<PAGE> 1
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:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
NOBLE DRILLING CORPORATION
(Name of Registrant as Specified In Its Charter)
NOBLE DRILLING CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(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 transaction applies:
...............................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
...............................................................
4) Proposed maximum aggregate value of transaction:
...............................................................
5) Total Fee Paid:
...............................................................
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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
[LOGO]
NOBLE DRILLING CORPORATION
10370 RICHMOND AVENUE, SUITE 400
HOUSTON, TEXAS 77042
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 1996
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 25, 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 two directors, comprising the members of the class of
directors whose term expires at the annual meeting, for a three-year term
expiring in 1999;
2. To consider and vote upon a proposal to approve and ratify
indemnity agreements between the Company and its directors and officers;
and
3. 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 13, 1996
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 1995 and financial statements
for the fiscal year ended December 31, 1995 are contained in the accompanying
1995 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 27, 1996
<PAGE> 3
[LOGO]
NOBLE DRILLING CORPORATION
10370 RICHMOND AVENUE, SUITE 400
HOUSTON, TEXAS 77042
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 25, 1996
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 27,
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 and for the other
proposal set forth in the notice. 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. Abstentions may be specified
on the proposal to approve and ratify the indemnity agreements and will be
counted as present for purposes of determining the existence of a quorum
regarding such item of business. Abstentions on the proposal to approve and
ratify the indemnity agreements will have the effect of a negative vote because
such proposal requires the affirmative vote of a majority of shares of Common
Stock present in person or represented by proxy and entitled to vote. Under
applicable Delaware law, a broker non-vote (or other limited proxy) will have
no effect on the outcome of the election of directors or the proposal to
approve and ratify the indemnity agreements.
<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 13,
1996, 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 __________ 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, 1995 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>
P.A.J.W. Corporation . . . . . . . . . . . . . . . . . . . 8,651,690 (1) 9.2%
Potomac Tower, Suite 1700
1001 19th Street North
Arlington, Virginia 22209
Wellington Management Company . . . . . . . . . . . . . . 8,530,123 (2) 9.0%
75 State Street
Boston, Massachusetts 02109
The Equitable Companies Incorporated . . . . . . . . . . . 6,827,776 (3) 7.2%
787 Seventh Avenue
New York, New York 10019
The Samuel Roberts Noble Foundation, Inc. . . . . . . . . 5,474,639 (4) 5.8%
P. O. Box 2180
Ardmore, Oklahoma 73402
</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. Lawrence Chazen, a director of the Company, is currently
President and a director of P.A.J.W., and thus may be deemed to
beneficially own the 8,651,690 shares held by P.A.J.W.
(2) According to a Schedule 13G filed with the SEC by Wellington Management
Company ("WMC") dated February 9, 1996, WMC, in its capacity as
investment adviser, may be deemed the beneficial owner of 8,530,123
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 4,809,273 shares and shared
investment power with respect to 8,530,123 shares.
(footnotes continued on following page)
2
<PAGE> 5
(3) 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 9, 1996, the amount beneficially owned consists of
(i) 1,496,900 shares 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) 5,063,025 shares beneficially
owned by Alliance Capital Management L.P. ("Alliance"), with respect to
which it has sole investment power and with respect to 5,041,825 shares
of which it has sole voting power, and (iii) 267,851 shares (including
267,190 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 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.
(4) 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."
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 1996
annual meeting: Johnnie W. Hoffman, John F. Snodgrass and Lawrence J. Chazen.
The Bylaws of the Company provide for the mandatory retirement of Mr.
Snodgrass because of age at the 1996 annual meeting. The Board of Directors,
in accordance with authority granted by the Bylaws, has appointed Mr.
Snodgrass as a director emeritus of the Company, to serve at the pleasure of
the Board of Directors, and has determined to establish the number of directors
comprising the Board at eight, effective immediately after the 1996 annual
meeting. The Board of Directors has nominated Messrs. Hoffman and Chazen for
re-election as directors of the Company to serve three-year terms expiring in
1999.
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.
3
<PAGE> 6
Information with respect to the directors nominated for election this
year, and the directors whose terms do not expire at the 1996 annual meeting,
is presented below.
NOMINEES FOR DIRECTOR
JOHNNIE W. HOFFMAN,
age 69, 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.
LAWRENCE J. CHAZEN,
age 55, 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
President and a director of P.A.J.W.
CLASS WHOSE TERM EXPIRES IN 1997
JAMES C. DAY,
age 52, 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.
BILL M. THOMPSON,
age 63, 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.
MARC E. LELAND,
age 57, 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.
CLASS WHOSE TERM EXPIRES IN 1998
MICHAEL A. CAWLEY,
age 48, 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 67, director since 1988 Mr. Craighead is the President and owner of
T. C. Craighead & Company (which is the
general partner of The Joy Partners, Ltd.)
and Astro Oil, Inc., all
4
<PAGE> 7
based in Ardmore, Oklahoma. He is also
Vice-President of Tom-Sam, Inc. He has been
an oil and gas lease broker and independent
operator since 1962.
JAMES L. FISHEL,
age 64, 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.
