<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
POOL ENERGY SERVICES CO.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
<PAGE> 2
April 6, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of Pool
Energy Services Co. to be held on Thursday, May 6, 1999 at 10375 Richmond
Avenue, Houston, Texas, commencing at 10:00 a.m.
As you are probably well aware, the Company has recently signed a merger
agreement with Nabors Industries, Inc. We anticipate this transaction will be
consummated near the end of the second quarter of 1999, although the timing is
subject to certain conditions set forth in the merger agreement. While the
merger is pending, it is appropriate for the Company to continue conducting its
affairs in a normal manner, including holding its Annual Meeting in accordance
with the Bylaws.
At this meeting 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.
Sincerely,
/s/ J. T. JONGEBLOED
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 6, 1999
TO THE SHAREHOLDERS OF
POOL ENERGY SERVICES CO.: APRIL 6, 1999
The Annual Meeting of the Shareholders of Pool Energy Services Co.
(the "Company") will be held at 10375 Richmond Avenue, Houston, Texas, on May
6, 1999, at 10:00 a.m., for the following purposes:
1. To elect two Class II directors.
2. To ratify the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the year 1999.
3. To transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on March 22, 1999 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,
/s/ Geoffrey Arms
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 6, 1999
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, Houston, Texas, on the 6th day of May, 1999, 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 6, 1999.
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
also shall 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 (1) FOR the election as directors of the two nominees named below, and
(2) FOR ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for 1999. 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 21,205,054 shares of Common Stock outstanding on March 22, 1999 (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 (a
"broker non-vote") are not counted as shares entitled to vote on such matter.
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 six 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 II directors are to be elected at the Annual Meeting, to
serve for terms expiring in the year 2002. 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
DIRECTORS
The following table sets forth the name, age, and principal occupation
or employment during the past five years of each director of the Company, 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 II DIRECTOR NOMINEES Since
- -------------------------- -----
<S> <C>
DENNIS R. HENDRIX, 59. Mr. Hendrix has been a director of the Company 1998
since September 1998. Mr. Hendrix served as Chief Executive Officer of
PanEnergy Corp. from 1990 to 1995 and served as its Chairman from 1990 until
1997, when the company was merged with Duke Power to form Duke Energy
Corporation. Mr. Hendrix serves as a director of Allied Waste Industries,
Inc., Duke Energy Corporation, Newfield Exploration Company, Chase Bank of
Texas and National Power, P.L.C.
JOHN F. LAULETTA, 54. Mr. Lauletta has been a director of the 1998
Company since August 1998 and currently serves as a member of the
Compensation Committee. Mr. Lauletta has served as President and
Chief Executive Officer of Tuboscope, Inc. since 1996. Prior to that
time, Mr. Lauletta served as President and Chief Executive Officer
of Drexel Oil Field Services, Inc.
CLASS I CONTINUING DIRECTORS [Terms Expiring in 2001]
WILLIAM H. MOBLEY, 57. 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, 62. Mr. Musolino is Vice Chairman-Texas 1994
of NationsBank, N.A. and has served in such capacity for more than
the last five years. He also serves as a director of Justin Industries,
Inc.
</TABLE>
-3-
<PAGE> 7
<TABLE>
<S> <C>
CLASS III CONTINUING DIRECTORS [Terms Expiring in 2000]
JAMES T. JONGEBLOED, 57. 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, 62. 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>
BOARD COMMITTEES
The Board of Directors has established the following standing
committees:
Committee Current Members
--------- ---------------
Audit/Finance Messrs. Musolino (Chairman) and Mobley
Compensation Messrs. Payne (Chairman) and Lauletta
Directors' Nominating Messrs. Payne (Chairman) and Jongebloed
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 12 times during the year ended December
31, 1998, and the Audit/Finance, Directors' Nominating and Compensation
committees met four, 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, pursuant to the
Company's 1996 Directors' Stock Incentive Plan (the "1996 Plan"), 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. The restriction is deemed satisfied in the
event of a change in control of the Company. The proposed merger of the Company
with a subsidiary of Nabors Industries, Inc. (the "Nabors Merger") would
constitute a change in control as contemplated by the 1996 Plan. 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.
