the lower 48 and Alaska rigs resulted in the removal of
16 rigs from the Company's fleet. Aggregating the items described above, the
Company recorded a $19,718,000 provision during the fourth quarter of fiscal
1994.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 3 - Long-term Debt
<CAPTION>
August 31, 1995 1994
-------------------------------------------------------------------------
(Dollars in Thousands)
<S>
Parker Drilling <C> <C>
Note payable annually until November 2001
with interest at 5.75% $1,850 $ -
Parker Drilling International of New Zealand, Ltd.
Note payable monthly through February 2003
to bank with interest at bank's business
lending rate plus margin (total rate at
August 31, 1995 was 11.5%) 187 -
------ ------
Total debt 2,037 -
Less current portion 289 -
------ ------
Total long-term debt $1,748 $ -
------ ------
------ ------
</TABLE>
The Company's long-term debt matures $289,000 each year for the years
1996 through 2000.
The Company has a credit agreement which provides a $7,500,000 revolving
credit facility through March 1, 1996. The credit agreement was subsequently
amended in the fourth quarter of fiscal 1995 to extend the expiration date to
May 31, 1996. Interest on the revolving credit facility is at prime plus 3/4
of one percent and commitment fees on the unused credit facility are 1/2 of
one percent. The agreement requires, among other things, maintenance of
minimum working capital and restricts capital expenditures and creation of
additional indebtedness. Under this agreement, the payment of dividends on
the Company's common stock is limited to the lesser of 40 percent of
consolidated net income for the preceding fiscal year or $2,600,000. At
August 31, 1995, all of the credit facility was available for drawdown.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 4 - Income Taxes
Income (loss) before income taxes (in thousands) is summarized as
follows:
<CAPTION>
Years Ended August 31,
-------------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
United States $ 1,180 $(33,929) $(11,318)
Foreign 5,920 7,010 294
-------- -------- --------
$ 7,100 $(26,919) $(11,024)
-------- -------- --------
-------- -------- --------
</TABLE>
<TABLE>
Income tax expense (benefit) (in thousands) is summarized as follows:
<CAPTION>
Years Ended August 31,
-------------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Current:
United States:
Federal $ - $ - $ (110)
State - (246) 6
Foreign 3,478 3,037 1,198
Deferred:
United States:
Federal - (326) -
State - - -
Foreign (294) (578) (1,431)
------ ------- ------
$3,184 $ 1,887 $ (337)
------ ------- ------
------ ------- ------
</TABLE>
During fiscal 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109: Accounting for Income Taxes.
SFAS No. 109 requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 4 - Income Taxes (continued)
Total income tax expense (benefit) differs from the amount computed by
multiplying income (loss) before income taxes by the U.S. federal income tax
statutory rate. The reasons for this difference (dollars in thousands) are as
follows:
<CAPTION>
Years Ended August 31,
------------------------------------------------------
1995 1994 1993
--------------- --------------- ---------------
% of % of % of
pretax pretax pretax
income income income
Amount (loss) Amount (loss) Amount (loss)
--------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Computed expected tax
expense (benefit) $ 2,414 34% $(9,153) (34%) $(3,748) (34%)
Foreign tax at rates
different than U.S. 1,171 16% 76 - (333) (3%)
Utilization of loss
carryforwards (401) (5%) - - - -
Limitation on
recognition of tax
benefit - - 11,536 43% 3,848 35%
Other - - (572) (2%) (104) (1%)
------- ---- ------- ---- ------- ----
Actual tax expense
(benefit) $ 3,184 45% $ 1,887 7% $ (337) (3%)
------- ---- ------- ---- ------- ----
------- ---- ------- ---- ------- ----
</TABLE>
<TABLE>
The components of the Company's tax assets and (liabilities) as of August
31, 1995 and 1994, are shown below (in thousands):
<CAPTION>
Domestic: 1995 1994
-------- --------
<S> <C> <C>
Deferred tax assets:
Net operating loss and tax credit carryforwards $ 67,259 $ 67,379
Reserves established against realization
of certain assets 1,089 1,455
Accruals not deducted for tax purposes 4,169 4,561
Depreciation of property, plant and equipment 3,385 8,913
------- -------
75,902 82,308
Deferred tax liabilities:
Depreciation of property, plant and equipment (8,408) (13,503)
------- -------
Net deferred tax asset 67,494 68,805
Valuation allowance (67,494) (68,805)
------- -------
$ - $ -
-------- --------
-------- --------
Foreign:
Depreciation of property, plant and equipment $ - $ 294
-------- --------
Deferred tax liability $ - $ 294
-------- --------
-------- --------
</TABLE>
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 4 - Income Taxes (continued)
At August 31, 1995, the Company had $137,500,000 net operating loss
carryforwards for tax purposes which expire over a fifteen year period
beginning in the year 2000. In addition, the Company had $13,600,000
investment tax credit carryforwards for tax purposes which expire over a
fifteen year period beginning in the year 1997.
Note 5 - Redeemable Preferred Stock
In January 1984, the Company began redeeming annually one-tenth of the
$.75 cumulative Series C preferred stock shares then outstanding and completed
the redemption in January 1993.
Note 6 - Common Stock and Stock Options
The Company's 1969 Key Employees Stock Grant Plan (formerly the 1969 Key
Employees Stock Option Plan) was amended in December 1990 to provide for the
issuance of 223,000 shares of common stock for no cash consideration to key
non-officer employees. Each employee receiving a grant of shares may dispose
of 15 percent of his/her grant on each annual anniversary date from the date
of grant for the first four years. On the fifth year anniversary, the
employee may dispose of the remaining 40 percent of his/her grant. No shares
were granted in fiscal 1995 and 1994. In fiscal 1995, 1,375 shares were
cancelled leaving 1,375 shares reserved for issuance or available for granting
as of August 31, 1995.
The Company's 1980 Incentive Career Stock Plan ("1980 Plan") provides for
the issuance of 2,100,000 shares of common stock for no cash consideration to
key employees. Each employee receiving a grant of shares may dispose of 15
percent of his/her grant on each annual anniversary date from the date of
grant for the first four years. On the fifth year anniversary, the employee
may dispose of the remaining 40 percent of his/her grant. No shares were
granted and no shares were cancelled in fiscal 1994. No shares were granted in
fiscal 1995 and 3,500 shares were cancelled leaving 6,250 shares reserved for
issuance and available for granting at August 31, 1995.
The Company's 1991 Stock Grant Plan ("1991 Plan") provides for the
issuance to officers and key employees of up to 3,160,000 shares of common
stock for no cash consideration. Shares granted under the 1991 Plan are fully
vested no earlier than 24 months from the effective date of the grant and not
later than 36 months. The specific vesting schedule for each grant is
determined at the time of grant. During fiscal 1994, 45,000 shares were
granted and no shares were cancelled. In fiscal 1995, 545,000 shares were
granted and no shares were cancelled leaving 1,580,195 shares reserved for
issuance and available for granting at August 31, 1995.
The fair market value of the common stock at date of grant for the Plans
is recorded as deferred compensation and amortized to expense over the period
during which the restrictions lapse. Deferred compensation is shown as a
deduction from stockholders' equity.
During fiscal 1995, 1994 and 1993, the Company purchased 51,279, 41,638
and 64,173 Parker Drilling shares, respectively, from certain of its
employees who had received stock grants under the 1991 and 1980 Plans. The
Company acquired the shares at the market price (weighted average price
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 6 - Common Stock and Stock Options (continued)
was $5.40 per share in fiscal 1995, $7.31 per share in fiscal 1994 and
$5.98 per share in fiscal 1993). The proceeds were used to pay the employees'
tax withholding obligations arising from the vesting of shares under the
Plans.
The 1994 Non-Employee Director Stock Option Plan ("Director Plan")
was approved by shareholders of the Company on December 14, 1994.
The Director Plan provides for the issuance of options to purchase up
to 200,000 shares of the Company's common stock. The option price per
share is equal to the fair market value of a Parker Drilling share on
the date of grant. The term of each option is ten years, and an option
first becomes exercisable six months after the date of grant. Under the
Plan, on the first trade day of each calendar year, each person who is
then a non-employee director of the Company will be automatically
granted an option to purchase 5,000 shares of common stock.
The 1994 Executive Stock Option Plan ("Option Plan") was approved
by shareholders of the Company on December 14, 1994. The Option Plan
provides for the granting of a maximum of 2,400,000 shares to key
employees and consultants of the Company and its subsidiaries through
the granting of stock options, stock appreciation rights and restricted
and deferred stock awards. The option price per share may not be less
than 50% of the fair market value of a share on the date the option is
granted, and the maximum term of a non-qualified option may not exceed
fifteen years and the maximum term of an incentive option is ten years.
<TABLE>
Information regarding the Company's stock option plans is summarized
below:
<CAPTION>
1994 Option Plan
1994 Non-
Director Incentive qualified
Plan Options Options
-------- --------- ---------
<S> <C> <C> <C>
Shares under option:
Outstanding at September 1, 1994 - - -
Granted 15,000 733,000 147,000
Exercised - - (7,000)
Cancelled - - -
--------- -------- -------
Outstanding at August 31, 1995 15,000 733,000 140,000
Average option price per share
at August 31, 1995 $4.56 $4.50 $2.25
Options exercisable
at August 31, 1995 15,000 733,000 42,000
</TABLE>
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 6 - Common Stock and Stock Options (continued)
The following is a summary of common stock reserved for issuance at
fiscal year end:
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Key employee stock plans 4,180,820 2,127,945
Stock Bonus Plan 186,279 79,867
Warrants<F1> 400,000 400,000
--------- ---------
Total shares reserved for issuance 4,767,099 2,607,812
--------- ---------
--------- ---------
<FN>
<F1>
Warrants for 400,000 shares are exercisable at $3.88 per share, subject to
certain adjustments, no later than October 24, 1995.
</FN>
</TABLE>
Note 7 - Employee Benefit Plans
The Parker Drilling Company Stock Bonus Plan ("Plan") was adopted
effective September 1980 for employees of Parker Drilling and its subsidiaries
who are U.S. citizens and who have completed one year of service with the
Company. It was amended in 1983 to qualify as a 401(k) plan under the
Internal Revenue Code which permits a specified percentage of an employee's
salary to be voluntarily contributed on a before-tax basis and to provide for
a Company matching feature. Participants may contribute from one percent to
15 percent of eligible earnings and direct contributions to one or more of
seven investment funds. The Company presently makes dollar-for-dollar
matching contributions up to three percent of a participant's compensation.
The Company's matching contribution is made in Parker Drilling common stock.
The Plan was amended in 1989 to change the vesting schedule to no percent
vesting if a participant has less than five years of service and 100 percent
vesting if a participant has five or more years of service. Each Plan year,
Company contributions can be made, at the discretion of the Board of
Directors, in amounts not exceeding the permissible deductions under the
Internal Revenue Code. The Company issued 113,399 shares to the Plan in 1995,
123,619 shares in 1994 and 95,177 shares in 1993.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 8 - Business Segments
Information regarding the Company's operations by geographic area is as
follows:
<CAPTION>
1995 1994 1993
--------- --------- ---------
Operations by Geographic Area (Dollars in Thousands)
<S> <C> <C> <C>
Revenue:
United States $ 28,487 $ 30,975 $ 30,936
Other Western Hemisphere 76,115 52,722 31,604
Asia Pacific 44,911 43,445 22,556
Africa, Middle East and C.I.S. 7,858 25,282 15,705
-------- -------- --------
Total revenue $157,371 $152,424 $100,801
-------- -------- --------
-------- -------- --------
Operating income (loss):
United States $ (7,609) $(30,518) $(11,355)
Other Western Hemisphere (921) (5,937) 792
Asia Pacific 8,701 6,771 (1,240)
Africa, Middle East and C.I.S. (1,668) 831 (577)
-------- -------- --------
Total operating income (loss) $ (1,497) $(28,853) $(12,380)
-------- -------- --------
-------- -------- --------
Identifiable assets:
United States $ 71,233 $ 64,337 $121,130
Other Western Hemisphere 83,345 73,688 39,420
Asia Pacific 49,223 43,456 43,176
Africa, Middle East and C.I.S. 13,158 27,867 32,616
-------- -------- --------
Total identifiable assets $216,959 $209,348 $236,342
-------- -------- --------
-------- -------- --------
</TABLE>
Two customers accounted for approximately 22 percent and 13 percent,
respectively, of total revenue in 1995. Three customers accounted for
approximately 14 percent, 12 percent and 11 percent, respectively, of total
revenue in 1994. Three customers accounted for approximately 22 percent, 14
percent and 10 percent, respectively, of total revenue in 1993. Operating
income (loss) is total revenue less operating expenses including depreciation,
depletion and amortization and an allocation of general corporate expenses
based on rig operating days. Operating income (loss) excludes interest
expense, interest capitalized, non-operating income or expense and income
taxes.
Note 9 - Commitments and Contingencies
At August 31, 1995, the Company had letters of credit facilities of
$17,651,000 of which $7,277,000 had been issued.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 9 - Commitments and Contingencies
Certain officers have entered into a Severance Compensation and
Consulting Agreement ("the Agreement") with the Company. The Agreement has an
initial ten year term and provides certain benefits upon a change in control.
A change in control includes certain mergers, sale of all of the Company's
assets, liquidation of the Company or a third party acquiring a greater
percentage of stock than the aggregate ownership of Robert L. Parker, Robert
L. Parker Jr. and Robert L. Parker Trust. After a change in control occurs,
if an officer is terminated other than for cause or resigns for good reason,
the Agreement provides for a payment of three times the annual cash
compensation, a one year consulting agreement at the officer's annual cash
compensation, miscellaneous executive benefits and extended life and health
benefits for four years.
A former employee ("Plaintiff") was injured while working for the Company
on a rig owned and operated by another firm ("Defendant") for which he sought
damages against the firm. Pursuant to the indemnity provision in the contract
between the Company and the Defendant, the Company agreed to defend and
indemnify the Defendant. The litigation ultimately resulted in a settlement
in favor of the Plaintiff totalling $6,750,000. Because certain findings of
fact by the jury created a dispute over the obligations of the Company under
the indemnity provision, the Defendant and the Company entered into litigation
to determine liability for funding the settlement. This ancillary proceeding
also resulted in a settlement, with the Defendant agreeing to pay $1,687,000
and the Company $5,063,000.
The Company has filed suit against its excess insurer claiming
reimbursement of the compensatory portion of the settlement with the
Plaintiff. The Company has also commenced legal proceeding against the
counsel retained to defend the Defendant claiming that the Company was damaged
in having to indemnify the Defendant for the balance of the settlement with
the Plaintiff due to the malpractice/misrepresentation of the counsel. During
fiscal 1994, the Company recorded a $2,562,000 expense related to this
litigation.
In addition, the Company is a party to various other lawsuits and claims
arising out of the ordinary course of business. Management, after review and
consultation with legal counsel, considers that any liability resulting from
these matters would not materially affect the results of operations or the
financial position of the Company.
Note 10 - Related Party Transactions
At August 31, 1995, the Company owned an insurance policy on the life of
Mr. R. L. Parker, chairman and a principal stockholder. The Company is the
beneficiary of this policy which was issued pursuant to a Stock Purchase
Agreement ("Agreement") approved by vote of the stockholders at the 1975
Annual Meeting on December 10, 1975. This Agreement was entered into between
the Company and the Robert L. Parker Trust and provides that upon the death of
Robert L. Parker, the Company would be required, at the option of the Trust,
to purchase from the Trust at a discounted price the amount of Parker Drilling
common stock which could be purchased with the proceeds of the policy of
$7,000,000. On August 3, 1994, the Company and the Trust modified this
Agreement so that the Company will have the option but not the obligation to
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 10 - Related Party Transactions (continued)
purchase the stock at a discounted price with the proceeds or to retain the
entire proceeds upon the death of Robert L. Parker. If action under the
agreement had been required at August 31, 1995, and the Company elected to
purchase Parker Drilling common stock from the Trust, Parker Drilling's
outstanding common stock would have been reduced by approximately three
percent.
As a part of the agreement to terminate the option held by the Trust and
to grant the Company a limited option to purchase stock at a discounted price,
the Company has also agreed to pay a premium of $655,019 annually for a split
dollar last-to-die life insurance policy on Robert L. Parker and Mrs.
Robert L. Parker. Upon the deaths of Mr. Parker and Mrs. Parker, the Company
will be reimbursed by the Robert L. Parker Sr. and Catherine M. Parker Family
Trust from the proceeds of the policy for the full amount of premiums paid
plus interest at the one-year treasury bill rate on the premiums paid after
fiscal year 1999. Additionally, Robert L. Parker Jr., Chief Executive Officer
of the Company and son of Robert L. Parker, will receive as a beneficiary of
the Trust one-third of the net proceeds of this policy. The face value of the
policy is $13,200,000.
Note 11 - Supplementary Information
Maintenance and repairs expense for the years ended August 31, 1995, 1994
and 1993 was $14,364,000, $15,548,000 and $10,149,000, respectively.
Advertising, royalties, taxes other than payroll and income taxes,
depreciation and amortization of intangible assets, pre-operating costs and
similar deferrals were each less than one percent of total revenue. At August
31, 1995, accrued liabilities included $1,178,000 of workers' compensation
liabilities and $2,981,000 of accrued payroll and payroll taxes. At August
31, 1994, accrued liabilities included $2,236,000 of workers' compensation
liabilities and $2,714,000 of accrued payroll and payroll taxes. Other long-
term liabilities included $1,679,000 and $1,179,000 of workers' compensation
liabilities as of August 31, 1995 and 1994, respectively.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
Note 12 - Selected Quarterly Financial Data (Unaudited)
<CAPTION>
Quarter
-------------------------------------------------
First Second Third Fourth Total
-------- -------- -------- -------- ---------
(Dollars in Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
FISCAL 1995
- -----------
Revenue $33,283 $38,738 $43,259 $ 42,091 $157,371
Gross profit <F2> $ 1,558 $ 5,005 $ 5,666 $ 5,439 $ 17,668
Operating income (loss) $(3,457) $ (135) $ 1,016 $ 1,079 $ (1,497)
Net income (loss) $(1,093) $ 69 $ 2,050 $ 2,890 $ 3,916
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Primary and fully
diluted earnings
(loss) per share $ (.02) $ .00 $ .04 $ .05 $ .07
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Quarter
-------------------------------------------------
First Second Third Fourth<F1> Total
-------- -------- -------- -------- ---------
(Dollars in Thousands Except Per Share Amounts)
FISCAL 1994
- -----------
Revenue $40,043 $40,732 $36,679 $ 34,970 $152,424
Gross profit <F2> $ 6,044 $ 3,751 $ 1,049 $ (1,665) $ 9,179
Operating income (loss) $ 1,994 $(1,163) $(2,936) $(26,748) $(28,853)
Net income (loss) $ 1,608 $ (750) $(2,791) $(26,873) $(28,806)
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Primary and fully
diluted earnings
(loss) per share $ .03 $ (.01) $ (.05) $ (.49) $ (.53)<F3>
------- ------- ------- -------- --------
------- ------- ------- -------- --------
<FN>
<F1>
The fourth quarter of fiscal 1994 includes a $19,718,000 Provision for
reduction in carrying value of certain assets and a $2,562,000 charge for
litigation discussed in Notes 2 and 9, respectively.
