<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
POOL ENERGY SERVICES CO.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
April 2, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Pool
Energy Services Co. to be held on Thursday, May 7, 1998 at 10375 Richmond
Avenue, First Floor, Houston, Texas, commencing at 10:00 a.m. Your Board of
Directors and management look forward to greeting personally those shareholders
able to attend.
This year you are being asked to elect two directors and to ratify the
appointment of independent auditors. These matters are discussed in greater
detail in the accompanying proxy statement.
Your Board of Directors recommends a vote FOR the election of both of the
nominees for directors and FOR ratification of independent auditors.
Regardless of the number of shares you own or whether you plan to attend, it is
important that your shares are represented and voted at the meeting. You are
requested to sign, date and mail the enclosed proxy promptly.
Your interest and participation in the affairs of the Company are greatly
appreciated.
Sincerely,
J. T. Jongebloed
Chairman, President and
Chief Executive Officer
<PAGE> 3
POOL ENERGY SERVICES CO.
10375 Richmond Avenue
Houston, Texas 77042
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 1998
TO THE SHAREHOLDERS OF
POOL ENERGY SERVICES CO.: APRIL 2, 1998
The Annual Meeting of the Shareholders of Pool Energy Services Co.
(the "Company") will be held at 10375 Richmond Avenue, First Floor, Houston,
Texas, on May 7, 1998, at 10:00 a.m., for the following purposes:
1. To elect two Class I directors, each for a term of three
years.
2. To ratify the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the year 1998.
3. To transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on March 9, 1998 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
All shareholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
Geoffrey Arms
Corporate Secretary
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY PROMPTLY.
<PAGE> 4
POOL ENERGY SERVICES CO.
10375 Richmond Avenue
Houston, Texas 77042
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 1998
The following information is submitted concerning the enclosed form of
proxy and the matters to be acted upon under the authority thereof at the
Annual Meeting of Shareholders of the Company to be held at 10375 Richmond
Avenue, First Floor, Houston, Texas, on the 7th day of May, 1998, at 10:00
a.m., or any adjournment thereof, pursuant to the Notice of Meeting. This
Proxy Statement and the enclosed form of proxy are first being sent to holders
of the Company's Common Stock on or about April 2, 1998.
INFORMATION CONCERNING PROXY
Proxies are being solicited on behalf of the Board of Directors of the
Company from holders of the Company's common stock, no par value ("Common
Stock"). Any proxy may be revoked by a shareholder at any time prior to the
exercise thereof by filing with the Corporate Secretary of the Company a
written revocation or a duly executed proxy bearing a later date. The proxy
shall also be revoked if the shareholder is present at the meeting and elects
to vote in person.
All duly executed proxies will be voted in accordance with the
instructions given. Any duly executed proxies for which no instructions are
given (and which have not been revoked or suspended before they are voted) will
be voted FOR (1) the election as directors of the two nominees named below, and
(2) ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for 1998. All duly executed proxies also will be voted in
accordance with the recommendation of the Board of Directors as to any other
matters that may properly come before the meeting.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mail, employees of the Company, who will not receive
any additional compensation for their activities, may solicit proxies by
telephone or other means of communication. Upon request, the Company will
reimburse brokers, dealers, bankers, and trustees, or their nominees, for
reasonable expenses incurred by them in forwarding proxy material to beneficial
owners of shares of Common Stock.
1
<PAGE> 5
VOTING SECURITIES
The securities of the Company entitled to vote at the Annual Meeting
consist of 19,486,831 shares of Common Stock outstanding on March 9, 1998 (the
"Record Date"). Each such share of Common Stock entitles the holder to one
vote on each matter that is submitted to a vote at the meeting. Only
shareholders of record on the Record Date will be entitled to vote at the
meeting. The Articles of Incorporation of the Company prohibit cumulative
voting. Directors will be elected by a plurality of the votes cast unless
otherwise required by law. All other matters to be considered at the meeting
will be decided by the affirmative vote of the holders of a majority of the
shares present or represented by proxy and entitled to vote at the Annual
Meeting.
For purposes of a vote on any matter that requires for adoption the
affirmative vote of a majority of the shares present or represented by proxy
and entitled to vote at the Annual Meeting: (i) shares as to which the holder
abstains from voting effectively will constitute a "no" vote because such
shares nevertheless are considered present and entitled to vote, and (ii)
shares held in "street name" by a broker or other nominee who does not have
discretionary voting authority to vote such shares on the particular matter are
not counted as shares entitled to vote on such matter and, therefore, such a
"broker non-vote" will not affect the outcome of the voting.
1. ELECTION OF DIRECTORS
Pursuant to the Company's Bylaws, the Board of Directors is required
to consist of at least two, but not more than ten directors, which number shall
be determined by the Board of Directors from time to time. The Board of
Directors currently consists of five members. The Bylaws of the Company
provide for three classes of directors, designated as Class I, Class II and
Class III. At the expiration of the term of each class, the directors of that
class are elected for a term of three years and until their successors have
been elected and qualified. Class I directors are to be elected at the Annual
Meeting, to serve for terms expiring in the year 2001. Unless contrary
instructions are set forth in the proxy, the persons named in the proxy will
vote all shares represented by duly executed proxies for the election as
directors of the two nominees named below. Should either of the nominees named
herein become unable or unwilling to serve as a director, the persons acting
under authority of the proxies will vote for the election, in the nominee's
stead, of such other person as the Board of Directors shall nominate. The
Board of Directors has no reason to believe that either of the nominees will be
unable or unwilling to serve if elected.