Also, under the Company's 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. Options granted under the 1996 Plan become fully
vested upon the occurrence of a change in control of the Company. 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.
Directors of the Company who were in office prior to May 1996 may
also hold options previously granted pursuant to the 1991 Directors' Stock
Option Plan which has terms and conditions similar to those of the 1996 Plan.
-5-
<PAGE> 9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee (i) was, during 1998, an
officer or employee of the Company or any of its subsidiaries, (ii) was
formerly an officer of the Company or any of its subsidiaries, or (iii) had any
relationships required to be disclosed by the Company under the rules of the
Securities and Exchange Commission.
INDEMNITY ARRANGEMENTS
The Company's Bylaws obligate the Company to indemnify any person who
is or was a director, officer, employee or agent of the Company to the fullest
extent that a corporation may or is required to grant indemnification to a
director under the Texas Business Corporations Act. The Company's Articles of
Incorporation, as amended, further provide that a director of the Company shall
not be liable to the Company or its shareholders for monetary damages for any
act or omission in such director's capacity as a director of the Company, in
each case to the fullest extent permitted by Texas law.
In October 1998, the Company entered into indemnity agreements
pursuant to which the Company will indemnify directors against liabilities
arising from their serving as directors and will advance the expenses of
defending against such liabilities. Such agreements, which were designed to
implement the indemnification provisions of Texas law to the maximum
practicable extent, set forth, among other things, the standards of conduct
required for a director to receive indemnification, the methods of securing
approval for indemnity payments and the procedural requirements necessary to
secure the advancement of expenses.
COMPENSATION COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION
This report of the Compensation Committee (the "Committee") sets forth the
Company's policy with respect to executive officer compensation and describes
the basis for 1998 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.
-6-
<PAGE> 10
- 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, in addition to using survey data, 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.
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 1998, 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 1998 could be paid in Company stock, and the Committee
directed that 44 percent of the 1998 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). Amounts paid in stock were, in accordance with the terms of the plan,
increased by 15 percent.
LONG TERM INCENTIVE COMPENSATION - Executive officers also participate
in a long term incentive compensation program. For 1998, award opportunities
were established for each executive officer under which awards will be made
based on performance over a three-year
- --------
(1)EBITD is earnings before interest, income taxes,
depreciation/amortization and minority interest.
-7-
<PAGE> 11
period ending December 31, 2000. The awards, if earned, are to be paid solely
in restricted stock (50 percent restricted for one year and 50 percent
restricted for two years of continuing service after the end of the plan
period, except for earlier retirement, death, disability or change in control),
provided, however, that to the extent sufficient shares are not available for
such purpose under the Company's Stock Incentive Plan, award payouts will be
made in cash. Entitlement to receive awards is based 50 percent on EBITD
performance and 50 percent on total return to shareholders compared to that of
a peer group of companies over the three-year period. Target awards are based
on a percentage of each recipient's annual salary in effect at the beginning of
the performance period, and the number of shares to be received is based on the
average price of the Company's Common Stock during a specified period just prior
to 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. For 1999, a similar plan has been adopted under which awards will be
made based on performance over a three-year period ending December 31, 2001.
Target awards under the 1999 plan are based 25 percent on EBITD performance, 25
percent on total return to shareholders as compared to a peer group of
companies, 25 percent on Common Stock performance compared to the Standard &
Poor's 500 Index, and 25 percent on price appreciation of the Common Stock.
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). All options granted under
the Stock Incentive Plan vest and become fully exercisable, and restrictions on
Restricted Stock issued pursuant to the Stock Incentive Plan will be deemed
satisfied, in the event of a change in control of the Company.
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
-8-
<PAGE> 12
Stock Plan is administered by the Committee, and the Committee determines
eligibility and grants all awards thereunder.
No awards of Stock Appreciation Rights or Phantom Stock have yet been made
under the SAR/ Phantom Stock Plan.
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.
