<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 /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
NOBLE DRILLING CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[NOBLE LOGO]
NOBLE DRILLING CORPORATION
10370 RICHMOND AVENUE, SUITE 400
HOUSTON, TEXAS 77042
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1995
To the Stockholders of
Noble Drilling Corporation:
The annual meeting of stockholders of Noble Drilling Corporation, a
Delaware corporation (the "Company"), will be held on Thursday, April 27, 1995,
at 10:00 a.m., local time, at The Ritz-Carlton, 1919 Briar Oaks Lane, Houston,
Texas, for the following purposes:
1. To elect three directors, comprising the members of the class
of directors whose term expires at the annual meeting, for a three-year
term expiring in 1998; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 8, 1995
as the record date for the determination of stockholders entitled to notice of
and to vote at the annual meeting or any adjournment thereof. Only holders of
record of Common Stock at the close of business on the record date are entitled
to notice of and to vote at the meeting. A complete list of such stockholders
will be available for examination at the offices of the Company in Houston,
Texas during normal business hours for a period of 10 days prior to the
meeting.
A record of the Company's activities during 1994 and financial statements
for the fiscal year ended December 31, 1994 are contained in the accompanying
1994 Annual Report and Form 10-K. The Annual Report and Form 10-K do not form
any part of the material for solicitation of proxies.
All stockholders are cordially invited to attend the meeting.
Stockholders are urged, whether or not they plan to attend the meeting, to
sign, date and mail the enclosed proxy or voting instruction card in the
postage-paid envelope provided. If a stockholder who has returned a proxy
attends the meeting in person, such stockholder may revoke the proxy and vote
in person on all matters submitted at the meeting.
By Order of the Board of Directors
Julie J. Robertson
Secretary
Houston, Texas
March 31, 1995
<PAGE> 3
[NOBLE LOGO]
NOBLE DRILLING CORPORATION
10370 RICHMOND AVENUE, SUITE 400
HOUSTON, TEXAS 77042
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 1995
GENERAL
This proxy statement is furnished to stockholders of Noble Drilling
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies for use at the annual meeting of
stockholders to be held at the time and place and for the purposes set forth in
the accompanying notice. The approximate date of mailing of this proxy
statement and the accompanying proxy or voting instruction card is March 31,
1995.
PROXY CARDS AND VOTING INSTRUCTION CARDS
If a proxy card is enclosed, it serves to appoint proxies for record
holders of common stock, par value $.10 per share ("Common Stock"), of the
Company. Shares represented by a proxy in such form, duly executed and
returned to the Company and not revoked, will be voted at the meeting in
accordance with the directions given. If no direction is made, the proxy will
be voted for election of the directors named in the proxy. Any stockholder
giving a proxy may revoke it at any time before it is voted by communicating
such revocation in writing to the Secretary of the Company or by executing and
delivering a later-dated proxy.
If a voting instruction card is enclosed, it serves as a voting
instruction to the trustee of the Noble Drilling Corporation Thrift Plan, as
amended (the "Thrift Plan"), from the plan participant. The trustee under the
Thrift Plan will vote the shares of Common Stock credited to Thrift Plan
participants' accounts in accordance with such participants' instructions. If
no such voting instructions are received from a participant, then, according to
the terms of the Thrift Plan, the trustee under the Thrift Plan will vote the
shares in such participant's account in its absolute discretion.
VOTING PROCEDURES AND TABULATION
The Company will appoint one or more inspectors of election to act at the
meeting and to make a written report thereof. Prior to the meeting, the
inspectors will sign an oath to perform their duties in an impartial manner and
according to the best of their ability. The inspectors will ascertain the
number of shares outstanding and the voting power of each, determine the shares
represented at the meeting and the validity of proxies and ballots, count all
votes and ballots, and perform certain other duties as required by law.
With regard to the election of directors, votes may be cast in favor of
or withheld from each nominee. Votes that are withheld will be excluded
entirely from the vote and will have no effect. Brokers who hold NASDAQ/NMS
shares in street name have the authority to vote on all items whether or not
they have received instructions from beneficial owners. Brokers that do not
receive instructions are therefore entitled to vote on the election of
directors. Under applicable Delaware law and the Company's Certificate of
Incorporation and Bylaws, a broker non-vote will have no effect on the outcome
of the election of directors.
<PAGE> 4
VOTING SECURITIES
The only voting security of the Company outstanding is its Common Stock.
Only holders of record of Common Stock at the close of business on March 8,
1995, the record date for the meeting, are entitled to notice of and to vote at
the meeting. On the record date for the meeting, there were 79,100,802 shares
of Common Stock outstanding and entitled to be voted at the meeting. A
majority of such shares, present in person or represented by proxy, is
necessary to constitute a quorum. Each share of Common Stock is entitled to
one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of December 31, 1994 information with
respect to the only persons who were known to the Company to be the beneficial
owners of more than five percent of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
-----------------------------------
NAME AND ADDRESS OF NUMBER PERCENT OF
BENEFICIAL OWNER OF SHARES CLASS
-------------------- ---------------- ---------------
<S> <C> <C> <C>
P.A.J.W. Corporation . . . . . . . . . . . . . . . . . . . 8,651,690 (1) 11.1%
Potomac Tower, Suite 1700
1001 19th Street North
Arlington, Virginia 22209
FMR Corp. . . . . . . . . . . . . . . . . . . . . . . . . 7,650,785 (2) 9.8%
82 Devonshire Street
Boston, Massachusetts 02109
The Samuel Roberts Noble Foundation, Inc. . . . . . . . . 5,474,639 (3) 7.0%
P. O. Box 2180
Ardmore, Oklahoma 73402
Merrill Lynch & Co., Inc. . . . . . . . . . . . . . . . . 5,144,443 (4) 6.6%
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
Wellington Management Company . . . . . . . . . . . . . . 4,926,049 (5) 6.3%
75 State Street
Boston, Massachusetts 02109
Metropolitan Life Insurance Company . . . . . . . . . . . . 4,753,927 (6) 6.1%
One Madison Avenue
New York, New York 10010
The Equitable Companies Incorporated . . . . . . . . . . . 4,423,145 (7) 5.7%
787 Seventh Avenue
New York, New York 10019
</TABLE>
_______________________
(1) According to a Schedule 13D filed with the Securities and Exchange
Commission (the "SEC") by P.A.J.W. Corporation ("P.A.J.W.") jointly with
Gordon P. Getty and Marc E. Leland dated September 21, 1994, P.A.J.W.
beneficially owns, and has sole voting and investment power with respect
to, the 8,651,690 shares. Mr. Getty, as the sole stockholder of
P.A.J.W., may be deemed to beneficially own, and have sole voting and
investment power with respect to, the 8,651,690 shares held by P.A.J.W.
According to such filing,
(footnotes continued on following page)
2
<PAGE> 5
Mr. Leland may be deemed to beneficially own, and have sole voting and
investment power with respect to, the 8,651,690 shares held by P.A.J.W.
For additional information regarding the beneficial ownership of Common
Stock by Mr. Leland, a director of the Company, see "Security Ownership
of Management."
(2) According to a Schedule 13G (Amendment No. 2) filed with the SEC by FMR
Corp. jointly with Edward C. Johnson 3d and Fidelity Management &
Research Company ("Fidelity") dated February 13, 1995, the amount
beneficially owned includes 7,017,403 shares (including 1,378,468 shares
and 1,021,109 shares, respectively, attributable to shares of Common
Stock not outstanding but subject to currently convertible $2.25
Convertible Exchangeable Preferred Stock and $1.50 Convertible Preferred
Stock of the Company) beneficially owned by several investment companies
("Funds") for which Fidelity acts as investment adviser. FMR Corp. is
the parent of Fidelity and is controlled by Edward C. Johnson 3d. FMR
Corp., Fidelity, Mr. Johnson and the Funds have sole investment power
with respect to such shares. The Board of Trustees of each of the Funds
has sole voting power with respect to the shares held by such Fund.