2
<PAGE> 6
NOMINEES FOR ELECTION AS DIRECTORS; CONTINUING DIRECTORS
The following table sets forth the name, age, and principal
occupation or employment during the past five years of each nominee for
election as a director and of each continuing director, as well as certain
other directorships held by each such person and his period of service as a
director of the Company.
<TABLE>
<CAPTION>
Director
Continuously
CLASS I DIRECTOR NOMINEES Since
- ------------------------- -----
<S> <C>
WILLIAM H. MOBLEY, 56. Dr. Mobley is President and Managing 1990
Director of PDI Global Research Consortia, Ltd., an
international management research and consulting firm. He was
previously a professor in the Graduate School of Business at
Texas A&M University from 1980 to 1996. From 1993 to 1994 he
was Chancellor of the Texas A&M University System, and from
1988 to 1993 he was President of Texas A&M University. He is
also a director of Medici Medical Group, Inc.
JOSEPH R. MUSOLINO, 61. Mr. Musolino has been Vice Chairman 1994
of NationsBank of Texas, N.A. for more than the last five years. He
also serves as a director of Justin Industries, Inc.
CLASS II CONTINUING DIRECTORS - [Terms Expiring in 1999]
- -----------------------------
Currently, there are no Class II directors following the resignation of
Mr. Gary D. Nicholson in September 1997 and the death of Mr. W. C. McCord
in January 1998.
CLASS III CONTINUING DIRECTORS [Terms Expiring in 2000]
- ------------------------------
J. T. JONGEBLOED, 56. Mr. Jongebloed has been Chairman since 1989
1994 and President and Chief Executive Officer of the Company since
1990. He served as President and Chief Operating Officer from 1989 to
1990 and in various executive positions with the Company since 1978.
JAMES L. PAYNE, 61. Mr. Payne has been Chairman of the Board, 1992
Chief Executive Officer and a director of Santa Fe Energy Resources,
Inc. since 1990. He was President of Santa Fe Energy Resources, Inc.
from 1990 to 1998.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
DONALD D. SYKORA, 67. Mr. Sykora is a private investor. He was 1989
President and Chief Operating Officer of Houston Industries from 1993
to 1995 and served as a director of Houston Industries from 1982 to
1995. From 1982 to 1993 he served as President and Chief Operating
Officer of Houston Lighting & Power Company. He is also a director of
TransTexas Gas Corporation, Powell Industries, Inc., Allstar Systems,
Inc. and ARS Services, Inc.
</TABLE>
BOARD COMMITTEES
The Board of Directors has established the following standing
committees:
<TABLE>
<CAPTION>
Committee Current Members
---------------------- --------------------------------------------
<S> <C>
Audit/Finance Messrs. Mobley and Musolino
Compensation Messrs. Sykora (Chairman) and Payne
Directors' Nominating Messrs. Payne (Chairman), Sykora and Jongebloed
</TABLE>
The principal functions of the Audit/Finance Committee are to select a
firm of independent certified public accountants whose duty is to examine the
consolidated financial statements of the Company, to review the general scope
of services to be rendered by the independent public accountants, to review the
financial condition and results of operations of the Company and to make
inquiries as to the adequacy of the Company's financial and accounting
controls. The principal function of the Compensation Committee is to review
employee compensation matters and to oversee the administration of the
Company's employee benefit plans. The function of the Directors' Nominating
Committee is to recommend nominees for election to the Board of Directors. The
Directors' Nominating Committee will consider one or more persons recommended
by a shareholder as nominees for election to the Board of Directors if such
shareholder submits the name of each such person in writing to the committee,
in care of the Corporate Secretary of the Company, together with a full
statement of such person's qualifications and a written consent indicating his
or her willingness to serve. Any such submission must be received no later
than the date specified for submission of shareholder proposals in "Information
Concerning Shareholder Proposals" hereinbelow.
MEETINGS OF THE BOARD AND BOARD COMMITTEES
The Board of Directors met seven times during the year ended December
31, 1997, and the Audit/Finance, Directors' Nominating and Compensation
committees met six, one, and six times, respectively. During the year, no
incumbent director attended fewer than 75 percent of the total number of
meetings held by the Board and by all Board committees of which he was a
member.
4
<PAGE> 8
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is currently
compensated by an annual cash retainer fee of $12,000 and an annual grant of
1,000 shares of Common Stock. The shares of common stock may not be sold or
transferred by the Director for a period of one year after the grant and are
subject to forfeiture if the Director resigns as Director prior to completion
of the one year period. Such directors also receive a fee of $1,000 for each
Board or Board committee meeting attended. If more than one meeting is held on
the same day, however, full payment is made for only one meeting and the fee
for each additional meeting attended that day is $800. In addition, a $2,000
per annum fee is paid for service on a Board committee, with an additional
$1,500 per annum paid to the chairman of a Board committee. Directors who are
employed by the Company receive no additional compensation for service as
members of the Board or any committee of the Board.