1998 Compensation
The base salary level approved by the Committee in 1998 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 4.3
percent increase over his previous base salary which had been in effect for the
previous 14 months. Mr. Jongebloed's bonus compensation for 1998 was calculated
and paid pursuant to the Company's 1998 Senior Executive Bonus Plan and was
based on the Company's attaining or exceeding goals based on (i) EBITD
performance compared to budget and (ii) return to shareholders compared to that
of a peer group of companies. The bonus earned was approximately 41 percent of
the maximum bonus attainable under the Plan.
The Committee approved base salary levels in 1998 for other executive officers
based on recommendations by the Chief Executive Officer and Hay's
recommendations. Bonuses for 1998 were paid to executive officers pursuant to
the terms of the Company's 1998 Senior Executive Bonus Plan and were determined
on the basis of the Company's financial and safety performance for the year.
Each of the executive officers received a bonus based on the Company's
attaining or exceeding the EBITD and return to shareholders goals mentioned
above, and some also received amounts for attaining or exceeding operating unit
net income and safety goals. These bonuses were on average approximately 51
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 1998, 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.
-9-
<PAGE> 13
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 believes that all compensation paid to its executive officers
during 1998 will qualify for deductibility because no executive's compensation
is expected to exceed the dollar limitations of such provision.
COMPENSATION COMMITTEE
J. L. Payne, Chairman
J. F. Lauletta
-10-
<PAGE> 14
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 1998 for services rendered in all capacities to the Company for the years
ended December 31, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
LONGTERM COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------- ---------------------
SHARES
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK STOCK ALL OTHER
SALARY BONUS(1) COMPENSATION(3) AWARDS OPTIONS COMPENSATION(1)(2)(4)
NAME AND PRINCIPAL POSITION YEAR YEAR ($) ($) ($) ($) (#) ($)
- -------------------------------- ---- ------ -------- -------------- ------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. T. Jongebloed 1998 466,077 226,550 - -0- 150,000 15,202
Chairman, President and 1997 437,461 336,000 - -0- 50,000 12,850
Chief Executive Officer 1996 404,423 303,615 - -0- 60,779 250
W. J Myers 1998 264,462 120,484 - -0- 16,000 8,202
Group Vice President- 1997 248,723 116,640 - 190,875 19,000 4,624
U.S. Operations 1996 238,846 123,117 - -0- 24,416 250
E. J. Spillard 1998 217,736 79,214 - -0- 49,000 5,478
Senior Vice President, 1997 207,154 120,000 - -0- 16,000 4,750
Finance 1996 195,068 111,234 - -0- 19,792 250
R. G. Hale 1998 202,431 126,788 - -0- 38,000 8,618
Group Vice President- 1997 194,769 114,000 - -0- 15,000 4,525
International Operations 1996 185,846 105,608 - -0- 18,909 250
G. G. Arms 1998 158,342 44,417 - -0- 23,000 3,181
Vice President and 1997 150,291 73,000 - -0- 9,000 2,988
General Counsel; 1996 140,808 66,178 - -0- 10,597 250
Corporate Secretary
</TABLE>
- ----------------
(1) Of the bonus for 1997, 75 percent was paid in cash and the remainder in
restricted shares of Common 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 was $12,600, $4,374, $4,500, $4,275 and $2,738 for Messrs.
Jongebloed, Myers, Spillard, Hale and Arms, respectively, and is included
in the amount shown in the "All Other Compensation" column.
(2) Of the bonus for 1998, 56 percent was paid in cash and the remainder in
restricted shares of Common Stock, the number of which was determined by
dividing 44 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 was $14,952, $7,952, $5,228, $8,368 and $2,931 for Messrs.
Jongebloed, Myers, Spillard, Hale and Arms, respectively, and is included
in the amount shown in the "All Other Compensation" column.
(3) Perquisites and other personal benefits paid in each year to each of the
named executive officers did not exceed the lesser of $50,000 or 10
percent of such individual's total salary and bonus.
(4) Includes the amount contributed by the Company to each individual's 401(k)
Plan account in such year, as well as, for 1997 and 1998, the amounts
described in notes (1) and (2).