Messrs. Chazen and Leland were elected to the Board of Directors in
September 1994 pursuant to provisions contained in the agreement and plan of
merger under which Chiles Offshore Corporation merged with and into Noble
Offshore Corporation, a wholly owned subsidiary of the Company. These
provisions related to the initial election to the Board and are inapplicable to
nominations for re-election.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
BOARD MEETINGS AND COMMITTEES
During 1995 the Board of Directors held nine meetings. Each director of
the Company attended every meeting of the Board and every meeting of the Board
committees on which he served in 1995, except that Mr. Fishel did not attend
two meetings and Messrs. Cawley and Thompson did not attend one meeting.
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 1995, 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, the audit committee has responsibility 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 (one meeting). 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.
Nominating Committee (no meetings). 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 1997 annual meeting of
stockholders must be received by the Company no later than January 24,
1997.
5
<PAGE> 8
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 1995. 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.
6
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of January 31, 1996 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 11 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 $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 . . . . . . . . . . . . . . . . . . . . . 5,544,322 (3)(4) 5.9%
Lawrence J. Chazen . . . . . . . . . . . . . . . . . . . . 8,651,690 (5) 9.2%
Tommy C. Craighead . . . . . . . . . . . . . . . . . . . . 49,000 (4) 0.1%
James C. Day . . . . . . . . . . . . . . . . . . . . . . . 565,805 (4) 0.6%
James L. Fishel . . . . . . . . . . . . . . . . . . . . . . 13,500 (4) --
Johnnie W. Hoffman . . . . . . . . . . . . . . . . . . . . 77,066 (4) 0.1%
Marc E. Leland . . . . . . . . . . . . . . . . . . . . . . 38,316 --
John F. Snodgrass . . . . . . . . . . . . . . . . . . . . . 5,535,762 (3)(4) 5.9%
Bill M. Thompson . . . . . . . . . . . . . . . . . . . . . 20,000 (4) --
Named Executive Officers (excluding
any director named above) and Group
Byron L. Welliver . . . . . . . . . . . . . . . . . . . . . 253,173 (4) 0.3%
Julie J. Robertson . . . . . . . . . . . . . . . . . . . . 50,235 (4) 0.1%
All directors and executive
officers as a group (11 persons) . . . . . . . . . . . . 15,324,230 (6) 16.1%
- ------------
</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
(4) 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 --
68,500 shares; Mr. Craighead -- 13,500 shares; Mr. Day -- 384,333 shares;
Mr. Fishel -- 13,500; Mr. Hoffman -- 73,500 shares; Mr. Snodgrass --
58,500 shares; Mr. Thompson -- 10,000 shares; Mr. Welliver -- 209,667
shares; and Ms. Robertson -- 35,133 shares.
(5) Consists of 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.
Chazen disclaims any pecuniary interest in the 8,651,690 shares.
(6) Includes 866,633 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.
7
<PAGE> 10
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 1995
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 1995, 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
8
<PAGE> 11
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.
Applying these criteria, the compensation committee determined that no
annual incentive bonuses would be paid to executive officers of the Company for
1995.
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 January 18, 1996, 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
1998) (50 percent).
In February 1995, 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 1995
were granted with an exercise price of fair market value at the date of grant.
One-third of the options granted in 1995 vest after one year from the date of
grant, one-third vest after two years from the date of grant and one-third vest
after three 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.
1995 COMPENSATION OF CEO
The 1995 salary of Mr. Day was determined by the compensation committee
in October 1994 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 $410,000 per year in October 1995 based upon competitive
and financial data presented by Mercer. The increase in salary was implemented
on January 1, 1996.
In determining that no bonus would be paid to Mr. Day for 1995, the
compensation committee applied the performance goals criteria and adjustment
factors as discussed above under "Annual Incentive Bonus."
9
<PAGE> 12
On February 2, 1995, 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 1995 results of operations under Mr. Day's leadership.
On January 18, 1996, the stock option committee awarded Mr. Day 37,500
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 1995 adequately reflect the conservative compensation goals and policies
of the Company.
March 27, 1996 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
10
<PAGE> 13
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 1995 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
OTHER UNDERLYING
ANNUAL OPTIONS 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, Chairman, 1995 $ 379,375 $ 0 $ 4,699 100,000 $ 10,971(2)
President and CEO 1994 $ 295,000 $ 95,150 $ 6,161 100,000 $ 10,848
1993 $ 272,822 $177,000 $ 3,961 30,000 $ 9,767
Byron L. Welliver, 1995 $ 180,875 $ 0 $ 3,307 35,000 $ 4,465(3)
Senior Vice President- 1994 $ 165,000 $ 37,250 $ 3,307 30,000 $ 3,908
Finance, Treasurer and 1993 $ 152,500 $100,000 $ 2,678 15,000 $ 6,733
Controller
Julie J. Robertson, 1995 $ 101,500 $ 0 $ 0 25,000 $ 6,470(3)
Corporate Secretary (4) 1994 $ 85,000 $ 16,450 $ 0 15,000 $ 2,012
</TABLE>
__________________________
(1) Options represent the right to purchase shares of Common Stock at a fixed
price per share. At the end of 1995, Mr. Day held 75,000 shares of
restricted Common Stock ("Restricted Shares") having a value of $675,000;
Mr. Welliver held 26,000 Restricted Shares having a value of $234,000;
and Ms. Robertson held 8,500 Restricted Shares having a value of $76,500.
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. 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. Awards of Restricted Shares made on January 18,
1996 will be reported in the Company's proxy statement for 1996 in
accordance with the SEC's rules and regulations.
