<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Parker Drilling Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
Parker Drilling Logo
PROXY STATEMENT
MARCH 17, 2000
<TABLE>
<S> <C>
[PICTURE] [PICTURE]
[PICTURE] [PICTURE]
</TABLE>
<PAGE> 3
YOUR VOTE IS IMPORTANT
Shareholders of record can vote any one of three ways:
- - By Telephone: Call the toll-free telephone number on your proxy card to vote
by phone.
- - Via the Internet: Visit the web site on your proxy card to vote via the
Internet.
- - By Mail: Mark, sign, date and mail your proxy card to our Transfer Agent,
Norwest Bank of Minnesota, N.A., in the enclosed postage-paid envelope.
If your shares are held in the name of a bank, broker or other holder of record,
you will receive instructions from the holder of record that you must follow in
order for your shares to be voted. Telephone and Internet voting also will be
offered to shareholders owning stock through certain banks and brokers.
ELIMINATE DUPLICATE MAILINGS
Securities and Exchange Commission ("SEC") rules require us to provide an Annual
Report to shareholders who receive this proxy statement. If you are a
shareholder of record and have more than one account in your name or at the same
address as other shareholders of record, you may authorize us to discontinue
mailings of multiple Annual Reports. To discontinue mailings of multiple Annual
Reports, mark the designated box on the appropriate proxy card(s).
<PAGE> 4
PARKER DRILLING COMPANY
8 East Third Street
Tulsa, OK 74103
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
- -------------------------------------------------------------------------------
TIME............................. 10:00 a.m. on Thursday, April 27, 2000
PLACE............................ Parker Drilling Company Corporate Office
8 East Third Street
Tulsa, Oklahoma 74103
ITEMS OF BUSINESS................ (1) To elect three Class I members of the
Board of Directors for three years
terms,
(2) To approve PricewaterhouseCoopers LLP
as our independent accountants for
the year 2000, and
(3) To transact such other business as
may properly come before the Meeting
and any adjournment or postponement
RECORD DATE...................... You can vote if you are a shareholder of
record on March 13, 2000.
ANNUAL REPORT.................... Our 1999 Annual Report, which is not a
part of our proxy soliciting material, is
enclosed.
PROXY VOTING..................... It is important that your shares be
represented and voted at the Meeting.
Please vote in one of these ways:
(1) USE THE TOLL-FREE TELEPHONE NUMBER
shown on the proxy card (this call is
free in the U.S.)
(2) VISIT THE WEB SITE on your proxy card
to vote via the Internet; or
(3) MARK, SIGN, DATE AND PROMPTLY RETURN
the enclosed proxy card in the
postage-paid envelope.
Any proxy may be revoked at any time
prior to its exercise at the Meeting.
March 17, 2000 Leslie D. Rosencutter
Secretary
<PAGE> 5
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
PAGE
<S> <C>
PROXY STATEMENT............................................. 1
Annual Meeting Admission............................... 1
Shareholders Entitled to Vote.......................... 1
Proxies................................................ 1
Vote by Telephone...................................... 1
Vote via the Internet.................................. 1
Vote by Mail........................................... 2
Voting at the Annual Meeting........................... 2
Voting of Other Matters................................ 2
List of Shareholders................................... 2
Required Vote.......................................... 2
Multiple Copies of Annual Report to Shareholders....... 3
Cost of Proxy Solicitation............................. 3
Shareholder Account Maintenance........................ 3
Section 16(a) Beneficial Ownership Reporting
Compliance........................................... 3
Questions.............................................. 3
GOVERNANCE OF THE COMPANY................................... 4
Board and Committee Membership......................... 4
The Audit Committee.................................... 4
The Compensation Committee............................. 4
Compensation of Directors.............................. 5
Compensation Committee Interlocks and Insider
Participation........................................ 5
Related Transactions................................... 6
Severance Compensation and Consulting Agreements....... 7
Indemnification of Directors........................... 7
ITEM 1 - ELECTION OF DIRECTORS.............................. 8
Nominees for Director Whose Term Expire 2002........... 9
Directors Whose Terms Expire 2000...................... 10
Directors Whose Terms Expire 2001...................... 11
Named Executive Officers Who Are Not Directors......... 11
ITEM 2 - APPROVAL OF INDEPENDENT ACCOUNTANTS................ 11
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF
MANAGEMENT.................................................. 12
Compensation Committee Report on Executive
Compensation......................................... 13
Audit Committee Report................................. 16
EXECUTIVE COMPENSATION...................................... 17
Summary Compensation Table............................. 17
Option/SAR Grants in 1999.............................. 18
Aggregated Option/SAR Exercises in fiscal year 1999 and
fiscal year-end 1999 Option/SAR Values............... 19
Stock Performance Graphs............................... 20
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY
PROPOSALS, NOMINATION OF DIRECTORS AND OTHER BUSINESS OF
SHAREHOLDERS................................................ 21
</TABLE>
<PAGE> 7
Parker Drilling Company
8 East Third Street
Tulsa,OK 74103
PROXY STATEMENT
- --------------------------------------------------------------------------------
These proxy materials are delivered in connection with the solicitation by the
Board of Directors of Parker Drilling Company ("Parker", the "Company", "we",
"us"), a Delaware corporation, of proxies to be voted at our 1999 Annual Meeting
of Shareholders and at any adjournment or postponement.
You are invited to attend our Annual Meeting of Shareholders on April 27, 2000,
beginning at 10:00 a.m. The meeting will be held at the Parker Corporate Office
at 8 East Third Street, Tulsa, Oklahoma.
This Proxy Statement, form of proxy and voting instructions are being mailed
starting March 17, 2000.
ANNUAL MEETING ADMISSION
All stockholders of record, their proxy holders and Parker guests are invited to
attend the meeting. If you plan to attend the Annual Meeting, please vote your
proxy as instructed in these materials.
SHAREHOLDERS ENTITLED TO VOTE
Holders of record of Parker common stock at the close of business on March 13,
2000, are entitled to receive this notice and to vote their shares at the Annual
Meeting. As of that date, there were 77,410,988 common shares outstanding. Each
common share is entitled to one vote on each matter properly brought before the
meeting.
PROXIES
Your vote is important. Shareholders of record may vote their proxies by
telephone, Internet or mail. A toll-free telephone number and web site address
are included on your proxy card. If you choose to vote by mail, a postage-paid
envelope is provided.
Proxies may be revoked at any time before they are exercised by (1) written
notice to the Secretary of the Company, (2) timely delivery of a valid,
later-dated proxy or (3) voting by ballot at the Annual Meeting.
VOTE BY TELEPHONE
You can vote your shares by telephone by calling the toll-free telephone number
(at no cost to you) on your proxy card. Telephone voting is available 24 hours a
day. Easy to follow voice prompts allow you to vote your shares and confirm that
your instructions have been properly recorded. Our telephone voting procedures
are designed to authenticate shareholders by using individual control numbers.
If you vote by telephone DO NOT return your proxy card.