-11-
<PAGE> 15
OPTION EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
The following table sets forth information with respect to stock option
exercises during 1998, and unexercised stock options held, as of the end of
1998, by the persons named in the Summary Compensation Table:
<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES ACQUIRED VALUE AT 12-31-98 AT 12-31-98
ON EXERCISE REALIZED (#) ($)
------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- --------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. T. Jongebloed -0- -0- 166,722 223,947 330,331 63,562
W. J Myers -0- -0- 22,437 45,875 26,625 27,934
E. J. Spillard -0- -0- 90,457 74,563 168,443 25,189
R. G. Hale -0- -0- 12,504 62,455 16,412 24,665
G. G. Arms -0- -0- 45,803 38,049 80,668 16,371
</TABLE>
OPTION GRANT TABLE
OPTION GRANTS IN 1998
The following table sets forth information with respect to stock options
granted during 1998 to the persons named in the Summary Compensation Table:*
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
NUMBER OF OPTIONS APPRECIATION FOR OPTION
SHARES UNDERLYING GRANTED TO EXERCISE TERM (5)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED (1)(2)(3) 1998 ($/SH)(4) DATE 5% 10%
- ---------------- ------------------- ------------ --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
J. T. Jongebloed 40,000 7.04% 18.34375 2/17/08 $461,451 $1,169,408
110,000 19.35% 12.50 7/9/08 864,600 2,191,200
W. J Myers 16,000 2.81% 18.34375 2/17/08 184,580 467,763
E. J. Spillard 14,000 2.46% 18.34375 2/17/08 161,508 409,293
35,000 6.16% 12.50 7/9/08 275,100 697,200
R. G. Hale 13,000 2.29% 18.34375 2/17/08 149,972 380,058
25,000 4.40% 12.50 7/9/08 196,500 498,000
G. G. Arms 8,000 1.41% 18.34375 2/17/08 92,290 233,882
15,000 2.64% 12.50 7/9/08 117,900 298,800
TOTAL 276,000 48.55% $2,503,901 $6,345,604
All Shareholders(6) N/A N/A N/A N/A $205,388,444 $517,259,013
Named Executives' Gain as
% of all Shareholders' Gain N/A N/A N/A N/A 1.22% 1.23%
</TABLE>
- ---------
(1) All options granted in February 1998 become exercisable in three equal
annual increments on February 17, 1999, 2000 and 2001, and options
granted in July 1998 become exercisable in four equal annual
increments on July 9, 1999, 2000, 2001, and 2002. Vesting is
accelerated, however, in the event of a change in control of the
Company.
(2) The Compensation Committee and/or the Board of Directors retains
discretion, subject to plan limits, to modify the terms of outstanding
options.
-12-
<PAGE> 16
(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 at December 31, 1998 were
purchased at a price of $15.42 per share, which is the unweighted
average exercise price of the 1998 option grants.
*See also "Change in Control Agreements" below for a discussion of the effect
of a change in control on options or restricted stock granted under the
Company's Stock Incentive Plans.
LONG-TERM INCENTIVE PLANS
LONG-TERM INCENTIVE PLANS
1998 PLAN AWARDS. The following table sets forth information with
respect to the potential awards of Common Stock under the Company's 1998
Long-Term Incentive Plan ("1998 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, 1998 and ending December 31, 2000.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYMENT
---------------------------------------
NUMBER OF PERFORMANCE THRESHOLD TARGET MAXIMUM
NAME SHARES PERIOD (#) (#) (#)
--------------- ---------- ------------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
J. T. Jongebloed 11,389 3 years 2,847 11,389 17,084
W. J Myers* 4,209 3 years 1,052 4,209 6,313
E. J. Spillard 3,549 3 years 887 3,549 5,323
R. G. Hale 3,301 3 years 825 3,301 4,952
G. G. Arms 1,599 3 years 400 1,599 2,398
</TABLE>
*Mr. Myers retired from the Company in January 1999 and is not a
participant in the 1999 Plan.