(2) Consists of Company contributions to defined contribution plan of $8,975,
term life insurance premiums of $1,096, and directors' fees of $900.
(3) Consists of Company (or subsidiary) contributions to defined contribution
plan and term life insurance premiums, respectively, as follows: Mr.
Welliver -- $3,780 and $685; and Ms. Robertson -- $6,090 and $380.
(4) 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 Drilling Services Inc. on September 14, 1994.
11
<PAGE> 14
The following table sets forth certain information with respect to
options to purchase Common Stock granted during the year ended December 31,
1995 to each of the named executive officers.
OPTION/SAR GRANTS IN 1995
<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/ EXERCISE
GRANTED GRANTED TO PRICE EXPIRA-
(NUMBER OF EMPLOYEES PER TION
NAME SHARES) (2) IN 1995 SHARE DATE 5% (3) 10% (4)
---- --------------- ----------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
James C. Day 100,000 9% $ 5.188 2/2/05 $ 327,000 $ 825,000
Byron L. Welliver 35,000 3% $ 5.188 2/2/05 $ 114,450 $ 288,750
Julie J. Robertson 25,000 2% $ 5.188 2/2/05 $ 81,750 $ 206,250
</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 February 2, 1995. One-third of
the options became exercisable on February 2, 1996, one-third of the
options becomes exercisable on February 2, 1997 and one-third of the
options becomes exercisable on February 2, 1998. Options granted in 1995
were without SARs.
(3) Represents an assumed market price per share of Common Stock of $8.46.
(4) Represents an assumed market price per share of Common Stock of $13.44.
12
<PAGE> 15
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, 1995, and the unexercised options held at December 31, 1995 and
the value thereof, by each of the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN 1995
AND 12/31/95 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 12/31/95 (SHARES) 12/31/95
(NUMBER VALUE -------------------------- -------------------------
NAME OF SHARES) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ---------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James C. Day . . . . . . 0 $ 0 301,000 150,000 $1,300,140 $ 462,450
Byron L. Welliver . . . . 0 $ 0 170,000 50,000 $ 883,455 $ 157,795
Julie J. Robertson . . . 0 $ 0 19,300 32,500 $ 69,886 $ 107,488
</TABLE>
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.
PENSION PLAN TABLE
<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. Accordingly, the amounts reported in the Summary Compensation
Table included elsewhere herein under the table caption "Annual
Compensation" approximate covered compensation for 1995.
(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. The amount of
benefit shown is subject to deductions for Social Security.
As of December 31, 1995, the named executive officers had the following
approximate credited years of service for retirement purposes: Mr. Day--18;
Mr. Welliver--14; and Ms. Robertson--7.
13
<PAGE> 16
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)
[CHART]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Company 100 43.1 61.2 120.7 81.0 124.1
CRSP 100 159.6 185.2 214.4 207.4 288.0
Competitor Index (3) 100 57.0 54.6 84.6 65.8 136.0
- ------------------------------------------------------------------------------------
</TABLE>
(1) Total return assuming reinvestment of dividends. Assumes $100 invested
on January 1, 1991 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.
14
<PAGE> 17
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)
[CHART]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
1987 1988 1989 1990 1991 1992 1993 1994 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Company 100 121.9 231.3 181.3 78.1 110.9 218.8 146.9 225.0
CRSP 100 117.7 143.8 122.3 195.2 226.4 262.2 253.6 352.1
Competitor Index (3) 100 94.7 160.8 153.1 87.2 83.5 129.5 100.8 208.2
- -----------------------------------------------------------------------------------------------
</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 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.
15
<PAGE> 18
PROPOSAL TO APPROVE AND RATIFY
DIRECTOR AND OFFICER INDEMNITY AGREEMENTS
INTRODUCTION
The Company's Board of Directors has approved, and has authorized the
Company to enter into, indemnity agreements with the Company's current
directors and bylaw officers, and with the Company's future directors, which
agreements increase the protection afforded such persons against legal claims
and related expenses. The Company entered into indemnity agreements with its
current directors and bylaw officers effective December 6, 1995. As authorized
by the Board of Directors, the Company contemplates that the same or a similar
form of indemnity agreement will be entered into with future directors and
bylaw officers. In addition to any rights granted by the indemnity agreements,
the Company's directors and officers presently have certain rights to
indemnification under the Company's Certificate of Incorporation (the
"Certificate of Incorporation") and Bylaws (the "Bylaws") and Section 145 of
the General Corporation Law of the State of Delaware (the "Delaware Statute").
The Board of Directors believes that the Company should provide the
maximum indemnification protection for its present and future directors and
bylaw officers, both as a matter of fairness and to assist the Company in
attracting capable individuals to serve in such capacities. For this reason,
the Board of Directors believes that the Company should supplement the
indemnification protection available under the Certificate of Incorporation,
the Bylaws and the Delaware Statute by executing agreements with its directors
and bylaw officers providing for indemnification to the fullest extent
permitted by law.
The form of indemnity agreement, as approved by the Board of Directors
and entered into between the Company and its directors and bylaw officers (the
"Indemnity Agreement"), is attached to this Proxy Statement as Exhibit A. The
following summary of the Indemnity Agreement is qualified in its entirety by
reference thereto.