<F2>
Gross profit is calculated by excluding General and administrative expense and
Provision for reduction in carrying value of certain assets from Operating
income (loss), as reported in the Consolidated Statement of Operations.
<F3>
As a result of shares issued during the year, earnings (loss) per share for the
year's four quarters, which are based on average shares outstanding during each
quarter, do not equal the annual earnings (loss) per share, which is based on
the average shares outstanding during the year.
</FN>
</TABLE>
<PAGE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
This item is not applicable to the Company in that disclosure is required
under Regulation S-X by the Securities and Exchange Commission only if the
Company had changed independent auditors and, if it had, only under certain
circumstances.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Proposal One - Election of
Directors" and "Executive Officers" in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held December 13,
1995, to be filed with the Securities and Exchange Commission ("Commission")
within 120 days of the end of the Company's fiscal year on August 31, 1995.
Item 11. Executive Compensation
The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Meetings, Committees and
Compensation of the Board", "Executive Compensation", "Severance Compensation
and Consulting Agreements", "Compensation Committee Report on Executive
Compensation" and "Performance Graph" in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held December 13, 1995,
to be filed with the Commission within 120 days of the end of the Company's
fiscal year on August 31, 1995. Notwithstanding the foregoing, in accordance
with the instructions to Item 402 of Regulation S-K, the information contained
in the Company's proxy statement under the sub-headings "Compensation
Committee Report on Executive Compensation" and "Performance Graph" shall not
be deemed to be filed as part of or incorporated by reference into this Form
10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Voting" and "Common Stock
Ownership of Directors and Executive Officers" in the Company's definitive
proxy statement for the Annual Meeting of Stockholders to be held December 13,
1995, to be filed with the Commission within 120 days of the end of the
Company's fiscal year on August 31, 1995.
Item 13. Certain Relationships and Related Transactions
The information required by this item is hereby incorporated by reference
to such information appearing under the caption "Certain Relationships and
Related Transactions" in the Company's definitive proxy statement for the
Annual Meeting of Stockholders to be held December 13, 1995, to be filed with
the Commission within 120 days of the end of the Company's fiscal year on
August 31, 1995.
<PAGE>
<PAGE>
<TABLE>
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a) The following documents are filed as part of this report:
<CAPTION>
(1) Financial Statements of Parker Drilling Company and subsidiaries
which are included in Part II, Item 8:
Page
----
<S> <C>
Report of Independent Accountants 13
Consolidated Statement of Operations for each
of the three years in the period ended August 31, 1995 14
Consolidated Balance Sheet as of August 31, 1995 and 1994 15
Consolidated Statement of Cash Flows for each of the
three years in the period ended August 31, 1995 17
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity for each of the three
years in the period ended August 31, 1995 19
Notes to Consolidated Financial Statements 20
(2) Financial Statement Schedule:
Schedule II - Valuation and qualifying accounts 35
</TABLE>
<TABLE>
<CAPTION>
(3) Exhibits:
Exhibit Number Description
-------------- -----------
<S> <C>
3(a) - Restated Certificate of Incorporation of Parker Drilling
Company; incorporated herein by reference to Exhibit 3(a)
to Annual Report on Form 10-K for the year ended August 31,
1989, as amended by Form 8 dated December 27, 1989.
3(b) - By-laws of Parker Drilling Company; incorporated herein by
reference to Exhibit 3(b) to Annual Report on Form 10-K for
the year ended August 31, 1992, as amended by Form 8 dated
February 18, 1993.
10(a) - Credit Agreement, dated as of September 24, 1992, between
Morgan Guaranty Trust Company of New York, Internationale
Nederlanden Bank N.V. and Parker Drilling Company as
amended; incorporated herein by reference to Exhibit 10(b)
to Annual Report on Form 10-K for the year ended August 31,
1992, as amended by Form 8 dated February 18, 1993;
Exhibit(a) to Quarterly Report on Form 10-Q for the
quarterly period ended February 28, 1994; Exhibit (a) to
Quarterly Report on Form 10-Q for the quarterly period
ended May 31, 1994; amendment dated June 30, 1995, to the
Credit Agreement, dated as of September 24, 1992, between
Morgan Guaranty Trust Company of New York, Internationale
Nederlanden Bank N.V. and Parker Drilling Company as
amended.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
PART IV
(continued)
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(continued)
<CAPTION>
(3) Exhibits: (continued)
Exhibit Number Description
-------------- -----------
<S> <C>
10(b) - Parker Drilling Company and Subsidiaries 1991 Stock Grant
Plan; incorporated herein by reference to Exhibit 10(c) to
Annual Report on Form 10-K for the year ended August 31,
1992, as amended by Form 8 dated February 18, 1993.<F1>
10(c) - 1980 Incentive Career Stock Plan; incorporated herein by
reference to Exhibit 10(c) to Annual Report on Form 10-K for
the year ended August 31, 1989, as amended by Form 8 dated
December 27, 1989.<F1>
10(d) - 1969 Key Employees Stock Grant Plan; incorporated herein by
reference to Exhibit 10(e) to Annual Report on Form 10-K for
the year ended August 31, 1992, as amended by Form 8 dated
February 18, 1993.<F1>
10(e) - Parker Drilling Company Stock Bonus Plan; incorporated
herein by reference to Exhibit 10(e) to Annual Report on
Form 10-K for the year ended August 31, 1993, as amended by
Form 10-K/A dated February 24, 1994, and by Exhibit 10(a) to
Quarterly Report on Form 10-Q for the quarterly period ended
February 28, 1995.
10(f) - 1975 Stock Purchase Agreement; incorporated herein by
reference to Exhibit 10(g) to Annual Report on Form 10-K for
the year ended August 31, 1986, as amended by Form 8 dated
December 29, 1986.
10(g) - Form of Severance Compensation and Consulting Agreement
entered into between Parker Drilling Company and each
officer of Parker Drilling Company; incorporated herein by
reference to Exhibit 10(g) to Annual Report on Form 10-K for
the year ended August 31, 1988, as amended by Form 8 dated
December 28, 1988 and Form 8 dated October 4, 1989.<F1>
10(h) - 1994 Parker Drilling Company Deferred Compensation Plan.<F1>
10(i) - 1994 Non-Employee Director Stock Option Plan.<F1>
10(j) - 1994 Executive Stock Option Plan.<F1>
21 - Subsidiaries of the Registrant. 36
23 - Consent of Independent Accountants. 37
27 - Financial Data Schedule.
99 - Additional Exhibit - Annual Report on To be
Form 11-K with respect to Parker Drilling filed by
Company Stock Bonus Plan amendment
<FN>
<F1>
Management Contract, Compensatory Plan or Agreement
</FN>
</TABLE>
(b) Reports on Form 8-K:
There were no reports on Form 8-K for the three months ended August 31,
1995.
<PAGE>
<PAGE>
<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
- -------------------------------- --------- --------- --------- ---------
Balance Charged
at to cost Balance
beginning and at end of
Classifications of period expenses Deductions period
- -------------------------------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Year ended August 31, 1995:
Allowance for doubtful accounts
and notes $ 1,050 $ - $ 254 $ 796
Reduction in carrying value of
rig materials and supplies $ 2,230 $ 870 $ 1,020 $ 2,080
Deferred tax valuation allowance $68,805 $(1,311) $ - $67,494
Year ended August 31, 1994:
Allowance for doubtful accounts
and notes $ 1,217 $ - $ 167 $ 1,050
Reduction in carrying value of
rig materials and supplies $ 1,798 $ 1,017 $ 585 $ 2,230
Deferred tax valuation allowance $58,251 $10,554 $ - $68,805
Year ended August 31, 1993:
Allowance for doubtful accounts
and notes $ 1,390 $ - $ 173 $ 1,217
Reduction in carrying value of
rig materials and supplies $ 4,693 $ 1,373 $ 4,268 $ 1,798
Deferred tax valuation allowance $ - $58,251 $ - $58,251
</TABLE>
<PAGE>
<PAGE>
<TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
PARKER DRILLING COMPANY
By /s/ Robert L. Parker Jr. Date: Nov. 2, 1995
------------------------------
Robert L. Parker Jr.
President and Chief
Executive Officer and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert L. Parker Chairman of the Board and
By ------------------------ Director Date: Nov. 2, 1995
Robert L. Parker
/s/ Robert L. Parker Jr. President and Chief Executive
------------------------- Officer and Director
By Robert L. Parker Jr. (Principal Executive Officer) Date: Nov. 2, 1995
Vice President of Finance and
/s/ James J. Davis Chief Financial Officer
By ------------------------- (Principal Financial Officer) Date: Nov. 2, 1995
James J. Davis
/s/ Randy L. Ellis Corporate Controller
By ------------------------- (Principal Accounting Officer) Date: Nov. 2, 1995
Randy L. Ellis
Executive Vice President and
/s/ James W. Linn Chief Operating Officer and
By ------------------------- Director Date: Nov. 2, 1995
James W. Linn
/s/ Earnest F. Gloyna
By ------------------------- Director Date: Nov. 2, 1995
Earnest F. Gloyna
/s/ David L. Fist
By ------------------------ Director Date: Nov. 2, 1995
David L. Fist
/s/ R. Rudolph Reifrank
By ------------------------- Director Date: Nov. 2, 1995
R. Rudolph Reinfrank
</TABLE>
<PAGE>
Exhibit 10(a)
SECOND AMENDMENT
TO CREDIT AGREEMENT
THIS SECOND AMENDMENT dated as of June 30, 1995 to the Credit
Agreement dated as of September 24, 1992 ("Agreement") between Parker
Drilling Company, a Delaware corporation (the "Borrower") and
Internationale Nederlanden (U.S.) Capital Corporation ("INCC").
WITNESSETH:
----------
WHEREAS, the Borrower and INCC are parties to the Agreement
referred to above; and
WHEREAS, the Borrower has requested INCC and INCC has agreed to
extend the Standby L/C Commitment Period to May 31, 1996;
WHEREAS, the parties hereto have agreed to such amendment subject
to the terms contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower and INCC agree as follows:
1. Amendment of Termination Date. The definition of
-----------------------------
Termination Date is hereby amended, as follows:
"'Termination Date' shall mean May 31, 1996, or if such day
is not a Business Day, the Business Day next preceding such
day;"
2. Effectiveness. This Amendment shall become effective as of
-------------
the date first written above after being executed by the Borrower and
INCC and after Borrower has delivered to INCC Resolutions of the Board
of Directors of Borrower approving the execution, delivery and
performance of this Amendment.
3. Expenses. The Borrower agrees to pay on demand all
--------
reasonable costs and expenses incurred in connection with the
preparation, negotiation, execution and delivery of this Amendment,
including reasonable fees and expenses of counsel for INCC.
4. Definitions. Terms defined in the Agreement shall have
-----------
their defined meanings when used herein.
5. Effect of Amendment. Except as amended and modified by this
-------------------
Amendment, the Agreement and all other Loan Documents shall continue to
be, and shall remain, in full force and effect in accordance with their
terms.
<PAGE>
<PAGE>
6. Governing Law. This Amendment shall be governed by, and
-------------
construed and interpreted in accordance with, the laws of the State of
New York.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective duly authorized officers as
of the date first
written above.
PARKER DRILLING COMPANY
By:/s/ I. E. Hendrix, Jr.
------------------------------
Name: I. E. Hendrix, Jr.
Title: Vice President-Treasurer
INTERNATIONAL NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By:/s/ John Catchpole
------------------------------
Name: John Catchpole
Title: Managing Director
<PAGE>
<PAGE>
Exhibit 10(h)
PARKER DRILLING COMPANY
DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 1994
<PAGE>
<PAGE>
PARKER DRILLING COMPANY DEFERRED COMPENSATION PLAN
- --------------------------------------------------
PARKER DRILLING COMPANY (the "Company") adopts, effective as of January 1,
1994, an unfunded, deferred compensation plan on behalf of certain designated
management or highly compensated employees of the Company. This document
defines the provisions of such plan and shall be known as the "Parker Drilling
Company Deferred Compensation Plan."
This plan is intended in part to be an unfunded, deferred compensation plan
for a select group of management or highly compensated employees, as described
in sections 201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income
Security Act of 1974 ("ERISA").
ALL BENEFITS PAYABLE UNDER THIS PLAN CONSTITUTE GENERAL CORPORATE OBLIGATIONS
WHICH SHALL BE SUBJECT TO THE CLAIMS OF THE GENERAL CREDITORS OF THE COMPANY
IN THE EVENT OF THE COMPANY'S INSOLVENCY.
<PAGE>
<PAGE>
<TABLE>
TABLE OF CONTENTS
- ---------------------------------------------------------------------
ARTICLE I
<CAPTION>
PAGE
<S> <C> <C>
DEFINITIONS 1
1.1 "Accounting Period" 1
1.2 "Accounts" 1
1.3 "Authorized Leave of Absence" 1
1.4 "Beneficiary" 1
1.5 "Board of Directors" 2
1.6 "Bonus Award" 2
1.7 "CEO" 2
1.8 "Change of Control" 2
1.9 "Committee" 3
1.10 "Commonly Controlled Entity" 3
1.11 "Company" 3
1.12 "Company Stock" 3
1.13 "Compensation" 3
1.14 "Compensation Committee" 4
1.15 "Conversion Election" 4
1.16 "Deferrals" 4
1.17 "Deferral Election" or "Election" 4
1.18 "Deferral Percentage" 4
1.19 "Designated Participant" 4
1.20 "Effective Date" 4
1.21 "Eligible Employee" 4
1.22 "Employee" 5
1.23 "Employer" 5
1.24 "Enrollment Election" 5
1.25 "Exchange Act" 5
1.26 "Installment Form of Payment" 5
1.27 "Internal Revenue Code" or "Code" 5
1.28 "Investment Election" 5
1.29 "Investment Fund" or "Fund" 5
1.30 "Notice Date" 5
1.31 "Participant" 6
1.32 "Payment Date" 6
1.33 "Plan" 6
1.34 "Plan Year" 6
1.35 "Qualified Plan" 6
1.36 "Settlement Date" 6
1.37 "Spouse" 6
1.38 "Sweep Date" 6
1.39 "Termination of Employment" 6
1.40 "Trade Date" 6
</TABLE>
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TABLE OF CONTENTS
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ARTICLE II
PAGE
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PARTICIPATION 7
2.1 Eligibility 7
2.2 New Hires 7
ARTICLE III
PARTICIPANT DEFERRALS 8
3.1 Deferral Election 8
3.2 Election Procedures 9
3.3 Coordination with Qualified Plan 9
ARTICLE IV
DEFERRALS AND POSTING 10
4.1 Pre-Tax Deferrals 10
4.2 Bonus Deferral 10
ARTICLE V
PARTICIPANTS' ACCOUNTS 11
5.1 Individual Participant Accounting 11
5.2 Accounting for Investment Funds 11
ARTICLE VI
INVESTMENT FUNDS AND ELECTIONS 12
6.1 General 12
6.2 Investment of Deferrals 12
6.3 Investment of Accounts 12
6.4 Investment Returns on Pre-Tax Deferrals 13
6.5 Restrictions on Investment 13
ARTICLE VII
VESTING AND FORFEITURES 14
7.1 Fully Vested Accounts 14
</TABLE>
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TABLE OF CONTENTS
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ARTICLE VIII
PAGE
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IN-SERVICE WITHDRAWALS 15
8.1 Withdrawals for General Hardship 15
8.2 Withdrawal Processing 15
ARTICLE IX
DISTRIBUTIONS 16
9.1 Pre-Tax Accounts 16
9.3 Death Benefit of Accounts 16
9.4 Payment of Accounts Due to a Change of Control 16
ARTICLE X
AMENDMENT, TERMINATION, MERGER AND CHANGE OF CONTROL 17
ARTICLE XI
MISCELLANEOUS PROVISIONS 18
11.1 Administration 18
11.2 Finality of Determination 18
11.3 Expenses 18
11.4 Indemnification and Exculpation 18
11.5 Funding 18
11.6 Corporate Action 19
11.7 Interests not Transferable 19
11.8 Effect on Other Benefit Plans 19
11.9 Legal Fees and Expenses 19
11.10 Deduction of Taxes from Amounts Payable 19
11.11 Facility of Payment 19
11.12 Company Merger 20
11.13 Gender and Number 20
11.14 Invalidity of Certain Provisions 20
11.15 Headings 20
11.16 Notice and Information Requirements 20
11.17 Governing Law 20
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ARTICLE
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DEFINITIONS
-----------
The following sections of this Article I provide basic definitions of
terms used throughout the Plan, and whenever used herein in a capitalized
form, except as otherwise expressly provided, the terms shall be deemed to
have the following meanings:
1.1 "Accounting Period" means each business day.
1.2 "Accounts" means the record of a Participant's interest in this
Plan represented by his or her:
(a) "Bonus Account" which means a Participant's interest in
this Plan composed of Bonus Deferrals posted for each Plan Year on or
after January 1, 1994 to the Participant under this Plan, if any (as
identified by the Committee) for such Plan Year, plus all income and
gains credited to and minus all losses charged to such account, and
minus all withdrawals and distributions actually charged to such
account; and
(b) "Pre-Tax Account" means a Participant's interest in this
Plan composed of Pre-Tax Deferrals posted for each Plan Year on or
after January 1, 1994, to the Participant under this Plan, if any (as
identified by the Committee) for such Plan Year, plus all income and
gains credited to and minus all losses deemed charged to such account
from an Investment Fund and minus all withdrawals and distributions
actually charged to such account.
1.3 "Authorized Leave of Absence" means an absence, with or without
Compensation, authorized on a nondiscriminatory basis by a Commonly Controlled
Entity under its standard personnel practices applicable to the Employee,
including any period of time during which such person is covered by a
short-term disability plan of his Employer. The date that an Employee's
Authorized Leave of Absence ends shall be determined in accordance with the
personnel policies of such Commonly Controlled Entity, which ending date shall
be no earlier than the date that the Authorized Leave of Absence is scheduled
to end, unless the Employee communicates to such Commonly Controlled Entity
that he is to have a Termination of Employment as of an earlier date.
1.4 "Beneficiary" means with respect to the balance of a
Participant's Accounts as of the death of such Participant, each person
designated by the Participant on his or her most recent Enrollment Election
form approved by the Committee; provided that if a Participant fails to
designate a Beneficiary on an Enrollment Election form or if all such
designated persons predecease the Participant without the Participant
completing a new, approved Enrollment Election form, then Beneficiary means
any person designated by the Participant (actually or by default) to receive
the balance of any of his or her accounts which are payable with respect to
the death of such Participant under the Qualified Plan.
A Beneficiary's participation continues until his or her Accounts are
distributed.
1.5 "Board of Directors" means the board of directors of the
Company.
1.6 "Bonus Award" means the amount of award payable to a
Participant during the Plan Year (without regard to his or her Deferral
Election).
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1.7 "CEO" means the Chief Executive Officer of the Company.