Under the Company's 1996 Directors' Stock Incentive Plan (the "1996
Plan") each director who is not a full-time employee of the Company
automatically receives an initial grant of an option to purchase 8,000 shares
of Common Stock upon being elected or appointed to the Board of Directors for
the first time (the "Initial Option Grant") and receives an additional option
to purchase 4,000 shares of Common Stock on the date of each Annual Meeting of
Shareholders after the year in which the Initial Option Grant occurred (the
"Annual Option Grant"). The exercise price of the options is equal to the fair
market value per share of Common Stock on the date an option is granted. Each
option granted under the 1996 Plan becomes exercisable generally one year from
the date of grant and expires ten years after the date of the grant. If a
participant's service as a director terminates by reason of disability, death,
the failure of the Board to nominate him for reelection other than for "cause,"
as defined in the 1996 Plan, or his ineligibility for reelection pursuant to
the age limitation imposed by the Company's Bylaws, his options may be
exercised for up to one year after the date of the disability, death or
termination. If a director's service terminates because he decides not to
stand for reelection, or if he becomes a full-time employee, his options may be
exercised for up to three months after such event, and, if his service
terminates for any other reason, except for "cause," his options may be
exercised for up to five business days after such termination. In the event a
director's service terminates for "cause" his options will become immediately
null and void. Provision is made in the 1996 Plan for adjustments of options
in cases of mergers, stock splits and similar capital reorganizations and for
immediate vesting in the case of a change in control of the Company.
Directors of the Company in office prior to May 1996 also hold options
previously granted pursuant to the 1991 Directors' Stock Option Plan which has
terms and conditions similar to the terms and conditions of the 1996 Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except for Mr. McCord, no member of the Compensation Committee (i)
was, during 1997, an officer or employee of the Company or any of its
subsidiaries, (ii) was formerly an
5
<PAGE> 9
officer of the Company or any of its subsidiaries, or (iii) or had any
relationships required to be disclosed by the Company under the rules of the
Securities and Exchange Commission. Mr. McCord was formerly an officer of Pool
Company and various other subsidiaries of the Company.
COMPENSATION OF EXECUTIVE OFFICERS
The Company's executive compensation is administered by the
Compensation Committee.
COMPENSATION COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION
This report of the Compensation Committee sets forth the Company's policy with
respect to executive officer compensation and describes the basis for 1997
compensation determinations made by the Committee with respect to the Chief
Executive Officer and other executive officers of the Company.
Compensation Philosophy
The Company's philosophy with regard to executive compensation is to:
- Provide a competitive total compensation package consistent with
industry practice that enables the Company to attract and retain key
executives.
- Structure incentive compensation so as to focus executive attention
and effort on the fulfillment of the Company's financial objectives,
and on the appreciation of the value of the Company's stock.
Compensation Program Elements
The elements of the Company's compensation program for executive officers are
as follows:
BASE SALARY - Base salary levels are largely determined through
comparisons with compensation paid to executives of companies of similar size
and complexity as the Company within the industry. The Committee attempts to
ensure that such pay levels are competitive within a range that the Committee
considers to be reasonable and necessary. The Committee utilizes for this
purpose surveys and the assistance of outside consultants as well as market
information from other sources and takes into consideration the Company's
performance both in absolute terms and in comparison with other companies in
the industry. With respect to the compensation of officers other than the Chief
Executive Officer, the Committee gives strong consideration to the
recommendations of the Chief Executive Officer which are based as to each such
executive officer largely on performance, longevity and responsibilities.
6
<PAGE> 10
ANNUAL INCENTIVE COMPENSATION - The Company's executive officers are
eligible to participate in management bonus plans established from time to
time, typically on an annual basis, which provide for bonus awards based on
attaining or exceeding specified financial and other performance objectives.
Under the bonus plan that was in effect for 1997, bonus awards were based on a
net earnings goal, an EBITD(1) goal and on return to shareholders in comparison
with a peer group of companies. For certain executives, a safety performance
goal was also added. Provision was made for awards under such plan to be
increased, in the event performance goals were exceeded by specified amounts,
to a maximum of twice the amount that would be awarded for attaining the
targeted performance objectives. Actual awards were subject to decreases or
increases on the basis of the Committee's evaluation of the Company's and/or
the executive's performance, although no such discretionary action was taken.
The plan also provided that, at the Committee's discretion, up to 50 percent of
any bonuses payable for 1997 could be paid in Company stock, and the Committee
directed that 25 percent of the 1997 bonuses would be paid in shares of
restricted stock (restricted for a period of one year of continuing service
after receipt, except for earlier retirement, death, disability or change in
control). The amounts paid in stock were, under the terms of the plan,
increased by 15 percent.
LONG TERM INCENTIVE COMPENSATION - Executive officers also
participated in a long term incentive compensation plan. In 1997, award
opportunities were established for each executive officer under which awards
will be made based on performance over a three-year period. The awards, if
earned, will be paid solely in restricted stock (50 percent thereof restricted
for one year and 50 percent restricted for two years of continuing service
after receipt, except for earlier retirement, death, disability or change in
control). Entitlement to receive awards is based 50 percent on cumulative
EBITD performance and 50 percent on cumulative total return to shareholders
performance compared to a peer group of companies over the three-year period.
Target awards are set at a percentage of each recipient's annual salary in
effect at the beginning of the performance period. The target awards will be
increased by up to 50 percent in the event performance goals are exceeded by
specified amounts.
STOCK INCENTIVE PLAN - The Company has an Employee Stock Incentive
Plan (the "Stock Incentive Plan") pursuant to which executive officers and
other employees, from time to time, may be granted nonqualified options to
purchase Company Common Stock. The exercise price of all such stock options is
the market price of the shares on the date the option is granted, and the
realization of any value is, therefore, totally dependent on future stock price
appreciation. This is intended to provide added incentive to work for the
continued growth and success of the Company. The Stock Incentive Plan also
permits the Committee to make awards to executive officers and other employees,
in lieu of cash compensation, of (i) Restricted Stock (shares of Common Stock
that are subject to such vesting requirements or other restrictions as the
Committee shall establish), and (ii) Bonus Stock (shares of Common Stock that
are not subject to vesting or other restrictions).