1999 PLAN AWARDS. The following table sets forth information with
respect to the potential awards of Common Stock under the Company's 1999
Long-Term Incentive Plan ("1999 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, 1999 and ending December 31, 2001.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYMENT
--------------------------------------
NUMBER OF PERFORMANCE THRESHOLD TARGET MAXIMUM
NAME SHARES PERIOD (#) (#) (#)
--------------- ---------- ------------ ---------- -------- ----------
<S> <C> <C> <C> <C> <C>
J. T. Jongebloed 26,182 3 years 9,818 26,182 39,273
E. J. Spillard 8,145 3 years 3,055 8,145 12,218
R. G. Hale 7,564 3 years 2,836 7,564 11,345
G. G. Arms 3,773 3 years 1,415 3,773 5,659
</TABLE>
-13-
<PAGE> 17
OTHER TERMS. Under the 1998 Plan and the 1999 Plan (collectively, the
"Long-Term Plans"), a target award of shares is 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 each
of the Long-Term Plans will depend on the extent to which the established
performance criteria are satisfied. Target awards under the 1998 Plan are based
50 percent on EBITD performance and 50 percent on total return to shareholders
as compared to a peer group of companies. Target awards under the 1999 Plan are
based 25 percent on EBITD performance, 25 percent on total return to
shareholders as compared to a peer group of companies, 25 percent on Common
Stock performance compared to the Standard & Poor's 500 Index, and 25 percent
on price appreciation of the Common Stock.
All awards under the Long-Term Plans 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 Long-Term Plans 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 25 percent of the target payouts under the 1998 Plan and 37.5
percent of the target payouts under the 1999 Plan. Maximum payouts under each
of the Long-Term Plans 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 payouts. Maximum payments are made if performance
exceeds by a specified amount that which is necessary to earn the target
payouts. See also "Change in Control Agreements" below for a discussion of the
effect of a change in control on payouts under the Long-Term Plans.
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 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
-14-
<PAGE> 18
annuity, the Plan permits other forms of benefit payment. At December 31, 1998,
credited service under the plan for Messrs. Jongebloed, Myers, Spillard, Hale
and Arms was 8.67 years each, and the highest average annual compensation
recognized by the Plan for each of them was $154,000, $154,000, $154,000,
$154,000, and $139,400, respectively. Effective December 31, 1998, further
accruals under the Plan were discontinued concurrent with the institution of
the Company's enhanced Savings Plan.
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 1998 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.............................. $17,844 $23,792 $29,740 $35,688 $41,636
125,000.............................. 23,844 31,792 39,740 47,688 55,636
150,000.............................. 29,844 39,792 49,740 59,688 69,636
175,000.............................. 32,244 42,992 53,740 64,488 75,236
200,000.............................. 32,244 42,992 53,740 64,488 75,236
225,000.............................. 32,244 42,992 53,740 64,488 75,236
250,000.............................. 32,244 42,992 53,740 64,488 75,236
300,000.............................. 32,244 42,992 53,740 64,488 75,236
400,000.............................. 32,244 42,992 53,740 64,488 75,236
500,000.............................. 32,244 42,992 53,740 64,488 75,236
</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 $130,000
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.
SAVINGS PLAN. The Company's 401(k) Savings Plan was enhanced
significantly, effective January 1, 1999. Beginning as of that date, employees
may contribute up to 20 percent of their annual compensation to the Savings
Plan on a tax-deferred basis, and the Company will match 100 percent of the
first 3 percent, and 50 percent of the next 2 percent, of compensation
contributed by each employee. The Company will contribute an additional 3.5
percent of compensation for certain employees of its Alaska operation. All
Company contributions to the Savings Plan will be made in shares of Common
Stock. In addition to Common Stock, participants may direct the investment of
their savings into one or more of five funds with varying degrees of investment
risk and opportunity. As of January 1, 1999, participants were 100 percent
vested in the Company's contributions to the Savings Plan.
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 the Company, Pool
-15-
<PAGE> 19
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 2.5 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, 1998, credited service under these plans for
Messrs. Jongebloed, Myers, Spillard, Hale and Arms was 20.3, 10.9, 19.0, 27.1
and 23.2 years, respectively, and the highest average annual compensation
recognized by the plans for each of them was $632,969, $336,127, $276,597,
$274,883 and $192,137, 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 1999 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.............................. $19,656 $26,208 $30,260 $24,312 $18,364
125,000.............................. 23,031 30,708 35,260 27,312 19,364
150,000.............................. 26,406 35,208 40,260 30,312 20,364
175,000.............................. 33,381 44,508 51,260 40,512 30,788
200,000.............................. 42,756 57,008 66,260 55,512 48,288
225,000.............................. 52,131 69,508 81,260 70,512 65,788
250,000.............................. 61,506 82,008 96,260 85,512 83,288
300,000.............................. 80,256 107,008 126,260 115,512 118,288
400,000.............................. 117,756 157,008 186,260 175,512 188,288
500,000.............................. 155,256 207,008 246,260 235,512 258,288
600,000.............................. 192,756 257,008 306,260 295,512 328,288
700,000.............................. 230,256 307,008 366,260 355,512 398,288
</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 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.