VOTE VIA THE INTERNET
You can also choose to vote via the Internet. The web site for Internet voting
is on your proxy card. Internet voting is available 24 hours a day. You will be
given the opportunity to confirm that your instructions have been properly
recorded. If you vote via the Internet, DO NOT return your proxy card.
<PAGE> 8
VOTE BY MAIL
If you choose to vote by mail, simply mark your proxy, date and sign it, and
return it to Norwest Bank Minnesota, N.A. in the postage-paid envelope provided.
If you wish to discontinue future duplicate Annual Reports, check the box
provided on the card.
VOTING AT THE ANNUAL MEETING
The method by which you vote now will in no way limit your right to vote at the
Annual Meeting if you later decide to attend in person. If your shares are held
in the name of a bank, broker or other holder of record, you must obtain a
proxy, executed in your favor, from the holder of record to be able to vote at
the Meeting.
All shares that have been properly voted -- whether by telephone, Internet or
mail -- and not revoked will be voted at the Annual Meeting in accordance with
your instructions. If you sign your proxy card but do not give voting
instructions, the shares represented by that proxy will be voted in favor of the
proposals in each such case.
You may receive more than one proxy card in the mail depending on how you hold
your shares. Parker employees receive a separate card for any shares they hold
in the Company's 401(k) plan. Also, if you have shares that are held by your
stockbroker you may get material from them asking how you want to vote.
VOTING OF OTHER MATTERS
If any other matters are properly presented at the Annual Meeting for
consideration, the persons named in the enclosed form of proxy will have the
discretion to vote on those matters for you. At the date this proxy statement
went to press, we do not know of any other matter to be raised at the Annual
Meeting.
LIST OF SHAREHOLDERS
A list of shareholders entitled to vote at the Annual Meeting will be available
at the Annual Meeting and for ten days prior to the meeting, between the hours
of 8:00 a.m. and 4:30 p.m., at our offices at 8 East Third Street, Tulsa, OK
74103, by contacting the Secretary of the Company.
REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of the votes
entitled to be cast by the shareholders entitled to vote at the Annual Meeting
is necessary to constitute a quorum. Abstentions and broker "non-votes" are
counted as present and entitled to vote for purposes of determining a quorum. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary power for that particular item and has not received instructions
from the beneficial owner.
A plurality of the votes cast is required for the election of Directors.
Abstentions and broker "non-votes" are not counted for purposes of the election
of Directors.
The affirmative vote of a majority of the votes cast is required to approve the
appointment of PricewaterhouseCoopers LLP as independent accountants for the
Company. Abstentions and broker "non-votes" are not counted for purposes of
approving this matter.
2
<PAGE> 9
MULTIPLE COPIES OF ANNUAL REPORT TO SHAREHOLDERS
Our 1999 Annual Report to Shareholders has been mailed to shareholders. If more
than one copy of the Annual Report is sent to your address, we will discontinue
the mailing of the reports on the accounts you select if you so advise us.
At least one account must continue to receive the Annual Report. Mailing of
proxy materials and special notices will not be affected by your election to
discontinue future duplicate mailings of the Annual Report. To discontinue or
resume mailing of an Annual Report to an account, call the Parker Shareowner
Services Department toll free number: 1-800-468-9716.
If you own common shares through a bank, broker or other nominee and receive
more than one Parker Annual Report, contact the holder of record to eliminate
duplicate mailing.
COST OF PROXY SOLICITATION
We will pay the expenses of soliciting proxies. Proxies may be solicited on our
behalf by Directors, officers or employees in person or by telephone, electronic
transmission, facsimile transmission or by telegram. We have also hired
Georgeson Shareholder Communications Inc. to assist us in the distribution and
solicitation of proxies. We will pay Georgeson Shareholder Communications Inc. a
fee of $6,500 plus expenses for these services.
SHAREHOLDER ACCOUNT MAINTENANCE
Our Transfer Agent is Norwest Bank Minnesota, N.A. All communications concerning
accounts of shareholders of record, including address changes, name changes,
inquiries as to the requirements to transfer common shares and similar issues
can be handled by calling the Parker Shareowner Services Department toll free
number: 1-800-468-9716 or contacting the web site at
[email protected]. For other information about Parker, shareholders
can visit our web site at www.parkerdrilling.com.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors and
executive officers to file reports of holdings and transactions in Parker shares
with the SEC and the New York Stock Exchange. Based on our record and other
information, we believe that in 1999 our Directors and executive officers met
all applicable SEC filing requirements.
QUESTIONS
If you have questions or need more information about the annual meeting, write
to:
Parker Drilling Company
Corporate Secretary
8 East Third Street
Tulsa, OK 74103
or call us at (918) 585-8221.
3
<PAGE> 10
GOVERNANCE OF THE COMPANY
- --------------------------------------------------------------------------------
BOARD AND COMMITTEE MEMBERSHIP
During 1999, the Board of Directors met five times and had two ongoing
committees. Those committees consisted of: an Audit Committee and a Compensation
Committee.
<TABLE>
<CAPTION>
Audit Compensation
Board Meeting Committee Committee
Name Board Attendance Audit Attendance Compensation Attendance
- ---- ----- ------------- ----- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Barnes........................ X 5 X* 1
Mr. Duroc-Danner.................. X 3
Mr. Fist.......................... X 5 X 2
Dr. Gloyna........................ X 5 X 1
Mr. Linn.......................... X 5
Mr. Parker Jr. ................... X 5
Mr. Parker Sr. ................... X* 5
Mr. Reinfrank..................... X 5 X* 2
1999 Meetings..................... 5 1 2
</TABLE>
- ---------------
* Chair
THE AUDIT COMMITTEE
The Audit Committee is responsible for recommending the annual appointment of
the public accounting firm to be our independent accountants, subject to
approval by the Board and the shareholders. The Committee:
- - reviews with the independent accountants the scope of their audit of the
Company's financial statements, their fees and related matters;
- - reviews with management and the independent accountants our year-end financial
statements and material changes in accounting principles or practices;
- - reviews the internal audit plan, all internal audit reports, and discusses
them with management and the internal auditors; and
- - reviews management's policies and procedures regarding compliance with laws
and regulations.
During 1999, the Audit Committee convened one time. In addition to conducting
its regular business during the year 1999, the Committee met once after year-end
1999, for the purpose of addressing the recently adopted regulations of the
Securities and Exchange Commission. The Audit Committee report is included with
this proxy statement.
The entire Board of Directors reviewed the standards of independence as defined
by the SEC and the New York Stock Exchange and determined that the members of
the Audit Committee, Dr. Earnest Gloyna and Mr. James Barnes, satisfy those
standards of independence.
THE COMPENSATION COMMITTEE
The Compensation Committee is comprised of Messrs. Fist and Reinfrank. During
fiscal year 1999, the Compensation Committee convened two times for the purpose
of reviewing annual and long-term performance goals for executive officers and
key employees. This responsibility includes establishing the compensation and
evaluating the performance of the Chairman
4
<PAGE> 11
and CEO and other elected officers and key employees. The committee also:
- - advises the Board regarding the granting of stock options and grants under the
stock and incentive plans;
- - advises on the setting of compensation for executive officers and key
employees;
- - submits an annual Compensation Committee Report for the shareholders included
with this proxy statement.