- ----------------------
(1) EBITD is earnings before interest, income taxes, depreciation/amortization
and minority interest.
7
<PAGE> 11
SAR/PHANTOM STOCK PLAN - The Company has a plan (the "SAR/Phantom
Stock Plan") pursuant to which executive officers and other employees, from
time to time, may be granted Stock Appreciation Rights and/or Phantom Stock
awards. A Stock Appreciation Right is the right to receive, upon the exercise
thereof, cash in an amount equal to the excess of the fair market value of a
share of the Company's Common Stock on the date of exercise over the base price
of the Stock Appreciation Right. A Phantom Stock award represents the right to
receive cash in an amount equal to the fair market value of a corresponding
number of shares of Common Stock, which vests over a period of time or upon the
occurrence of an event (including without limitation, a change in control) as
established by the Committee, without any payment to the Company by the
participant (except to the extent otherwise required by law). The SAR/Phantom
Stock Plan is administered by the Committee, and the Committee determines
eligibility and grants all awards thereunder.
The SAR/Phantom Stock Plan was established effective January 1, 1997, and no
awards of Stock Appreciation Rights or Phantom Stock have yet been made
thereunder.
The Committee's overall objective in structuring incentive compensation for
executive officers and other key personnel is to deliver competitive levels of
compensation for the attainment by the Company of short-term and long-term
financial objectives that the Committee believes will favorably influence the
Company's stock price over time. The Committee further believes that
compensating employees who have substantial responsibility for the management
and growth of the Company with Company stock, and providing such persons with
opportunities to benefit directly from increases in the value of Company stock,
will also align their interests more closely with those of other shareholders
and provide additional incentive to enhance the profitable growth of the
Company.
1997 Compensation
The base salary level approved by the Committee in 1997 for Mr. Jongebloed, as
Chairman, President and Chief Executive Officer, was established on the basis
of (i) personal performance, (ii) Company performance, and (iii) comparison
with salaries for chief executive officers of several well-recognized companies
in the same industry as the Company, as reported by an outside consultant, Hay
Management Consultants ("Hay"). Such base salary level amounted to a 9.5
percent increase over his previous base salary which had been in effect for the
previous 12 months. Mr. Jongebloed's bonus compensation for 1997 was
calculated and paid pursuant to the Company's 1997 Management Bonus Plan and
was based on the Company's attaining or exceeding goals based on (i) net income
compared to budget, (ii) EBITD performance compared to budget and (iii) return
to shareholders compared to that of a peer group of companies. The bonus
earned was the maximum bonus attainable under the Plan.
The Committee approved base salary levels in 1997 for other executive officers
based on recommendations by the Chief Executive Officer and Hay's
recommendations. Bonuses for 1997 were paid to executive officers pursuant to
the terms of the Company's 1997 Management Bonus
8
<PAGE> 12
Plan and were determined totally on the Company's financial performance for the
year. Each of the executive officers received a bonus on the basis of the
Company's attaining or exceeding the net income, EBITD and return to
shareholders goals mentioned above. These bonuses were on average
approximately 96 percent of the maximum bonuses attainable under the Plan.
Stock option grants pursuant to the Stock Incentive Plan were made to Mr.
Jongebloed and other executive officers in 1997, as reflected in the Option
Grants Table, on the basis of Hay's recommendations, each executive's personal
performance and the desire to link Company performance to compensation.
Compliance with Internal Revenue Code Section 162(m)
No formal policy has been adopted by the Company with respect to qualifying
compensation paid to its executive officers for an exemption from the
limitation on deductibility imposed by Section 162(m) of the Internal Revenue
Code. The Company anticipates that all compensation paid to its executive
officers during 1997 will qualify for deductibility because no executive's
compensation is expected to exceed the dollar limitations of such provision.
COMPENSATION COMMITTEE
D. D. Sykora, Chairman
J. L. Payne
9
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation paid
to the Chief Executive Officer and to each of the other four persons who were
the most highly compensated executive officers of the Company in 1997 for
services rendered in all capacities to the Company for the years ended December
31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
LONGTERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS
--------------------------------------------------- --------------------------
SHARES
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK STOCK ALL OTHER
SALARY BONUS(1) COMPENSATION(2) AWARDS OPTIONS COMPENSATION(1)(3)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
- --------------------------- ------ -------- -------- --------------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. T. Jongebloed 1997 437,461 336,000 - -0- 50,000 12,850
Chairman, President and 1996 404,423 303,615 - -0- 60,779 250
Chief Executive Officer 1995 376,961 47,250 - -0- 40,890 250
W. J Myers 1997 248,723 116,640 - 190,875 19,000 4,624
Group Vice President-- 1996 238,846 123,117 - -0- 24,416 250
U.S. Operations 1995 230,654 12,657 - -0- 20,000 250
E. J. Spillard 1997 207,154 120,000 - -0- 16,000 4,750
Senior Vice President, 1996 195,068 111,234 - -0- 19,792 250
Finance 1995 185,937 16,875 - -0- 20,000 250
R. G. Hale 1997 194,769 114,000 - -0- 15,000 4,525
Group Vice President- 1996 185,846 105,608 - -0- 18,909 250
International Operations 1995 177,653 29,563 - -0- 20,000 250
G. G. Arms 1997 150,291 73,000 - -0- 9,000 2,988
Vice President and 1996 140,808 66,178 - -0- 10,597 250
General Counsel; 1995 133,392 12,188 - -0- 15,000 250
Corporate Secretary
</TABLE>
- --------------
(1) Seventy-five percent of the bonus for 1997 was paid in cash and the
remainder in restricted shares of Company stock, the number of which was
determined by dividing 25 percent of the bonus amount by the share price
at the award date and, in accordance with provisions of the bonus plan,
increasing that result by 15 percent. The value at the award date of the
15 percent increase is included in the amount shown in the "All Other
Compensation" column.