1.8 "Change of Control" shall be deemed to have occurred if:
(a) there shall be consummated (i) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of the Company's
common stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of
the Company's common stock immediately prior to the merger have
substantially the same proportionate ownership of common stock of the
surviving corporation immediately after the merger; or (ii) any sale,
lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of
the Company; or
(b) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing an amount greater than two
times the aggregate percentage held or controlled by R. L. Parker,
his son R. L. Parker, Jr. and the Robert L. Parker Trust (and apart
from rights accruing in special circumstances) having the right to
vote in the election of directors, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases
or otherwise; or
(d) any three persons (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than the Company or any
employee benefit plan sponsored by the Company, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company whose ownership represents an
amount greater than four times the aggregate percentage held or
controlled by R.L. Parker, his son R. L. Parker, Jr. and the Robert
L. Parker Trust (and apart from rights accruing in special
circumstances) having the right to vote in the election of directors,
as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise; or
(e) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of the Company shall cease for any reason to constitute
at least a majority thereof, unless the election or the nomination
for election by the Company's shareholders of each new director
during such two-year period was approved by a vote of at least two-
thirds of the directors then still in office who were directors at
the beginning of such two-year period. A Change of Control shall not
be deemed to have occurred if banks or other creditors receive the
Company's stock in conjunction with transactions involving
forgiveness of outstanding debt or debt restructuring agreements.
(f) at any time an individual is elected to the Board of
Directors who was not nominated by the Board of Directors of the
Company to stand for election.
1.9 "Committee" means the committee appointed pursuant to the terms
of the Plan to manage and control the operation and administration of the Plan
which shall be the same committee for the Qualified Plan.
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1.10 "Commonly Controlled Entity" means an Employer and any
corporation, trade or business which is an affiliate of the Employer.
1.11 "Company" means PARKER DRILLING COMPNAY or any successor
corporation by merger, consolidation, purchase, or otherwise.
1.12 "Company Stock" means common stock of Parker Drilling Company.
1.13 "Compensation" means:
(a) for purposes of Pre-Tax Deferrals, pre-tax base pay paid
to an Eligible Employee by an Employer during a Plan Year (without
regard to any Deferral Election for such Plan Year); and
(b) for purposes of Bonus Deferrals, a Participant's pre-tax
Bonus Award.
Notwithstanding the foregoing provisions, Compensation shall include
elective amounts excludible from gross income under Code sections 125 and
402(a)(8).
1.14 "Compensation Committee" means the compensation committee of
the Board of Directors.
1.15 "Conversion Election" means an election, on such form that may
be required by the Committee, by a Participant to change the method of
measuring the investment return on such Participant's Accounts by investment
of all or some specified portion of such Participant's Accounts from one
Investment Fund to another Investment Fund. No Conversion Election shall be
deemed to have been given to the Committee unless it is complete and delivered
in accordance with the procedures established by such Committee for this
purpose.
1.16 "Deferrals" means amounts posted to this Plan by a Participant.
Specific types of deferrals include:
(a) "Bonus". An amount posted after 1993 based upon the
Participant's Deferral Election to defer some or all of
his or her Compensation.
(b) "Pre-Tax". An amount posted after 1993 based upon the
Participant's Deferral Election to defer some or all of
his or her Compensation.
1.17 "Deferral Election" or "Election" means irrevocable elections
made by a Participant (a) to reduce his or her Compensation for a Plan Year by
an amount equal to the product of his or her Deferral Percentage and such
Compensation subject to the Deferral Election; (b) to select whether Deferrals
for that Plan Year will be paid in an Installment Form of Payment; and (c) to
select a Payment Date for the Deferrals for that Plan Year.
1.18 "Deferral Percentage" means (a) with respect to Pre-Tax
Deferrals, the percentage of a Participant's Compensation for a Plan Year
which is to be deferred and posted to this Plan; and (b) with respect to Bonus
Deferrals, the percentage of a Participant's Compensation for a Plan Year
which is to be deferred and posted to this Plan.
1.19 "Designated Participant" means an individual who is allowed to
be a Participant of this Plan because he or she is on the list of Employees as
being an Eligible Employee for the purpose of this Plan as determined by the
CEO.
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1.20 "Effective Date" means January 1, 1994, the date upon which the
provisions of this document become effective. In general, the provisions of
this document only apply to Participants who are Employees on or after the
Effective Date.
1.21 "Eligible Employee" means any Employee (including an Employee
on an Authorized Leave of Absence) of an Employer whose Compensation in the
calendar year immediately preceding the calendar year with respect to which a
Deferral Election is to be effective was higher than the Compensation for
seventy-seven percent (77%) of all such Employees for that Plan Year and who
is a Designated Participant.
1.22 "Employee" means any person who is considered to be an employee
pursuant to the personnel policies of, or on and after a Change of Control,
who renders services as a common law employee to, the Employer.
1.23 "Employer" means the Company and any Commonly Controlled Entity
whose Employees are eligible to participate in the Plan as determined by the
CEO.
1.24 "Enrollment Election" means irrevocable elections made by a
Participant (a) to select the term of his or her Installment Form of Payment;
and (b) to select the Payment Date of his or her Accounts following
Termination of Employment.
1.25 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.26 "Installment Form of Payment" means with respect to each Plan
Year's Pre-Tax Account, the term of years selected by the Participant in his
or her annual Deferral Election form over which to pay such Pre-Tax Account in
annual installments commencing as of the Payment Date of such Pre-Tax Account
and payable on each January 1 thereafter over a period of not less than two
(2) nor more than ten (10) years (stated as a number of whole integers), with
each installment being an amount equal to the amount determined by dividing
the applicable balance of such Pre-Tax Account as of the date of payment by
the number of dates of payment remaining in the installment period (including
the current date of payment).
1.27 "Internal Revenue Code" or "Code" means the Internal Revenue
Code of 1986, as amended, any subsequent Internal Revenue Code and final
Treasury Regulations. If there is a subsequent Internal Revenue Code, any
references herein to Internal Revenue Code sections shall be deemed to refer
to comparable sections of any subsequent Internal Revenue Code.
1.28 "Investment Election" means an election, on such form that may
be required by the Committee, made by a Participant to direct the method of
measuring the investment return on his or her Deferrals by investment of such
Deferrals into one or more Investment Funds. No Investment Election shall be
deemed to have been given to the Committee unless it is complete and delivered
in accordance with the procedures established by such Committee for this
purpose.
1.29 "Investment Fund" or "Fund" means one or more of the investment
alternatives which are available under the Qualified Plan at any determination
date, as determined by the CEO.
1.30 "Notice Date" means the date established by the Committee as
the deadline for it to receive a Deferral Election or any other notification
with respect to an administrative matter in order to be effective under this
Plan which shall be November 30 with respect to each succeeding Plan Year and
February 25, 1994 with respect to the 1994 Plan Year.
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1.31 "Participant" means an Eligible Employee who begins to
participate in the Plan after completing the eligibility requirements. A
Participant's participation continues until his Accounts are distributed.
1.32 "Payment Date" means:
(a) with respect to each Plan Year, the date designated by a
Participant to distribute or commence to distribute his or her Pre-
Tax or Bonus Account for that Plan Year; and
(b) with respect to a Termination of Employment, the date
designated by a Participant for all of his or her Accounts to be
distributed or commence to be distributed which date is not later
than the first day of the fifteenth (15th) month following a
Participant's Termination of Employment.
1.33 "Plan" means the PARKER DRILLING COMPANY DEFERRED COMPENSATION
PLAN, as set forth herein and as hereafter may be amended from time to time.
1.34 "Plan Year" means the annual accounting period of the Plan
which ends on each December 31.
1.35 "Qualified Plan" means the PARKER DRILLING COMPANY STOCK BONUS
PLAN, as amended from time to time.
1.36 "Settlement Date" means the date on which financial
transactions from a Trade Date are settled with cash or an interest in an
Investment Fund.
1.37 "Spouse" means a person who, as of the earlier of a
Participant's Payment Date and death, is alive and married to the Participant
within the meaning of the laws of the State of the Participant's residence as
evidenced by a valid marriage certificate or other proof acceptable to the
Committee.
1.38 "Sweep Date" means the date established by the Committee as the
cutoff date and time for the Committee to receive notification with respect to
a financial transaction in order to be executed with respect to such Trade
Date.
1.39 "Termination of Employment" occurs when a person ceases to be
an Employee (1) as determined by the personnel policies of the Company, or
(2) on and after a Change of Control. Transfer of employment from the
Company, or from one affiliate of the Company to another affiliate of the
Company, shall not constitute a Termination of Employment for purposes of this
Plan.
1.40 "Trade Date" means the date as of which a financial transaction
is executed (e.g. Investment Election, Conversion Election, Payment Date).
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ARTICLE II
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<PAGE>
PARTICIPATION
2.1 Eligibility. On or after the Effective Date, each individual
who is an Eligible Employee on a January 1st shall become a Participant for
that Plan Year if he has a Deferral Election in effect for that Plan Year.
2.2 New Hires. On or after the Effective Date, each individual
who is employed as an Eligible Employee shall become a Participant for that
Plan Year if he has a Deferral Election in effect for that Plan Year.
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ARTICLE III
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PARTICIPANT DEFERRALS
3.1 Deferral Election.
(a) For each Plan Year commencing on or after January 1,
1994, a Participant who is an Eligible Employee and who desires to
have Pre-Tax Deferrals made on his or her behalf shall file a
Deferral Election pursuant to procedures specified by the Committee
specifying (1) his or her Deferral Percentage of not less than 2% and
not more than 100% (stated as a whole integer percentage) and
authorizing the Compensation otherwise payable to him or her for a
Plan Year to be reduced and deferred hereunder to such Participant's
Payment Date which shall not be earlier than two (2) full Plan Years
after the date the Deferral Election is received by the Committee;
and (2) whether or not the Pre-Tax Account created with respect to
such Plan Year will be distributed in the Installment Form of
Payment.
(b) For each Plan Year commencing on or after January 1,
1994, a Participant who is an Eligible Employee and who desires to
have a Bonus Deferral made on his or her behalf shall file a Deferral
Election pursuant to procedures specified by the Committee specifying
his or her Deferral Percentage of not less than 5% nor more than 100%
(stated as a whole integer percentage) and authorizing his or her
Compensation payable for a Plan Year to be reduced and deferred
hereunder to a fixed Payment Date not earlier than two (2) full Plan
Years after the date the Deferral Election is received by the
Committee; provided however, a Participant's Deferral Election shall
be limited to that percentage of his or her Compensation subject to
the Deferral Election which will result in no deferral of an amount
equal to the Employee's portion of taxes imposed by the Federal
Insurance Contributions Act with respect to the Bonus Award, unless
such Participant has made other arrangements with and acceptable to
the Committee for payment of such taxes.
(c) Notwithstanding Subsection (a) or (b) hereof, for any
Plan Year the Committee may, without amending this Plan, determine
that the maximum Deferral Percentage shall be greater or lesser than
the percentages set forth in Subsection (a) or (b) hereof.
Otherwise, the maximum Deferral Percentage as provided in Subsection
(a) or (b) hereof shall apply.
(d) Any Deferral Election which has not been properly
completed, or which is submitted at a time when the Participant does
not have outstanding a properly completed Investment Election, if
permitted, will be deemed not to have been received and be void. A
Participant's Deferral Election shall be effective only if received
by the Committee on or before the Notice Date for a Plan Year.
3.2 Election Procedures. If properly received by the Committee, a
Deferral Election will be effective only with respect to Compensation paid in
a Plan Year to which the Deferral Election applies and only with respect to
Compensation paid after the Notice Date for the Deferral Election. Consistent
with the above, the Committee may establish rules and procedures governing
when a Deferral Election will be effective and what Compensation will be
deferred by the Deferral Election; provided such rules and procedures are not
more permissive than the terms and provisions of this Plan.
3.3 Coordination with Qualified Plan. Notwithstanding a
Participant's Deferral Election, if a Participant makes a "401(k) Hardship"
withdrawal from the Qualified Plan during a Plan Year, the "401(k) Hardship"
withdrawal rules of the Qualified Plan, which are intended to be applicable to
this Plan, are incorporated by reference herein and made a part hereof, but
only to the extent required by Treas. Reg. Section 1.401(k)-1, in order for
the Qualified Plan to be a qualified cash or deferral arrangement.
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ARTICLE IV
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DEFERRALS AND POSTING
4.1 Pre-Tax Deferrals.
(a) Frequency and Eligibility. Subject to the limits of the
Plan and to the Committee's authority to limit Deferrals under the
terms of this Plan, for each period for which a Deferral Election is
in effect, the Employer shall post to each Participant's Pre-Tax
Account an amount equal to the amount designated by the Participant
as a Pre-Tax Deferral on his or her Deferral Election.
(b) Posting. Pre-Tax Deferrals made during an Accounting
Period shall be posted to each Participant's Pre-Tax Account by the
Committee as of the date such Compensation amount would otherwise
have been paid to the Participant.
4.2 Bonus Deferral.
(a) Frequency and Eligibility. For each period after 1994
for which a Deferral Election is in effect, the Company shall post to
this Plan on behalf of each Participant an amount equal to the amount
designated by the Participant as a Bonus Deferral on his or her
Deferral Election.
(b) Posting. The Bonus Deferral shall be posted to the
Bonus Deferral Account of such Participant as of the date his or her
Bonus Award would otherwise have been paid to the Participant.
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ARTICLE V
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PARTICIPANTS' ACCOUNTS
5.1 Individual Participant Accounting.
(a) Account Maintenance. The Committee shall cause the
Accounts for each Participant to reflect amounts posted to the
Accounts and the measurement of investment returns on such Accounts
in accordance with this Plan. Investment returns during or with
respect to an Accounting Period shall be accounted for at the
individual account level by posting such returns to each Account of
each affected Participant. Account values shall be maintained in
shares, units or dollars.
(b) Trade Date Accounting and Investment Cycle. For any
financial transaction involving a change in the measurement of
investment returns, withdrawals or distributions to be executed as of
a Trade Date, the Committee must receive instructions by the Sweep
Date and such instructions shall apply only to amounts posted to the
Accounts as of the Trade Date. Such financial transactions in an
Investment Fund shall be posted to a Participant's Accounts as of the
Trade Date and based upon the Trade Date values. All such
transactions shall be effected on the Settlement Date (or as soon as
is administratively feasible) relating to the Trade Date as of which
the transaction occurs.
(c) Suspension of Transactions. Whenever the Committee
considers such action to be appropriate, the Committee, in its
discretion, may suspend from time to time the Trade Date.
(d) Error Correction. The Committee may correct any errors
or omissions in the administration of this Plan by restoring or
charging any Participant's Accounts with the amount that would be
credited or charged to the Accounts had no error or omission been
made.
5.2 Accounting for Investment Funds. The Committee is responsible
for determining the dollar value or a share or unit value of each Investment
Fund as of each Trade Date. Fees and expenses incurred for the management and
maintenance of Investment Funds shall be charged at the Investment Fund level
and reflected in the net gain or loss of each Investment Fund.
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ARTICLE VI
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INVESTMENT FUNDS AND ELECTIONS
6.1 General. This Article will govern investment directions, if
permitted by the Committee. If no investment directions by Participants are
allowed by the Committee, Section 6.4 will control.
6.2 Investment of Deferrals.
(a) Investment Election. Each Participant may direct, by
submission to the Committee of a completed Investment Election form
provided for that purpose by the Committee, to select a measurement
of investment returns for Deferrals posted to his or her Accounts
(and the portion of such Accounts attributable to such Deferrals) by
investment of such Deferrals (and such portion of Accounts) in one or
more Investment Funds. Each Investment Election shall apply
proportionately to all Deferrals based upon the relative amount of
each. The frequency with which a Participant can make new Investment
Elections shall be determined by the Committee.
(b) Effective Date of Investment Election; Change of
Investment Election. A Participant's initial Investment Election
will be effective with respect to a Fund on the Trade Date which
relates to the Sweep Date on which or prior to which the Investment
Election is received pursuant to procedures specified by the
Committee. Any Investment Election which has not been properly
completed will be deemed not to have been received. A Participant's
Investment Election shall continue in effect, notwithstanding any
change in his or her Compensation or his or her Deferral Percentage,
until the effective date of a new Investment Election. A change in
Investment Election shall be effective with respect to a Fund on the
Trade Date which relates to the Sweep Date on which or prior to which
the Committee receives the Participant's new Investment Election.
6.3 Investment of Accounts.
(a) Conversion Election. Notwithstanding a Participant's
Investment Election, a Participant or Beneficiary may direct, by
submission of a completed Conversion Election form provided for that
purpose to the Committee, to change the measurement of investment
returns of his or her Accounts from one Investment Fund to another
Investment Fund. Each Conversion Election shall apply
proportionately to all affected Accounts based upon the relative
balance of each.
(b) Effective Date of Conversion Election. A Conversion
Election to change a Participant's measurement of investment returns
of his or her Accounts in one Investment Fund to another Fund shall
be effective with respect to such Funds on and after the Trade Date
which relates to the Sweep Date on which or prior to which the
Conversion Election is received pursuant to procedures specified by
the Committee. Notwithstanding the foregoing, to the extent
required by any provisions of an Investment Fund, the effective date
of any Conversion Election may be delayed or the amount of any
permissible Conversion Election may be reduced. Any Conversion
Election which has not been properly completed will be deemed not to
have been received.
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6.4 Investment Returns on Pre-Tax Deferrals. If no investment
directions are given by a Participant, his or her Accounts shall be deemed to
have been invested in an interest bearing investment. The rate of interest
compounded annually deemed to be earned on such Accounts on any day shall be a
rate set by the Compensation Committee and announced no later than November 30
for the immediately succeeding Plan Year, and for the 1994 Plan Year shall be
the rate announced November 30, 1993; provided however, in no event shall such
rate of interest with respect to any Plan Year be less than the prime rate of
interest quoted by Citibank, N.A. on the date of announcement, or if no
announcement, on November 30. For this purpose, the Trade Date and Settlement
Date are the same date as the Payment Date.
6.5 Restrictions on Investment. The following additional
restrictions shall apply to the investment of Deferrals and Accounts:
(a) No Investment Election or Conversion Election shall be
permitted which results in the investment of a Participant's Accounts
in an Investment Fund invested primarily in Company Stock; and
(b) Any limitations, conditions or restrictions which may be
imposed by the Committee.
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ARTICLE VII
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VESTING AND FORFEITURES
7.1 Fully Vested Accounts. A Participant shall be fully vested
and have a nonforfeitable right to his Accounts at all times.
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ARTICLE VIII
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IN-SERVICE WITHDRAWALS
8.1 Withdrawals for General Hardship.
(a) Requirements. A Participant may request the withdrawal
of the amount from his or her Accounts (but no more than the balance
of the Accounts) needed to satisfy a financial need by submitting a
completed withdrawal request to the Committee.
(b) Financial Need. A financial need for this purpose is a
severe, unanticipated hardship, the occurrence of which is beyond the
Participant's control and for which the amount needed to satisfy the
hardship is determined only after the Participant has used all
reasonably available funds or resources (other than this Plan or the
Qualified Plan).