COMPENSATION OF DIRECTORS
CASH RETAINER AND MEETING FEES
<TABLE>
<CAPTION>
Annual Board Committee
Board Meeting Meeting Holiday
Director Retainer Fees Fees Bonus Total
- -------- ------------ ------------ ------------ ------- -------
<S> <C> <C> <C> <C> <C>
Mr. Barnes........................ $7,000 $10,000 $1,000 $500 $18,500
Mr. Duroc-Danner.................. 7,000 10,000 500 17,500
Mr. Fist.......................... 7,000 10,000 2,000 500 19,500
Dr. Gloyna........................ 7,000 10,000 1,000 500 18,500
Mr. Linn.......................... 10,000 500 10,500
Mr. Parker Jr. ................... 10,000 500 10,500
Mr. Parker Sr. ................... 10,000 500 10,500
Mr. Reinfrank..................... 7,000 10,000 2,000 500 19,500
</TABLE>
ANNUAL CASH RETAINER FEES. Non-Employee Directors receive an annual retainer of
$7,000 per year. Compensation for employee directors is included in the salary
column of the Summary Compensation Table herein.
MEETING FEES. The Company compensated all directors at a rate of $2,000 for
board meetings during fiscal year 1999 and awarded each of the directors $500 as
a holiday bonus. In addition, committee members received $1,000 for each
meeting.
NON-EMPLOYEE DIRECTOR STOCK OPTIONS. On July 27, 1999, each non-employee
director was issued options to purchase 15,000 shares of common stock, except
for Mr. Barnes who was granted 20,000 shares, at a purchase price equal to the
fair market value per share of the common stock on such date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. David L. Fist, a director of the Company and member of the compensation
committee, is a lawyer with Rosenstein, Fist & Ringold, Tulsa, Oklahoma, a
professional legal services Corporation, which provides legal services for the
Company. The fees paid by the Company to this firm constituted less than five
percent of the firm's gross revenues during the latest fiscal year.
5
<PAGE> 12
RELATED TRANSACTIONS
Since 1975 when the stockholders approved a Stock Purchase Agreement between the
Company and the Robert L. Parker Trust, the Company and Robert L. Parker have
entered into various life insurance arrangements on the life of Robert L.
Parker. To insure the lives of Mr. and Mrs. Robert L. Parker for $15,000,000 and
Mr. Robert L. Parker for $6,000,000, the Company is currently paying $575,110 in
annual premiums, a reduction of $79,909 from the previous year. This savings has
been a result of the Company being able to take advantage of favorable changes
in the insurance industry. The amount of premiums advanced by the Company will
be reimbursed from the proceeds of the policies, with interest beginning in
March 2003 at the one-year treasury bill rate. The Company may use, at its
option, up to $7,000,000 of such proceeds to purchase Parker Drilling Company
stock from the Robert L. Parker Family Limited Partnership at a discounted
price. Robert L. Parker Jr., chief executive officer of the Company and son of
Robert L. Parker, will receive one third of the net proceeds of these policies
as a beneficiary.
* * *
As part of building business relationships and fostering closer ties to clients,
companies traditionally host customers in a variety of activities. Over the
years, Parker has found the most successful business development opportunities
are providing customers with industry-related conferences and seminars, coupled
with sporting and other outdoor activities.
Robert L. Parker, chairman of the Company, through the Robert L. Parker, Sr.
Family Limited Partnership (the "Limited Partnership") owns a 2687 acre ranch
near Kerrville, Texas, ("Cypress Springs Ranch") which the Limited Partnership
makes available to the Company for customer retreats and forums and meetings for
world-wide company management. The Cypress Springs Ranch provides lodging,
conference facilities, sporting and other outdoor activities in conjunction with
marketing and business purposes. These meetings facilitate in-depth discussions
among oil company customers and company operations personnel on all phases of
the industry. Robert L. Parker has a 50 percent general partnership interest and
a 46.5 percent limited partnership interest in the Limited Partnership. The
Limited Partnership also owns a 4,982 acre cattle ranch near Mazie, Oklahoma
("Mazie Ranch"), 40 miles from the corporate headquarters in Tulsa, Oklahoma.
The Mazie Ranch is also used by the Company for outdoor activities by customers
and is available to employees for family recreation. There is an understanding
between the Company and the Limited Partnership that the Cypress Springs Ranch
and the Mazie Ranch shall be available for Company use without limitation. In
consideration for the availability and use of these facilities, the Company pays
only the portion of the ranch operating expenses based on the Company's actual
use of said facilities. The total amount of these operating expenses paid by the
Company in fiscal year 1999 was $157,657.
Additionally, the Company uses a 1,380 acre ranch ("Camp Verde Ranch") owned by
Robert L. Parker Jr., president and chief executive officer of the Company,
which is near the Cypress Springs Ranch. The Camp Verde Ranch is used to provide
additional facilities and lodging for business functions at Cypress Springs
Ranch, for which the Company pays only that portion of the ranch operating
expenses based on the actual use of these facilities. The total amount of these
operating expenses paid by the Company in fiscal 1999 was $26,218.
Mr. Bernard Duroc-Danner, the Chairman of Weatherford International, Inc., is a
director of
6
<PAGE> 13
the Company. During fiscal year 1999, the Company and its subsidiaries purchased
approximately $6,900,000 worth of drillpipe from Grant Prideco, Inc., a
wholly-owned subsidiary of Weatherford International, Inc.
Mr. Robert L. Parker Jr. incurred tax liability of $163,092 on January 5, 1998,
in connection with the vesting of restricted stock granted to him in 1995 by the
Company pursuant to the Company's 1991 Stock Grant Plan. As is customary the
Company paid the estimated taxes on said stock grant pursuant to an agreement
that Mr. Parker Jr. would repay said amounts to the Company. At the present time
Mr. Parker Jr. is indebted to the Company in the amount of $163,092.
SEVERANCE COMPENSATION AND CONSULTING AGREEMENTS
Each officer named in the Summary Compensation Table and eight additional
officers of the Company have entered into Severance Compensation and Consulting
Agreements (the "Agreements") with the Company. Each Agreement has a six-year
term but is automatically extended on a year to year basis thereafter unless
terminated or unless a change in control occurs, in which case the Agreements
will remain in effect until no more benefits are payable thereunder.
Subsequent to the execution of the Agreements, there have been no events of
change in control that would trigger the payment of any benefits under the
Agreements in the event of the termination of employment of the signatories
thereto.
INDEMNIFICATION OF DIRECTORS
We indemnify our Directors and officers to the fullest extend permitted by law
so that they will serve free from undue concern that they will not be
indemnified. This is required under our By-Laws, and we have also signed
agreements with each of those individuals contractually obligating us to provide
this indemnification to them.