Although stockholder approval of the Indemnity Agreement is not required
by law, the Board is seeking stockholder approval because each of the directors
is potentially benefited by such an agreement and, therefore, has an inherent
conflict of interest with regard thereto. Also, stockholder approval would
strengthen the validity of the Indemnity Agreement by substantially reducing
the likelihood that any Indemnity Agreement could be successfully challenged on
grounds of the directors' conflict of interest. If the Company's stockholders
do not approve the proposal to ratify and approve the Indemnity Agreements and
to authorize the Company to enter into substantially similar Indemnity
Agreements with directors and bylaw officers in the future, the Company
anticipates that it will honor the existing Indemnity Agreements because the
Indemnity Agreements, by their terms, do not provide for a unilateral right of
termination by the Company. Thus, the existing Indemnity Agreements will
remain in full force and effect to the extent permitted under the General
Corporation Law of the State of Delaware. Under current Delaware law, whether
or not stockholder approval of the Indemnity Agreements is obtained, the
Indemnity Agreement would not be void or voidable solely because of the
directors' inherent conflict of interest if the Indemnity Agreement were held
to be fair as to the Company as of the time it was approved and authorized by
the Board of Directors. The Board would reconsider, however, whether
additional Indemnity Agreements should be entered into in the future.
The Indemnity Agreement is not being proposed in response to any specific
resignation, threat of resignation or refusal to serve by any director, and to
the knowledge of the Company, there is no pending or threatened litigation
affecting the directors or officers of the Company for which indemnification
may be sought under the Indemnity Agreement or otherwise.
REASONS AND PRINCIPAL EFFECTS OF THE PROPOSAL
Management of the Company believes that entering into the Indemnity
Agreement with each of its directors and bylaw officers is necessary in order
for the Company to be able to attract and retain qualified and competent
management personnel, upon whose efforts and judgment the success of the
Company is largely dependent. Accordingly, management believes that it is in
the best interests of the Company and its stockholders to protect its directors
and bylaw officers through the Indemnity Agreement, which generally provides
that the Company will indemnify such persons to the fullest extent permitted by
law.
16
<PAGE> 19
Management generally believes that because of the claims and litigation
normally associated with any business, directors and officers are continually
exposed to a potentially large number of claims, suits and other proceedings,
even though their actions are taken in complete good faith and in the best
interests of the Company. Responding to such claims and litigation can involve
very substantial personal expense, including legal fees, disbursements,
settlements and even judgments. For several reasons, management believes that
it is unfair to expect the directors and officers to personally bear expenses
that result from the Company's operations.
First, management believes that there has been a substantial increase in
the number of lawsuits that expose directors and officers of all corporations
to substantial financial penalties, ridicule, harassment and abuse. Second,
the vagaries of public policy and the interpretations of ambiguous statutes and
regulations appear to management to create such uncertainty as to deprive
corporate directors and officers of adequate, reliable, advance knowledge of
the risks to which they become personally exposed and the means of reducing or
eliminating such risks. Third, damages sought in third-party stockholder and
derivative suits frequently bear no reasonable or logical relationship to the
compensation received by directors for their services. Fourth, the cost of
defending against such suits, whether or not meritorious, is beyond the
resources of most persons. Fifth, the issues in controversy frequently involve
the knowledge, motives and intent of the persons involved such that they are
the only witnesses who can testify in their own defense; however, because of
the length of time that usually elapses before such suits are disposed of,
individuals will sometimes be retired or deceased and either they or their
estates will face undue hardship in maintaining an adequate defense to such
suits.
Management believes that the confluence of the foregoing factors has
generally led to an increased reluctance on the part of qualified persons to
serve on corporate boards of directors and, to a lesser degree, as officers of
public corporations. Furthermore, management believes that an inevitable
result of the above trends will be timid, overly cautious and less effective
direction and supervision of the Company's business and operations instead of
aggressive supervision in an attempt responsibly to maximize profits and serve
the best interests of the Company's stockholders. Management considers such
potential consequences to be so detrimental to the best interests of the
Company's stockholders that it has concluded that its directors and officers
should receive the maximum protection possible against the inordinate risks and
expenses of litigation outlined above to ensure that the most capable persons
available will be attracted to and retained in such positions.
The Delaware Statute contains detailed provisions governing the
indemnification of directors and officers and by its nonexclusive nature,
permits the adoption of indemnification agreements generally to effect the
policy of such indemnification. In accordance with the Delaware Statute, the
Certificate of Incorporation and Bylaws provide for the Company to indemnify
and insure its directors and officers to the fullest extent permitted by law.
Management believes, however, that the existing indemnification protection
provided is inadequate in certain respects. First, management believes that if
directors and officers liability insurance coverage becomes unavailable or
prohibitively expensive, the Indemnity Agreement will better serve the
interests of the Company and its stockholders by being the basis of
self-insurance against potential director and officer liabilities. Second,
management believes that the Certificate of Incorporation and Bylaws do not
provide sufficient protection for directors and officers since their provisions
can be unilaterally changed by the Company. Last, management believes that the
Delaware Statute expressly recognizes that a person may become entitled to
indemnification outside the terms of the statute. Accordingly, the purpose of
the Indemnity Agreement is also to provide fuller indemnification protection
for the Company's directors and officers than presently provided in the
Delaware Statute, the Certificate of Incorporation and the Bylaws.
SUMMARY OF THE INDEMNITY AGREEMENT
Actions Covered. Section 3 of the Indemnity Agreement deals with third
party proceedings (i.e., proceedings other than those by or on behalf of the
Company), and Section 4 deals with actions by or on behalf of the Company.