8.2 Withdrawal Processing.
(a) Minimum Amount. The minimum amount for any type of
withdrawal is $1,000.00.
(b) Application by Participant. A Participant must submit a
completed withdrawal request form to the Committee to apply for any
type of withdrawal.
(c) Approval by Committee. The Committee is responsible for
determining that a withdrawal request conforms to the requirements
described in this Article.
(d) Time of Processing. The Company shall process all
withdrawal requests which it receives by a Sweep Date, based on the
value as of the Trade Date to which it relates, and fund them on the
next Settlement Date. The Company shall then make payment to the
Participant as soon thereafter as is administratively feasible.
(e) Medium and Form of Payment. The medium of payment for
withdrawals is cash. The form of payment for withdrawals shall be a
single payment.
(f) Investment Fund Sources. Within each Account used for
funding a withdrawal, amounts shall be taken in direct proportion to
the value of the Participant's Account in each Investment Fund at the
time the withdrawal is made.
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ARTICLE IX
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DISTRIBUTIONS
Benefits payable under this Plan shall be paid in the form and time
prescribed below.
9.1 Pre-Tax Accounts.
(a) Form of Payment. The form of payment of the balance of
a Participant's Pre-Tax Account for a Plan Year will be a single sum
payment except with respect to those Accounts for which the
Participant has selected the Installment Form of Payment on his or
her Deferral Election form, in which case such Pre-Tax Accounts will
be paid in the Installment Form of Payment.
(b) Time of Payment. The Payment Date of the balance of a
Participant's Pre-Tax Account for a Plan Year shall be the earlier of
(1) the Payment Date selected in his or her annual Deferral Election
form or (2) the Payment Date following a Termination of Employment
selected in his or her Enrollment Election form.
9.2 Bonus Account.
(a) Form of Payment. The form of payment of the balance of
a Participant's Bonus Account for each Plan Year will be a single sum
payment.
(b) Time of Payment. The Payment Date of the balance of a
Participant's Bonus Account for each Plan Year shall be the earlier
of (1) the fixed Payment Date selected by the Participant on the
Deferral Election form for the Plan Year or (2) the Payment Date
following a Termination of Employment selected in his or her
Enrollment Election form.
9.3 Death Benefit of Accounts. Upon the death of a Participant,
the remaining balance in his or her Accounts shall be paid to the
Participant's Beneficiary in a single sum as soon as administratively possible
after the Participant's death; provided however, if such payment will result
in any portion of the payment (or any other amount paid to such Beneficiary
during the same Plan Year) not being deductible by reason of Code section
162(m), the Committee may defer payment to a later Payment Date designated by
it and such Accounts shall continue to be invested under this Plan.
9.4 Payment of Accounts Due to a Change of Control. In the event
of a Participant's Termination of Employment within two (2) years following a
Change of Control, the balances of his or her Accounts shall be paid
immediately in a single sum.
<PAGE>
<PAGE>
ARTICLE X
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AMENDMENT, TERMINATION, MERGER AND CHANGE OF CONTROL
The Company by action of the Compensation Committee reserves the
right to amend this Plan from time to time or to terminate this Plan at any
time; provided, however, without the written consent of each Participant and
Beneficiary of a deceased Participant, no such action may reduce or relieve
the Company of any obligation to pay any balance of Accounts maintained under
this Plan as of the date of such amendment or termination. Furthermore, if
the Company should ever amend this Plan to provide interest accruals for a
Plan Year of less than the prime rate of interest quoted by Citibank, N.A. on
the date the interest is established by the Compensation Committee for such
Plan Year, without also implementing Participant investment directions into
Investment Funds, this Plan shall terminate. Upon termination of this Plan,
all Account balances shall be paid immediately in cash in a lump sum to the
Participant or Beneficiary thereof.
<PAGE>
<PAGE>
ARTICLE XI
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MISCELLANEOUS PROVISIONS
11.1 Administration. This Plan shall be administered by the
Committee. The Committee shall have, to the extent appropriate, the same
powers, rights, duties, and obligations with respect to this Plan as the
Committee of the Qualified Plan has under each such document (other than the
power to amend this Plan). In the event a Participant who is a member of the
Committee or who is the CEO has an issue pending before the Committee, such
Participant, if a member of the Committee, may not act on, or otherwise
participate in, the Committee's action on such issue, and if the CEO, the
Committee shall defer authority for action on such issue to the Compensation
Committee.
11.2 Finality of Determination. The determination of the Committee
as to any disputed questions arising under this Plan, including questions of
construction and interpretation shall be final, binding, and conclusive upon
all persons.
11.3 Expenses. The expenses of administering this Plan shall be
borne by the Company.
11.4 Indemnification and Exculpation. The members of the
Committee, its agents and officers, directors and employees of the Company
shall be indemnified and held harmless by the Company against and from any and
all loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by them in connection with or resulting from any claim, action, suit,
or proceeding to which they may be a party or in which they may be involved by
reason of any action taken or failure to act under this Plan and against and
from any and all amounts paid by them in settlement (with the Company's
written approval) or paid by them in satisfaction of a judgment in any such
action, suit, or proceeding. The foregoing provision shall not be applicable
to any person if the loss, cost, liability, or expense is due to such person's
gross negligence or willful misconduct.
11.5 Funding. While all benefits payable under this Plan
constitute general corporate obligations, the Company may establish a separate
irrevocable grantor trust for the benefit of all Participants, which trust
shall be subject to the claims of the general creditors of the Company in the
event of the Company's insolvency, to be used as a reserve for the discharge
of the Company's obligations under this Plan to such Participants. Any
payments made to a Participant under the separate trust for his benefit shall
reduce dollar for dollar the amount payable to the Participant from the
general assets of the Company. The amounts payable under this Plan shall be
reflected on the accounting records of the Company but shall not be construed
to create or require the creation of a trust, custodial, or escrow account,
except as described above in this section. No Participant (or Beneficiary of
a Participant) shall have any right, title, or interest whatever in or to any
investment reserves, accounts, or funds that the Company may purchase,
establish, or accumulate to aid in providing benefits under this Plan.
Nothing contained in this Plan, and no action taken pursuant to its
provisions, shall create a trust or fiduciary relationship of any kind between
the Company, the Committee and a Participant, Beneficiary or any other person.
Neither a Participant nor Beneficiary shall acquire any interest greater than
that of an unsecured creditor.
11.6 Corporate Action. Any action required of or permitted by the
Company under this Plan shall be by resolution of the Compensation Committee
or any person or persons authorized by resolution of the Compensation
Committee.
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<PAGE>
11.7 Interests not Transferable. The interests of the Participants
and their Beneficiaries under this Plan are not subject to the claims of their
creditors and may not be voluntarily or involuntarily transferred, assigned,
alienated, or encumbered by them.
11.8 Effect on Other Benefit Plans. Amounts credited or paid under
this Plan shall not be considered to be compensation for the purposes of the
Qualified Plan maintained by the Company. The treatment of such amounts under
other employee benefits plans shall be determined pursuant to the provisions
of such plans.
11.9 Legal Fees and Expenses. After a Change of Control, the
Company shall pay all legal fees and expenses which the Participant may incur
as a result of the Company's contesting the validity, enforceability or the
Participant's interpretation of, or determinations under, this Plan.
11.10 Deduction of Taxes from Amounts Payable.
(a) Distribution. The Company shall deduct from the amount
to be distributed such amount as the Company, in its sole discretion,
deems proper to protect the Company against liability for the payment
of death, succession, inheritance, income, or other taxes, and out of
money so deducted, the Company may discharge any such liability and
pay the amount remaining to the Participant, the Beneficiary or the
deceased Participant's estate, as the case may be.
(b) Withholding. The Company may withhold whatever taxes
(including FICA, state or federal taxes) it, in its sole discretion,
deems proper to protect the Company against liability for the payment
of such withholding taxes and out of the money so deducted, the
Company may discharge any such liability. Withholding for this
purpose may come from any wages due to the Participant, or if none,
from the Participant's Accounts hereunder.
11.11 Facility of Payment. If a Participant or Beneficiary is
declared an incompetent or is a minor and a conservator, guardian, or other
person legally charged with his or her care has been appointed, any benefits
to which such Participant or Beneficiary is entitled shall be payable to such
conservator, guardian, or other person legally charged with his or her care.
The decision of the Committee in such matters shall be final, binding, and
conclusive upon the Company and upon each Participant, Beneficiary, and every
other person or party interested or concerned. The Company and the Committee
shall not be under any duty to see to the proper application of such payments.
11.12 Company Merger. This Plan shall be binding and enforceable
against any successor corporation to the Company, by merger, consolidation,
purchase or otherwise, and such successor corporation shall be substituted
hereunder for the Company.
11.13 Gender and Number. Except when the context indicates to the
contrary, when used herein, masculine terms shall be deemed to include the
feminine, and singular the plural.
11.14 Invalidity of Certain Provisions. If any provision of this
Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof and this Plan
shall be construed and enforced as if such provisions, to the extent invalid
or unenforceable, had not been included.
11.15 Headings. The headings or articles are included solely for
convenience of reference, and if there is any conflict between such headings
and the text of this Plan, the text shall control.
<PAGE>
<PAGE>
11.16 Notice and Information Requirements. Except as otherwise
provided in this Plan or as otherwise required by law, the Employer shall have
no duty or obligation to affirmatively disclose to any Participant or
Beneficiary, nor shall any Participant or Beneficiary have any right to be
advised of, any material information regarding the Employer, at any time prior
to, upon or in connection with the Employer's purchase, or any other
distribution or transfer (or decision to defer any such distribution) of any
Company Stock or any other stock held under this Plan.
11.17 Governing Law. This Plan shall be governed by the laws of the
State of Oklahoma.
Executed in one counterpart original this 4th day of October, 1994,
but effective as of the Effective Date.
PARKER DRILLING COMPANY
By:/s/JAMES J. DAVIS
--------------------------------
James J. Davis
Title:
-----------------------------
Vice President of Finance
& Chief Financial Officer
<PAGE>
<PAGE>
EXHIBIT 10(i)
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Parker Drilling Company
1994 Non-Employee
Director Stock Option Plan
<PAGE>
<PAGE>
PARKER DRILLING COMPANY
1994 NON-EMPLOYEE
DIRECTOR STOCK OPTION PLAN
<TABLE>
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TABLE OF CONTENTS
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ARTICLE I Establishment........................................... 1
1.1 Purpose................................................. 1
ARTICLE II Definintions............................................ 1
2.1 Affiliate............................................... 1
2.2 Agreement or Option Agreement........................... 1
2.3 Board of Directors or Board............................. 1
2.4 Cause................................................... 1
2.5 Change in Control....................................... 2
2.6 Change in Control Price................................. 3
2.7 Code or Internal Revenue Code........................... 3
2.8 Commission.............................................. 3
2.9 Committee............................................... 3
2.10 Common Stock............................................ 3
2.11 Company................................................. 3
2.12 Director................................................ 3
2.13 Disability.............................................. 3
2.14 Disinterested Person.................................... 4
2.15 Effective Date.......................................... 4
2.16 Exchange Act............................................ 4
2.17 Fair Market Value....................................... 4
2.18 Grant Date.............................................. 4
2.19 Notice Date............................................. 4
2.20 Option.................................................. 4
2.21 Option Period........................................... 4
2.22 Option Price............................................ 4
2.23 Participant............................................. 4
2.24 Plan.................................................... 5
2.25 Representative.......................................... 5
2.26 Rule 16b-3.............................................. 5
2.27 Securities Act.......................................... 5
2.28 Spread.................................................. 5
2.29 Termination of Directorship............................. 5
</TABLE>
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<CAPTION>
TABLE OF CONTENTS
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ARTICLE III Administration.......................................... 5
3.1 Committee Structure and Authority....................... 6
ARTICLE IV Stock Subject to Plan................................... 7
4.1 Number of Shares........................................ 8
4.2 Release of Shares....................................... 8
4.3 Restrictions on Shares.................................. 8
4.4 Shareholder Rights...................................... 8
4.5 Best Efforts to Register................................ 9
4.6 Anti-Dilution........................................... 9
ARTICLE V Option Grants........................................... 9
5.1 Eligibility............................................. 9
5.2 Grant and Exercise...................................... 9
5.3 Terms and Conditions....................................10
ARTICLE VI Change in Control Provisions............................12
6.1 Impact of Event.........................................12
ARTICLE VII Miscellaneous..........................................12
7.1 Amendments and Termination..............................12
7.2 General Provisions......................................13
7.3 Rights with Respect to Continuance of
Employment..............................................14
7.4 Options in Substitution for Options
Granted by Other Corporations...........................14
7.5 Procedure for Adoption..................................14
7.6 Procedure for Withdrawal................................15
7.7 Delay...................................................15
7.8 Headings................................................15
7.9 Severability............................................15
7.10 Successors and Assigns..................................15
7.11 Entire Agreement........................................15
</TABLE>
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<PAGE>
PARKER DRILLING COMPANY
1994 NON-EMPLOYEE
DIRECTOR STOCK INCENTIVE PLAN
ARTICLE I
Establishment
1.1 Purpose.
The Parker Drilling Company 1994 Director Stock Incentive Plan ("Plan")
is hereby established by Parker Drilling Company ("Company"). The purpose of
the Plan is to promote the overall financial objectives of the Company and its
shareholders by motivating directors of the Company who are not employees to
achieve long-term growth in shareholder equity in the Company and to retain
the association of those individuals. The Plan and the grant of awards
thereunder is expressly conditioned upon the Plan's approval by the security
holders of the Company to the extent required by Rule 16b-3 of the Securities
Exchange Act of 1934, as amended.
ARTICLE II
Definitions
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, the Company including, without limitation, any member of an affiliated
group of which the Company is a common parent corporation as provided in
Section 1504 of the Code.
2.2 "Agreement" or "Option Agreement" means, individually or
collectively, any agreement entered into pursuant to the Plan pursuant to
which an Option is granted to a Participant.
2.3 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.4 "Cause" means an act or acts of dishonesty by the Participant
constituting a felony under applicable law and resulting or intending to
result directly or indirectly in gain to or personal enrichment of the
Participant at the Company's expense. Notwithstanding the foregoing, the
Participant shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for that
purpose (after reasonable notice to him or her has been given or has been made
and an opportunity for him or her, together with his or her counsel, to be
heard before the Board), finding that in the good faith opinion of the Board
the Participant was guilty of conduct set forth above in the first sentence
hereof and specifying the particulars thereof in detail.
<PAGE>
<PAGE>
2.5 "Change in Control" means the happening of any of the following
events:
(a) there shall be consummated (i) any consolidation or merger of
the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock
would be converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's common stock
immediately prior to the merger have substantially the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company; or
(b) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company representing an amount greater than two times the
aggregate percentage held or controlled by R. L. Parker, his son R.
L. Parker, Jr. and the Robert L. Parker Trust (and apart from rights
accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise; or
(d) any three persons (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company whose ownership represents an amount greater than four
times the aggregate percentage held or controlled by R. L. Parker, his
son R. L. Parker, Jr. and the Robert L. Parker Trust (and apart from
rights accruing in special circumstances) having the right to vote in
the election of directors, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise; or
(e) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during such
two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such two-year period. A Change of Control shall not be deemed to have
occurred if banks or other creditors receive the Company's stock in
conjunction with transactions involving forgiveness of outstanding debt
or debt restructuring agreements.
(f) at any time an individual is elected to the Board of Directors
who was not nominated by the Board of Directors of the Company to stand
for election.
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<PAGE>
2.6 "Change in Control Price" means the highest price per share (a) paid
in any transaction reported on the New York Stock Exchange Composite or other
national exchange on which such shares are listed or on NASDAQ, or (b) paid or
offered in any bona fide transaction related to a potential or actual Change
in Control of the Company at any time during the preceding sixty (60) day
period as determined by the Committee.
2.7 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, final Treasury Regulations thereunder and any subsequent
Internal Revenue Code.
2.8 "Commission" means the Securities and Exchange Commission or any
successor agency.
2.9 "Committee" means the person or persons who administer the Plan, as
further described in the Plan.
2.10 "Common Stock" means the shares of the regular voting Common Stock,
$.16 2/3 par value per share, whether presently or hereafter issued, and any
other stock or security resulting from adjustment thereof as described
hereinafter or the common stock of any successor to the Company which is
designated for the purpose of the Plan.
2.11 "Company" means the Parker Drilling Company, a Delaware
corporation, and includes any successor or assignee corporation or
corporations into which the Company may be merged, changed or consolidated;
any corporation for whose securities the securities of the Company shall be
exchanged; and any assignee of or successor to substantially all of the assets
of the Company.
2.12 "Director" means each and any director who serves on the Board and
who is not an officer or employee of the Company or any of its Affiliates.
2.13 "Disability" means a permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan. The
determination of Disability for purposes of this Plan shall not be construed
to be an admission of disability for any other purpose.
2.14 "Disinterested Person" shall have the meaning set forth in Rule
16b-3, or any successor definition adopted by the Commission.
2.15 "Effective Date" means December 14, 1994 or such other date
specified by the Board at the time the Plan is approved by the Board.
2.16 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.17 "Fair Market Value" means, except as otherwise provided in this
Plan, the mean, as of any given date, between the highest and lowest reported
sales prices of the Common Stock on the New York Stock Exchange Composite Tape
or, if not listed on such exchange, any other national exchange on which the
Common Stock is listed or on NASDAQ. If there is no regular public trading
market for such stock, the Fair Market Value of the Common Stock shall be
determined by the Committee in good faith.
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<PAGE>
<PAGE>
2.18 "Grant Date" means (a) with respect to a Director on the Effective
Date, the first business day of the New York Stock Exchange in calendar year
1995, and (b) with respect to any person who continues as a Director or who
becomes a Director after the Effective Date, the first business day of the
principal exchange on which the Common Stock is traded (or, if applicable,
NASDAQ) in the calendar year immediately following each annual meeting of
shareholders of the Company (provided the person is a Director on such date).
2.19 "Notice Date" means the date established by the Committee as the
deadline for it to receive a Deferral Election or any other notification with
respect to an administrative matter in order to be effective under this Plan.
2.20 "Option" means the right to purchase the number of shares of Common
Stock specified by the Plan at a price and for a term fixed by the Plan, and
subject to such other limitations and restrictions as the Plan and the
Committee imposes.
2.21 "Option Period" means the period during which the Option shall be
exercisable in accordance with the Agreement and the Plan.
2.22 "Option Price" means the price at which the Common Stock may be
purchased under an Option.
2.23 "Participant" means any Director to whom an Option has been granted
under the Plan, and in the event a Representative is appointed for a
Participant or a former spouse becomes a Representative, then the term
"Participant" shall mean such appointed Representative, successor
Representative, or spouse as the case may be. The term shall also include any
person or entity to whom an Option has been transferred, including a trust for
the benefit of the Participant, the Participant's parents, spouse or
descendants, a partnership, the partners of which include any of the
foregoing, or a custodian under a uniform gifts to minors act or similar
statute for the benefit of the Participant's descendants, to the extent
permitted herein. Notwithstanding the foregoing, the term "Termination of
Directorship" shall mean the Termination of Directorship of the Participant.