(2) Perquisites and other personal benefits paid in each year to each of the
named executive officers did not exceed the lesser of $50,000 or 10
percent of such individual's total salary and bonus.
(3) Includes the amount contributed by the Company to each individual's 401(k)
Plan account in such year as well as, for 1997, the amount described in
note (1).
10
<PAGE> 14
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END OPTION VALUES
The following table sets forth information with respect to stock option
exercises during 1997, and unexercised stock options held, as of the end of
1997, by the persons named in the Summary Compensation Table:
<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT 12-31-97 AT 12-31-97
SHARES ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- --------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. T. Jongebloed 69,110 1,407,818 118,889 121,780 1,646,391 1,374,391
W. J Myers 23,604 295,742 2,500 49,812 31,563 570,252
E. J. Spillard 25,000 415,625 72,676 43,344 977,393 500,219
R. G. Hale 14,720 188,110 7 41,682 88 483,111
G. G. Arms 25,000 502,500 34,404 26,448 458,567 310,282
</TABLE>
- ------------------
(1) Value realized is the excess of the current market value at the date of
exercise minus the exercise price.
OPTION GRANT TABLE
OPTION GRANTS IN 1997
The following table sets forth information with respect to stock options
granted during 1997 to the persons named in the Summary Compensation Table:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
NUMBER OF OPTIONS APPRECIATION FOR OPTION
SHARES UNDERLYING GRANTED TO EXERCISE TERM (5)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------------
NAME GRANTED (1)(2)(3) 1997 ($/SH)(4) DATE 5% 10%
- ------------------- ----------------- ------------ --------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
J. T. Jongebloed 50,000 29.21% 13.50 5/1/07 $ 424,500 $ 1,075,800
W. J Myers 19,000 11.10% 13.50 5/1/07 161,310 408,804
E. J. Spillard 16,000 9.35% 13.50 5/1/07 135,840 344,256
R. G. Hale 15,000 8.76% 13.50 5/1/07 127,350 322,740
G. G. Arms 9,000 5.26% 13.50 5/1/07 76,410 193,644
TOTAL 109,000 63.67% $ 925,410 $ 2,345,244
All Shareholders (6) N/A N/A N/A N/A $165,121,552 $418,463,522
Named Executives' Gain as
% of all Shareholders' Gain N/A N/A N/A N/A 0.56% 0.56%
</TABLE>
- --------------
(1) All options granted in 1997 become exercisable in equal annual increments
of 33 1/3 percent commencing on the first anniversary of the award.
Vesting may be accelerated, however, in the event of a change in control
of the Company.
11
<PAGE> 15
(2) The Compensation Committee and/or the Board of Directors retains
discretion, subject to plan limits, to modify the terms of outstanding
options.
(3) The options have a term of ten years, but are subject to earlier
expiration in certain events related to termination of employment.
(4) The exercise price and any related tax withholding obligations arising in
connection with exercise may be satisfied by the optionholder's surrender
of already-owned shares or by offsetting a portion of the shares issuable
upon exercise, subject to certain limitations.
(5) The dollar amounts shown in these columns are the result of computation
required by SEC regulations, and are not intended to forecast future
appreciation, if any, of the Company's stock price.
(6) Potential shareholder gain is included for comparison purposes and is
calculated assuming all outstanding shares were purchased at a price equal
to the market price of the Common Stock ($13.50 per share) on May 1, 1997,
the date of the 1997 option grants.
12
<PAGE> 16
LONG-TERM INCENTIVE PLAN
AWARDS FOR 1997
The following table sets forth information with respect to the
potential awards of Common Stock under the Company's 1997 Long-Term Incentive
Plan to the persons named in the Summary Compensation Table. The receipt of
the shares indicated will depend on the Company's performance compared to
specified goals during the performance period commencing January 1, 1997 and
ending December 31, 1999.
<TABLE>
<CAPTION>
1997 PLAN
ESTIMATED FUTURE PAYOUTS
------------------------
NUMBER OF PERFORMANCE THRESHOLD TARGET MAXIMUM
NAME SHARES PERIOD (#) (#) (#)
---------------- --------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
J. T. Jongebloed 17,155 3 years 4,289 17,155 25,733
W. J Myers 6,617 3 years 1,654 6,617 9,926
E. J. Spillard 5,446 3 years 1,362 5,446 8,169
R. G. Hale 5,174 3 years 1,294 5,174 7,761
G. G. Arms 2,485 3 years 621 2,485 3,728
</TABLE>
Under the plan, a target award of shares was established for each
participant based on a percentage of the individual's salary in effect at the
beginning of the applicable three-year performance period. A payout under the
plan will depend on the extent to which the established performance criteria
are satisfied. Target awards are based 50 percent on earnings before interest,
taxes and depreciation performance and 50 percent on total return to
shareholders as compared to a peer group of companies. All awards are to be
paid in Common Stock, to the extent sufficient shares are available under the
Company's 1993 Employee Stock Incentive Plan, and otherwise are to be paid in
cash. Shares received under the Plan will be restricted so that, (i) if the
executive's employment terminates within one year after the shares are earned,
100 percent of the shares would be forfeited, and (ii) if the executive's
employment terminates between one and two years after the award is earned, 50
percent of the shares would be forfeited except in the event of termination of
the executive's employment due to retirement, death, total disability,
redundancy or change in control. Target payouts are equal to specified
percentages of participants' annual base salaries in effect at the beginning of
the performance period, as follows: 60 percent for Mr. Jongebloed, 40 percent
for Messrs. Myers, Spillard and Hale, and 25 percent for Mr. Arms. Threshold
payouts are one-fourth of the target payouts, and maximum payouts are 150
percent of the target payouts. Threshold payouts are made if performance falls
within a certain range below that which is necessary to earn the target award.