7
<PAGE> 14
ITEM 1 - ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
In accordance with the Charter and By-Laws of the Company, the board is
presently composed of eight directors, divided into three classes. At each
annual meeting of stockholders, members of one of the classes, on a rotating
basis, are elected for a term expiring at the third succeeding Annual Meeting of
Stockholders and the election and qualification of their successors. The Class
II and Class III Directors will serve until the Annual Meeting of Stockholders
for 2000 and 2001, respectively, or until their successors are elected. Each
current director was elected by the stockholders except Mr. Barnes who was
elected by the board in March 1998 as a Class II Director and will stand for
election at the year 2000 Annual Meeting.
The three directors comprising Class I have been nominated for election at the
meeting for the term expiring at the 2002 Annual Meeting of Stockholders and the
election and qualification of their successors. The persons designated by the
board as nominees for election are Mr. David Fist, Mr. James W. Linn and Mr. R.
Rudolph Reinfrank. All three are currently directors, having previously been
elected by the stockholders. All three of the nominees have advised the Company
of their willingness to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES FOR
ELECTION AS DIRECTORS.
In the event that any vacancy shall occur by reason of the death or other
unanticipated occurrence of the nominees for election as directors by the
stockholders, the persons named as proxies on the enclosed proxy card have
advised the board of directors that it is their intention to vote such proxy for
such substitute nominee as may be proposed by the board of directors or vote to
allow the vacancy created thereby to remain open until filled by the board. The
enclosed proxy card can only be voted for the persons who are nominees for
director, or for any substituted nominee that may be proposed by the board of
directors, and cannot be voted for any additional nominees who may be proposed
by a stockholder at the meeting.
The name, age and principal occupation of the nominees for election as directors
and each of the other directors whose term of office will continue after the
meeting are set forth below. Unless otherwise indicated, such persons have held
their respective principal occupations stated therein for more than five years.
Also included for each director is the year in which he first became a director
of the Company, his positions and offices with the Company, other directorships
and certain other biographical information.
8
<PAGE> 15
NOMINEES FOR DIRECTOR (CLASS I) -- WITH TERM OF OFFICE
EXPIRING AT THE 2002 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
DAVID L. FIST Mr. Fist is a member of the law firm of Rosenstein, Fist &
PHOTO Ringold, Tulsa, Oklahoma, having been associated with the
Age 68 firm since 1955. He serves as a director of Peoples State
Director Since 1993 Bank and Alliance Business Investment Company, a federally
licensed small business investment company.
- ------------------------------------------------------------------------------------------------------
JAMES W. LINN Mr. Linn is executive vice president and chief operating
PHOTO officer of the Company and has general charge of the
Age 54 Company's business affairs and its officers. He joined the
Director Since 1991 Company in 1973 in the Company's international department.
He then served in the Company's domestic operations, being
named northern U.S. district manager in 1976. He was
elected vice president of U.S. and Canada operations in
1979, was promoted to senior vice president in September
1981 and was elected to his present position in December
1991. He is a director of Sarkeys Energy Center, University
of Oklahoma. Mr. Linn is also a member of the board of
directors of the International Association of Drilling
Contractors.
- ------------------------------------------------------------------------------------------------------
R. RUDOLPH REINFRANK Since January 1, 1997, Mr. Reinfrank has been Managing
PHOTO General Partner of Rader Reinfrank & Co., LLC, Beverly
Age 44 Hills, California. From May 1993 through December 1996, Mr.
Director Since 1993 Reinfrank was a managing director of the Davis Companies.
- ------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 16
CONTINUING DIRECTORS (CLASS II) -- WITH TERM OF OFFICE
EXPIRING AT THE 2000 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
EARNEST F. GLOYNA Dr. Gloyna is presently a chaired professor in
PHOTO Environmental Engineering at The University of Texas at
Age 78 Austin. He served as dean, College of Engineering, from
Director Since 1989 April 1970 to August 1987. He is also a consultant in
environmental engineering through Earnest F. Gloyna
Enterprises, and is president of Gloyna Properties, Inc.
Dr. Gloyna serves as a member of the board of trustees of
Southwest Research Institute, a nonprofit research
institute, a member of the board of managers of
HydroProcessing, LLC and a member of the board of advisors
of International Isotopes, Inc.
- ------------------------------------------------------------------------------------------------------
BERNARD DUROC-DANNER Mr. Duroc-Danner is chairman, president and chief executive
PHOTO officer of Weatherford International, Inc., having held
Age 46 these positions since May, 1998. For the previous five
Director Since 1996 years he held the positions of president, chief executive
officer and director of Energy Ventures, Inc. ("EVI").
Weatherford International, Inc. is an international
manufacturer and supplier of oilfield equipment.
- ------------------------------------------------------------------------------------------------------
JAMES E. BARNES Mr. Barnes previously served as chairman, president and
PHOTO chief executive officer of MAPCO Inc., a diverse Fortune
Age 66 500 energy company, which merged in 1998 with The Williams
Director Since March 1998 Companies. Mr. Barnes also serves on the boards of Kansas
City Southern Industries, Inc., BOK Financial Corp., and
SBC Communications Inc.
- ------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 17
CONTINUING DIRECTORS (CLASS III) -- FOR TERM OF OFFICE
EXPIRING AT THE 2001 ANNUAL MEETING
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
ROBERT L. PARKER Mr. Parker, chairman of the board, served as president of
PHOTO the Company from 1954 until October 1977 when he was
Age 76 elected chief executive officer. Since December 1969 he has
Director Since 1969 retained the position of chairman. He also serves on the
board of directors of Clayton Williams Energy, Inc.; BOK
Financial Corporation; and Norwest Bank Texas, Kerrville,
N.A.. He is the father of Robert L. Parker Jr.
- ------------------------------------------------------------------------------------------------------
ROBERT L. PARKER JR. Mr. Parker Jr., president and chief executive officer,
PHOTO joined the Company in 1973 and was elected president and
Age 51 chief operating officer in 1977 and chief executive officer
Director Since 1973 in December 1991. He previously was elected a vice
president in 1973 and executive vice president in 1976. Mr.
Parker Jr. is on the board of directors of the American Red
Cross, the University of Texas Engineering Foundation
Advisory Council, the University of Texas Development Board
and the International Association of Drilling Contractors.
He is the son of Robert L. Parker.
- ------------------------------------------------------------------------------------------------------
</TABLE>
NAMED EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
<TABLE>
<S> <C> <C>
W. KIRK BRASSFIELD................ 44 Corporate Controller
JAMES J. DAVIS.................... 53 Sr. Vice President -- Finance and Chief Financial Officer
DONALD L. GOODSON................. 45 Vice President and General Manager, International Operations
THOMAS L. WINGERTER............... 47 Vice President and General Manager, North American
Operations
</TABLE>
ITEM 2 - APPROVAL OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
The board of directors, upon the recommendation of the Audit Committee, has
unanimously selected PricewaterhouseCoopers LLP (PWC) as the independent
accountants for the Company for the year 2000, subject to the approval of our
stockholders at the Annual Meeting. A representative of PWC will attend the
forthcoming Annual Meeting, will have the opportunity to make a statement if he
or she desires to do so and will be available to answer appropriate questions.