2.24 "Plan" means the Parker Drilling Company 1994 Director Stock Option
Plan, as herein set forth and as may be amended from time to time.
2.25 "Representative" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the Participant's primary residence at the date of
the Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
beneficiary of the Participant upon or following the Participant's death; or
(d) any person to whom an Option has been permissibly transferred; provided
that only one of the foregoing shall be the Representative at any point in
time as determined under applicable law and recognized by the Committee.
2.26 "Rule 16b-3" means Rule 16b-3, as promulgated under the Exchange
Act, as amended from time to time, or any successor thereto.
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<PAGE>
2.27 "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2.28 "Spread" means (a) prior to a Change in Control, the amount, on the
relevant date, by which the Fair Market Value of Common Stock exceeds the
Option Price and (b) with respect to a Change in Control, the amount by which
the Change in Control Price exceeds the Option Price.
2.29 "Termination of Directorship" means the occurrence of any act or
event that actually or effectively causes or results in the person's ceasing,
for whatever reason, to be a Director of the Company or of any Affiliate,
including, without limitation, death, Disability, removal, severance at the
election of the Participant, retirement, failure to be elected or stand for
election as a Director, or severance as a result of the discontinuance,
liquidation, sale or transfer by the Company or its Affiliates of all
businesses owned or operated by the Company or its Affiliates.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
Administration
3.1 Committee Structure and Authority. The Plan shall be administered
by the Committee which, except as provided herein, may be comprised of one or
more persons. The Committee shall be the Compensation Committee of the Board
of Directors, unless such committee does not exist or the Board establishes a
committee whose sole purpose is the administration of this Plan; provided that
only those members of the Compensation Committee of the Board who participate
in the decision relative to Options under the Plan shall be deemed to be part
of the "Committee" for purposes of the Plan. In the absence of an
appointment, the Board or the portion thereof that is a Disinterested Person
shall be the Committee. A majority of the Committee shall constitute a quorum
at any meeting thereof (including telephone conference) and the acts of a
majority of the members present, or acts approved in writing by a majority of
the entire Committee without a meeting, shall be the acts of the Committee for
purposes of this Plan. The Committee may authorize any one or more of its
members or an officer of the Company to execute and deliver documents on
behalf of the Committee. A member of the Committee shall not exercise any
discretion respecting himself or herself under the Plan. Any member of the
Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its
agents, such duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan and the limitation of Rule 16b-3 so that the Plan is
described therein:
(a) to determine the terms and conditions of any Option hereunder
(including, but not limited to, the Option Price and Period, any
exercise restriction or limitation and any exercise acceleration or
forfeiture waiver regarding any Option and the shares of Common Stock
relating thereto);
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<PAGE>
<PAGE>
(b) to adjust the terms and conditions, at any time or from time
to time, of any Option, subject to the limitations of Section 7.1;
(c) to provide for the forms of Agreement to be utilized in
connection with this Plan;
(d) to determine whether a Participant has a Disability or a
retirement;
(e) to determine what securities law requirements are applicable
to the Plan, Options, and the issuance of shares of Common Stock and to
require of a Participant that appropriate action be taken with respect
to such requirements;
(f) to cancel, with the consent of the Participant or as otherwise
provided in the Plan or an Agreement, outstanding Options;
(g) to interpret and make a final determination with respect to
the remaining number of shares of Common Stock available under
Article IV;
(h) to require as a condition of the exercise of an Option or the
issuance or transfer of a certificate of Common Stock, the withholding
from a Participant of the amount of any federal, state or local taxes as
may be necessary in order for the Company or any other employer to
obtain a deduction or as may be otherwise required by law;
(i) to determine whether and with what effect an individual has
incurred a Termination of Directorship;
(j) to determine whether the Company or any other person has a
right or obligation to purchase Common Stock from a Participant and, if
so, the terms and conditions on which such Common Stock is to be
purchased;
(k) to determine the restrictions or limitations on the transfer
of Common Stock;
(l) to determine whether an Option is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the
terms of an Agreement;
(m) to determine the permissible methods of Option exercise and
payment, including cashless exercise arrangements;
(n) to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of this Plan; and
(o) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
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<PAGE>
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of
the Plan and any Option issued under the Plan (and any Agreement) and to
otherwise supervise the administration of the Plan. The Committee's policies
and procedures may differ with respect to Options granted at different times
and to different Participants.
Any determination made by the Committee pursuant to the provisions of
the Plan shall be made in its sole discretion, and in the case of any
determination relating to an Option, may be made at the time of the grant of
the Option or, unless in contravention of any express term of the Plan or an
Agreement, at any time thereafter. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and Participants. Any determination shall not
be subject to de novo review if challenged in court.
ARTICLE IV
Stock Subject to Plan
4.1 Number of Shares. Subject to the adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Options under the Plan shall be 200,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
4.2 Release of Shares. If any shares of Common Stock that have been
optioned cease to be subject to an Option, if any shares of Common Stock that
are subject to any Option are forfeited, if any Option otherwise terminates
without issuance of shares of Common Stock being made to the Participant, or
if any shares (whether or not restricted) of Common Stock that were previously
issued under the Plan are received in connection with the exercise of an
Option, such shares, in the discretion of the Committee, may again be
available for distribution in connection with Options under the Plan.
4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Option shall be subject to the terms and conditions specified herein and
to such other terms, conditions and restrictions as the Committee in its
discretion may determine or provide in the Option Agreement. The Company
shall not be required to issue or deliver any certificates for shares of
Common Stock, cash or other property prior to (i) the listing of such shares
on any stock exchange (or other public market) on which the Common Stock may
then be listed (or regularly traded), (ii) the completion of any registration
or qualification of such shares under federal or state law, or any ruling or
regulation of any government body which the Committee determines to be
necessary or advisable, and (iii) the satisfaction of any applicable
withholding obligation in order for the Company or an Affiliate to obtain a
deduction with respect to the exercise of an Option. The Company may cause
any certificate for any share of Common Stock to be delivered to be properly
marked with a legend or other notation reflecting the limitations on transfer
of such Common Stock as provided in this Plan or as the Committee may
otherwise require. The Committee may require any person exercising an Option
to make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the shares of
Common Stock in compliance with applicable law or otherwise. Fractional
shares shall not be delivered, but shall be rounded to the next lower whole
number of shares.
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4.4 Shareholder Rights. No person shall have any rights of a shareholder
as to shares of Common Stock subject to an Option until, after proper exercise
of the Option or other action required, such shares shall have been recorded
on the Company's official shareholder records as having been issued or
transferred. Upon exercise of the Option or any portion thereof, the Company
will have thirty (30) days in which to issue the shares, and the Participant
will not be treated as a shareholder for any purpose whatsoever prior to such
issuance. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date such shares are recorded as issued
or transferred in the Company's official shareholder records, except as
provided herein or in an Agreement.
4.5 Best Efforts To Register. The Company will register under the
Securities Act the Common Stock delivered or deliverable pursuant to Options
on Commission Form S-8 if available to the Company for this purpose (or any
successor or alternate form that is substantially similar to that form to the
extent available to effect such registration), in accordance with the rules
and regulations governing such forms, as soon as such forms are available for
registration to the Company for this purpose. The Company will use its best
efforts to cause the registration statement to become effective as soon as
possible and will file such supplements and amendments to the registration
statement as may be necessary to keep the registration statement in effect
until the earliest of (a) one year following the expiration of the Option
Period of the last Option outstanding, (b) the date the Company is no longer a
reporting company under the Exchange Act and (c) the date all Participants
have disposed of all shares delivered pursuant to any Option. The Company may
delay the foregoing obligation if the Committee reasonably determines that any
such registration would materially and adversely affect the Company's
interests or if there is no material benefit to Participants.
4.6 Anti-Dilution. In the event of any Company stock dividend, stock
split, combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company shareholders other than a normal cash dividend), sale
by the Company of all or a substantial portion of its assets (measured on
either a stand-alone or consolidated basis), reorganization, rights offering,
a partial or complete liquidation, or any other corporate transaction, Company
share offering or event involving the Company and having an effect similar to
any of the foregoing, then the Committee shall adjust or substitute, as the
case may be, the number of shares of Common Stock available for Options under
the Plan, the number of shares of Common Stock covered by outstanding Options,
the exercise price per share of outstanding Options, and any other
characteristics or terms of the Options as the Committee shall deem necessary
or appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated by rounding to the next lower whole number
of shares with appropriate payment for such fractional share as shall
reasonably be determined by the Committee.
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ARTICLE V
Option Grants
5.1 Eligibility. Each Director shall be eligible to be granted Options
to purchase shares of Common Stock as provided in the Plan.
5.2 Grant and Exercise. Each Director who is a Director on the Effective
Date shall be granted an Option on the Grant Date to purchase 5,000 shares of
Common Stock without further action by the Board or the Committee. On each
Grant Date after the Effective Date each person who is a Director on such
Grant Date shall be granted an Option to purchase 5,000 shares of Common Stock
without further action by the Board or the Committee. If the number of shares
of Common Stock available to grant under the Plan on a scheduled date of grant
is insufficient to make all automatic grants required to be made pursuant to
the Plan on such date, then each eligible Director shall receive an Option to
purchase a pro rata number of the remaining shares of Common Stock available
under the Plan; provided further, however, that if such proration results in
fractional shares of Common Stock, then such Option shall be rounded down to
the nearest number of whole shares of Common Stock. Once the total number of
shares received for issuance has been granted, no further shares shall be
granted. Each Option granted under this Plan shall be evidenced by an
Agreement, in a form approved by the Committee, which shall embody the terms
and conditions of such Option and which shall be subject to the express terms
and conditions set forth in the Plan.
5.3 Terms and Conditions. Options shall be subject to such terms and
conditions as shall be determined by the Committee and unless otherwise
provided in an Agreement shall include the following:
(a) Option Price. The Option Price of all Options shall be the
Fair Market Value per share on the Grant Date.
(b) Option Period. The Option Period of each Option shall be ten
(10) years.
(c) Exercisability. Subject to Section 6.1, Options shall be
exercisable upon the earliest of the date of the Participant's death or
Disability and the date that is the six-month anniversary of the Grant
Date. If the Committee provides that any Option is exercisable only in
installments, the Committee may at any time waive such installment
exercise provisions, in whole or in part. In addition, the Committee
may at any time accelerate the exercisability of any Option. An Option,
including any Options not yet exercised and the value of the Account not
yet distributed shall be forfeited if the Participant incurs a
Termination of Directorship due to Cause.
(d) Method of Exercise. A Participant desiring to exercise an
Option, in whole or in part, at any time during the Option Period must
give written notice of exercise on a form provided by the Committee (if
available) to the Company specifying the number of shares of Common
Stock subject to the Option to be purchased. Such notice shall be
accompanied by payment in full of the purchase price by cash or check or
such other form of payment as the Company may accept. If approved by
the Committee, payment in full or in part may also be made (i) by
delivering Common Stock already owned by the Participant having a
total Fair Market Value on the date of such delivery equal to the Option
Price; (ii) by the execution and delivery of a note or other evidence of
indebtedness (and any security agreement thereunder) satisfactory to the
Committee and permitted in accordance with Section 5.3(e); (iii) by
authorizing the Company to retain shares of Common Stock which would
otherwise be issuable upon exercise of the Option having a total Fair
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Market Value on the date of delivery equal to the Option Price; (iv) by
the delivery of cash or the extension of credit by a broker-dealer to
whom the Participant has submitted a notice of exercise or otherwise
indicated an intent to exercise (in accordance with Part 220,
Chapter II, Title 12 of the Code of Federal Regulations, so-called
"cashless" exercise); or (v) by any combination of the foregoing. No
shares of Common Stock shall be issued until full payment therefor has
been made.
(e) Company Loan or Guarantee. Upon the exercise of any Option and
subject to the pertinent Agreement and the discretion of the Committee,
the Company may at the request of the Participant:
(i) lend to the Participant, with recourse, an amount equal
to such portion of the Option Price as the Committee may
determine; or
(ii) guarantee a loan obtained by the Participant from a
third-party for the purpose of tendering the Option Price.
The terms and conditions of any loan or guarantee, including the term,
interest rate, and any security interest thereunder, shall be determined by
the Committee, except that no extension of credit or guarantee shall obligate
the Company for an amount to exceed the lesser of the aggregate Fair Market
Value per share of the Common Stock on the date of exercise, less the par
value of the shares of Common Stock to be purchased upon the exercise of the
Option, or the amount permitted under applicable laws or the regulations and
rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.
(f) Non-transferability of Options. Except as provided in an Agreement,
no Option shall be transferable by the Participant other than by will or by
the laws of descent and distribution, and all Options shall be exercisable
during the Participant's lifetime only by the Participant. Notwithstanding
the foregoing, if and to the extent transferability is permitted by and exempt
under Rule 16b-3 and except as otherwise provided herein or in an Agreement,
every Option granted hereunder shall be freely transferable.
(g) Cashing Out of Option; Settlement of Spread Value in Stock. On
receipt of written notice of exercise any Option for which at least six months
has elapsed since the Grant Date (provided that such limitation of six months
shall not apply to an Option granted to a Participant who has died), the
Committee may elect to cash out all or part of the portion of any Option to be
exercised by paying the Participant an amount, in cash or Common Stock, equal
to the Spread times the number of shares of Common Stock subject to the Option
on the effective date of such cash out. Cash outs relating to Options held by
a Participant who is actually or potentially subject to Section 16(b) of the
Exchange Act shall comply with the "window period" provisions of Rule 16b-3,
to the extent applicable, and the Committee may determine the Spread by
applying the Fair Market Value based on the highest mean sales price of the
Common Stock on any exchange on which the Common Stock is listed (or NASDAQ)
on any day during such "window period".
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ARTICLE VI
Change in Control Provisions
6.1 Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control:
(a) Any Options outstanding as of the date such Change in Control
and not then exercisable shall become fully exercisable to the full
extent of the original grant.
(b) Notwithstanding any other provision of the Plan, unless the
Committee shall provide otherwise in an Agreement, a Change in Control
is within six months of the Grant Date of the Option held by a
Participant (except a Participant who has died during such six month
period), such Option shall be cancelled in exchange for a payment to the
Participant on the date of the Participant's Termination of Directorship
equal to the Spread multiplied by the number of shares of Common Stock
granted under the Option, plus interest on such amount at the prime rate
determined from the date of the Change in Control to the date of the
Termination of Directorship.
ARTICLE VII
Miscellaneous
7.1 Amendments and Termination. The Board may amend, alter, discontinue
or terminate the Plan at any time, but no amendment, alteration,
discontinuation or termination shall be made which would (a) reduce or impair
the rights of a Participant under an Option theretofore granted without the
Participant's consent, except such an amendment made to cause the Plan to
qualify for the exemption provided by Rule 16b-3 or (b) disqualify the Plan
from the exemption provided by Rule 16b-3. In addition, no such amendment
shall be made without the approval of the Company's shareholders to the extent
such approval is required by law or agreement. Notwithstanding the foregoing,
the Plan may not be amended more than once every six (6) months to change the
Plan provisions listed in Rule 16b-3, other than to comport with changes in
the Code or Rule 16b-3.
The Committee may amend the Plan at any time provided that (a) no
amendment shall impair the rights of any Participant under any Option
theretofore granted without the Participant's consent, (b) no amendment shall
disqualify the Plan from the exemption provided by Rule 16b-3, and (c) any
amendment shall be subject to the approval or rejection of the Board.
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The Committee may amend the terms of any Option, prospectively or
retroactively, but no such amendment shall impair the rights of any
Participant without the Participant's consent, except such an amendment made
to cause the Plan or Option to qualify for the exemption provided by Rule
16b-3. The Committee may also substitute new Options for previously granted
Options, including previously granted Options having higher Option Prices but
no such substitution shall be made which would impair the rights of
Participants under such Option theretofore granted without the Participant's
consent. The Committee's discretion to amend the Plan or Agreement shall be
limited to the Plan's constituting a plan described in Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Options which qualify for beneficial
treatment under such rules without shareholder approval.
The Board may terminate the Plan at any time.
7.2 General Provisions.
(a) Representation. The Committee may require each person
purchasing or receiving shares pursuant to an Option to represent to and
agree with the Company in writing that such person is acquiring the
shares without a view to the distribution thereof. The certificates for
such shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
(b) No Additional Obligation. Nothing contained in the Plan shall
prevent the Company or an Affiliate from adopting other or additional
compensation arrangements for Directors or employees.
(c) Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the Participant for
Federal income tax purposes with respect to any Option, the Participant
shall pay to the Company (or other entity identified by the Committee),
or make arrangements satisfactory to the Company or other entity
identified by the Committee regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be withheld
with respect to such amount required in order for the Company or an
Affiliate to obtain a current deduction. Unless otherwise determined by
the Committee, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Option that gives rise to the
withholding requirement provided that any applicable requirements under
Section 16 of the Exchange Act are satisfied. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Participant.
(d) Representation. The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a Representative
to whom any amounts payable in the event of the Participant's death are
to be paid.
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(e) Controlling Law. The Plan and all Options made and actions
taken thereunder shall be governed by and construed in accordance with
the laws of the State of Delaware (other than its law respecting choice
of law). The Plan shall be construed to comply with all applicable law,
and to avoid liability to the Company, an Affiliate or a Participant,
including, without limitation, liability under Section 16(b) of the
Exchange Act.
(f) Offset. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the
value of any shares of Common Stock, cash or other thing of value under
this Plan or an Agreement to be transferred to the Participant, and no
shares of Common Stock, cash or other thing of value under this Plan or
an Agreement shall be transferred unless and until all disputes between
the Company and the Participant have been fully and finally resolved and
the Participant has waived all claims to such against the Company or an
Affiliate.
7.3 Rights with Respect to Continuance of Employment. Nothing contained
herein shall be deemed to alter the relationship between the Company or an
Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment or appointment between the Company or an
Affiliate and a Participant. The Company or an Affiliate and each of the
Participants continue to have the right to terminate the employment or other
relationship at any time for any reason, except as provided in a written
contract. The Company or an Affiliate shall have no obligation to retain the
Participant in its employ or service as a result of this Plan. There shall be
no inference as to the length of employment or service hereby, and the Company
or an Affiliate reserves the same rights to terminate the Participant's
employment or service as existed prior to the individual becoming a
Participant in this Plan.
7.4 Options in Substitution for Options Granted by Other Corporations.
Options may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become Directors of the Company or an Affiliate as the result
of a merger or consolidation of the employing corporation with the Company or
an Affiliate, or the acquisition by the Company or an Affiliate of the assets
of the employing corporation, or the acquisition by the Company or Affiliate
of the stock of the employing corporation, as the result of which it becomes a
designated employer under the Plan. The terms and conditions of the Options
so granted may vary from the terms and conditions set forth in this Plan at
the time of such grant as the majority of the members of the Committee may
deem appropriate to conform, in whole or in part, to the provisions of the
awards in substitution for which they are granted.