Maximum payments are made if performance exceeds by a specified amount that
which is necessary to earn the target payouts.
RETIREMENT BENEFITS & CHANGE IN CONTROL ARRANGEMENTS
RETIREMENT PLAN. The Company has a defined benefit retirement plan
for its employees with different benefit formulas for salaried and hourly
employees (the "Qualified Retirement
13
<PAGE> 17
Plan"). The normal monthly retirement benefit payable at age 65, or later if
employment continues beyond age 65, for salaried employees is equal to 1
percent of the monthly average of the participant's highest rate of base
compensation determined as of each January 1 of any five consecutive years
during the ten consecutive years preceding retirement, plus 0.6 percent of the
excess of compensation as so determined over the monthly average of the maximum
taxable wage base used to calculate old-age benefits under the Federal Social
Security Act for the 35 years ending with the year in which the participant
will attain his normal retirement age under the Federal Social Security Act,
multiplied by years and fractions thereof of credited service after May 1,
1990, up to 35 years. The plan provides for actuarially reduced benefits for
early retirement. Although the normal form of benefit for married participants
is a joint and 50 percent survivor annuity and, for unmarried participants, a
life only annuity, the plan permits other forms of benefit payment. At
December 31, 1997, credited service under the plan for Messrs. Jongebloed,
Myers, Spillard, Hale and Arms was 7.67 years each, and the highest average
annual compensation recognized by the plan for each of them was $152,000,
$152,000, $152,000, $152,000, and $132,800, respectively.
The table below illustrates the amount of annual pension benefit
payable under the plan on a straight life annuity basis beginning at age 65 to
a person in a specified average salary and years of service classification
using, for all years, the 1996 maximum taxable wage base used to calculate
old-age benefits under the Federal Social Security Act:*
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------------
Remuneration 15 20 25 30 35
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 . . . . . . . . . . . . . $ 18,114 $ 24,152 $ 30,190 $ 36,228 $ 42,266
125,000 . . . . . . . . . . . . . 24,114 32,152 40,190 48,228 56,266
150,000 . . . . . . . . . . . . . 30,114 40,152 50,190 60,228 70,266
175,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
200,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
225,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
250,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
300,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
400,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
500,000 . . . . . . . . . . . . . 32,514 43,352 54,190 65,028 75,866
</TABLE>
- ---------------
*In accordance with the applicable provisions of the Internal Revenue Code of
1986, annual compensation above $160,000 is disregarded in calculating
benefits, and the benefits payable under the plan are limited to $125,000
annually. Both limits are subject to adjustment by the Secretary of the
Treasury to reflect cost-of-living increases and are included in the above
table.
SUPPLEMENTARY EXECUTIVE RETIREMENT PLANS. The Company has two
nonqualified supplementary executive retirement plans which provide retirement
benefits for certain senior executives, one of which plans was implemented in
1993 and the other in 1996. The 1993 plan provides benefits equal to 2 percent
of the average of the participant's salary and annual bonus compensation for
each of the five years for which such compensation was highest out of the last
ten consecutive years of employment, multiplied by years of credited service of
employment with
14
<PAGE> 18
the Company, Pool Company and ENSERCH Corporation, up to 35 years, minus (i)
social security benefits and (ii) retirement benefits payable to the
participant pursuant to, or resulting from his participation in, any other
qualified defined benefit plans of the Company, Pool Company or ENSERCH
Corporation, including the Qualified Retirement Plan. The 1996 plan provides
benefits equal to 2 1/2 percent of the average of the participant's salary and
annual bonus compensation for each of the five years for which such
compensation was highest out of the last ten consecutive years of employment,
multiplied by years of credited service of employment with the Company, Pool
Company and ENSERCH Corporation, up to 24 years, minus (i) retirement benefits
payable to the participant pursuant to, or resulting from his participation in,
any other qualified defined benefit plans of the Company, Pool Company or
ENSERCH Corporation, including the Qualified Retirement Plan and (ii) benefits
payable pursuant to the 1993 plan. The benefit thus determined is payable in
an actuarial equivalent lump sum amount. Messrs. Jongebloed, Myers, Spillard,
Hale and Arms are eligible for benefits under such plans. At December 31,
1997, credited service under these plans for Messrs. Jongebloed, Myers,
Spillard, Hale and Arms was 19.3, 9.9, 18.0, 26.1 and 22.2 years, respectively,
and the highest average annual compensation recognized by the plans for each of
them was $570,617, $303,472, $255,501, $246,852 and $179,449, respectively.