Fidelity Management Trust Company ("Fidelity Trust"), acting as
investment manager for institutional accounts, is the beneficial owner of
633,382 shares (including 27,100 shares and 164,032 shares, respectively,
attributable to shares of Common Stock not outstanding but subject to
currently convertible $2.25 Convertible Exchangeable Preferred Stock and
$1.50 Convertible Preferred Stock of the Company). Fidelity Trust is a
wholly owned subsidiary of FMR Corp., and FMR Corp. exercises sole
investment power over the 633,382 shares and sole voting power over
164,150 shares.
(3) According to a Schedule 13D (Amendment No. 3) filed with the SEC by The
Samuel Roberts Noble Foundation, Inc. (the "Foundation") dated February
8, 1995, the Foundation has sole voting and investment power with respect
to the 5,474,639 shares. Michael A. Cawley, as President and Chief
Executive Officer and a trustee of the Foundation, and John F. Snodgrass,
as the President Emeritus and a trustee of the Foundation, may be deemed
to beneficially own, and have shared voting and investment power with
respect to, the 5,474,639 shares held by the Foundation. As two of the
nine members of the board of trustees of the Foundation, neither Mr.
Cawley or Mr. Snodgrass, individually, nor both of them, acting together,
represents sufficient voting power on the Foundation's board of trustees
to determine voting or investment decisions with respect to the 5,474,639
shares. In the event of a vacancy in a trusteeship of the Foundation, a
majority of the remaining trustees has the power to elect a successor
trustee to fill the vacancy. For additional information regarding the
beneficial ownership of Common Stock by Messrs. Cawley and Snodgrass,
directors of the Company, see "Election of Directors" and "Security
Ownership of Management."
(4) According to a Schedule 13G filed with the SEC by Merrill Lynch & Co.,
Inc. ("ML&Co.") jointly with Merrill Lynch Group, Inc. ("ML Group"),
Princeton Services, Inc. ("PSI"), Merrill Lynch Asset Management, L.P.
(d/b/a) Merrill Lynch Asset Management ("MLAM"), and Merrill Lynch Global
Allocation Fund, Inc. (the "Fund") dated January 19, 1995, ML&Co.
beneficially owns, and has shared voting and investment power with
respect to, the 5,144,443 shares, which consist of (i) 5,014,276 shares
(including 1,216,151 shares attributable to shares of Common Stock not
outstanding but subject to currently convertible $1.50 Convertible
Preferred Stock of the Company) beneficially owned by the Fund and one
other investment company for which MLAM acts as investment adviser and
120,000 shares beneficially owned by an investment company for which Fund
Asset Management, L.P. (d/b/a) Fund Asset Management ("FAM") acts as
investment adviser, and (ii) 10,167 shares beneficially owned by Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned subsidiary of
ML&Co., as a result of its proprietary trading activity. ML&Co. is the
parent of ML Group, which is the parent of PSI, the general partner of
MLAM and FAM.
(5) According to a Schedule 13G filed with the SEC by Wellington Management
Company ("WMC") dated February 3, 1995, WMC, in its capacity as
investment adviser, may be deemed the beneficial owner of 4,926,049
shares of Common Stock which are owned by numerous investment counseling
clients. These clients receive dividends, if any, and the proceeds from
the sale of such shares. No such client is known to WMC to have such an
interest with respect to more than five percent of the class. WMC has
shared voting power with respect to 2,930,199 shares and shared
investment power with respect to 4,926,049 shares.
(footnotes continued on following page)
3
<PAGE> 6
(6) According to a Schedule 13G filed with the SEC by Metropolitan Life
Insurance Company ("MetLife") dated February 9, 1995, the amount
beneficially owned includes 1,044,879 shares and 374,023 shares,
respectively, attributable to shares of Common Stock not outstanding but
subject to currently convertible $2.25 Convertible Exchangeable Preferred
Stock and $1.50 Convertible Preferred Stock of the Company. MetLife has
sole voting power with respect to 3,809,254 shares and sole investment
power with respect to 4,753,927 shares. Of the 4,753,927 shares,
3,558,577 shares (including 20,594 shares and 222,458 shares,
respectively, attributable to shares of Common Stock not outstanding but
subject to currently convertible $2.25 Convertible Exchangeable Preferred
Stock and $1.50 Convertible Preferred Stock of the Company) are
beneficially owned by State Street Research and Management Company, Inc.,
an investment adviser and a subsidiary of MetLife.
(7) According to a Schedule 13G filed with the SEC by The Equitable Companies
Incorporated (the "Equitable Companies") jointly with AXA Assurances
I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Alpha Assurances I.A.R.D.
Mutuelle, Alpha Assurances Vie Mutuelle, Uni Europe Assurance Mutuelle,
and AXA dated February 10, 1995, the amount beneficially owned consists
of (i) 667,912 shares (including 214,612 shares attributable to shares of
Common Stock not outstanding but subject to currently convertible $2.25
Convertible Exchangeable Preferred Stock of the Company) beneficially
owned by The Equitable Life Assurance Society of the United States
("Equitable Life"), with respect to which it has sole voting and
investment power, (ii) 2,906,448 shares (including 267,723 shares
attributable to shares of Common Stock not outstanding but subject to
currently convertible $2.25 Convertible Exchangeable Preferred Stock of
the Company) beneficially owned by Alliance Capital Management L.P.
("Alliance"), with respect to which it has sole investment power and with
respect to 2,897,448 shares of which it has sole voting power, and (iii)
848,785 shares (consisting of 815,921 shares and 32,864 shares,
respectively, attributable to shares of Common Stock not outstanding but
subject to currently convertible $2.25 Convertible Exchangeable Preferred
Stock and $1.50 Convertible Preferred Stock of the Company) beneficially
owned by Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
with respect to which it has sole voting and investment power. Each of
Equitable Life, Alliance and DLJ is a subsidiary of the Equitable
Companies which operates under independent management and makes
independent voting and investment decisions.
On September 15, 1994, Chiles Offshore Corporation ("Chiles") merged with
and into Noble Offshore Corporation, a wholly owned subsidiary of the Company,
pursuant to an Agreement and Plan of Merger (the "Merger Agreement"). As a
result of P.A.J.W.'s beneficial ownership of common stock of Chiles immediately
prior to the Chiles merger, P.A.J.W. received 8,651,690 shares of Common
Stock. Pursuant to the Merger Agreement, (i) Chiles designated Marc E. Leland,
President and sole director of P.A.J.W. at the time of the Chiles merger, and
Lawrence J. Chazen, to become directors of the Company and (ii) the Company
entered into an agreement with P.A.J.W. pursuant to which it obtained certain
rights to require the Company to register for sale under the Securities Act of
1933 the shares of Common Stock that P.A.J.W. received in connection with such
merger.
ELECTION OF DIRECTORS
The Certificate of Incorporation and Bylaws of the Company provide for
three classes of directors, with approximately one-third of the directors
constituting the Board being elected each year to serve a three-year term.
There are three directors comprising the class whose term expires at the 1995
annual meeting: Michael A. Cawley, Tommy C. Craighead and James L. Fishel.
The Board of Directors has nominated Messrs. Cawley, Craighead and Fishel for
re- election as directors of the Company to serve three-year terms expiring in
1998.