7.5 Procedure for Adoption. Any Affiliate of the Company may by
resolution of such Affiliate's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the
Board of Directors, adopt the Plan for the benefit of its Directors as of the
date specified in the board resolution.
7.6 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its adoption
of the Plan.
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7.7 Delay. If at the time a Participant incurs a Termination of
Directorship (other than due to Cause) or if at the time of a Change in
Control, the Participant is subject to "short-swing" liability under Section
16 of the Exchange Act, any time period provided for under the Plan or an
Agreement to the extent necessary to avoid the imposition of liability shall
be suspended and delayed during the period the Participant would be subject to
such liability, but not more than six (6) months and one (1) day and not to
exceed the Option Period. The Company shall have the right to suspend or
delay any time period described in the Plan or an Agreement if the Committee
shall determine that the action may constitute a violation of any law or
result in liability under any law to the Company, an Affiliate or a
shareholder of the Company until such time as the action required or permitted
shall not constitute a violation of law or result in liability to the Company,
an Affiliate or a shareholder of the Company. The Committee shall have the
discretion to suspend the application of the provisions of the Plan required
solely to comply with Rule 16b-3 if the Committee shall determine that Rule
16b-3 does not apply to the Plan.
7.8 Headings. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this Plan.
7.9 Severability. If any provision of this Plan shall for any reason be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not effect any other provision hereby, and this Plan shall be construed as if
such invalid or unenforceable provision were omitted.
7.10 Successors and Assigns. This Plan shall inure to the benefit of and
be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant's heirs, legal representatives and
successors.
7.11 Entire Agreement. This Plan and the Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the
terms and conditions of this Plan shall control.
Executed on this 14th day of September, 1994.
PARKER DRILLING COMPANY
By: /s/ Robert L. Parker Jr.
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EXHIBIT 10(j)
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Parker Drilling Company
1994 Executive Stock Option Plan
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PARKER DRILLING COMPANY
1994 EXECUTIVE STOCK OPTION PLAN
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ARTICLE I Establishment........................................... 1
1.1 Purpose................................................. 1
ARTICLE II Definitions............................................. 1
2.1 Affiliate............................................... 1
2.2 Agreement or Award Agreement............................ 1
2.3 Award................................................... 1
2.4 Board of Directors or Board............................. 1
2.5 Cause................................................... 2
2.6 Change in Control and Change in
Control Price........................................... 2
2.7 Code or Internal Revenue Code........................... 2
2.8 Commission.............................................. 2
2.9 Committee............................................... 2
2.10 Common Stock............................................ 2
2.11 Company................................................. 2
2.12 Deferred Stock.......................................... 2
2.13 Disability.............................................. 2
2.14 Disinterested Person.................................... 3
2.15 Effective Date.......................................... 3
2.16 Exchange Act............................................ 3
2.17 Fair Market Value....................................... 3
2.18 Grant Date.............................................. 3
2.19 Incentive Stock Option.................................. 3
2.20 Nonqualified Stock Option............................... 3
2.21 Option Period........................................... 3
2.22 Option Price............................................ 3
2.23 Participant............................................. 3
2.24 Plan.................................................... 4
2.25 Representative.......................................... 4
2.26 Restricted Stock........................................ 4
2.27 Retirement.............................................. 4
2.28 Rule 16b-3.............................................. 4
2.29 Securities Act.......................................... 4
2.30 Stock Appreciation Right................................ 4
2.31 Stock Option or Option.................................. 4
2.32 Termination of Employment................................4
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ARTICLE III Aministration........................................... 5
3.1 Committee Structure and Authority....................... 5
ARTICLE IV Stock Subject to Plan................................... 7
4.1 Number of Shares........................................ 7
4.2 Release of Shares....................................... 7
4.3 Restrictions on Shares.................................. 8
4.4 Shareholder Rights...................................... 8
4.5 Best Efforts to Register................................ 8
4.6 Anti-Dilution........................................... 9
ARTICLE V Eligibility............................................. 9
5.1 Eligibility............................................. 9
ARTICLE VI Stock Options........................................... 9
6.1 General................................................. 9
6.2 Grant and Exercise......................................10
6.3 Terms and Conditions....................................10
6.4 Termination by Reason of Death,
Disability or Retirement................................12
6.5 Other Termination.......................................12
6.6 Cashing Out of Option...................................13
ARTICLE VII Stock Appreciation Rights...............................13
7.1 General.................................................13
7.2 Grant...................................................13
7.3 Terms and Conditions....................................14
ARTICLE VIII Restricted Stock........................................15
8.1 General.................................................15
8.2 Awards and Certificates.................................16
8.3 Terms and Conditions....................................16
ARTICLE IX Deferred Stock..........................................17
9.1 General.................................................17
9.2 Terms and Conditions....................................17
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ARTICLE X Change in Control Provisions........................... 18
10.1 Impact of Event........................................ 18
10.2 Definition of Change in Control........................ 19
10.3 Change in Control Price................................ 20
ARTICLE XI MISCELLANEOUS.......................................... 21
11.1 Amendments and Termination............................. 21
11.2 Unfunded Status of Plan................................ 22
11.3 General Provisions..................................... 22
11.4 Mitigation of Excise Tax............................... 23
11.5 Rights with Respect to Continuance
of Employment.......................................... 23
11.6 Awards in Substitution for Awards
Granted by Other Corporations.......................... 23
11.7 Procedure for Adoption................................. 24
11.8 Procedure for Withdrawal............................... 24
11.9 Delay.................................................. 24
11.10 Headings............................................... 24
11.11 Severability........................................... 24
11.12 Successors and Assigns................................. 24
11.13 Entire Agreement....................................... 25
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PARKER DRILLING COMPANY
1994 EXECUTIVE STOCK OPTION PLAN
ARTICLE I
Establishment
I. Purpose.
The Parker Drilling Company 1994 Executive Stock Option Plan ("Plan") is
hereby established by Parker Drilling Company ("Company"). The purpose of the
Plan is to promote the overall financial objectives of the Company and its
shareholders by motivating those persons selected to participate in the Plan
to achieve long-term growth in shareholder equity in the Company and by
retaining the association of those individuals who are instrumental in
achieving this growth. The Plan and the grant of awards thereunder is
expressly conditioned upon the Plan's approval by the security holders of the
Company. The Plan is adopted effective as of December 14, 1994.
ARTICLE II
Definitions
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, the Company including, without limitation, any member of an affiliated
group of which the Company is a common parent corporation as provided in
Section 1504 of the Code.
2.2 "Agreement" or "Award Agreement" means, individually or
collectively, any agreement entered into pursuant to the Plan pursuant to
which an Award is granted to a Participant.
2.3 "Award" means a Stock Option, Stock Appreciation Right, Restricted
Stock or Deferred Stock.
2.4 "Board of Directors" or "Board" means the Board of Directors of the
Company.
2.5 "Cause" shall mean, for purposes of whether and when a Participant
has incurred a Termination of Employment for Cause, any act or omission which
permits the Company to terminate the written agreement or arrangement between
the Participant and the Company or an Affiliate for Cause as defined in such
agreement or arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term "cause,"
then Cause shall mean an act or acts of dishonesty by the Participant
constituting a felony under applicable law and resulting or intending to
result directly or indirectly in gain to or personal enrichment of the
Participant at the Company's expense. Notwithstanding the foregoing, the
Participant shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him or her a copy of a resolution,
duly adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for that
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purpose (after reasonable notice to him or her has been given or has been made
and an opportunity for him or her, together with his or her counsel, to be
heard before the Board), finding that in the good faith opinion of the Board
the Participant was guilty of conduct set forth above in the previous sentence
of this Section and specifying the particulars thereof in detail.
2.6 "Change in Control" and "Change in Control Price" have the meanings
set forth in Sections 10.2 and 10.3, respectively.
2.7 "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, final Treasury Regulations thereunder and any subsequent
Internal Revenue Code.
2.8 "Commission" means the Securities and Exchange Commission or any
successor agency.
2.9 "Committee" means the person or persons appointed by the Board of
Directors to administer the Plan, as further described in the Plan.
2.10 "Common Stock" means the shares of the regular voting Common Stock,
$.16 2/3 par value, whether presently or hereafter issued, and any other stock
or security resulting from adjustment thereof as described hereinafter or the
common stock of any successor to the Company which is designated for the
purpose of the Plan.
2.11 "Company" means Parker Drilling Company, a Delaware corporation,
and includes any successor or assignee corporation or corporations into which
the Company may be merged, changed or consolidated; any corporation for whose
securities the securities of the Company shall be exchanged; and any assignee
of or successor to substantially all of the assets of the Company.
2.12 "Deferred Stock" means an award made pursuant to Article IX.
2.13 "Disability" means permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan.
Notwithstanding the foregoing, a Disability shall not qualify under this Plan
if it is the result of (i) a willfully self-inflicted injury or willfully
self-induced sickness; or (ii) an injury or disease contracted, suffered, or
incurred, while participating in a criminal offense. The determination of
Disability shall be made by the Committee. The determination of Disability
for purposes of this Plan shall not be construed to be an admission of
disability for any other purpose.
2.14 "Disinterested Person" shall have the meaning set forth in
Rule 16b-3, or any successor definition adopted by the Commission and shall
mean a person who is also an "outside director" under Section 162(m) of the
Code.
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2.15 "Effective Date" means December 14, 1994.
2.16 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.17 "Fair Market Value" means the mean, as of any given date, between
the highest and lowest reported sales prices of the Common Stock on the New
York Stock Exchange or, if not listed on such exchange, any other national
exchange on which the Common Stock is listed or on NASDAQ. If there is no
regular public trading market for such stock, the Fair Market Value of the
Common Stock shall be determined by the Committee in good faith.
2.18 "Grant Date" means the date that as of which an Award is granted
pursuant to the Plan.
2.19 "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
2.20 "Nonqualified Stock Option" means an Option to purchase Common
Stock in the Company granted under the Plan other than an Incentive Stock
Option within the meaning of Section 422 of the Code.
2.21 "Option Period" means the period during which the Option shall be
exercisable in accordance with the Agreement and Article VI.
2.22 "Option Price" means the price at which the Common Stock may be
purchased under an Option as provided in Section 6.3.
2.23 "Participant" means a person who satisfies the eligibility
conditions of Article V and to whom an Award has been granted by the Committee
under the Plan, and in the event a Representative is appointed for a
Participant or a former spouse becomes a Representative, then the term
"Participant" shall mean such appointed Representative, successor,
Representative, or former spouse as the case may be. The term shall also
include any person or entity to whom an Option has been transfered including a
trust for the benefit of the Participant, the Participant's parents, spouse or
descendants, a partnership, the partners of which include any of the
foregoing, or a custodian under a uniform gifts to minors act or similar
statute for the benefit of the Participant's descendants, to the extent
permitted herein. Notwithstanding the foregoing, the term "Termination of
Employment" shall mean the Termination of Employment of the Participant.
2.24 "Plan" means the Parker Drilling Company 1994 Executive Stock
Option Plan, as herein set forth and as may be amended from time to time.
2.25 "Representative" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the Participant's primary residence at the date of
the Participant's death; (b) the person or entity acting as the guardian or
temporary guardian of a
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Participant; (c) the person or entity which is the beneficiary of the
Participant upon or following the Participant's death; or (d) any person to
whom an Option has been permissibly transferred; provided that only one of the
foregoing shall be the Representative at any point in time as determined under
applicable law and recognized by the Committee.
2.26 "Restricted Stock" means an award under Article VIII.
2.27 "Retirement" means the Participant's Termination of Employment
after attaining either the normal retirement age or the early retirement age
as defined in the principal (as determined by the Committee) tax-qualified
plan of the Company or an Affiliate, if the Participant is covered by such
plan, and if the Participant is not covered by such a plan, then age 65, or
age 55 with the accrual of 10 years of service.
2.28 "Rule 16b-3" means Rule 16b-3, as promulgated under the Exchange
Act, as amended from time to time, or any successor thereto.
2.29 "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
2.30 "Stock Appreciation Right" means a right granted under Article VII.
2.31 "Stock Option" or "Option" means an option granted under
Article VI.
2.32 "Termination of Employment" means the occurrence of any act or
event whether pursuant to an employment agreement or otherwise that actually
or effectively causes or results in the person's ceasing, for whatever reason,
to be an officer, employee or consultant of the Company or of any Affiliate,
or to be an officer, employee or consultant of any entity that provides
services to the Company or an Affiliate, including, without limitation, death,
Disability, dismissal, severance at the election of the Participant,
Retirement, or severance as a result of the discontinuance, liquidation, sale
or transfer by the Company or its Affiliates of all businesses owned or
operated by the Company or its Affiliates. With respect to any person who is
not an employee with respect to the Company or an Affiliate, the Agreement
shall establish what act or event shall constitute a Termination of Employment
for purposes of the Plan. A Termination of Employment shall occur to an
employee who is employed by an Affiliate if the Affiliate shall cease to be an
Affiliate and the Participant shall not immediately thereafter become an
employee of the Company or an Affiliate.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
Administration
3.1 Committee Structure and Authority. The Plan shall be administered by
the Committee which, except as provided herein, may be comprised of one or
more persons. The Committee shall be the Compensation Committee of the Board
of Directors, unless such committee does not exist or the Board establishes a
committee whose sole purpose is the administration of this Plan; provided that
only those members of the Compensation Committee of the Board who participate
in the decision relative to Awards under the Plan shall be deemed to be part
of the "Committee" for purposes of the Plan. In the absence of an
appointment, the Board or the portion thereof that is a Disinterested Person
shall be the Committee. A majority of the Committee shall constitute a quorum
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at any meeting thereof (including telephone conference) and the acts of a
majority of the members present, or acts approved in writing by a majority of
the entire Committee without a meeting, shall be the acts of the Committee for
purposes of this Plan. The Committee may authorize any one or more of its
members or an officer of the Company to execute and deliver documents on
behalf of the Committee. A member of the Committee shall not exercise any
discretion respecting himself or herself under the Plan. The Board shall have
the authority to remove, replace or fill any vacancy of any member of the
Committee upon notice to the Committee and the affected member. Any member of
the Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its
agents, such duties and responsibilities as it determines.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan:
(a) to select those persons to whom Awards may be granted from
time to time;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights, Restricted Stock and Deferred Stock or any
combination thereof are to be granted hereunder;
(c) to determine the number of shares of Common Stock to be
covered by each Award granted hereunder;
(d) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the Option Price, the Option
Period, any exercise restriction or limitation and any exercise
acceleration or forfeiture waiver regarding any Award and the shares of
Common Stock relating thereto);
(e) to adjust the terms and conditions, at any time or from time
to time, of any Award, subject to the limitations of Section 11.1;
(f) to determine to what extent and under what circumstances
Common Stock and other amounts payable with respect to an Award shall be
deferred;
(g) to determine under what circumstances an Award may be settled
in cash or Common Stock.
(h) to provide for the forms of Agreement to be utilized in
connection with this Plan;
(i) to determine whether a Participant has a Disability or a
Retirement;
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(j) to determine what securities law requirements are applicable
to the Plan, Awards, and the issuance of shares of Common Stock and to
require of a Participant that appropriate action be taken with respect
to such requirements;
(k) to cancel, with the consent of the Participant or as otherwise
provided in the Plan or an Agreement, outstanding Awards;
(l) to interpret and make a final determination with respect to
the remaining number of shares of Common Stock available under
Article IV;
(m) to require as a condition of the exercise of an Award or the
issuance or transfer of a certificate of Common Stock, the withholding
from a Participant of the amount of any federal, state or local taxes
as may be necessary in order for the Company or any other employer to
obtain a deduction or as may be otherwise required by law;
(n) to determine whether and with what effect an individual has
incurred a Termination of Employment;
(o) to determine whether the Company or any other person has a
right or obligation to purchase Common Stock from a Participant and, if
so, the terms and conditions on which such Common Stock is to be
purchased;
(p) to determine the restrictions or limitations on the transfer
of Common Stock;
(q) to determine whether an Award is to be adjusted, modified or
purchased, or is to become fully exercisable, under the Plan or the
terms of an Agreement;
(r) to determine the permissible methods of Award exercise and
payment, including cashless exercise arrangements;
(s) to adopt, amend and rescind such rules and regulations as, in
its opinion, may be advisable in the administration of the Plan; and
(t) to appoint and compensate agents, counsel, auditors or other
specialists to aid it in the discharge of its duties.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of
the Plan and any Award issued under the Plan (and any Agreement) and to
otherwise supervise the administration of the Plan. The Committee's policies
and procedures may differ with respect to Awards granted at different times or
to different Participants.
Any determination made by the Committee pursuant to the provisions of
the Plan shall be made in its sole discretion, and in the case of any
determination relating to an Award, may be made at the time of the grant of
the Award or, unless in contravention of any express term of the Plan or an
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Agreement, at any time thereafter. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and Participants. Any determination shall not
be subject to de novo review if challenged in court.
ARTICLE IV
Stock Subject to Plan
4.1 Number of Shares. Subject to the adjustment under Section 4.6, the
total number of shares of Common Stock reserved and available for distribution
pursuant to Awards under the Plan shall be 2,400,000 shares of Common Stock
authorized for issuance on the Effective Date. Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
4.2 Release of Shares. Subject to Section 7.3(f), if any shares of
Common Stock that have been optioned cease to be subject to an Award, if any
shares of Common Stock that are subject to any Award are forfeited, if any
Award otherwise terminates without issuance of shares of Common Stock being
made to the Participant, or if any shares (whether or not restricted) of
Common Stock that were previously issued under the Plan are received in
connection with the exercise of an Award, such shares, in the discretion of
the Committee, may again be available for distribution in connection with
Awards under the Plan.
4.3 Restrictions on Shares. Shares of Common Stock issued upon exercise
of an Award shall be subject to the terms and conditions specified herein and
to such other terms, conditions and restrictions as the Committee in its
discretion may determine or provide in the Award Agreement. The Company shall
not be required to issue or deliver any certificates for shares of Common
Stock, cash or other property prior to (i) the listing of such shares on any
stock exchange (or other public market) on which the Common Stock may then be
listed (or regularly traded), (ii) the completion of any registration or
qualification of such shares under federal or state law, or any ruling or
regulation of any government body which the Committee determines to be
necessary or advisable, and (iii) the satisfaction of any applicable
withholding obligation in order for the Company or an Affiliate to obtain a
deduction with respect to the exercise of an Award. The Company may cause any
certificate for any share of Common Stock to be delivered to be properly
marked with a legend or other notation reflecting the limitations on transfer
of such Common Stock as provided in this Plan or as the Committee may
otherwise require. The Committee may require any person exercising an Award
to make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the shares of
Common Stock in compliance with applicable law or otherwise. Fractional
shares shall not be delivered, but shall be rounded to the next lower whole
number of shares.
4.4 Shareholder Rights. No person shall have any rights of a shareholder
as to shares of Common Stock subject to an Award until, after proper exercise
of the Award or other action required, such shares shall have been recorded on
the Company's official shareholder records as having been issued or
transferred. Upon exercise of the Award or any portion thereof, the Company
will have thirty (30) days in which to issue the shares, and the Participant
will not be treated as a shareholder for any purpose whatsoever prior to such
issuance. No adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date such shares are recorded as issued
or transferred in the Company's official shareholder records, except as
provided herein or in an Agreement.