Under both sections, the right to indemnification extends to a person who is a
party or is threatened to be made a party to any proceeding by reason of the
fact that the person is or was a director and/or officer of the Company, or is
or was serving at the request of the Company as a director, officer, employee
or agent of another entity.
With respect to third party proceedings, indemnification extends to
expenses, judgments, fines and amounts paid in settlement that are actually and
reasonably incurred. In the case of proceedings by or on behalf of the
Company, indemnification extends only to expenses actually and reasonably
incurred by the indemnitee in connection
17
<PAGE> 20
with the defense, settlement or other disposition of such proceeding, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which the indemnitee shall have been adjudged to be liable to the Company
unless, and only to the extent that, the Delaware Court of Chancery or the
court in which such proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, the indemnitee is fairly and reasonably entitled to
indemnity for such expenses as the Delaware Court of Chancery or such other
court shall deem proper.
Requisite Standards of Conduct. The general standard of conduct required
for indemnification is that the individual acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company. Added to this standard in the case of third party criminal actions is
the requirement that the individual had no reasonable cause to believe his
conduct was unlawful.
Expenses. Section 6 of the Indemnity Agreement provides that the
expenses incurred by an indemnitee pursuant to Sections 3 and/or 4 of the
Indemnity Agreement in connection with any proceeding shall, at the written
request of the indemnitee, be paid by the Company in advance of the final
disposition of such proceeding upon receipt by the Company of an undertaking
(which need not be secured) by or on behalf of the indemnitee (the
"indemnitee's undertaking") to repay such amount to the extent that it is
ultimately determined that the indemnitee is not entitled to be indemnified by
the Company. As used in the Indemnity Agreement, the term "expenses" includes,
without limitation, all reasonable attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a proceeding.
Determinations on Indemnification. Pursuant to Section 7 of the
Indemnity Agreement, any indemnification under Sections 3 and/or 4 of the
Indemnity Agreement shall be made no later than 45 days after receipt by the
Company of the written request of an indemnitee, unless a determination is made
within the 45-day period by (i) a majority vote of the directors of the Company
who are not parties to the involved proceeding, even though less than a quorum,
or (ii) independent legal counsel in a written opinion (which counsel shall be
appointed if there are no such directors or if such directors so direct), that
the indemnitee has not met the applicable standards for indemnification set
forth in Section 3 or 4, as the case may be. Any advancement of expenses under
Section 6 of the Indemnity Agreement shall be made no later than 10 days after
receipt by the Company of the indemnitee's undertaking.
In any action to establish or enforce the right of indemnification or to
receive advancement of expenses as provided in the Indemnity Agreement, the
burden of proving that indemnification or advancement of expenses is not
appropriate shall be on the Company. Neither the failure of the Company
(including its Board of Directors or independent legal counsel) to have made a
determination prior to the commencement of such action that indemnification or
advancement of expenses is proper in the circumstances because an indemnitee
has met the applicable standard of conduct, nor an actual determination by the
Company (including its Board of Directors or independent legal counsel) that an
indemnitee has not met such applicable standard of conduct, will be a defense
to the action or create a presumption that an indemnitee has not met the
applicable standard of conduct. Expenses incurred by an indemnitee in
connection with successfully establishing or enforcing his right of
indemnification or to receive advancement of expenses, in whole or in part,
under the Indemnity Agreement will also be indemnified by the Company.
Success on the Merits or Otherwise. Section 5 of the Indemnity Agreement
provides that, to the extent that an indemnitee has been successful on the
merits or otherwise in defense of any proceeding referred to in Sections 3
and/or 4 of the Indemnity Agreement, or in defense of any claim, issue or
matter therein, including dismissal without prejudice, the indemnitee shall be
indemnified against all expenses actually and reasonably incurred by such
indemnitee in connection therewith.
Other Provisions. The Indemnity Agreement provides that the rights of
indemnification and to receive advancement of expenses provided by it shall not
be deemed exclusive of any other rights to which an indemnitee may be entitled
under the Certificate of Incorporation, Bylaws, any other agreement, any vote
of stockholders or disinterested directors, the General Corporation Law of the
State of Delaware, or otherwise, both as to action in his official capacity and
as to action in another capacity while holding such office. In addition, the
Indemnity
18
<PAGE> 21
Agreement provides that it is intended to be retroactive and shall be available
as to events occurring prior to the date of the Indemnity Agreement.
Furthermore, the Indemnity Agreement provides that the rights of
indemnification and to receive advancement of expenses provided by it shall
continue as to an indemnitee even though an indemnitee may have ceased to be a
director or officer of the Company and shall inure to the benefit of an
indemnitee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
RECOMMENDATION AND REQUIRED AFFIRMATIVE VOTE
The affirmative vote of the holders of record of a majority of shares of
Common Stock, present in person or represented by proxy and entitled to vote
thereon, is required to approve the proposal to approve and ratify the
Indemnity Agreement. For the reasons stated above, the Board of Directors of
the Company unanimously recommends that the Company's stockholders vote FOR the
approval of the proposal to approve and ratify the Indemnity Agreement.
Proxies will be voted FOR the proposal unless a vote against this proposal or
an abstention is specifically indicated in the proxy.