The directors will be elected by a plurality of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote. All duly submitted and unrevoked proxies in the form enclosed will be
voted for the nominees selected by the Board of Directors, except where
authorization so to vote is withheld. The Board recommends that stockholders
vote FOR the election of its nominees for director.
Information with respect to the directors nominated for election this
year, and the directors whose terms do not expire at the 1995 annual meeting,
is presented below.
4
<PAGE> 7
<TABLE>
<CAPTION>
CLASS WHOSE TERM EXPIRES IN 1995
<S> <C>
MICHAEL A. CAWLEY,
age 47, director since 1985 Mr. Cawley has served as President and Chief Executive Officer of the Foundation
since February 1, 1992, after serving as Executive Vice President of the Foundation
since January 1, 1991. For more than five years prior to 1991, Mr. Cawley was the
President of Thompson & Cawley, a professional corporation, attorneys at law; and Mr.
Cawley currently serves as of counsel to the law firm of Thompson, Cawley, Veazey &
Burns, a professional corporation. Mr. Cawley has served as a trustee of the
Foundation since 1988 and is also a director of Noble Affiliates, Inc. and Panhandle
Royalty Company.
TOMMY C. CRAIGHEAD,
age 66, director since 1988 Mr. Craighead is the President and owner of T. C. Craighead & Company and Astro Oil,
Inc. and is a general partner of Joy Oil & Gas Co., all based in Ardmore, Oklahoma.
He has been an oil and gas lease broker and independent operator since 1962.
JAMES L. FISHEL,
age 63, director since 1989 Mr. Fishel retired as Vice President and Manager of Corporate Credit Operations of
General Electric Capital Corporation ("GECC") in 1994, after serving with GECC in
various positions since 1974. He is also a director of American Health Properties,
Inc., which is a real estate investment company.
</TABLE>
<TABLE>
<CAPTION>
CLASS WHOSE TERM EXPIRES IN 1996
<S> <C>
JOHNNIE W. HOFFMAN,
age 68, director since 1983 Mr. Hoffman conducts his own ranching operations. He retired as Vice President and
Division Manager - Offshore of the Company in 1986, after serving the Company in
various positions for 39 years.
JOHN F. SNODGRASS,
age 69, director since 1985 Mr. Snodgrass is President Emeritus of the Foundation. Prior to his election to such
position effective February 1, 1992, Mr. Snodgrass served as the Foundation's
President since 1982. Mr. Snodgrass has served as a trustee of the Foundation since
1982 and is also a director of Noble Affiliates, Inc., Oklahoma Gas and Electric
Company, and Exchange National Bank and Trust Company of Ardmore, Oklahoma.
LAWRENCE J. CHAZEN,
age 54, director since 1994 Mr. Chazen has served as Chief Executive Officer of Lawrence J. Chazen, Inc., a
California registered investment advisor, since 1977. He has provided financial
advisory services to Gordon P. Getty, the Gordon P. Getty Family Trust, and other
clients since 1977. Mr. Chazen serves as a director of P.A.J.W.
</TABLE>
<TABLE>
<CAPTION>
CLASS WHOSE TERM EXPIRES IN 1997
<S> <C>
JAMES C. DAY,
age 51, director since 1983 Mr. Day has served as Chairman of the Board since October 22, 1992 and as President
and Chief Executive Officer of the Company since January 1, 1984. From January 1983
until his election as President and Chief Executive Officer, Mr. Day served as Vice
President of the Company. Mr. Day is also a director of Global Industries Limited
and Noble Affiliates, Inc.
</TABLE>
5
<PAGE> 8
<TABLE>
<S> <C>
BILL M. THOMPSON,
age 62, director since 1993 Mr. Thompson retired from Phillips Petroleum Company in December 1992, after 38 years
of service. From October 1988 to December 1991, Mr. Thompson served as Executive
Vice President of Phillips Petroleum Company. In 1992, Mr. Thompson served as
Chairman of the Board, President and Chief Executive Officer of GPM Gas Corporation,
a wholly owned subsidiary of Phillips Petroleum Company, prior to his retirement.
Mr. Thompson is also a director of Hadson Corporation.
MARC E. LELAND,
age 56, director since 1994 Mr. Leland has served since 1984 as President of Marc E. Leland & Associates, Inc., a
company engaged in the business of providing financial advisory services to Gordon P.
Getty and certain Getty Family Trusts. See Footnote (1) to the table in "Security
Ownership of Certain Beneficial Owners."
</TABLE>
Mr. Fishel was nominated by the Company for re-election as a director in
1992 as the designee of GECC pursuant to the terms of the Assets Purchase
Agreement dated January 8, 1988 between the Company and GECC and TIFD IV, Inc.,
a wholly owned subsidiary of GECC. The contractual provisions entitling GECC
so to designate a nominee expired in 1993 when GECC's beneficial ownership of
Common Stock decreased below 10 percent of the outstanding Common Stock.
Currently there are no arrangements or understandings between Mr. Fishel and
any other person pursuant to which he has been selected for nomination.
In accordance with the Merger Agreement, the number of directors
comprising the Company's Board of Directors was increased from seven to nine,
effective September 20, 1994, and Messrs. Chazen and Leland were added to fill
the new directorships.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
BOARD MEETINGS AND COMMITTEES
During 1994 the Board of Directors held 11 meetings. Each director of
the Company attended every meeting of the Board and every meeting of the Board
committees on which he served in 1994, except that Mr. Fishel did not attend
two meetings.
The Company has standing audit, compensation, stock option, and
nominating committees of the Board of Directors. The members of the
committees, number of meetings held by each committee in 1994, and a brief
description of the functions performed by each committee are set forth below:
Audit Committee (five meetings). James L. Fishel, Chairman;
Michael A. Cawley; Lawrence J. Chazen; and John F. Snodgrass. The
primary responsibilities of the audit committee are to review with the
Company's auditors the scope of the audit procedures to be applied in
conducting the annual audit and the results of the annual audit. In
addition, effective April 28, 1994, the audit committee assumed the
responsibilities of the former environmental committee. Such
responsibilities are to provide oversight review to the management of the
Company and its subsidiaries responsible for (i) the establishment and
periodic review of an environmental policy statement of the Company and
procedures and internal controls regarding compliance with applicable
environmental laws and regulations and (ii) the establishment of a
program for periodic compliance audits.
Compensation Committee (five meetings). Bill M. Thompson,
Chairman; Tommy C. Craighead; Johnnie W. Hoffman; and Marc E. Leland.
The primary responsibilities of the compensation committee are to review
and set the compensation levels of the officers of the Company, including
those officers who are also directors, evaluate the performance of
management, consider management succession and related matters, and
administer the annual compensation plans of the Company.
Stock Option Committee (two meetings). Bill M. Thompson, Chairman;
Tommy C. Craighead; and Marc E. Leland. The primary responsibilities of
the stock option committee are to administer the long-term incentive
compensation plans of the Company.
6
<PAGE> 9
Nominating Committee (one meeting). Michael A. Cawley, Chairman;
Tommy C. Craighead; James C. Day; and Bill M. Thompson. The primary
responsibility of the nominating committee is to select and recommend
nominees for director of the Company. The nominating committee will
consider nominees recommended by stockholders entitled to vote for the
election of directors, provided that such recommendations are made in
accordance with the Bylaws of the Company. Generally, the Bylaws provide
that a stockholder must deliver written notice to the Secretary of the
Company not later than 90 days prior to the annual meeting naming such
stockholder's nominee(s) for director and specifying certain information
concerning such stockholder and nominee(s). Accordingly, stockholder
nominee(s) for director to be presented at the 1996 annual meeting of
stockholders must be received by the Company no later than January 26,
1996.