THE BOARD RECOMMENDS YOU VOTE FOR THE APPROVAL OF PWC AS OUR INDEPENDENT
ACCOUNTANTS FOR 2000.
11
<PAGE> 18
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
- --------------------------------------------------------------------------------
The following table sets forth information concerning beneficial ownership of
the Company's common stock as of January 31, 2000, by (a) all persons known by
the Company to be beneficial owners of more than five percent (5%) of such
stock, (b) each director and nominee for director of the Company, (c) each of
the executive officers of the Company named in the Executive Compensation table,
and (d) all directors and executive officers as a group. Unless otherwise noted,
the persons named below have sole voting and investment power with respect to
such shares.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED(1)
----------------------
NUMBER OF PERCENT OF
NAME OF BENEFICIAL OWNER SHARES CLASS
- ------------------------ --------- ----------
<S> <C> <C> <C>
Dimensional Fund Advisors 4,169,600(2) 5.42%
Robert L. Parker 4,399,971(3) 5.7%
Robert L. Parker Jr. 1,147,703(4) 1.5%
James W. Linn 738,754(5) *
James J. Davis 553,614(6) *
Thomas L. Wingerter 259,176(7) *
Earnest F. Gloyna 76,800(8) *
R. Rudolph Reinfrank 71,000(9) *
David L. Fist 67,600(10) *
Bernard Duroc-Danner 57,000(11) *
James E. Barnes 52,000(12) *
All directors and all executive officers
as a whole Group (12 persons) 7,657,863(13) 9.9%
</TABLE>
- ---------------
* Less than one percent
(1) Unless otherwise indicated, all shares are directly held with sole voting
and investment power. Additionally, there are no voting or investment
powers over shares which are represented by presently exercisable stock
options.
(2) Based on information obtained from Dimensional Fund Advisors as of January
31, 2000.
(3) Includes 67,200 shares owned by Mr. Parker's spouse, as to which shares Mr.
Parker disclaims any beneficial ownership and has no voting control,
3,796,045 shares held by the Robert L. Parker Trust, over which Mr. Parker
has sole voting control and shared dispositive power, options to purchase
240,000 shares under the 1994 Executive Stock Option Plan and options to
purchase 260,000 shares under the 1997 Stock Plan.
(4) Includes 5,760 shares held as trustee for Mr. Parker Jr.'s nieces, as to
which he disclaims any beneficial ownership, options to purchase 526,000
shares under the 1994 Executive Stock Option Plan and options to purchase
390,000 shares under the 1997 Stock Plan.
(5) Includes options to purchase 304,000 shares under the 1994 Executive Stock
Option Plan and options to purchase 209,000 shares under the 1997 Stock
Plan.
(6) Includes 77,200 shares held by Mr. Davis' spouse in a trust over which she
is trustee only, options to purchase 247,000 shares under the 1994
Executive Stock Option Plan and options to purchase 209,000 shares under
the 1997 Stock Plan.
12
<PAGE> 19
(7) Includes options to purchase 127,000 shares under the 1994 Executive Stock
Option Plan and options to purchase 90,000 shares under the 1997 Stock
Plan.
(8) Includes 2,000 shares held in trust by Dr. Gloyna's spouse, as to which Dr.
Gloyna disclaims beneficial ownership and options to purchase 67,000
shares.
(9) Includes options to purchase 67,000 shares.
(10) Includes options to purchase 67,000 shares.
(11) Includes options to purchase 57,000 shares.
(12) Includes options to purchase 22,000 shares. All shares are held by the
James E. Barnes Revocable Trust.
(13) This number of shares includes the total number of shares which may be
acquired pursuant to the exercise of options by the directors and executive
officers.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During fiscal year 1999 the compensation committee of the board of directors was
comprised of two outside directors, Mr. David Fist and Mr. R. Rudolph Reinfrank.
The Committee formally convened two times during the year in addition to
contacts by telephone and correspondence to discuss and share information
necessary to establish, review and recommend the compensation policies and
programs for officers and key employees.
COMPENSATION GUIDELINES
The committee has established guidelines to attract, motivate and retain a
talented executive team, whose performance is essential to meet the business
goals of efficient management and to maximize the value of the stockholders'
investments. In pursuit of this objective, the committee has adopted the
following guidelines for retaining and motivating executives with the necessary
skills and expertise to lead an international drilling service company:
(1) Provide competitive cash compensation commensurate with individual
contributions, level of responsibility and results in adapting to current
market conditions and improving stockholder value.
(2) Reward executive officers and key employees for exceptional performance
with regard to the business performance of the Company.
(3) Utilize stock options to motivate executive officers and other key
employees toward effective management of the Company's operations that
produces long-term profitability.
One of the principal factors used by the committee in making recommendations on
compensation is an analysis of how Parker compensates its executive officers in
comparison with peer companies. In performing this analysis the committee
reviews surveys prepared by expert compensation consultants of these peer
companies. The survey analyzes base salary, bonuses, stock grants, etc. for each
executive position and other key employees.
Although base salary compensation is not directly tied to specific formulas and
some subjectivity is involved, the Company takes into consideration performance
based on the level of responsibility. Each executive officer's and key
employee's performance is reviewed by his or her immediate supervisor based on
initiative, business judgment, technical expertise, management skills and
ability to execute the Company's plans and react to
13
<PAGE> 20
unanticipated change in events. In addition to these general factors, the
committee also considered the continued downturn in business, projected level of
activity and cash needs for the coming year, the contribution of key personnel
to the restructuring of the Company and the salary freeze of executive officers
in the preceding year.
Based on the foregoing, the committee agreed with management's recommendation to
increase salaries of the executive officers and key employees an average of 8.5%
for 2000.
The second aspect of compensation considered by the committee is incentive
compensation in the form of bonuses. In 1998 the Company adopted an incentive
bonus plan that rewards the performance of management and certain operations
personnel based on actual financial and operating performance as compared to
budget. The bonus calculation was weighted based on several performance
measures, including cash flow, net income, return on capital employed and
reductions in working capital. Because certain factors which affect the
performance of the Company, such as the price of oil, level of exploration and
development activity and worldwide economic conditions, are beyond the control
of management and operations personnel, there is also a subjective element
involved in the process of determining bonuses recommended by management. In
1999, management determined that due to the depressed market there was no method
to accurately forecast budgets as a basis for establishing performance targets
for incentive compensation purposes. As a result, management recommended to the
Compensation Committee that bonuses be paid at a flat rate of 30% of base bonus
for the top four executive officers and 40% for all other incentive bonus plan
participants. Management advised the committee, and the committee concurred,
that despite the operating losses incurred in 1999, some bonuses were necessary
to retain key personnel and to compensate key personnel for leading the company
through the industry downturn, including the restructuring of the management of
operations.