The table below illustrates the amount of annual pension benefit that
would be payable under the supplementary plans on a straight life annuity basis
beginning at age 65 to a person in a specified average salary and years of
service classification using for all years the maximum Social Security primary
insurance amounts for a worker retired at age 65 in 1996 and estimated
retirement benefits payable under the Company's current qualified defined
benefit retirement plan:*
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------------
Remuneration 15 20 25 30 35
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 . . . . . . . . . . . . . $ 0 $ 0 $ 3,706 $ 7,668 $ 11,630
125,000 . . . . . . . . . . . . . 0 1,744 6,206 10,668 15,130
150,000 . . . . . . . . . . . . . 0 3,744 8,706 13,668 18,630
175,000 . . . . . . . . . . . . . 3,882 10,544 17,206 23,868 30,530
200,000 . . . . . . . . . . . . . 11,382 20,544 29,706 38,868 48,030
225,000 . . . . . . . . . . . . . 18,882 30,544 42,206 53,868 65,530
250,000 . . . . . . . . . . . . . 26,382 40,544 54,706 68,868 83,030
300,000 . . . . . . . . . . . . . 41,382 60,544 79,706 98,868 118,030
400,000 . . . . . . . . . . . . . 71,382 100,544 129,706 158,868 188,030
500,000 . . . . . . . . . . . . . 101,382 140,544 179,706 218,868 258,030
600,000 . . . . . . . . . . . . . 131,382 180,544 229,706 278,868 328,030
700,000 . . . . . . . . . . . . . 161,382 220,544 279,706 338,868 398,030
</TABLE>
- ---------------------
*The annual benefits shown in the table have been reduced by the amount of any
retirement benefits payable pursuant to other qualified defined benefit plans
of the Company and other required offset items, but does not reflect the offset
which will be made for any benefits payable under any applicable ENSERCH
Corporation retirement plan (see text above).
POOL COMPANY RETIREMENT PLAN. Prior to the Company's acquisition of
Pool Company, Pool Company had a defined benefit retirement plan (which was
merged into the ENSERCH Corporation Retirement and Death Benefit Program) that
provided for a fixed benefit for salaried employees upon retirement at age 65.
Participants who were employees of the Company ceased
15
<PAGE> 19
to accrue further benefits thereunder on the completion of the Company's
acquisition of Pool Company. Payments under this plan are offsets under the
supplemental executive retirement plans discussed above. Pursuant to the terms
of such plan, Messrs. Jongebloed, Myers, and Spillard are entitled to annuity
payments of $19,635, $3,299, and $12,226, respectively, per annum for life
commencing upon normal retirement at age 65. Messrs. Hale and Arms were not
participants in such plan.
CHANGE IN CONTROL AGREEMENTS
Messrs. Jongebloed, Myers, Spillard, Hale and Arms each have entered
into change in control agreements with the Company that set forth certain
benefits that the Company will provide in the event their employment is
terminated subsequent to a "change in control" of the Company, as defined in
the agreements. Such agreements continue in effect for three years following a
change in control of the Company unless terminated by the Company prior to a
change of control. The agreements each provide that if the officer's
employment is terminated, or if the officer elects to terminate employment
under certain circumstances defined as "good reason," within three years
following a change in control of the Company, the officer will be entitled to a
lump sum severance payment equal to (i) three times the officer's annual base
salary (but not in excess of the aggregate base salary that could be earned up
to the officer's normal retirement date), (ii) an amount equal to the largest
bonus paid to him during the preceding three years, prorated for the current
year, and (iii) the value over the exercise price of unexercised stock options.
In addition, the officer will be entitled to a three-year continuation of
certain employee benefits, two additional years of service credit under the
Company's retirement program, and reimbursement of certain legal fees,
expenses, and any applicable excise taxes.
16
<PAGE> 20
Comparison of Five Year Cumulative Total Return*
Among Pool Energy Services Co.,
A Peer Group Index and Standard & Poor's 500**
[Performance Graph appears here. Plot points are listed below]
<TABLE>
<CAPTION>
YEARS ENDING
-------------------------------------------------------------
COMPANY NAME/INDEX DEC.93 DEC.94 DEC.95 DEC.96 DEC.97
- --------------------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Pool Energy Services Co. 119.61 105.88 149.02 241.18 349.02
S&P 500 Index 110.08 111.53 153.45 188.68 251.63
Peer Group Index 127.21 113.88 180.44 322.85 433.24
</TABLE>
Assumes $100 invested on December 31, 1992 in Pool Energy Services Co. Common
Stock, the Standard & Poor's 500 index and a peer group consisting of the
following ten companies: Atwood Oceanics, Inc., Baker Hughes Incorporated,
ENSCO International Incorporated, Global Marine Inc., Noble Drilling
Corporation, Parker Drilling Company, Pride International, Inc., Rowan
Companies, Inc., Tuboscope Inc. and Weatherford Enterra, Inc. Peer Group
returns have been weighted according to market capitalization.
*Total Return Assumes Reinvestment of Dividends
**Fiscal Year Ending December 31
17
<PAGE> 21
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information concerning the
number of shares of Common Stock owned beneficially, as of December 31, 1997,
by each person known to the Company to own more than five percent of the
outstanding shares of Common Stock, and as of March 3, 1998, by (i) each
director of the Company, (ii) each executive officer listed in the Summary
Compensation Table, and (iii) all directors and executive officers of the
Company as a group. No shares of any other class of equity securities are
outstanding.
<TABLE>
<CAPTION>
Beneficial Ownership
------------------------------
Percent
Name of Beneficial Owner Shares of Total
- ----------------------------------------------------------------------- ---------------- --------
<S> <C> <C>
Pilgrim Baxter & Associates, Ltd. ..................................... 1,851,300(1)(2) 9.5%
J. T. Jongebloed ...................................................... 175,359(3)(4) *
William H. Mobley ..................................................... 24,200(3)(5) *
Joseph R. Musolino .................................................... 13,000(3)(6) *
James L. Payne ........................................................ 12,000(3)(7) *
Donald D. Sykora ...................................................... 11,000(3)(7) *
G. G. Arms ............................................................ 45,447(3)(8) *
R. G. Hale ............................................................ 16,521(3)(9) *
W. J Myers ............................................................ 29,815(3)(10) *
E. J. Spillard ........................................................ 96,761(3)(11) *
All directors and executive officers as a group (10 persons) .......... 434,853(3)(12) 2.2%
</TABLE>
- ----------------------------
*Less than 1%
(1) Pilgrim Baxter & Associates, Ltd. is a registered investment adviser
located at 825 Dupertail Road, Wayne, PA 19087. Sole power to dispose
and vote - 1,851,300 shares; shared power to vote - 1,651,000 shares.