Compensation Committee Interlocks and Insider Participation. The current
members of the compensation committee identified above were the only persons
who served on such committee during 1994. Mr. Hoffman was an officer of the
Company prior to his retirement in 1986. See "Election of Directors" in this
proxy statement for a description of Mr. Hoffman's prior business experience
and principal employment. Mr. Day serves as an executive officer of certain
wholly-owned subsidiaries of the Company, and in some instances, one or more
directors of these subsidiaries is also an executive officer of the Company.
However, Mr. Day's compensation is set solely by the compensation committee of
the Board of Directors of the Company, and he receives no additional
compensation for performing duties as an executive officer of these
subsidiaries. Neither Mr. Day nor any other officer or employee of the Company
or its subsidiaries is a member of the Company's compensation committee.
COMPENSATION OF DIRECTORS
Fees and Expenses. Directors who are not officers of the Company receive
an annual retainer of $20,000 and a fee of $1,000 for each Board meeting
attended. Such directors also receive a fee of $500 for each Board committee
meeting attended, but only if the committee meeting is held otherwise than in
connection with a scheduled Board meeting. A director who is an officer of the
Company receives a fee of $100 for each Board meeting attended. The Company
also reimburses directors for travel, lodging and related expenses they may
incur in attending Board and committee meetings.
Non-Employee Director Stock Options. Under the 1992 Nonqualified Stock
Option Plan for Non-Employee Directors (the "1992 Option Plan"), which was
approved and ratified by stockholders at the 1993 annual meeting, non-employee
directors receive a one-time grant of an option to purchase 10,000 shares of
Common Stock. Thereafter, on the next business day after each annual meeting
of stockholders of the Company, such directors receive an annual grant of an
option to purchase 3,500 shares of Common Stock. The options are granted at
fair market value on the grant date and are exercisable from time to time over
a period commencing one year from the grant date and ending on the expiration
of ten years from the grant date, unless terminated sooner as described in the
1992 Option Plan.
7
<PAGE> 10
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of December 31, 1994 the beneficial
ownership of Common Stock by each director of the Company, each named executive
officer listed in the Summary Compensation Table appearing on page 12 of this
proxy statement, and all directors and executive officers as a group. No
director or named executive officer owned as of that date any shares of the
Company's $2.25 Convertible Exchangeable Preferred Stock, par value $1.00 per
share ("$2.25 Preferred Stock"), or $1.50 Convertible Preferred Stock, par
value $1.00 per share ("$1.50 Preferred Stock").
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED (1)
-----------------------------------
NUMBER PERCENT OF
NAME OF SHARES CLASS (2)
- ---- ---------------- ---------------
<S> <C> <C>
Directors
Michael A. Cawley . . . . . . . . . . . . . . . . . . . . . 5,540,822 (3)(4) 7.1%
Lawrence J. Chazen . . . . . . . . . . . . . . . . . . . . 0 0.0%
Tommy C. Craighead . . . . . . . . . . . . . . . . . . . . 45,500 (4) 0.1%
James C. Day . . . . . . . . . . . . . . . . . . . . . . . 445,064 (4) 0.6%
James L. Fishel . . . . . . . . . . . . . . . . . . . . . . 0 0.0%
Johnnie W. Hoffman . . . . . . . . . . . . . . . . . . . . 73,566 (4) 0.1%
Marc E. Leland . . . . . . . . . . . . . . . . . . . . . . 8,690,006 (5) 11.2%
John F. Snodgrass . . . . . . . . . . . . . . . . . . . . . 5,532,262 (3)(4) 7.1%
Bill M. Thompson . . . . . . . . . . . . . . . . . . . . . 10,000 --
Named Executive Officers (excluding
any director named above) and Group
C. Ray Bearden . . . . . . . . . . . . . . . . . . . . . . 124,608 (6) 0.2%
Julie J. Robertson . . . . . . . . . . . . . . . . . . . . 29,677 (4) --
Warren L. Twa . . . . . . . . . . . . . . . . . . . . . . . 91,000 (4)(7) 0.1%
Byron L. Welliver . . . . . . . . . . . . . . . . . . . . . 178,901 (4) 0.2%
All directors and executive
officers as a group (13 persons) . . . . . . . . . . . . 15,284,590 (8) 19.6%
- ------------
</TABLE>
(1) Unless otherwise indicated, the beneficial owner has sole voting and
investment power with respect to all shares listed.
(2) The percent of class shown is less than one-tenth of one percent unless
otherwise indicated.
(3) Includes 5,474,639 shares held of record by the Foundation. See
footnote (3) to the table in "Security Ownership of Certain Beneficial
Owners." Messrs. Cawley and Snodgrass each disclaim any pecuniary
interest in the 5,474,639 shares.
(4) Includes shares attributable to shares of Common Stock not outstanding
but subject to currently exercisable options, as follows: Mr. Cawley --
65,000 shares; Mr. Craighead -- 10,000 shares; Mr. Day -- 301,000 shares;
Mr. Hoffman -- 70,000 shares; Mr. Snodgrass -- 55,000 shares; Ms.
Robertson -- 19,300 shares; Mr. Twa -- 65,000 shares; Mr. Welliver --
148,000 shares; and all directors and executive officers as a group --
733,300 shares.
(5) Includes 8,651,690 shares held of record by P.A.J.W. See footnote (1) to
the table in "Security Ownership of Certain Beneficial Owners." Mr.
Leland disclaims any pecuniary interest in the 8,651,690 shares.
(6) Mr. Bearden resigned as President of Noble Drilling Services Inc., a
wholly owned subsidiary of the Company ("Noble Services"), effective
January 12, 1995.
(7) Mr. Twa resigned as Senior Vice President - International Operations of
Noble Services effective February 28, 1995.
(8) Includes 733,300 shares not outstanding but subject to currently
exercisable options, 5,474,639 shares held of record by the Foundation
and 8,651,690 shares held of record by P.A.J.W. See footnotes (3), (4)
and (5) above.
8
<PAGE> 11
EXECUTIVE COMPENSATION
The following report of the compensation and stock option committees on
executive compensation and the information herein under "Executive
Compensation--Performance Graph" shall not be deemed to be "soliciting
material" or to be "filed" with the SEC or subject to the SEC's proxy rules,
except for the required disclosure herein, or to the liabilities of Section 18
of the Securities Exchange Act of 1934 (the "Exchange Act"), and such
information shall not be deemed to be incorporated by reference into any filing
made by the Company under the Securities Act of 1933 or the Exchange Act.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
ON EXECUTIVE COMPENSATION
To the Stockholders
of Noble Drilling Corporation:
As members of the compensation and stock option committees of the Board
of Directors, it is our responsibility to review and set the compensation
levels of the officers of the Company, evaluate the performance of management,
and consider management succession and related matters. In addition, we
administer the annual and long-term incentive compensation plans of the
Company. All decisions by the committees relating to the compensation of
executive officers are reviewed by the full Board, except for decisions about
grants or awards under the 1991 Stock Option and Restricted Stock Plan (the
"Option Plan") of the Company. Decisions under the Option Plan are made by the
stock option committee, which is composed solely of directors who satisfy the
criteria as disinterested administrators under the applicable Federal
securities laws and regulations and as outside directors under Section 162(m)
of the Internal Revenue Code.
The Company has retained the services of William M. Mercer, Incorporated
("Mercer"), a management and compensation consulting firm, from time to time to
assist the committees in the performance of their respective responsibilities.