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4.5 Best Efforts To Register. The Company will register under the
Securities Act the Common Stock delivered or deliverable pursuant to Awards on
Commission Form S-8 if available to the Company for this purpose (or any
successor or alternate form that is substantially similar to that form to the
extent available to effect such registration), in accordance with the rules
and regulations governing such forms, as soon as such forms are available for
registration to the Company for this purpose. The Company will use its best
efforts to cause the registration statement to become effective as soon as
possible and will file such supplements and amendments to the registration
statement as may be necessary to keep the registration statement in effect
until the earliest of (a) one year following the expiration of the Option
Period of the last Option outstanding, (b) the date the Company is no longer a
reporting company under the Exchange Act and (c) the date all Participants
have disposed of all shares delivered pursuant to any Award. The Company may
delay the foregoing obligation if the Committee reasonably determines that any
such registration would materially and adversely affect the Company's
interests or if there is no material benefit to Participants.
4.6 Anti-Dilution. In the event of any Company stock dividend, stock
split, combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company shareholders other than a normal cash dividend), sale
by the Company of all or a substantial portion of its assets (measured on
either a stand-alone or consolidated basis), reorganization, rights offering,
a partial or complete liquidation, or any other corporate transaction, Company
share offering or event involving the Company and having an effect similar to
any of the foregoing, then the Committee shall adjust or substitute, as the
case may be, the number of shares of Common Stock available for Awards under
the Plan, the number of shares of Common Stock covered by outstanding Awards,
the exercise price per share of outstanding Awards, and any other
characteristics or terms of the Awards as the Committee shall deem necessary
or appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated by rounding to the next lower whole number
of shares with appropriate payment for such fractional share as shall
reasonably be determined by the Committee.
ARTICLE V
Eligibility
5.1 Eligibility. Except as herein provided, the persons who shall be
eligible to participate in the Plan and be granted Awards shall be those
persons who are officers, employees and consultants of the Company or any
subsidiary who shall be in a position, in the opinion of the Committee, to
make contributions to the growth, management, protection and success of the
Company and its subsidiaries. Of those persons described in the preceding
sentence, the Committee may, from time to time, select
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persons to be granted Awards and shall determine the terms and conditions with
respect thereto. In making any such selection and in determining the form of
the Award, the Committee may give consideration to the functions and
responsibilities of the person's contributions to the Company and its
subsidiaries, the value of the individual's service to the Company and its
subsidiaries and such other factors deemed relevant by the Committee. The
Committee may designate any person who is not eligible to participate in the
Plan if such person would otherwise be eligible to participate in the Plan
(and members of the Committee are excluded to the extent such persons are
intended as Disinterested Persons).
ARTICLE VI
STOCK OPTIONS
6.1 General. The Committee shall have authority to grant Options under
the Plan at any time or from time to time. Stock Options may be granted alone
or in addition to other Awards and may be either Incentive Stock Options or
Non-Qualified Stock Options. An Option shall entitle the Participant to
receive shares of Common Stock upon exercise of such Option, subject to the
Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements) including without
limitation, payment of the Option Price. During any calendar year, Options
for no more than 200,000 shares of Common Stock shall be granted to any
Participant.
6.2 Grant and Exercise. The grant of a Stock Option shall occur as of
the date the Committee determines. Each Option granted under this Plan shall
be evidenced by an Agreement, in a form approved by the Committee, which shall
embody the terms and conditions of such Option and which shall be subject to
the express terms and conditions set forth in the Plan. Such Agreement shall
become effective upon execution by the Participant. Only a person who is a
common-law employee of the Company, any parent corporation of the Company or a
subsidiary (as such terms are defined in Section 424 of the Code) on the date
of grant shall be eligible to be granted an Option which is intended to be and
is an Incentive Stock Option. To the extent that any Stock Option is not
designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option. Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any Incentive
Stock Option under such Section 422.
6.3 Terms and Conditions. Stock Options shall be subject to such terms
and conditions as shall be determined by the Committee, including the
following:
(a) Option Period. The Option Period of each Stock Option shall be fixed
by the Committee; provided that no Non-Qualified Stock Option shall be
exercisable more than fifteen (15) years after the date the Stock Option is
granted. In the case of an Incentive Stock Option, the Option Period shall
not exceed ten (10) years from the date of grant or five (5) years in the case
of an individual who owns more than ten percent (10%) of the combined voting
power of all classes of stock of the
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Company, a corporation which is a parent corporation of the Company or any
subsidiary of the Company (each as defined in Section 424 of the Code). No
Option which is intended to be an Incentive Stock Option shall be granted more
than ten (10) years from the date the Plan is adopted by the Company or the
date the Plan is approved by the shareholders of the Company, whichever is
earlier.
(b) Option Price. The Option Price per share of the Common Stock
purchasable under an Option shall be determined by the Committee, but in no
event shall the Option Price be less than 50% of the Fair Market Value on the
Grant Date. If such Option is intended to qualify as an Incentive Stock
Option, the Option Price per share shall be not less than the Fair Market
Value per share on the date the Option is granted, or where granted to an
individual who owns or who is deemed to own stock possessing more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company, a corporation which is a parent corporation of the Company or any
subsidiary of the Company (each as defined in Section 424 of the Code), not
less than one hundred ten percent (110%) of such Fair Market Value per share.
(c) Exercisability. Subject to Section 10.1, Stock Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee. If the Committee provides that any
Stock Option is exercisable only in installments, the Committee may at any
time waive such installment exercise provisions, in whole or in part. In
addition, the Committee may at any time accelerate the exercisability of any
Stock Option.
(d) Method of Exercise. Subject to the provisions of this Article VI, a
Participant may exercise Stock Options, in whole or in part, at any time
during the Option Period by the Participant's giving written notice of
exercise on a form provided by the Committee (if available) to the Company
specifying the number of shares of Common Stock subject to the Stock Option to
be purchased. Such notice shall be accompanied by payment in full of the
purchase price by cash or check or such other form of payment as the Company
may accept. If approved by the Committee, payment in full or in part may also
be made (i) by delivering Common Stock already owned by the Participant having
a total Fair Market Value on the date of such delivery equal to the Option
Price; (ii) by the execution and delivery of a note or other evidence of
indebtedness (and any security agreement thereunder) satisfactory to the
Committee and permitted in accordance with Section 6.3(e); (iii) by
authorizing the Company to retain shares of Common Stock which would otherwise
be issuable upon exercise of the Option having a total Fair Market Value on
the date of delivery equal to the Option Price; (iv) by the delivery of cash
or the extension of credit by a broker-dealer to whom the Participant has
submitted a notice of exercise or otherwise indicated an intent to exercise an
Option (in accordance with Part 220, Chapter II, Title 12 of the Code of
Federal Regulations, so-called "cashless" exercise); or (v) by any combination
of the foregoing. If payment of the Option Price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock or Deferred
Stock, the number of shares of Common Stock to be received upon such exercise
equal to the number of shares of Restricted Stock or Deferred Stock used for
payment of the Option Price shall be subject to the same forfeiture
restrictions or deferral limitations to which such Restricted Stock or
Deferred Stock was subject, unless otherwise determined by the Committee. In
the case of an Incentive Stock Option, the right to make a payment in the form
of already owned shares of Common Stock of the same class as the Common Stock
subject to the Stock Option may be authorized only at the time the Stock
Option is granted. No shares of Common Stock shall be issued until full
payment therefor has been made. Subject to any forfeiture restrictions or
deferral limitations that may apply if a Stock Option is exercised using
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Restricted Stock or Deferred Stock, a Participant shall have all of the rights
of a shareholder of the Company holding the class of Common Stock that is
subject to such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends), when the Participant has given
written notice of exercise, has paid in full for such shares and such shares
have been recorded on the Company's official shareholder records as having
been issued or transferred.
(e) Company Loan or Guarantee. Upon the exercise of any Option and
subject to the pertinent Agreement and the discretion of the Committee, the
Company may at the request of the Participant:
(i) lend to the Participant, with recourse, an amount equal to
such portion of the Option Price as the Committee may determine; or
(ii) guarantee a loan obtained by the Participant from a third-
party for the purpose of tendering the Option Price.
The terms and conditions of any loan or guarantee, including the term,
interest rate, and any security interest thereunder, shall be determined by
the Committee, except that no extension of credit or guarantee shall obligate
the Company for an amount to exceed the lesser of the aggregate Fair Market
Value per share of the Common Stock on the date of exercise, less the par
value of the shares of Common Stock to be purchased upon the exercise of the
Award, or the amount permitted under applicable laws or the regulations and
rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.
(f) Non-transferability of Options. Except as provided in an Agreement,
no Stock Option or interest therein shall be transferable by the Participant
other than by will or by the laws of descent and distribution, and all Stock
Options shall be exercisable during the Participant's lifetime only by the
Participant. Notwithstanding the foregoing, if and to the extent
transferability is permitted by and exempt under Rule 16b-3 and except as
otherwise provided herein or by an Agreement, every Option granted hereunder
shall be freely transferable.
6.4 Termination by Reason of Death, Disability or Retirement. Unless
otherwise provided in an Agreement or determined by the Committee, if a
Participant incurs a Termination of Employment due to death, Disability or
Retirement, any unexpired and unexercised Stock Option held by such
Participant shall thereafter be fully exercisable for a period of five (5)
years (or such other period or no period as the Committee may specify)
immediately following the date of such death, Disability or Retirement (as
applicable) or until the expiration of the Option Period, whichever period is
the shorter. In the event of Termination of Employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option.
6.5 Other Termination. Unless otherwise provided in an Agreement or
determined by the
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Committee, if a Participant incurs a Termination of Employment that is not due
to death, Retirement, Disability or with Cause) any Stock Option held by such
Participant shall thereupon terminate, except that such Stock Option, to the
extent then exercisable, may be exercised for the lesser of a period of two
(2) years commencing with the date of such Termination of Employment or until
the expiration of the Option Period, or in the case of a voluntary Termination
of Employment (other than due to death, Retirement, Disability or with Cause),
for a period of six (6) months commencing with the date of such Termination of
Employment in the case of a voluntary Termination of Employment or until the
expiration of the Option Period, whichever is less. If the Participant incurs
a Termination of Employment which is with Cause, the Option shall terminate
immediately. The death, Disability or Retirement of a Participant after a
Termination of Employment otherwise provided herein shall not extend the
exercisability of the time permitted to exercise an Option.
6.6 Cashing Out of Option. On receipt of written notice of exercise, the
Committee may elect to cash out all or part of the portion of any Stock Option
to be exercised by paying the Participant an amount, in cash or Common Stock,
equal to the excess of the Fair Market Value of the Common Stock that is
subject to the Option over the Option Price times the number of shares of
Common Stock subject to the Option on the effective date of such cash out.
Cash outs relating to Options held by Participants who are actually or
potentially subject to Section 16(b) of the Exchange Act shall comply with the
"window period" provisions of Rule 16b-3, to the extent applicable, and, in
the case of cash outs of Non-Qualified Stock Options held by such
Participants, the Committee may determine Fair Market Value under the pricing
rule set forth in Section 7.3(b).
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 General. The Committee shall have authority to grant Stock
Appreciation Rights under the Plan at any time or from time to time. Subject
to the Participant's satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement, a Stock
Appreciation Right shall entitle the Participant to surrender to the Company
the Stock Appreciation Right and to be paid therefor in shares of the Common
Stock, cash or a combination thereof as herein provided, the amount described
in Section 7.3(b).
7.2 Grant. Stock Appreciation Rights may be granted in conjunction with
all or part of any Stock Option granted under the Plan in which case the
exercise of the Stock Appreciation Right shall require the cancellation of a
corresponding portion of the Stock Option and the exercise of the Stock Option
will result in the cancellation of a corresponding portion of the Stock
Appreciation Right. In the case of a Non-Qualified Stock Option, such rights
may be granted either at or after the time of grant of such Stock Option. In
the case of an Incentive Stock Option, such rights may be granted only at the
time of grant of such Stock Option. A Stock Appreciation Right may also be
granted on a stand alone basis. The grant of a Stock Appreciation Right shall
occur as of the date the Committee determines. Each Stock Appreciation Right
granted under this Plan shall be evidenced by an Agreement, which shall embody
the terms and conditions of such Stock Appreciation Right and which shall be
subject to the terms and conditions set forth in the Plan. During any
calendar year, no more than 200,000 Stock Appreciation Rights shall be granted
to any Participant.
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7.3 Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including
the following:
(a) Period and Exercise. The term of a Stock Appreciation Right
shall be established by the Committee. If granted in conjunction with a
Stock Option, the Stock Appreciation Right shall have a term which is
the same as the Option Period and shall be exercisable only at such time
or times and to the extent the related Stock Options would be
exercisable in accordance with the provisions of Article VI. A Stock
Appreciation Right which is granted on a stand alone basis shall be for
such period and shall be exercisable at such times and to the extent
provided in an Agreement. Stock Appreciation Rights shall be exercised
by the Participant's giving written notice of exercise on a form
provided by the Committee (if available) to the Company specifying the
portion of the Stock Appreciation Right to be exercised.
(b) Amount. Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount in cash, shares of
Common Stock or both as determined by the Committee or as otherwise
permitted in an Agreement equal in value to the excess of the Fair
Market Value per share of Common Stock over the Option Price per share
of Common Stock specified in the related Agreement multiplied by the
number of shares in respect of which the Stock Appreciation Right is
exercised. In the case of a Stock Appreciation Right granted on a stand
alone basis, the Agreement shall specify the value to be used in lieu of
the Option Price per share of Common Stock. The aggregate Fair Market
Value per share of the Common Stock shall be determined as of the date
of exercise of such Stock Appreciation Right.
(c) Special Rules. In the case of Stock Appreciation Rights
relating to Stock Options held by Participants who are actually or
potentially subject to Section 16(b) of the Exchange Act:
(i) The Committee may require that such Stock Appreciation
Rights be exercised only in accordance with the applicable "window
period" provisions of Rule 16b-3;
(ii) The Committee may provide that the amount to be paid
upon exercise of such Stock Appreciation Rights (other than those
relating to Incentive Stock Options) during a Rule 16b-3 "window
period" shall be based on the highest mean sales price of the
Common Stock on the principal exchange on which the Common Stock
is traded, NASDAQ or other relevant market for determining value
on any day during such "window period"; and
(iii) no Stock Appreciation Right shall be exercisable
during the first six months of its term, except that this
limitation shall not apply in the event of death or Disability of
the Participant prior to the expiration of the six-month period.
(d) Non-transferability of Stock Appreciation Rights. Stock
Appreciation Rights shall be transferable only when and to the extent
that a Stock Option would be transferable under the Plan unless
otherwise provided in an Agreement.
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(e) Termination. A Stock Appreciation Right shall terminate at
such time as a Stock Option would terminate under the Plan, unless
otherwise provided in an Agreement.
(f) Effect on Shares Under the Plan. To the extent required by
Rule 16b-3, upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 4.2 on the number of shares of Common Stock to be
issued under the Plan, but only to the extent of the number of shares of
Common Stock covered by the Stock Appreciation Right at the time of
exercise based on the value of the Stock Appreciation Right at such
time.
(g) Incentive Stock Option. A Stock Appreciation Right granted in
tandem with an Incentive Stock Option shall not be exercisable unless
the Fair Market Value of the Common Stock on the date of exercise
exceeds the Option Price. In no event shall any amount paid pursuant to
the Stock Appreciation Right exceed the difference between the Fair
Market Value on the date of exercise and the Option Price.
ARTICLE VIII
RESTRICTED STOCK
8.1 General. The Committee shall have authority to grant Restricted
Stock under the Plan at any time or from time to time. Shares of Restricted
Stock may be awarded either alone or in addition to other Awards granted under
the Plan. The Committee shall determine the persons to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of
shares of Restricted Shares to be awarded to any Participant, the time or
times within which such Awards may be subject to forfeiture and any other
terms and conditions of the Awards. Each Award shall be confirmed by, and be
subject to the terms of, an Agreement. The Committee may condition the grant
of Restricted Stock upon the attainment of specified performance goals by the
Participant or by the Company or an Affiliate (including a division or
department of the Company or an Affiliate) for or within which the Participant
is primarily employed or upon such other factors or criteria as the Committee
shall determine. The provisions of Restricted Stock Awards need not be the
same with respect to any Participant.
8.2 Awards and Certificates. Notwithstanding the limitations on issuance
of shares of Common Stock otherwise provided in the Plan, each Participant
receiving an Award of Restricted Stock shall be issued a certificate in
respect of such shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Award as determined by the Committee. The Committee may require that the
certificates evidencing such shares be held in custody by the Company until
the restrictions thereon shall have lapsed and that, as a condition of any
Award of Restricted Stock, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Common Stock covered by such Award.
8.3 Terms and Conditions. Shares of Restricted Stock shall be subject to
the following terms and conditions:
-14-
<PAGE>
<PAGE>
(a) Limitations on Transferability. Subject to the provisions of
the Plan and except as provided in an Agreement, during a period set by
the Committee, commencing with the date of such Award (the "Restriction
Period"), the Participant shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber any interest in shares of
Restricted Stock.
(b) Rights. Except as provided in Section 8.3(a), the Participant
shall have, with respect to the shares of Restricted Stock, all of the
rights of a shareholder of the Company holding the class of Common Stock
that is the subject of the Restricted Stock, including, if applicable,
the right to vote the shares and the right to receive any cash
dividends. Unless otherwise determined by the Committee and subject to
the Plan, cash dividends on the class of Common Stock that is the
subject of the Restricted Stock shall be automatically deferred and
reinvested in additional Restricted Stock, and dividends on the class of
Common Stock that is the subject of the Restricted Stock payable in
Common Stock shall be paid in the form of Restricted Stock of the same
class as the Common Stock on which such dividend was paid.
(c) Criteria. Based on service, performance by the Participant or
by the Company or the Affiliate, including any division or department
for which the Participant is employed or such other factors or criteria
as the Committee may determine, the Committee may provide for the lapse
of restrictions in installments and may accelerate the vesting of all or
any part of any Award and waive the restrictions for all or any part of
such Award.
(d) Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment during the Restriction Period due to death or Disability, the
restrictions shall lapse and the Participant shall be fully vested in
the Restricted Stock. Except to the extent otherwise provided in the
applicable Agreement and the Plan, upon a Participant's Termination of
Employment for any reason during the Restriction Period other than death
or Disability, all shares of Restricted Stock still subject to
restriction shall be forfeited by the Participant, except the Committee
shall have the discretion to waive in whole or in part any or all
remaining restrictions with respect to any or all of such Participant's
shares of Restricted Stock.
(e) Delivery. If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction
Period, unlegended certificates for such shares shall be delivered to
the Participant.
(f) Election. A Participant may elect to further defer receipt of
the Restricted Stock for a specified period or until a specified event,
subject in each case to the Committee's approval and to such terms as
are determined by the Committee. Subject to any exceptions adopted by
the Committee, such election must be made one (1) year prior to
completion of the Restriction Period.