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 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
beneficial owners of more than 10 percent of the Common Stock or $1.50
Preferred Stock 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, 1995, all Section
16(a) filing requirements applicable to its directors, officers, and beneficial
owners of more than ten percent of its Common Stock or $1.50 Preferred Stock
were complied with.
AUDITORS
The Board of Directors has appointed Price Waterhouse LLP, which has
audited the Company's financial statements since October 7, 1994, to audit the
financial statements of the Company for the year ending December 31, 1996.
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 the year ended
December 31, 1993 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 the year ended December 31, 1993
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 periods. Additionally, no "reportable
events" (as such term is defined under the applicable rules and regulations of
the SEC) occurred during the year ended December 31, 1993 or the subsequent
interim period preceding Arthur Andersen LLP's dismissal.
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals for inclusion in the Company's proxy materials in
connection with the 1997 annual meeting of stockholders, which is currently
scheduled to be held on April 24, 1997, must be received by the Company at its
office in Houston, Texas, addressed to the Secretary of the Company, no later
than November 27, 1996.
19
<PAGE> 22
The cost of solicitation of proxies will be borne by the Company. The
Company has employed Corporate Investor Communications, 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 27, 1996
20
<PAGE> 23
EXHIBIT A
INDEMNITY AGREEMENT
This Agreement made and entered into as of this _____ day of _________,
19__, by and between NOBLE DRILLING CORPORATION, a Delaware corporation (the
"Company"), and ______________ ("Indemnitee"), who is currently serving the
Company in the capacity of a director and/or officer thereof;
W I T N E S S E T H:
WHEREAS, the Company and Indemnitee recognize that the interpretation
of ambiguous statutes, regulations and court opinions and of the Certificate of
Incorporation and Bylaws of the Company, and the vagaries of public policy, are
too uncertain to provide the directors and officers of the Company with
adequate or reliable advance knowledge or guidance with respect to the legal
risks and potential liabilities to which they become personally exposed as a
result of performing their duties in good faith for the Company; and
WHEREAS, the Company and the Indemnitee are aware that highly
experienced and capable persons are often reluctant to serve as directors or
officers of a corporation unless they are protected to the fullest extent
permitted by law by comprehensive insurance or indemnification, especially
since the legal risks and potential liabilities, and the very threat thereof,
associated with lawsuits filed against the officers and directors of a
corporation, and the resultant substantial time, expense, harassment, ridicule,
abuse and anxiety spent and endured in defending against such lawsuits, whether
or not meritorious, bear no reasonable or logical relationship to the amount of
compensation received by the directors or officers from the corporation; and
WHEREAS, Section 145 of the General Corporation Law of the State of
Delaware, which sets forth certain provisions relating to the mandatory and
permissive indemnification of, and advancement of expenses to, officers and
directors (among others) of a Delaware corporation by such corporation, is
specifically not exclusive of other rights to which those indemnified
thereunder may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, and, thus, does not by itself limit the
extent to which the Company may indemnify persons serving as its officers and
directors (among others); and
WHEREAS, after due consideration and investigation of the terms and
provisions of this Agreement and the various other options available to the
Company and the Indemnitee in lieu thereof, the board of directors of the
Company has determined that the following Agreement is not only reasonable and
prudent but necessary to promote and ensure the best interests of the Company
and its stockholders; and
WHEREAS, the Company desires to have Indemnitee serve or continue to
serve as an officer and/or director of the Company, free from undue concern for
unpredictable, inappropriate or unreasonable legal risks and personal
liabilities by reason of his acting in good faith in the performance of his
duty to the Company; and Indemnitee desires to serve, or to continue to serve
(provided that he is furnished the indemnity provided for hereinafter), in
either or both of such capacities;
<PAGE> 24
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Indemnitee, intending to be legally bound, do hereby agree as follows:
1. AGREEMENT TO SERVE. Indemnitee agrees to serve or continue to
serve as director and/or officer of the Company, at the will of the Company or
under separate contract, if such exists, for so long as he is duly elected or
appointed and qualified in accordance with the provisions of the Bylaws of the
Company or until such time as he tenders his resignation in writing.
2. DEFINITIONS. As used in this Agreement:
(a) The term "Proceeding" shall mean any action, suit or
proceeding, whether civil, criminal, administrative, arbitrative or
investigative, any appeal in such an action, suit or proceeding, and
any inquiry or investigation that could lead to such an action, suit
or proceeding, except one initiated by Indemnitee to enforce his
rights under this Agreement.
(b) The term "Expenses" includes, without limitation, all
reasonable attorneys' fees, retainers, court costs, transcript costs,
fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery
service fees and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, or being or preparing
to be a witness in a Proceeding.
(c) References to "other enterprise" shall include
employee benefit plans; references to "fines" shall include any (i)
excise taxes assessed with respect to any employee benefit plan and
(ii) penalties; references to "serving at the request of the Company"
shall include any service as a director, officer, employee or agent of
the Company which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acts
in good faith and in a manner he reasonably believes to be in the
interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.
3. INDEMNITY IN THIRD PARTY PROCEEDINGS. The Company shall
indemnify Indemnitee in accordance with the provisions of this Section 3 if
Indemnitee is a party to or is threatened to be made a party to or otherwise
involved in any threatened, pending or completed Proceeding (other than a
Proceeding by or in the right of the Company to procure a judgment in its
favor) by reason of the fact that Indemnitee is or was a director and/or
officer of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in
connection with such Proceeding, provided it is determined pursuant to Section
7 of this Agreement or by the court having jurisdiction in the matter, that
Indemnitee acted in
2
<PAGE> 25
good faith and in a manner that he reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any Proceeding by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create
a presumption that Indemnitee did not act in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal Proceeding, had reasonable cause to
believe that his conduct was unlawful.
4. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY.
The Company shall indemnify Indemnitee in accordance with the provisions of
this Section 4 if Indemnitee is a party to or is threatened to be made a party
to or otherwise involved in any threatened, pending or completed Proceeding by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all Expenses actually and reasonably incurred by
Indemnitee in connection with the defense, settlement or other disposition of
such Proceeding, but only if he acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests of the
Company, except that no indemnification shall be made under this Section 4 in
respect of any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company unless and only to the extent that the
Delaware Court of Chancery or the court in which such Proceeding was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses as the Delaware Court of
Chancery or such other court shall deem proper.
5. INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provision of this Agreement to the contrary, to the
extent that Indemnitee has been successful on the merits or otherwise in
defense of any Proceeding referred to in Sections 3 and/or 4 of this Agreement,
or in defense of any claim, issue or matter therein, including dismissal
without prejudice, Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by Indemnitee in connection therewith.
6. ADVANCES OF EXPENSES. The Expenses incurred by Indemnitee
pursuant to Sections 3 and/or 4 of this Agreement in connection with any
Proceeding shall, at the written request of the Indemnitee, be paid by the
Company in advance of the final disposition of such Proceeding upon receipt by
the Company of an undertaking by or on behalf of Indemnitee ("Indemnitee's
Undertaking") to repay such amount to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company.
The request for advancement of Expenses by Indemnitee and the undertaking to
repay of Indemnitee, which need not be secured, shall be substantially in the
form of Exhibit A to this Agreement.
7. RIGHT OF INDEMNITEE TO INDEMNIFICATION OR ADVANCEMENT OF
EXPENSES UPON APPLICATION; PROCEDURE UPON APPLICATION.
(a) Any indemnification under Sections 3 and/or 4 of this
Agreement shall be made no later than 45 days after receipt by the
Company of the written request of
3
<PAGE> 26
Indemnitee, unless a determination is made within said 45-day period
by (i) a majority vote of the directors of the Company who are not
parties to the involved Proceeding, even though less than a quorum, or
(ii) independent legal counsel in a written opinion (which counsel
shall be appointed if there are no such directors or if such directors
so direct), that the Indemnitee has not met the applicable standards
for indemnification set forth in Section 3 or 4, as the case may be.
(b) Any advancement of Expenses under Section 6 of this
Agreement shall be made no later than 10 days after receipt by the
Company of Indemnitee's Undertaking.
(c) In any action to establish or enforce the right of
indemnification or to receive advancement of Expenses as provided in
this Agreement, the burden of proving that indemnification or
advancement of Expenses is not appropriate shall be on the Company.
Neither the failure of the Company (including its board of directors
or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification or advancement of
Expenses is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the
Company (including its board of directors or independent legal
counsel) that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct. Expenses
incurred by Indemnitee in connection with successfully establishing or
enforcing his right of indemnification or to receive advancement of
Expenses, in whole or in part, under this Agreement shall also be
indemnified by the Company.
8. INDEMNIFICATION AND ADVANCEMENT OF EXPENSES UNDER THIS
AGREEMENT NOT EXCLUSIVE. The rights of indemnification and to receive
advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may be entitled under the
Certificate of Incorporation or Bylaws of the Company, any other agreement, any
vote of stockholders or disinterested directors, the General Corporation Law of
the State of Delaware, or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
9. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Agreement to indemnification or to receive advancement by the
Company for some or a portion of the Expenses, judgments, fines or amounts paid
in settlement actually and reasonably incurred by Indemnitee in the
investigation, defense, appeal, settlement or other disposition of any
Proceeding but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled.
10. RIGHTS CONTINUED. The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall continue as
to Indemnitee even though Indemnitee may have ceased to be a director or
officer of the Company and shall inure to the benefit of Indemnitee's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
4
<PAGE> 27
11. NO CONSTRUCTION AS AN EMPLOYMENT AGREEMENT OR ANY OTHER
COMMITMENT. Nothing contained in this Agreement shall be construed as giving
Indemnitee any right to be retained in the employ of the Company or any of its
subsidiaries, if Indemnitee currently serves as an officer of the Company, or
to be renominated as a director of the Company, if Indemnitee currently serves
as a director of the Company.
12. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies in accordance
with its or their terms, to the maximum extent of the coverage available for
any director or officer of the Company under such policy or policies.
13. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment of amounts otherwise indemnifiable
under this Agreement if, and to the extent that, Indemnitee has otherwise
actually received such payment under any contract, agreement or insurance
policy, the Certificate of Incorporation or Bylaws of the Company, or
otherwise.
14. SUBROGATION. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including without
limitation the execution of such documents as may be necessary to enable the
Company effectively to bring suit to enforce such rights.
15. EXCEPTIONS. Notwithstanding any other provision in this
Agreement, the Company shall not be obligated pursuant to the terms of this
Agreement, to indemnify or advance Expenses to the Indemnitee with respect to
any Proceeding, or any claim therein, (i) brought or made by Indemnitee
against the Company, or (ii) in which final judgment is rendered against the
Indemnitee for an accounting of profits made from the purchase and sale or the
sale and purchase by Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended,
or similar provisions of any federal, state or local statute.