Mercer, or its predecessor, has been retained by the Company in this capacity
since 1979.
Mercer provides advice to the committees with respect to the
reasonableness of compensation paid to senior officers of the Company, as well
as all employees of the Company and its subsidiaries in managerial positions.
In doing so, it takes into account how compensation compares to compensation
paid by competitors in our industry as well as the performance of the Company.
Members of the committees also review results of compensation surveys provided
by Mercer and others.
COMPENSATION POLICIES AND PROGRAMS
The compensation policies of the Company, which are endorsed by the
committees, are designed to attract, motivate and retain persons of high
quality who will have the skill, training and dedication to assist the Company
to achieve its corporate goals. The executive compensation program for 1994
consisted of three elements: base salary, annual incentive bonus, and long-term
incentive through the granting of stock options and the awarding of
performance-based restricted stock pursuant to the Option Plan.
Base Salary: Base salary for executive officers is determined principally
by competitive factors and the marketplace. The policy of the compensation
committee is generally to set base salary levels for positions at approximately
the average levels determined from survey information for positions deemed
comparable by the committee.
Annual Incentive Bonus: The compensation policy of the Company is that a
part of the annual compensation of each officer be related to and contingent
upon the performance of the Company, as well as the individual contribution of
each officer. The short-term incentive compensation plan of the Company (the
"STIP"), which was amended for 1994, is available to all full-time employees of
the Company or its subsidiaries in salary classifications 18 and higher who
have completed one year of service at the close of the plan year (December 31).
The bonus earned by employees with less than two years of service is prorated
based on the number of full months served. The target bonus for an employee is
the base salary at year end of such employee multiplied times the percentage
factor assigned to such employee's salary classification. Target percentage
factors range from 15 to 50 percent, with a
9
<PAGE> 12
factor of 50 percent for the CEO and a maximum factor for an executive officer
other than the CEO of 35 percent. At the end of each year, the target bonus
pool is determined by the Board of Directors.
Annual performance goals for the Company are weighted with respect to
five criteria as follows: increased shareholder value (defined as share price
performance compared to industry peer group) (30 percent), cash flow from
operations (30 percent), major new contracts/operating days (20 percent), net
income (10 percent), and safety results (10 percent). The division goals are
weighted with respect to four criteria as follows: operating days (40 percent),
cash flow from operations (40 percent), safety results (10 percent), and rig
maintenance and appearance (10 percent). The compensation committee
establishes the annual performance goals at the beginning of each year.
Each goal weighing percentage is subject to adjustment within a range of
zero for achievement of less than 75 percent of the goal to 200 percent for
achievement of greater than 135 percent of the goal. The combined, weighted
goal achievement is then determined within a range of zero for achievement of
less than 65 percent of the goal to 200 percent for achievement of more than
160 percent of the goal. The target bonus for employees of divisions is also
adjusted to reflect the combined percentage of achievement of all assigned
goals using the ratio of 75 percent for division goal achievement and 25
percent for Company goal achievement. The bonus amount is then determined by
multiplying the target bonus times the applicable multiplier. Using these
percentages, the bonus received by the CEO will not exceed 100 percent of his
salary and the bonus received by any executive officer other than the CEO will
not exceed 70 percent of his salary.
Long-term Incentive Compensation: It is also the compensation policy of
the Company to use stock options and performance-based restricted stock as a
means of furnishing longer-term incentive to officers and other employees of
the Company and its subsidiaries. Under the Option Plan, which was approved by
stockholders at the 1991 annual meeting and which was amended on September 15,
1994 following stockholder approval, the Company has flexibility in creating
options and awarding restricted stock. On December 8, 1994, the stock option
committee approved the awarding of performance-based restricted stock to the
officers and several other key employees of the Company and its subsidiaries.
Pursuant to the performance restricted stock agreements setting forth the terms
and conditions of the awards, the shares of restricted stock are subject to
certain vesting/forfeiture provisions over a five-year period, continuous
employment by the awardee, and achievement of performance goals by the Company.
The performance goals are weighted with respect to two criteria as follows:
total return to stockholders (50 percent) and absolute price per share of
Common Stock (as determined by the average price during the last quarter of
1997) (50 percent).
In January 1994, the compensation committee (prior to the establishment
of the stock option committee) considered stock option grants to each of the
officers of the Company. Each of those officers received stock options that
were based on his or her responsibilities and relative position in the Company.
The stock options granted to each employee in 1994 were granted with an
exercise price of fair market value at the date of grant. The options granted
in 1994 vest 50 percent after one year from the date of grant and 50 percent
after two years from the date of grant. Mercer has advised the stock option
committee that options with extended vesting schedules have been an effective
means for other companies to retain valuable employees.
It is the general policy of the Company that no officer or other employee
have an employment agreement with the Company or its subsidiaries.
1994 COMPENSATION OF CEO
The 1994 salary of Mr. Day was determined in October 1993 as a function
of performance and competitive industry factors as provided by Mercer. The
compensation committee approved an increase in salary for Mr. Day to $375,000
per year in October 1994 based upon competitive and financial data presented by
Mercer. The increase in salary was implemented on January 1, 1995.
In determining the amount of bonus paid to Mr. Day for 1994, the
compensation committee applied the performance goals criteria and adjustment
factors as discussed above under "Annual Incentive Bonus," which resulted in
Mr. Day receiving a calculated bonus for 1994 of $95,150.
10
<PAGE> 13
On January 27, 1994, the compensation committee granted Mr. Day an option
to purchase 100,000 shares of Common Stock pursuant to the Option Plan. In
granting this option, the compensation committee relied upon competitive data
provided by Mercer and the assessment by the compensation committee of the
Company's 1993 record results of operations under Mr. Day's leadership.
On December 8, 1994, the stock option committee awarded Mr. Day 75,000
shares of performance-based restricted stock pursuant to the Option Plan.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Omnibus Budget Reconciliation Act of 1993 contains provisions which
limit the tax deductibility of executive compensation in excess of $1 million
per year, subject to certain exceptions. The policy of the Company is to
design its compensation programs to preserve the tax deductibility of
compensation paid to its executive officers and other members of management.
However, the committees could in the future determine, taking into
consideration the relevant factors then in existence, to make awards or approve
compensation that does not qualify for a compensation deduction for tax
purposes, if the committees believe it is in the Company's interest to do so.
SUMMARY
The members of the committees believe that linking executive compensation
to corporate performance results in a better alignment of compensation with
corporate goals and stockholder interests. As performance goals are met or
exceeded, resulting in increased value to stockholders, executive officers are
to be rewarded commensurately. The committees believe that compensation levels
during 1994 adequately reflect the conservative compensation goals and policies
of the Company.