In evaluating the equity incentives available to the executive officers and the
key employees, the committee considered the equity incentives of peer companies,
the individual contributions of executive officers and key employees, the most
recent grants and options awarded and the broad based nature of the Company's
1997 Stock Plan. The committee concurred with management that due to the low
stock price, which was caused by depressed oil prices and other factors largely
outside the control of management, the existing options did not provide adequate
incentive to management and key employees. As a result, the committee agreed
that additional equity incentives should be granted consistent with the broad
based nature of the 1997 Stock Plan. Based on the management and committee
recommendation, the entire board of directors authorized the issuance of the
following options in 1999:
14
<PAGE> 21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent of
Number of Total
Securities Options Exercise
Underlying Granted to Price Number of Options
Options Employees Per Granted in 1999
Granted in Fiscal Share Expiration Under 1997 Stock Plan
Name (#) Year(a) ($/S) Date Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Named Executive
Officers (from Summary
Compensation Table) 478,000 26% $3.1875 4/14/2006 119,500(1) 358,500(1)
Executive Officer Group 40,000 2% $3.1875 4/14/2006 10,000(1) 30,000(1)
Non-Exec. Officer Group 85,000 5% $3.1875 4/14/2006 21,250(1) 63,750(1)
Employee Group 1,213,000 67% $3.1875 4/14/2006 303,250 909,750
</TABLE>
(1) 25% of the grants to officers under the 1997 Stock Plan vested on April 15,
1999, 25% will vest on April 15, 2000 and 25% vest on April 14, 2001 and
April 15, 2002. See table under Option/SAR Grants in fiscal year 1999 in
following section for grants to each Named Executive Officer in the Summary
Compensation Table.
The committee also reviewed the equity ownership of the directors and
recommended that additional options be granted to the non-employee directors.
Based on the committee recommendation, the entire board of directors authorized
the issuance of the following options to non-employee directors:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Options Granted
Number of Options Granted in 1999 under 1994
in 1999 under 1997 Stock Non-Employee Director Stock
Plan Option Plan
Name Exercisable Non-Exercisable Exercisable Non-Exercisable
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Earnest F. Gloyna 15,000 -- 2,000 --
David L. Fist 15,000 -- 2,000 --
R. Rudolph Reinfrank 15,000 -- 2,000 --
Bernard J. Duroc-Danner 15,000 -- 2,000 --
James E. Barnes 20,000 -- 2,000 --
</TABLE>
15
<PAGE> 22
CHIEF EXECUTIVE OFFICER
Robert L. Parker Jr. serves as the president and chief executive officer of the
Company. The committee reviewed Mr. Parker's base salary, bonuses and
participation in stock option plans for fiscal years 1997, 1998 and 1999. The
Committee discussed Mr. Parker's personal performance over the past 12 months
including the restructuring and consolidation of the Company, business
developments and strategic planning, as well as his continued excellent
reputation and contacts in the drilling industry. Based on its evaluation of
these factors, the committee recommended that Mr. Parker be granted 150,000
stock options in 1999 (see table below), a bonus of $142,500 for 1999 but no
salary increase for 2000.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code imposed for 1995 and subsequent
years, a limitation on the deductibility of certain executive officer
compensation in excess of $1,000,000, subject to certain performance-related
exceptions. The compensation committee has not yet adopted a formal policy with
respect to qualifying compensation paid to its executive officers for an
exemption from the limitation on deductibility imposed by this section. The
committee anticipates that all compensation paid to its executive officers
during 2000 will qualify for deductibility because no executive's compensation
is expected to exceed the dollar limitations of such provision.
THE COMPENSATION COMMITTEE
Mr. R. Rudolph Reinfrank, Chairman
Mr. David Fist
AUDIT COMMITTEE REPORT
The Audit Committee, in addition to carrying out its customary duties contained
in its charter, was proactive in responding to the regulations adopted by the
SEC regarding audit committees in 1999. Although certain of these new
regulations are not effective until year-end 2000, the Audit Committee elected
to address many of these regulations in the current report, by undertaking the
following:
- - The Committee reviewed and discussed the 1999 year-end audited financial
statements with management and recommended to the Board of Directors that the
audited financial statements be included in the Annual Report.
- - The Committee discussed with the independent accountants the matters contained
in the Statement of Auditing Standards No. 61.
- - The Committee received from the accountants the disclosures regarding their
independence required by Independence Board Standard No. 1.
The Audit Committee has previously adopted a charter which is currently being
revised in accordance with the new regulations and will be submitted with the
proxy in 2000.
THE AUDIT COMMITTEE
Mr. James Barnes, Chairman
Dr. Earnest Gloyna
16
<PAGE> 23
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for services
rendered in all capacities to the Company by the chief executive officer and the
four next most highly compensated executive officers of the Company
(collectively, the "Named Executive Officers") for the year ended December 31,
1999 (1999), for the four-month period ended December 31, 1998 (4 mo.), for
fiscal year ended August 31, 1998 (1998) and the fiscal year ended August 31,
1997 (1997).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS/ COMPENSATION
PRINCIPAL POSITION PERIOD ($)(1) ($) ($)(2) ($) SARS(#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Parker Jr. 1999 497,500 162,925 26,556 -- 150,000 18,147(3)(13)
President and Chief 4 mo. 177,077 -- 2,091 -- -- 4,003(8)(13)
Executive Officer 1998 498,910 150,000 -- -- -- 10,552
1997 511,500 100,000 -- -- 600,000 10,396
Robert L. Parker 1999 472,500 154,350 154,720 -- 100,000 329,441(4)(13)
Chairman 4 mo. 168,423 -- 23,500 -- -- 114,232(9)(13)
1998 465,705 50,000 67,336 -- -- 344,750
1997 461,500 -- 96,975 -- 400,000 361,710
James W. Linn 1999 314,500 -- -- -- 89,000 16,290(5)(13)
Executive Vice 4 mo. 113,731 75,889 -- -- -- 3,277(10)(13)
President and Chief 1998 313,538 85,000 -- -- -- 8,765
Operating Officer 1997 315,167 75,000 -- -- 300,000 8,607
James J. Davis 1999 209,000 50,000 -- 89,000 17,163(6)(13)
Sr. Vice President- 4 mo. 72,346 48,020 -- -- -- 3,926(11)(13)
Finance and Chief 1998 206,192 75,000 -- -- -- 8,324
Financial Officer 1997 200,667 65,000 -- -- 300,000 8,167
Thomas L. Wingerter 1999 156,577 57,850 -- 50,000 48,626(7)(13)
Vice President and 4 mo. 45,969 -- -- -- -- 2,051(12)(13)
General Manager, 1998 129,431 30,000 -- -- -- 18,346
North American 1997 126,133 25,000 -- -- 100,000 6,819
Operations
</TABLE>
(1) For each of the employed directors, includes director's fees of $10,500,
$8,700, $14,500, and $24,500 for 1999, four-months ended December 31,
1998, fiscal years 1998 and 1997, respectively.
(2) No compensation was received by the Named Executive Officers which
requires disclosure in this column except for Mr. Parker whose Other
Annual Compensation in 1999 includes $105,131 for tax preparation and
$45,988 for salaries to employees who work jointly for the Company and the
Robert L. Parker Trust and for R. L. Parker Jr. whose Other Annual
Compensation in 1999 includes $8,700 for tax preparation and $9,494 for
salaries to employees who worked jointly for the Company and the Robert L.