16. NOTICES. Any notice or other communication required or
permitted to be given or made to the Company or Indemnitee pursuant to this
Agreement shall be given or made in writing by depositing the same in the
United States mail, with postage thereon prepaid, addressed to the person to
whom such notice or communication is directed at the address of such person on
the records of the Company, and such notice or communication shall be deemed
given or made at the time when the same shall be so deposited in the United
States mail. Any such notice or communication to the Company shall be
addressed to the Secretary of the Company.
17. CONTRACTUAL RIGHTS. The right to be indemnified or to receive
advancement of Expenses under this Agreement (i) is a contract right based upon
good and valuable consideration, pursuant to which Indemnitee may sue, (ii) is
and is intended to be retroactive and shall be available as to events occurring
prior to the date of this Agreement and (iii) shall continue after any
rescission or restrictive modification of this Agreement as to events occurring
prior thereto.
5
<PAGE> 28
18. SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby; and, to the
fullest extent possible, the provisions of this Agreement shall be construed so
as to give effect to the intent manifested by the provisions held invalid,
illegal or unenforceable.
19. SUCCESSORS; BINDING AGREEMENT. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company (whether direct or indirect, by purchase, merger, consolidation or
otherwise), by agreement in form and substance reasonably satisfactory to
Indemnitee, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 19 or which otherwise becomes bound by the terms and
provisions of this Agreement by operation of law.
20. COUNTERPARTS, MODIFICATION, HEADINGS, GENDER.
(a) This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same
instrument, and either party hereto may execute this Agreement by
signing any such counterpart.
(b) No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Indemnitee and an appropriate
officer of the Company. No waiver by any party at any time of any
breach by any other party of, or compliance with, any condition or
provision of this Agreement to be performed by any other party shall
be deemed a waiver of similar or dissimilar provisions or conditions
at the same time or at any prior or subsequent time.
(c) Section headings are not to be considered part of
this Agreement, are solely for convenience of reference, and shall not
affect the meaning or interpretation of this Agreement or any
provision set forth herein.
(d) Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa,
unless the context otherwise requires.
21. ASSIGNABILITY. This Agreement shall not be assignable by
either party without the consent of the other.
6
<PAGE> 29
22. EXCLUSIVE JURISDICTION; GOVERNING LAW. The Company and
Indemnitee agree that all disputes in any way relating to or arising under this
Agreement, including, without limitation, any action for advancement of
Expenses or indemnification, shall be litigated, if at all, exclusively in the
Delaware Court of Chancery, and, if necessary, the corresponding appellate
courts. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state without giving effect to the principles of
conflicts of laws. The Company and Indemnitee expressly submit themselves to
the personal jurisdiction of the State of Delaware.
23. TERMINATION.
(a) This Agreement shall terminate upon the mutual
agreement of the parties that this Agreement shall terminate or upon
the death of Indemnitee or the resignation, retirement, removal or
replacement of Indemnitee from all of his positions as a director
and/or officer of the Company.
(b) The termination of this Agreement shall not
terminate:
(i) the Company's liability for claims or actions
against Indemnitee arising out of or related to acts,
omissions, occurrences, facts or circumstances occurring or
alleged to have occurred prior to such termination; or
(ii) the applicability of the terms and conditions
of this Agreement to such claims or actions.
IN WITNESS WHEREOF, the Company and Indemnitee have executed this
Agreement as of the date and year first above written.
NOBLE DRILLING CORPORATION
By:
----------------------------------------
Name: Byron L. Welliver
Title: Senior Vice President - Finance,
Treasurer and Controller
INDEMNITEE
-------------------------------------------
Name:
7
<PAGE> 30
[LOGO]
[Proxy Card]
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 13, 1996, at the annual meeting of stockholders to
be held on April 25, 1996 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.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) [ ] nominees listed
below [ ]
LAWRENCE J. CHAZEN JOHNNIE W. HOFFMAN
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided below.)
-----------------------------------------------------------------------
2. Proposal to approve and ratify indemnity agreements between the
Company and its directors and certain officers and to authorize the
Company to enter into such agreements in the future with directors and
certain officers:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. 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.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 31
[Reverse of Proxy Card]
THIS PROXY, WHEN DULY EXECUTED AND RETURNED, WILL BE VOTED IN THE MANNER
DESIGNATED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF THIS PROXY IS DULY
EXECUTED AND RETURNED, BUT WITHOUT A CLEAR VOTING DESIGNATION, IT WILL BE VOTED
FOR ITEMS 1 AND 2.
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: , 1996
---------------------------
----------------------------------------
----------------------------------------
Signature(s) of Stockholder(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.
2
<PAGE> 32
[LOGO]
[Voting Instruction Card]
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 25, 1996 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.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) [ ] nominees listed
below [ ]
LAWRENCE J. CHAZEN JOHNNIE W. HOFFMAN
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
--------------------------------------------------------------------------
2. Proposal to approve and ratify indemnity agreements between the Company
and its directors and certain officers and to authorize the Company to
enter into such agreements in the future with directors and certain
officers:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
1
<PAGE> 33
[Reverse of Voting Instruction Card]
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 ITEMS 1 AND 2.
Dated: , 1996
----------------------------
----------------------------------------
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.
2