March 31, 1995 COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Bill M. Thompson, Chairman Bill M. Thompson, Chairman
Tommy C. Craighead Tommy C. Craighead
Johnnie W. Hoffman Marc E. Leland
Marc E. Leland
11
<PAGE> 14
The following table sets forth certain summary information concerning
the compensation awarded to, earned by or paid to the Chief Executive Officer
of the Company and each other person who is, or is deemed to be, an executive
officer of the Company whose combined salary and bonus for 1994 exceeded
$100,000 (collectively, the "named executive officers") for the years
indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------
Annual Compensation Awards(1)
----------------------------------------------------------------------
Securities
Underlying
Other Options/
Annual SARs All Other
Name and Compen- (number of Compen-
Principal Position Year Salary Bonus sation shares) sation
------------------ ---- --------- ---------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
James C. Day, 1994 $ 295,000 $ 95,150 $ 6,161 100,000 $ 10,848(2)
Chairman, President 1993 $ 272,822 $ 177,000 $ 3,961 30,000 $ 9,767
and CEO 1992 $ 243,977 $ 275,000 $11,904 56,500 $ 8,506
C. Ray Bearden (3) 1994 $ 165,000 $ 100,000(4) $ 0 0 $ 32,431(5)
Warren L. Twa (6) 1994 $ 170,000 $ 0 $ 4,698 30,000 $ 362(5)
1993 $ 161,667 $ 100,000 $ 3,961 15,000 $ 464
1992 $ 153,333 $ 25,000 $ 3,600 25,000 $ 3,485
Byron L. Welliver, 1994 $ 165,000 $ 37,250 $ 3,307 30,000 $ 3,908(5)
Senior Vice President- 1993 $ 152,500 $ 100,000 $ 2,678 15,000 $ 6,733
Finance, Treasurer and 1992 $ 143,642 $ 25,000 $ 2,678 25,000 $ 6,398
Controller
Julie J. Robertson, 1994 $ 85,000 $ 16,450 $ 0 15,000 $ 2,012(5)
Corporate Secretary (7)
</TABLE>
__________________________
(1) Shares of restricted Common Stock ("Restricted Shares") were awarded by
the Company to certain key employees on December 8, 1994. The Restricted
Shares were transferred to such employees on the effective date of
January 3, 1995. Delivery of the Restricted Shares is subject to
vesting/forfeiture provisions, achievement of performance goals by the
Company and continuous employment of the awardee by the Company or any of
its subsidiaries. For the number of Restricted Shares awarded and other
terms and conditions applicable to such awards, see "Long-Term Incentive
Plans - Awards In 1994" on page 14. At the end of 1994, Mr. Day held
75,000 Restricted Shares having a value of $440,625; Mr. Bearden held
30,000 Restricted Shares having a value of $176,250; Mr. Twa held 26,000
Restricted Shares having a value of $152,750; Mr. Welliver held 26,000
Restricted Shares having a value of $152,750; and Ms. Robertson held
8,500 Restricted Shares having a value of $49,938.
(2) Consists of Company contributions to defined contribution plan of $8,850,
term life insurance premiums of $798, and directors' fees of $1,200.
(3) Mr. Bearden was designated by the Board of Directors of the Company as an
executive officer concurrently with his election as President of Noble
Services upon completion of the Chiles merger on September 15, 1994.
Prior to the Chiles merger, Mr. Bearden served as President of Chiles.
Mr. Bearden resigned as President of Noble Services effective January 12,
1995.
(4) In 1993, the Board of Directors of Chiles agreed to an incentive bonus
for Mr. Bearden payable upon the completion of a transaction that
resulted in a specified change in control of Chiles. Such an event
occurred upon consummation of the Chiles merger on September 15, 1994.
(5) Consists of Company (or subsidiary) contributions to defined contribution
plan and term life insurance premiums, respectively, as follows: Mr.
Bearden -- $5,858 and $4,573; Mr. Twa -- $0 and $362; Mr. Welliver --
$3,465 and $443; and Ms. Robertson -- $1,849 and $163. For Mr. Bearden,
this number also includes $22,000 in loan forgiveness which occurred as
of January 1, 1994. See "Certain Transactions" for further information.
(footnotes continued on following page)
12
<PAGE> 15
(6) Mr. Twa served as an executive officer of the Company until September 15,
1994. At such date, Mr. Twa was named Senior Vice President -
International Operations of Noble Services. Mr. Twa resigned from this
position effective February 28, 1995.
(7) Ms. Robertson was designated by the Board of Directors of the Company as
an executive officer concurrently with her promotion to Vice President -
Administration of Noble Services on September 14, 1994.
The following table sets forth certain information with respect to
options to purchase Common Stock granted during the year ended December 31,
1994 to each of the named executive officers.
OPTION/SAR GRANTS IN 1994
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term (1)
----------------------------------------------------------- -------------------------------
Number of
Securities Percent of
Underlying Total
Options/ Options/
SARs SARs Exercise
Granted Granted to Price Expira-
(number of Employees Per tion
Name shares) (2) in 1994 Share Date 5% (3) 10% (4)
---- --------------- ----------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
James C. Day 100,000 14% $ 7.375 1/26/04 $ 464,625 $ 1,172,625
C. Ray Bearden 0 0 N/A N/A N/A N/A
Warren L. Twa 30,000 4% $ 7.375 1/26/04 $ 139,387 $ 351,788
Byron L. Welliver 30,000 4% $ 7.375 1/26/04 $ 139,387 $ 351,788
Julie J. Robertson 15,000 2% $ 7.375 1/26/04 $ 69,694 $ 175,894
</TABLE>
__________________________
(1) The values shown are based on the indicated assumed annual rates of
appreciation compounded annually. Actual gains realized, if any, on
stock option exercises and Common Stock holdings are dependent on the
future performance of the Common Stock and overall stock market
conditions. There can be no assurance that the values shown in this
table will be achieved.
(2) Represents a single grant of options on January 27, 1994. One-half of
the options became exercisable on January 27, 1995, and one-half of the
options becomes exercisable on January 27, 1996. Options granted in 1994
were without SARs.
(3) Represents an assumed market price per share of Common Stock of $12.02.
(4) Represents an assumed market price per share of Common Stock of $19.10.
13
<PAGE> 16
The following table sets forth certain information with respect to the
exercise of options to purchase Common Stock and SARs during the year ended
December 31, 1994, and the unexercised options held at December 31, 1994 and
the value thereof, by each of the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 1994
AND 12/31/94 OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Shares Underlying In-the-Money
Acquired Options/SARs at Options/SARs at
on Exercise 12/31/94 (shares) 12/31/94
(number Value ------------------------- --------------------------
Name of shares) Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James C. Day . . . . 62,217 $ 207,083 199,500 151,500 $ 309,700 $ 169,433
C. Ray Bearden . . . 0 $ 0 0 0 $ 0 $ 0
Warren L. Twa . . . . 0 $ 0 38,500 27,500 $ 53,700 $ 60,825
Byron L. Welliver . . 0 $ 0 148,000 50,000 $ 286,875 $ 60,825
Julie J. Robertson. . 0 $ 0 7,050 19,750 $ 10,191 $ 13,054
</TABLE>
The following table sets forth certain information with respect to awards
of performance-based shares of restricted Common Stock ("Restricted Shares")
made during the year ended December 31, 1994 to each of the named executive
officers.
LONG-TERM INCENTIVE PLANS - AWARDS IN 1994
<TABLE>
<CAPTION>
Number of Performance or
Shares, Other Period Until
Units or Other Maturation or
Name Rights(1)(3) Payout (2)
---- ------------------ ------------------
<S> <C> <C>
James C. Day . . . . . . . . . . . . . . 75,000 12/94--3/98
C. Ray Bearden . . . . . . . . . . . . . 30,000 12/94--3/98
Warren L. Twa . . . . . . . . . . . . . . 26,000 12/94--3/98
Byron L. Welliver . . . . . . . . . . . . 26,000 12/94--3/98
Julie J. Robertson . . . . . . . . . . . 8,500 12/94--3/98
</TABLE>
__________________
(1) This number represents the number of Restricted Shares awarded pursuant
to a Performance Restricted Stock Agreement entered into under the
Company's 1991 Stock Option and Restricted Stock Plan, as amended,
between the awardee and the Company, delivery of which shares is subject
to vesting/forfeiture provisions, achievement of performance goals by the
Company, and continuous employment of the awardee by the Company or any
of its subsidiaries.