Parker Trust.
(3) Mr. Parker Jr.'s All Other Compensation for 1999 includes Company matching
contributions to its 401(k) plan of $6,400, $361 representing the full
dollar value of the term portion of a company-paid premium for split
dollar life insurance policy and $4,087 representing the present value of
the benefit of the non-term portion of that premium.
(4) Mr. Parker's All Other Compensation for 1999 includes Company matching
contributions to its 401(k) plan of $6,174, $50,554 representing the full
dollar value of the term portion of a Company-paid premium for a split
dollar life insurance policy and $270,033 representing the present value
of the non-term portion of that premium. See caption "Related
Transactions" on page 6.
17
<PAGE> 24
(5) Mr. Linn's All Other Compensation for 1999 includes Company matching
contributions to its 401(k) plan of $6,674, $274 representing the full
dollar value of the term portion of a Company-paid premium for a split
dollar life insurance policy and $2,768 representing the present value of
the benefit of the non-term portion of that premium.
(6) Mr. Davis' All Other Compensation for 1999 includes Company matching
contributions to its 401(k) plan of $8,445, $222 representing the full
dollar value of the term portion of a Company-paid premium for a split
dollar life insurance policy and $2,290 representing the present value of
the benefit of the non-term portion of that premium.
(7) Mr. Wingerter's All Other Compensation for 1999 includes Company matching
contributions to its 401(k) plan of $4,152, $166 representing the full
dollar value of the term portion of a Company-paid premium for a split
dollar life insurance policy and $2,732 representing the present value of
the benefit of the non-term portion of that premium.
(8) Mr. Parker Jr.'s All Other Compensation for the four-month period ended
December 31, 1998 includes $118 representing the full dollar value of the
term portion of a Company-paid premium for split dollar life insurance
policy and $1,587 representing the present value of the benefit of the
non-term portion of that premium.
(9) Mr. Parker's All Other Compensation for the four-month period ended
December 31, 1998 includes $15,108 representing the full dollar value of
the term portion of a Company-paid premium for split dollar life insurance
policy and $98,209 representing the present value of the benefit of the
non-term portion of that premium.
(10) Mr. Linn's All Other Compensation for the four-month period ended December
31, 1998 includes $89 representing the full dollar value of the term
portion of a Company-paid premium for split dollar life insurance policy
and $1,095 representing the present value of the benefit of the non-term
portion of that premium.
(11) Mr. Davis' All Other Compensation for the four-month period ended December
31, 1998 includes Company matching contributions to its 401(k) plan of
$820, $72 representing the full dollar value of the term portion of a
Company-paid premium for split dollar life insurance policy and $953
representing the present value of the benefit of the non-term portion of
that premium.
(12) Mr. Wingerter's All Other Compensation for the four-month period ended
December 31, 1998 includes Company matching contributions to its 401(k)
plan of $1,154, $54 representing the full dollar value of the term portion
of a Company-paid premium for split dollar life insurance policy and $843
representing the present value of the benefit of the non-term portion of
that premium.
(13) The present value of the benefit of the non-term portion of the split
dollar life insurance policies was determined by calculating the present
value of interest at risk on future premiums to be paid by the Company,
assuming an interest crediting rate of 8% plus the present value of past
premiums paid by the Company, assuming an interest credit rating of 8%.
The present value of the benefit of the non-term portion of an additional
split dollar life insurance policy for Robert L. Parker was determined by
multiplying the following factors; the non-term portion of the premium, an
assumed interest crediting rate of 8 percent, 10 years (which is the
number of years at which point the cash surrender value exceeds the total
of premiums paid by the Company) and 8 percent (net present value).
OPTION/SAR GRANTS IN 1999
The following table provides information on the options granted to the Executive
Officers named in the Executive Compensation Table and the potential realizable
value of those grants (on a pre-tax basis) determined in accordance with SEC
rules. The information in this table shows how much the named executive officers
may eventually realize in future dollars under two hypothetical situations: if
the stock grains 5% or 10% in value per year compounded over the ten-year life
of the options. These are assumed rates of appreciation and not intended to
forecast future appreciation of the Company's common stock.
18
<PAGE> 25
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value At Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term(b)
- ------------------------------------------------------------------------------------------------------------------
Number of
Securities Percent of
Underlying Total Options Exercise
Options Granted to Price Per
Granted Employees in Share Expiration 5% 10% Grant Date
Name (#) Fiscal Year(a) ($/S) Date ($) ($) Value(c)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Parker 100,000 5.5% 3.1875 4/14/06 30,000 302,000 $171,000
Robert L. Parker Jr. 150,000 8.2% 3.1875 4/14/06 195,000 454,000 $256,500
James W. Linn 89,000 4.9% 3.1875 4/14/06 115,000 269,000 $152,190
James J. Davis 89,000 4.9% 3.1875 4/14/06 115,000 269,000 $152,190
Thomas L. Wingerter 50,000 2.7% 3.1875 4/14/06 65,000 151,000 $ 85,500
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
(a) Based on the total number of options granted to employees under the 1997
Stock Plan in 1999.
(b) Calculated over a seven-year period, which is equal to the maximum term of
the options.
(c) Calculated using the Black-Scholes option pricing model, based on the
Company's current dividend policy, volatility based on stock price data
over the six years preceding the option grants (49%) and a risk-free
interest rate (6.5%), which equaled, at the time of the option grants, the
yield on U.S. Treasury Strips with a time to maturity that approximates
the six-year estimated average life of the options. The result is a
Black-Scholes option value of $1.71 per share. The Company does not
believe the values estimated by this model, or any other model,
necessarily will be indicative of the values to be realized by an
executive.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1999 AND
FISCAL YEAR-END 1999 OPTION/SAR VALUES
The following table provides information on the Named Executive Officers'
unexercised options at December 31, 1999. None of the Named Executive Officers
exercised any options during 1999 and no stock appreciation rights have been
granted since the inception of the 1994 Executive Stock Option Plan, nor are any
allowable under the 1997 Stock Plan.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised
Unexercised Options/SAR's at In-the-Money Options/ SAR's at
December 31, 1999(#) December 31, 1999($)(1)
-------------------------------- ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert L. Parker Jr. 563,500 352,500(2) 0 0
Robert L. Parker 265,000 235,000(3) 0 0
James W. Linn 326,250 186,750(4) 0 0
James J. Davis 269,250 186,750(4) 0 0
Thomas L. Wingerter 139,500 77,500(5) 0 0
</TABLE>
(1) The value per option is calculated by subtracting the exercise price of each
option ($4.50 for previous awards under the 1994 Plan and $8.875 for all
awards in 1997 under the 1994 and the 1997 Plans and $3.1875 for awards in
1999 under the 1997 Plan) from the $3.1875 closing price of the Company's
common stock on the New York Stock Exchange on December 31, 1999.
19
<PAGE> 26
(2) 157,500 vest annually in 2000 and 2001 and 37,500 in 2002.