(2) Based upon the most recent amended Schedule 13G delivered to the Company
by such person.
(3) Sole voting and dispositive power when acquired.
(4) Includes 160,972 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become exercisable
within 60 days after March 3, 1998.
(5) Includes 21,000 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within
60 days after March 3, 1998.
(6) Includes 10,000 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within
60 days after March 3, 1998.
(7) Includes 8,000 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within
60 days after March 3, 1998.
(8) Includes 43,803 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within
60 days after March 3, 1998.
(9) Includes 14,734 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within
60 days after March 3, 1998.
18
<PAGE> 22
(10) Includes 19,937 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within 60
days after March 3, 1998.
(11) Includes 87,957 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within 60
days after March 3, 1998.
(12) Includes 382,570 shares which may be acquired through the exercise of stock
options that are currently exercisable or will become exercisable within 60
days after March 3, 1998.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than 10 percent of a
registered class of the Company's equity securities (collectively, the
"Reporting Persons"), to file with the Securities and Exchange Commission
initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock and other equity securities of the Company. To the
Company's best knowledge, all of the reports required to be filed by the
Reporting Persons under Section 16(a) during or in respect of the year 1997
were filed on a timely basis.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit/Finance Committee of the Board of Directors has appointed
Deloitte & Touche LLP as independent certified public accountants to audit and
express an opinion on the Company's financial statements for the year ending
December 31, 1998. Deloitte & Touche LLP has served as the Company's
independent auditors since 1988. Ratification of the appointment of Deloitte &
Touche LLP requires the affirmative vote of the holders of a majority of the
shares present or represented by proxy and entitled to vote at the Annual
Meeting.
A representative of Deloitte & Touche LLP will attend the Annual
Meeting and will have the opportunity to make a statement if he desires to do
so and to respond to appropriate questions.
In the event the shareholders fail to ratify the appointment of
Deloitte & Touche LLP as the Company's independent auditors, it is not
anticipated that Deloitte & Touche LLP would be replaced in 1998. A
non-ratification would, however, be considered by the Audit/Finance Committee
in selecting the Company's independent auditors for 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
3. OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Company knows of no matters other than those stated above which
are to be brought before the Annual Meeting. However, if any other matters do
properly come before the Annual Meeting, the enclosed form of proxy authorizes
the named persons to vote all of the shares of Common Stock represented by such
proxy in accordance with their best judgment with respect to any such matter.
19
<PAGE> 23
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
A shareholder intending to present a proposal at the 1999 Annual
Meeting of Shareholders, scheduled to be held on May 6, 1999, and who desires
that such proposal be considered for inclusion in the Company's Proxy Statement
and form of proxy relating to the meeting, must deliver such proposal, along
with any supporting statement, in writing, to the Corporate Secretary at the
Company's principal offices no later than December 1, 1998.
A copy of the Annual Report for 1997 is being mailed to shareholders
with this Proxy Statement. The Annual Report is not to be regarded as proxy
soliciting material.
Whether or not you intend to attend the Annual Meeting, you are urged
to execute and return promptly the enclosed form of proxy. If you attend the
meeting and wish to vote your stock in person, you may do so.
By Order of the Board of Directors,
Geoffrey Arms
Corporate Secretary
DATED: April 2, 1998
20
<PAGE> 24
DETACH HERE
PROXY
POOL ENERGY SERVICES CO.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 7, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J.T. Jongebloed and James L. Payne, and
each of them, attorneys and agents, with full power of substitution, to vote as
proxies all the shares of Common Stock of Pool Energy Services Co. standing in
the name of the undersigned at the Annual Meeting of Shareholders to be held at
10375 Richmond Avenue, 1st Floor, Houston, Texas at 10:00 a.m., Houston time,
on the reverse side, and with discretionary authority with respect to such
other matters, not known or determined at the time of the solicitation of this
proxy, as may properly come before said meeting or any adjournment thereof.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE> 25
DETACH HERE
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
RECEIPT OF THE NOTICE OF MEETING AND PROXY STATEMENT IS HEREBY
ACKNOWLEDGED.
THE UNDERSIGNED HEREBY REVOKES ANY PROXIES HERETOFORE GIVEN AND
DIRECTS SAID ATTORNEYS TO ACT OR VOTE AS FOLLOWS:
1. ELECTION OF DIRECTORS
NOMINEES: William H. Mobley, Joseph R. Musolino
FOR [ ] WITHHELD [ ]
MARK HERE IF YOUR PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
[ ]
--------------------------------------
For all nominees except as noted above
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR THE YEAR 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS HEREON. IN THE
ABSENCE OF SUCH SPECIFICATION, THIS PROXY WILL BE VOTED IN FAVOR OF EACH
NOMINEE FOR DIRECTOR AND "FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF
DELOITTE & TOUCHE LLP.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on
this card. When signing as an attorney, trustee, executor, administrator,
guardian or corporate officer, please give your FULL TITLE.
Signature: Date:
-------------------------------------------- ---------------
Signature: Date:
-------------------------------------------- ---------------