(2) As soon as practicable after December 31, 1997 (the "Performance Date"),
the Stock Option Committee of the Board of Directors will review the
performance goals applicable to the award (see footnote 3 below) and
confirm the maximum number of Restricted Shares, if any, that may be
vested (the "Calculated Shares"). One-third of the Calculated Shares
will vest as of the March 31st immediately following the Performance Date
(or if such March 31st is not a business day, the business day
immediately preceding such March 31st) (the "Initial Vesting Date"); one-
third of the Calculated Shares will vest on the first anniversary of the
Initial Vesting Date; and one-third of the Calculated Shares will vest on
the second anniversary of the Initial Vesting Date.
(3) The number of Restricted Shares deemed earned will be determined by
making a weighted average calculation based on the following corporate
objectives (each to be given a 50 percent weight): (i) total return to
stockholders (as compared to a peer group), and (ii) absolute target
price per share of Common Stock (as
(footnotes continued on following page)
14
<PAGE> 17
determined in the last quarter of 1997). The percentage of Restricted
Shares deemed earned under each corporate objective can range from zero
percent to 100 percent. The Restricted Shares will earn dividends when,
as, and if dividends are declared on the Common Stock by the Board. Any
such dividends will be held in escrow, along with the Restricted Shares,
and payment of such dividends to the awardee is subject to vesting of the
shares of Common Stock.
DEFINED BENEFIT PLANS
The defined benefit plans of the Company that cover its executive
officers provide the benefits shown below. The estimates assume that benefits
are received in the form of 10-year certain and life annuity.
<TABLE>
<CAPTION>
Estimated Annual Benefits Upon Retirement
at Age 65 After Completion of the Following Years of Service (2)
Five-Year Average -------------------------------------------------------------------
Annual Compensation (1) 15 20 25 30
----------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
$ 125,000 . . . . . . . $ 30,000 $ 40,000 $ 50,000 $ 60,000
150,000 . . . . . . . 36,000 48,000 60,000 72,000
200,000 . . . . . . . 48,000 64,000 80,000 96,000
250,000 . . . . . . . 60,000 80,000 100,000 120,000
300,000 . . . . . . . 72,000 96,000 120,000 144,000
400,000 . . . . . . . 96,000 128,000 160,000 192,000
500,000 . . . . . . . 120,000 160,000 200,000 240,000
600,000 . . . . . . . 144,000 192,000 240,000 288,000
</TABLE>
_______________________
(1) Benefit amounts under the Noble Drilling Salaried Employees' Retirement
Plan (and unfunded, nonqualified excess benefit plan) are based on an
employee's vested percentage, average monthly compensation and number of
years of benefit service (maximum 30 years). The average monthly
compensation is defined in the plan generally to mean the participant's
average monthly rate of compensation from the Company for the five
successive calendar years which give the highest average monthly rate of
compensation for the participant. Compensation is defined (with certain
exceptions) to mean basic compensation, bonuses, commissions and overtime
pay, exclusive of extraordinary compensation but prior to reduction for
any compensation deferred under a cash or deferred arrangement qualifying
under Sections 401(k) or 125 of the Internal Revenue Code of 1986, as
amended.
(2) Retirement benefits shown above are calculated using 1.6 percent of final
average pay multiplied by years of service. This slightly overstates the
benefit since that part of the final average pay that is below the Social
Security "covered compensation" level should be multiplied by 1.0 percent
instead of 1.6 percent. "Covered compensation" is the average of the
Social Security Wage Bases during the 30-year period ending with the year
the employee reaches Social Security Retirement Age.
As of December 31, 1994, the named executive officers had the following
approximate credited years of service for retirement purposes: Mr. Day--17;
Mr. Bearden--0; Mr. Twa--6; Mr. Welliver--13; and Ms. Robertson--6.
15
<PAGE> 18
PERFORMANCE GRAPH
The following graph sets forth the cumulative total stockholder return
for the Common Stock, the CRSP Total Return Index for The Nasdaq Stock Market
(U.S. and Foreign Companies), and a Competitor Group Index for the years
indicated as prescribed by the SEC's rules.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG NOBLE DRILLING CORPORATION, CRSP TOTAL RETURN INDEX (U.S. AND FOREIGN
COMPANIES) AND COMPETITOR GROUP INDEX (2)
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Company 100 78.4 33.8 48.0 94.6 63.5
CRSP 100 85.0 135.7 157.4 181.2 175.3
Competitor Index (3) 100 95.2 54.2 51.9 80.5 62.7
</TABLE>
(1) Total return assuming reinvestment of dividends. Assumes $100 invested on
January 1, 1990 in Common Stock, CRSP Total Return Index (U.S. and Foreign
Companies) and a Company constructed competitor group index.
(2) Fiscal year ending December 31.
(3) In accordance with the SEC's rules, the Company has elected to select a
group of peer companies on an industry basis for comparison purposes. The
competitor group is composed of six industry participants: Atwood
Oceanics, Inc., Cliffs Drilling Company, Global Marine, Inc., Marine
Drilling Company, Inc., Reading & Bates Corporation and Rowan Companies,
Inc. Total return calculations were weighted according to the respective
company's market capitalization.
16
<PAGE> 19
SUPPLEMENTAL PERFORMANCE GRAPH
The Company has elected to include a supplemental performance graph which
compares the cumulative total stockholder return for the Common Stock, the CRSP
Total Return Index for The Nasdaq Stock Market (U.S. and Foreign Companies) and
a Competitor Group Index for the period indicated below.
COMPARISON OF SEVEN YEAR CUMULATIVE TOTAL RETURN (1)
AMONG NOBLE DRILLING CORPORATION, CRSP TOTAL RETURN INDEX (U.S. AND FOREIGN
COMPANIES) AND COMPETITOR GROUP INDEX (2)
<TABLE>
<CAPTION>
1987 1988 1989 1990 1991 1992 1993 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Company 100 121.9 231.3 181.3 78.1 110.9 218.8 146.9
CRSP 100 117.6 143.8 122.2 195.1 226.2 260.4 251.9
Competitor Index (3) 100 94.7 160.8 148.0 82.5 77.5 126.2 99.0
</TABLE>
(1) Total return assuming reinvestment of dividends. Assumes $100 invested on
January 1, 1988 in Common Stock, CRSP Total Return Index (U.S. and Foreign
Companies) and a Company constructed competitor group index.
(2) Fiscal year ending December 31.
(3) In accordance with the SEC's rules, the Company has elected to select a
group of peer companies on an industry basis for comparison purposes. The
competitor group is composed of seven industry participants: Atwood
Oceanics, Inc., Chiles Offshore Corporation, Cliffs Drilling Company,
Global Marine, Inc., Marine Drilling Company, Inc., Reading & Bates
Corporation and Rowan Companies, Inc. Total return calculations were
weighted according to the respective company's market capitalization.
17
<PAGE> 20
CERTAIN TRANSACTIONS
On July 1, 1993, Chiles entered into a Severance Agreement with C. Ray
Bearden, who, at that time and until the Chiles merger, served as President and
a director of Chiles. The Severance Agreement provided that in the event of a
"Termination Event" with respect to Mr. Bearden within one year following a
specified change in control of Chiles (which includes the Chiles merger),
Chiles would (i) pay Mr. Bearden a lump sum, (ii) continue certain insurance
coverage, and (iii) accelerate the vesting of unvested stock options, if any,
held by Mr. Bearden by up to 30 percent. Noble Offshore Corporation assumed
these obligations by operation of law in connection with the Chiles merger.