(3) 105,000 vest annually in 2000 and 2001 and 25,000 in 2002.
(4) 82,250 vest annually in 2000 and 2001 and 22,250 in 2002.
(5) 32,500 vest annually in 2000 and 2001 and 12,500 in 2002.
STOCK PERFORMANCE GRAPH
The following performance graph compares cumulative total stockholder returns on
the Company's common stock compared to the Standard and Poor's Oil and Gas
Drilling Index and a Peer Group Index consisting of Nabors Industries, Rowan
Companies, Inc., Noble Drilling Corp., Helmerich & Payne, and Pride
International, Inc., calculated at the end of each fiscal year, December 31,
1995 through December 31, 1999. The composition of companies that comprise the
Peer Group Index has changed from the previous year due to the acquisition of
Pool by Nabors and merger of R&B and Falcon. The Oil and Gas Drilling Index was
used in lieu of the Standard and Poors Mid Cap 400, because the Company is no
longer included in the latter index. The graph assumes $100 was invested on
December 31, 1994 in the Company's common stock and in each of the referenced
indices and assumes reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
PEER GROUP (HR, NBR,
PARKER DRILLING S & P O&G DRILLING NE, RDC, PDE)
--------------- ------------------ --------------------
<S> <C> <C> <C>
94 100.0000 100.0000 100.0000
95 128.9470 136.3580 142.6400
96 202.6320 278.0440 278.4260
97 256.5790 369.6770 377.4110
98 67.1368 156.5160 127.4110
99 67.1053 254.2260 247.2080
</TABLE>
20
<PAGE> 27
REQUIREMENTS, INCLUDING DEADLINES FOR SUBMISSION OF PROXY PROPOSALS,
NOMINATION OF DIRECTORS AND OTHER BUSINESS OF SHAREHOLDERS
- --------------------------------------------------------------------------------
Under our By-laws, certain procedures are provided which a shareholder must
follow to nominate persons for election as Directors or to introduce an item of
business at an annual meeting of shareholders. These procedures provide that
nominations for Director nominees and/or an item of business to be introduced at
an annual meeting of shareholders must be submitted in writing to the Secretary
of the Company at 8 East Third Street, Tulsa, OK 74103. The nomination or
proposed item of business must be received no later than 90 days in advance of
an annual meeting.
For any other annual or special meeting, the nomination or item of business must
be received by the tenth day following the date of public disclosure of the date
of meeting. The nomination must contain the following information about the
nominee:
- - name;
- - age;
- - business and residence addresses;
- - principal occupation or employment;
- - the number of shares of common stock held by the nominee;
- - the information that would be required under the rules of the SEC in a proxy
statement soliciting proxies for the election of such nominee as a Director,
and
- - a signed consent of the nominee to serve as a Director of the Company, if
elected.
Notice of a proposed item of business must include:
- - a brief description of the substance of, and the reasons for conducting such
business at the annual meeting;
- - the shareholder's name and address;
- - the number of shares of common stock held by the shareholder (with supporting
documentation where appropriate); and
- - any material interest of the shareholder in such business.
The Board is not aware of any matters that are expected to come before the
Annual Meeting other than those referred to in this Proxy Statement. If any
other matter should come before the Annual Meeting, the persons named in the
accompanying proxy intend to vote the proxies in accordance with their best
judgment, including consideration of the recommendations of management.
The chairman of the meeting may refuse to allow the transaction of any business
not presented beforehand, or to acknowledge the nomination of any person not
made, in compliance with the foregoing procedures.
Under the rules of the SEC, shareholder proposals intended to be presented at
the Company's 2000 Annual Meeting of Shareholders must be received by us,
attention: Ms. Leslie D. Rosencutter, Secretary, at our principal executive
offices by November 25, 2000 for inclusion in the proxy statement and form of
proxy relating to that meeting.
Whether or not you plan to attend the Meeting, please vote by telephone or
Internet or mark, sign, date and promptly return the enclosed proxy in the
enclosed envelope. The toll free number to vote by telephone is at no cost to
you. No postage is required for mailing in the United States.
By order of the Board of Directors,
/s/ LESLESLIE D. ROSENCUTTER
Corporate Secretary
Tulsa, Oklahoma
March 17, 2000
21
<PAGE> 28
ANNUAL REPORT
Stockholders are invited to keep current on the Company's latest contracts, news
releases and other developments throughout the year by way of the Internet. The
Parker Drilling Company home page can be accessed by setting your World Wide Web
browser to http://www.parkerdrilling.com for regularly updated information.
The Company has provided to each person whose proxy is being solicited a copy of
its 1999 Annual Report to Stockholders. THE COMPANY WILL PROVIDE WITHOUT CHARGE
TO EACH PERSON WHO REQUESTS, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
(INCLUDING THE FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES THERETO) REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER
31, 1999. Such requests should be directed to Mr. Chuck Sullivan, Public
Relations Department, Parker Drilling Company, 8 East Third Street, Tulsa,
Oklahoma 74103.
22
<PAGE> 29
PARKER DRILLING COMPANY
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, APRIL 27, 2000
10:00 A.M.
PARKER BUILDING
8 EAST THIRD STREET
TULSA, OKLAHOMA
- --------------------------------------------------------------------------------
[LOGO] PARKER DRILLING COMPANY -- 2000 PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
The undersigned appoints ROBERT L. PARKER and LESLIE D. ROSENCUTTER, or either
of them, as Proxies, with the power of substitution, and authorizes them to
represent the undersigned at the annual meeting of stockholders to be held April
27, 2000, or any adjournment thereof, and to vote all the shares of common stock
of Parker Drilling Company held of record by the undersigned on March 13, 2000,
as designated on the reverse side.
This Proxy, when properly executed, will be voted in the manner directed by the
undersigned stockholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED IN
FAVOR OF THE PROPOSALS IN EACH SUCH CASE.
See reverse for voting instructions.
<PAGE> 30
COMPANY #
CONTROL #
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on April 26, 2000.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
o Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- http://www.eproxy.com/pkd/ -- QUICK *** EASY *** IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. on April 26, 2000.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Parker Drilling Company, c/o Shareowner
Services(TM), P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
o Please detach here o
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2.
<TABLE>
<S> <C> <C>
1. Election of directors-- director nominees:
01 David L. Fist 02 James W. Linn 03 R. Rudolph Reinfrank [ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
(except as marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, [ ]
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.)
2. PROPOSAL TO RATIFY the selection of PricewaterhouseCoopers LLP as
independent accountants for the Company for the year 2000. [ ] For [ ] Against [ ] Abstain
3. IN THEIR DISCRETION, the Proxies are authorized to vote in their best
judgment upon such other business as may properly come before the meeting.
</TABLE>
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE.
Address Change? Mark Box [ ]
Indicate changes below:
Date __________________________
[______________________________]
Signature(s) in Box
Please sign exactly as your name(s)
appear on Proxy. If held in joint
tenancy, all persons must sign.
Trustees, administrators, etc.,
should include title and authority.
Corporations should provide full
name of corporation and title of
authorized officer signing the
proxy.