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<PAGE>
ARTICLE IX
DEFERRED STOCK
9.1 General. The Committee shall have authority to grant Deferred Stock
under the Plan at any time or from time to time. Shares of Deferred Stock may
be awarded either alone or in addition to other Awards granted under the Plan.
The Committee shall determine the persons to whom and the time or times at
which Deferred Stock will be awarded, the number of shares of Deferred Stock
to be awarded to any Participant, the duration of the period (the "Deferral
Period") prior to which the Common Stock will be delivered, and the conditions
under which receipt of the Common Stock will be deferred and any other terms
and conditions of the Awards. Each Award shall be confirmed by, and be
subject to the terms of, an Agreement. The Committee may condition the grant
of Deferred Stock upon the attainment of specified performance goals by the
Participant or by the Company or an Affiliate, including a division or
department of the Company or an Affiliate for or within which the Participant
is primarily employed or upon such other factors or criteria as the Committee
shall determine. The provisions of Deferred Stock Awards need not be the same
with respect to any Participant.
9.2 Terms and Conditions. Deferred Stock Awards shall be subject to the
following terms and conditions:
(a) Limitations on Transferability. Subject to the provisions of
the Plan and except as provided in an Agreement, Deferred Stock Awards,
or any interest therein, may not be sold, assigned, transferred, pledged
or otherwise encumbered during the Deferral Period. At the expiration
of the Deferral Period (or Elective Deferral Period as defined in
Section 9.2(e), where applicable), the Committee may elect to deliver
Common Stock, cash equal to the Fair Market Value of such Common Stock
or a combination of cash and Common Stock, to the Participant for the
shares covered by the Deferred Stock Award.
(b) Rights. Unless otherwise determined by the Committee and
subject to the Plan, cash dividends on the Common Stock that is the
subject of the Deferred Stock Award shall be automatically deferred and
reinvested in additional Deferred Stock, and dividends on the Common
Stock that is the subject of the Deferred Stock Award payable in Common
Stock shall be paid in the form of Deferred Stock of the same class as
the Common Stock on which such dividend was paid.
(c) Criteria. Based on service, performance by the Participant or
by the Company or the Affiliate, including any division or department
for which the Participant is employed or such other factors or criteria
as the Committee may determine, the Committee may provide for the lapse
of deferral limitations in installments and may accelerate the vesting
of all or any part of any Award and waive the deferral limitations for
all or any part of such Award.
(d) Forfeiture. Unless otherwise provided in an Agreement or
determined by the Committee, if the Participant incurs a Termination of
Employment during the Deferral Period due to death or Disability, the
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<PAGE>
<PAGE>
restrictions shall lapse and the Participant shall be fully vested in
the Deferred Stock. Unless otherwise provided in an Agreement or
determined by the Committee, upon a Participant's Termination of
Employment for any reason during the Deferral Period other than death or
Disability, the rights to the shares still covered by the Award shall be
forfeited by the Participant, except the Committee shall have the
discretion to waive in whole or in part any or all remaining deferral
limitations with respect to any or all of such Participant's Deferred
Stock.
(e) Election. A Participant may elect to further defer receipt of
the Deferred Stock payable under an Award (or an installment of an
Award) for a specified period or until a specified event, subject in
each case to the Committee's approval and to such terms as are
determined by the Committee. Subject to any exceptions adopted by the
Committee, such election must be made at one (1) year prior to
completion of the Deferral Period for the Award.
ARTICLE X
CHANGE IN CONTROL PROVISIONS
10.1 Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control (as defined in
Section 10.2):
(a) Any Stock Appreciation Rights and Stock Options outstanding as
of the date such Change in Control and not then exercisable shall become
fully exercisable to the full extent of the original grant;
(b) The restrictions and deferral limitations applicable to any
Restricted Stock and Deferred Stock shall lapse, and such Restricted
Stock and Deferred Stock shall become free of all restrictions and
become fully vested and transferable to the full extent of the original
grant.
(c) Notwithstanding any other provision of the Plan, unless the
Committee shall provide otherwise in an Agreement, a Participant shall
have the right, whether or not the Award is fully exercisable or may be
otherwise realized by the Participant, by giving notice during the 60-
day period from and after a Change in Control to the Company, to elect
to surrender all or part of the Award to the Company and to receive
cash, within 30 days of such notice, in an amount equal to the amount by
which the "Change in Control Price" (as defined in Section 10.3) per
share of Common Stock on the date of such election shall exceed the
amount which the Participant must pay to exercise the Award per share of
Common Stock under the Award (the "Spread") multiplied by the number of
shares of Common Stock granted under the Award as to which the right
granted hereunder shall have been exercised; provided, however, that if
the end of such 60-day period from and after a Change in Control is
within six months of the date of grant of the Award held by a
Participant (except a Participant who has died during such six month
period) who is an officer or director of the Company (within the meaning
of Section 16(b) of the Exchange Act), such Award shall be cancelled in
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<PAGE>
<PAGE>
exchange for a payment to the Participant at the time of the
Participant's Termination of Employment, equal to the Spread multiplied
by the number of shares of Common Stock granted under the Award, plus
interest on such amount at the prime rate compounded annually and
determined from time to time. With respect to any Participant who is an
officer or director of the Company (within the meaning of
Section 16(b) of the Exchange Act), the 60-day period shall be extended,
if necessary, to include the "window period" of Rule 16(b)-3 which first
commences on or after the date of the Change in Control, and the
Committee shall have sole discretion, if necessary, to approve the
Participant's exercise hereunder and the date in which the Spread is
calculated may be adjusted, if necessary, to a later date if necessary
to avoid liability to such Participant under Section 16(b).
10.2 Definition of Change in Control. For purposes of the Plan, a
"Change in Control" shall mean the happening of any of the following events:
(a) there shall be consummated (i) any consolidation or merger of
the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's common stock
would be converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's common stock
immediately prior to the merger have substantially the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; or (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all
or substantially all of the assets of the Company; or
(b) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company; or
(c) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company representing an amount greater than two times the
aggregate percentage held or controlled by R.L. Parker, his son R.L.
Parker, Jr. and the Robert L. Parker Trust (and apart from rights
accruing in special circumstances) having the right to vote in the
election of directors, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise; or
(d) any three persons (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company or any employee
benefit plan sponsored by the Company, shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities
of the Company whose ownership represents an amount greater than four
times the aggregate percentage held or controlled by R. L. Parker, his
son R. L. Parker, Jr. and the Robert L. Parker Trust (and apart from
rights accruing in special circumstances) having the right to vote in
election of directors, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise; or
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(e) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute at
least a majority thereof, unless the election or the nomination for
election by the Company's shareholders of each new director during such
two-year period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such two-year period. A Change of Control shall not be deemed to have
occurred if banks or other creditors receive the Company's stock in
conjunction with transactions involving forgiveness of outstanding debt
or debt restructuring agreements.
(f) at any time an individual is elected to the Board of Directors
who was not nominated by the Board of Directors of the Company to stand
for election.
10.3 Change in Control Price. For purposes of the Plan, "Change in
Control Price" means the higher of (a) the highest reported sales price of a
share of Common Stock in any transaction reported on the principal exchange on
which such shares are listed or on NASDAQ during the 60 day period prior to
and including the date of a Change in Control or (b) if the Change in Control
is the result of a tender or exchange offer or a Corporate Transaction, the
highest price per share of Common Stock paid in such tender or exchange offer
or a Corporate Transaction, except that, in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options,
such price shall be based only on the Fair Market Value of the Common Stock on
the date such Incentive Stock Option or Stock Appreciation Right is exercised.
To the extent that the consideration paid in any such transaction described
above consists all or in part of securities or other non-cash consideration,
the value of such securities or other non-cash consideration shall be
determined in the sole discretion of the Committee.
ARTICLE XI
MISCELLANEOUS
11.1 Amendments and Termination. The Board may amend, alter, discontinue
or terminate the Plan at any time, but no amendment, alteration,
discontinuation or termination shall be made which would (a) impair the rights
of a Participant under a Stock Option, Stock Appreciation Right, Restricted
Stock Award or Deferred Stock Award theretofore granted without the
Participant's consent, except such an amendment made to cause the Plan to
qualify for the exemption provided by Rule 16b-3 or (b) disqualify the Plan
from the exemption provided by Rule 16b-3. In addition, no such amendment
shall be made without the approval of the Company's shareholders to the extent
such approval is required by law or agreement.
The Committee may amend the Plan at any time provided that (a) no
amendment shall impair the rights of any Participant under any Award
theretofore granted without the Participant's consent, (b) no amendment shall
disqualify the Plan from the exemption provided by Rule 16b-3, and (c) any
amendment shall be subject to the approval or rejection of the Board.
The Committee may amend the terms of any Award or other Award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any Participant without the Participant's consent,
except such an amendment made to cause the Plan or Award to qualify for the
exemption provided by Rule 16b-3. The Committee may also substitute new Stock
Options or Stock Appreciation Rights for previously granted Stock Options,
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<PAGE>
including previously granted Stock Options or Stock Appreciation Rights having
higher Option Prices but no such substitution shall be made which would impair
the rights of Participants under such Stock Option or Stock Appreciation Right
theretofore granted without the Participant's consent.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without shareholder approval.
11.2 Unfunded Status of Plan. It is intended that the Plan be an
"unfunded" plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or make payments; provided,
however, that, unless the Committee otherwise determines, the existence of
such trusts or other arrangements is consistent with the "unfunded" status of
the Plan.
11.3 General Provisions.
(a) Representation. The Committee may require each person
purchasing or receiving shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the
shares without a view to the distribution thereof. The certificates for
such shares may include any legend which the Committee deems appropriate
to reflect any restrictions on transfer.
(b) No Additional Obligation. Nothing contained in the Plan shall
prevent the Company or an Affiliate from adopting other or additional
compensation arrangements for its employees.
(c) Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the Participant for
Federal income tax purposes with respect to any Award, the Participant
shall pay to the Company (or other entity identified by the Committee),
or make arrangements satisfactory to the Company or other entity
identified by the Committee regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be withheld
with respect to such amount required in order for the Company or an
Affiliate to obtain a current deduction. Unless otherwise determined by
the Committee, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement provided that any applicable requirements under
Section 16 of the Exchange Act are satisfied. The obligations of the
Company under the Plan shall be conditional on such payment or
arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Participant.
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(d) Reinvestment. The reinvestment of dividends in additional
Deferred or Restricted Stock at the time of any dividend payment shall
only be permissible if sufficient shares of Common Stock are available
for such reinvestment (taking into account then outstanding Options and
other Awards).
(e) Representation. The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a Representative
to whom any amounts payable in the event of the Participant's death are
to be paid.
(f) Controlling Law. The Plan and all Awards made and actions
taken thereunder shall be governed by and construed in accordance with
the laws of the State of Delaware (other than its law respecting choice
of law). The Plan shall be construed to comply with all applicable law,
and to avoid liability to the Company, an Affiliate or a Participant,
including, without limitation, liability under Section 16(b) of the
Exchange Act.
(g) Offset. Any amounts owed to the Company or an Affiliate by the
Participant of whatever nature may be offset by the Company from the
value of any shares of Common Stock, cash or other thing of value under
this Plan or an Agreement to be transferred to the Participant, and no
shares of Common Stock, cash or other thing of value under this Plan or
an Agreement shall be transferred unless and until all disputes between
the Company and the Participant have been fully and finally resolved and
the Participant has waived all claims to such against the Company or an
Affiliate.
11.4 Mitigation of Excise Tax. If any payment or right accruing to a
Participant under this Plan (without the application of this Section 11.4),
either alone or together with other payments or rights accruing to the
Participant from the Company or an Affiliate ("Total Payments") would
constitute a "parachute payment" (as defined in Section 280G of the Code and
regulations thereunder), such payment or right shall be reduced to the largest
amount or greatest right that will result in no portion of the amount payable
or right accruing under the Plan being subject to an excise tax under
Section 4999 of the Code or being disallowed as a deduction under Section 280G
of the Code. The determination of whether any reduction in the rights or
payments under this Plan is to apply shall be made by the Committee in good
faith after consultation with the Participant, and such determination shall be
conclusive and binding on the Participant. The Participant shall cooperate in
good faith with the Committee in making such determination and providing the
necessary information for this purpose. The foregoing provisions of this
Section 11.4 shall apply with respect to any person only if after reduction
for any applicable federal excise tax imposed by Section 4999 of the Code and
federal income tax imposed by the Code, the Total Payments accruing to such
person would be less than the amount of the Total Payments as reduced, if
applicable, under the foregoing provisions of the Plan and after reduction for
only federal income taxes.
11.5 Rights with Respect to Continuance of Employment. Nothing contained
herein shall be deemed to alter the relationship between the Company or an
Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment between the Company or an Affiliate and a
Participant. The Company or an Affiliate and each of the Participants
continue to have the right to terminate the employment or service relationship
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at any time for any reason, except as provided in a written contract. The
Company or an Affiliate shall have no obligation to retain the Participant in
its employ or service as a result of this Plan. There shall be no inference
as to the length of employment or service hereby, and the Company or an
Affiliate reserves the same rights to terminate the Participant's employment
or service as existed prior to the individual becoming a Participant in this
Plan.
11.6 Awards in Substitution for Awards Granted by Other Corporations.
Awards may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become officers, directors or employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate, or the acquisition by the
Company or an Affiliate of the assets of the employing corporation, or the
acquisition by the Company or Affiliate of the stock of the employing
corporation, as the result of which it becomes a designated employer under the
Plan. The terms and conditions of the Awards so granted may vary from the
terms and conditions set forth in this Plan at the time of such grant as the
majority of the members of the Committee may deem appropriate to conform, in
whole or in part, to the provisions of the awards in substitution for which
they are granted.
11.7 Procedure for Adoption. Any Affiliate of the Company may by
resolution of such Affiliate's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the
Board of Directors, adopt the Plan for the benefit of its employees as of the
date specified in the board resolution.
11.8 Procedure for Withdrawal. Any Affiliate which has adopted the Plan
may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its adoption
of the Plan. If the Participant disposes of shares of Common Stock acquired
pursuant to an Incentive Stock Option in any transaction considered to be a
disqualifying transaction under the Code, the Participant must give written
notice of such transfer and the Company shall have the right to deduct any
taxes required by law to be withheld from any amounts otherwise payable to the
Participant.
11.9 Delay. If at the time a Participant incurs a Termination of
Employment (other than due to Cause) or if at the time of a Change in Control,
the Participant is subject to "short-swing" liability under Section 16 of the
Exchange Act, any time period provided for under the Plan or an Agreement to
the extent necessary to avoid the imposition of liability shall be suspended
and delayed during the period the Participant would be subject to such
liability, but not more than six (6) months and one (1) day and not to exceed
the Option Period, or the period for exercise of a Stock Appreciation Right as
provided in the Agreement, whichever is shorter. The Company shall have the
right to suspend or delay any time period described in the Plan or an
Agreement if the Committee shall determine that the action may constitute a
violation of any law or result in liability under any law to the Company, an
Affiliate or a shareholder of the Company until such time as the action
required or permitted shall not constitute a violation of law or result in
liability to the Company, an Affiliate or a shareholder of the Company. The
Committee shall have the discretion to suspend the application of the
provisions of the Plan required solely to comply with Rule 16b-3 if the
Committee shall determine that Rule 16b-3 does not apply to the Plan.
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11.10 Headings. The headings contained in this Plan are for reference
purposes only and shall not affect the meaning or interpretation of this Plan.
11.11 Severability. If any provision of this Plan shall for any reason
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not effect any other provision hereby, and this Plan shall be construed
as if such invalid or unenforceable provision were omitted.
11.12 Successors and Assigns. This Plan shall inure to the benefit of
and be binding upon each successor and assign of the Company. All obligations
imposed upon a Participant, and all rights granted to the Company hereunder,
shall be binding upon the Participant's heirs, legal representatives and
successors.
11.13 Entire Agreement. This Plan and the Agreement constitute the
entire agreement with respect to the subject matter hereof and thereof,
provided that in the event of any inconsistency between the Plan and the
Agreement, the terms and conditions of the Agreement shall control.
Executed on this 14th day of September, 1994.
PARKER DRILLING COMPANY
By /s/ Robert L. Parker Jr.
----------------------------------
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<TABLE>
SUBSIDIARIES OF THE REGISTRANT
<CAPTION>
Exhibit 21
Percentage of Voting
Securities Owned By
Immediate Parent as
of August 31, 1995
--------------------
Parent of the Registrant
Robert L. Parker 7% of Common Stock
(7% of voting
securities assuming
full dilution)
<S> <C>
Consolidated subsidiaries of the Registrant
(Jurisdiction of incorporation):
Parker Drilling Company of South America, Inc. (Oklahoma) 100%
Parker Drilling Company of Oklahoma, Inc. (Oklahoma) 100%
Parker Technology, Inc. (Oklahoma) <F1> 100%
Vance Systems Engineering, Inc. (Texas) <F2> 100%
Parker Drilling Company International Limited (Nevada) <F3> 100%
Parker Drilling Company of Alaska Limited (Alaska) 100%
Parker Drilling Company of New Guinea, Inc. (Oklahoma) 100%
Parker Drilling Company of North America, Inc. (Oklahoma) 100%
Parker Drilling Company Limited (Nevada) 100%
Certain subsidiaries have been omitted from the list since they would not,
even if considered in the aggregate, constitute a significant subsidiary. All
subsidiaries are included in the consolidated financial statements.
- -----------------------------------------------------------------------------
<FN>
<F1>
Parker Technology, Inc. owns 100% of three subsidiary corporations, namely:
Parco Masts and Substructures, Inc. (Oklahoma)
O.I.M.E. Export Corporation (Texas)
O.I.M.E. International, Inc. (Texas)
<F2>
Vance Systems Engineering, Inc. owns 100% of Parker Drilling Company
Limited (Bahamas), 100% of Parker Drilling Company Kuwait, Ltd. (Bahamas)
and 93% of Parker Drilling Company Eastern Hemisphere, Ltd. (Oklahoma).
Parker Drilling Company Limited owns 7% of Parker Drilling Company Eastern
Hemisphere, Ltd. (Oklahoma).
<F3>
Parker Drilling Company International Limited owns 100% of three subsidiary
corporations, namely:
Parker Drilling U.S.A. Ltd. (Nevada)
Choctaw International Rig Corp. (Nevada)
Creek International Rig Corp. (Nevada)
Choctaw International Rig Corp. owns 100% of the common stock of
Parker Drilling Company of Indonesia, Inc. (Oklahoma).
</FN>
</TABLE>
<PAGE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of Parker Drilling Company on Form S-8 (File No. 2-87944, 33-24155,
33-56698 and 33-57345) of our report dated October 17, 1995, on our audits of
the consolidated financial statements and financial statement schedules of
Parker Drilling Company and subsidiaries as of August 31, 1995 and 1994, and
for the years ended August 31, 1995, 1994 and 1993, which report is included
in this Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
October 17, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF AUGUST 31, 1995 AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED AUGUST 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
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0
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