On May 1, 1991, C. Ray Bearden, President of Chiles, borrowed $110,000
from Chiles for 13 months at an interest rate of 10 percent per annum. On May
31, 1992, the note was renewed at an interest rate of 8 percent per annum and
the maturity extended for a period of one year. Effective October 1, 1992, the
Board of Directors of Chiles approved the forgiveness of 20 percent of this
indebtedness each January 1, commencing January 1, 1993, subject to Mr.
Bearden's continued employment with Chiles as of such dates, which term was
included in an amended note in the principal amount of $88,000 dated May 31,
1993 (the "Note"). Under the Note, interest was due and payable annually on
January 1, and principal was to be forgiven at the rate of $22,000 per year,
commencing January 1, 1994; provided, that upon a termination of Mr. Bearden's
employment as an officer of Chiles that constituted a "Termination Event," as
defined in the Note, all outstanding principal would be forgiven. The largest
aggregate amount of principal and interest outstanding under the Note during
1994 was $94,096 (stated before application of $22,000 in debt forgiveness as
of January 1, 1994). The principal balance of $44,000 remaining outstanding on
January 12, 1995 (the date of Mr. Bearden's resignation from Noble Services)
has been forgiven by Noble Offshore Corporation, successor by merger to Chiles.
SECTION 16(A) REPORTING DELINQUENCIES
Section 16(a) of the Exchange Act requires directors and officers of the
Company, and persons who own more than 10 percent of the Common Stock, the
$2.25 Preferred Stock or the $1.50 Preferred Stock, to file with the SEC
initial reports of ownership and reports of changes in ownership of such stock.
Directors, officers and more than 10 percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1994, all Section
16(a) filing requirements applicable to its directors, officers, and more than
10 percent beneficial owners were complied with.
AUDITORS
On October 7, 1994, the accounting firm of Price Waterhouse LLP was
engaged as independent accountant to audit the financial statements of the
Company for the year ended December 31, 1994. The Board of Directors has also
appointed this firm to audit the financial statements of the Company for the
year ending December 31, 1995. Such appointment will not be submitted to
stockholders for ratification or approval. Representatives of Price Waterhouse
LLP are expected to be present at the meeting to respond to appropriate
questions from the stockholders and will be given the opportunity to make a
statement should they desire to do so.
The accounting firm of Arthur Andersen LLP served as independent
accountant for the Company from August 1, 1988 until dismissed by the Company
on October 7, 1994. The decision to change accountants was recommended by the
audit committee of the Board of Directors of the Company. Arthur Andersen
LLP's report on the financial statements of the Company for each of the years
ended December 31, 1993 and 1992 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles, or as to any other matter. During each of the years
ended December 31, 1993 and 1992 and the subsequent interim period preceding
the dismissal, there were no disagreements with Arthur Andersen LLP on any
matter of accounting principles or practices, financial statement disclosure,
or accounting scope or procedure, which disagreements if not resolved to the
satisfaction of Arthur Andersen LLP would have caused it to make reference
thereto in its reports on the financial statements of the Company for such
years. Additionally, no "reportable events" (as such term is defined under the
applicable rules and regulations of the SEC) occurred during the years ended
December 31, 1993 and 1992 or the subsequent interim periods preceding Arthur
Andersen LLP's dismissal.
18
<PAGE> 21
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals for inclusion in the Company's proxy materials in
connection with the 1996 annual meeting of stockholders must be received by the
Company at its office in Houston, Texas, addressed to the Secretary of the
Company, no later than December 2, 1995.
The cost of solicitation of proxies will be borne by the Company. The
Company has employed Beacon Hill Partners, Inc. to solicit proxies from
brokers, bank nominees, institutional holders and individual holders for use at
the meeting at a fee not to exceed $4,500 plus certain expenses. In addition,
certain officers and employees of the Company, who will receive no additional
compensation for their services, may solicit proxies in person or by mail,
telephone, facsimile telecommunication or telegraph.
The Board of Directors does not intend to present any other matter at the
meeting and knows of no other matters that will be presented. However, if any
other matter comes before the meeting, the persons named in the enclosed proxy
intend to vote thereon in accordance with their best judgment.
NOBLE DRILLING CORPORATION
James C. Day
Chairman, President and
Chief Executive Officer
Houston, Texas
March 31, 1995
19
<PAGE> 22
[LOGO] NOBLE DRILLING CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James C. Day and Byron L. Welliver, and
each of them, proxies with power of substitution in each, and hereby authorizes
them to represent and to vote, as designated below, all shares of Common Stock
of Noble Drilling Corporation (the "Company") standing in the name of the
undersigned on March 8, 1995, at the annual meeting of shareholders to be held
on April 27, 1995 at 10:00 a.m. at Houston, Texas, and at any adjournment
thereof and especially to vote on the items of business specified below, as
more fully described in the notice of the meeting and the proxy statement
accompanying the same, receipt of which is hereby acknowledged.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed below / /
contrary below) / /
MICHAEL A. CAWLEY TOMMY C. CRAIGHEAD JAMES L. FISHEL
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided
below.)
---------------------------------------------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other business or matters as may properly come before
the meeting or any adjournment thereof.
</TABLE>
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 23
THIS PROXY, WHEN DULY EXECUTED AND RETURNED, WILL BE VOTED IN THE
MANNER DESIGNATED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS DULY
EXECUTED AND RETURNED, BUT WITHOUT A CLEAR VOTING DESIGNATION, IT WILL BE VOTED
FOR ITEM 1.
The undersigned hereby revokes any proxy or proxies heretofore given to
represent or vote such Common Stock and hereby ratifies and confirms all
actions that said proxies, their substitutes, or any of them, may lawfully take
in accordance with the terms hereof.
Dated: _______________________, 1995
____________________________________
____________________________________
Signature(s) of Shareholders(s)
This proxy should be signed exactly
as your name appears hereon. Joint
owners should both sign. If signed
as attorney, executor, guardian or
in some other representative
capacity, or as officer of a
corporation, please indicate your
capacity or title.
PLEASE COMPLETE, DATE AND SIGN
THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
<PAGE> 24
[LOGO] NOBLE DRILLING CORPORATION
VOTING INSTRUCTION CARD FOR COMMON STOCK
VOTING INSTRUCTIONS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby instructs the trustee to vote, as designated
below, all shares of Common Stock of Noble Drilling Corporation that are
credited to the accounts of the undersigned (whether or not vested) in the
Noble Drilling Corporation Thrift Plan at the annual meeting of stockholders to
be held on April 27, 1995 at 10:00 a.m. at Houston, Texas, and at any
adjournment thereof, as more fully described in the notice of the meeting and
the proxy statement accompanying the same, receipt of which is hereby
acknowledged.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed below / /
contrary below) / /
MICHAEL A. CAWLEY TOMMY C. CRAIGHEAD JAMES L. FISHEL
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided
below.)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 25
THIS VOTING INSTRUCTION CARD, WHEN DULY EXECUTED AND RETURNED, WILL BE
VOTED BY THE TRUSTEE OF THE NOBLE DRILLING CORPORATION THRIFT PLAN ("THRIFT
PLAN") IN THE MANNER DESIGNATED HEREIN BY THE UNDERSIGNED THRIFT PLAN
PARTICIPANT. IF THIS VOTING INSTRUCTION CARD IS DULY EXECUTED AND RETURNED, BUT
WITHOUT A CLEAR VOTING DESIGNATION, IT WILL BE VOTED FOR ITEM 1.
Dated:______________________, 1995
_________________________________
Signature
This voting instruction card
should be signed exactly as your
name appears hereon.
PLEASE COMPLETE, DATE AND SIGN
THIS VOTING INSTRUCTION CARD AND
RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED
STATES.