-16-
<PAGE> 20
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, Spillard, Hale and Arms
have entered into change in control agreements with the Company that set forth
certain benefits that the Company will provide to such officers in the event of
a "change in control" or a "potential change in control" of the Company, as
defined in the agreements. Such agreements continue in effect until terminated
by the Company upon specified notice and continue for three years following a
change in control of the Company and for the duration of any potential change
in control. The proposed Nabors Merger would constitute a "change in control"
as contemplated by the subject agreements. The agreements each provide that if
a change in control occurs, the officer shall be entitled to receive upon the
occurrence of the "change in control" an amount equal to the "target amount"
provided for in each of the Long-Term Plans that is then in effect in which the
officer participates. Such payment is to be made in shares of Common Stock to
the extent the Long-Term Plan provides for payment in stock and to the extent
shares are available for such purpose, and otherwise such amount is to be paid
in cash. The agreements also provide that all stock options of the officer will
become fully vested upon a change in control, and provide that if the officer's
employment is terminated by the Company 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, or if the officer's
employment is terminated while there exists a potential change in control and a
change in control thereafter occurs within a certain period of time, the
officer will be entitled to a lump sum severance payment. Such severance
payment is to be 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 three times the
bonus award for achieving the target performance goals provided for in the
Company's management bonus plan for the year preceding that in which the change
in control occurs, and (iii) at the officer's election, the value over the
exercise price of unexercised stock options. In addition, the officer shall 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.
The Company has similar agreements with 12 other key employees.
-17-
<PAGE> 21
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.94 DEC.95 DEC.96 DEC.97 DEC.98
- -------------------------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Pool Energy Services Co. 88.52 124.59 201.64 291.80 141.81
S&P 500 Index 101.32 139.40 171.40 228.59 293.91
Peer Group Index 89.52 141.84 253.79 340.52 124.54
</TABLE>
Assumes $100 invested on December 31, 1993 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
-18-
<PAGE> 22
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, 1998,
by each person known to the Company to own more than 5 percent of the
outstanding shares of Common Stock, and as of February 1, 1999, 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>
Nabors Industries, Inc. ................................................... 2,209,500 (1) 10.5%
Alton Anthony Gonsoulin, Jr................................................ 2,000,000 (2) 9.5%
J. T. Jongebloed........................................................... 240,541 (3)(4) 1.1%
Dennis R. Hendrix.......................................................... 10,000 (3) *
John F. Lauletta........................................................... -0- *
William H. Mobley.......................................................... 20,200 (3)(5) *
Joseph R. Musolino......................................................... 14,000 (3)(6) *
James L. Payne............................................................. 13,000 (3)(7) *
R. G. Hale................................................................. 41,181 (3)(8) *
W. J Myers................................................................. 84,919 (3)(9) *
E. J. Spillard ............................................................ 118,973 (3)(10) *
G. G. Arms................................................................. 63,541 (3)(11) *
All directors and executive officers as a group (11 persons)............... 626,576 (3)(12) 2.9%
</TABLE>
- ---------
*Less than 1%
(1) Based upon an amended Schedule 13D filed on November 20, 1998; powers
to dispose and vote are shared with a wholly owned subsidiary.
(2) Based upon an amended Schedule 13D filed on September 18, 1998;
769,231 of such shares are held in escrow to fund indemnity
obligations to the Company through March 31, 2000; the escrowed
shares must be voted as directed by the Company through March 31,
2000, unless sooner converted into cash in accordance with the terms
of the escrow agreement.
(3) Sole voting and dispositive power when acquired.
(4) Includes 195,250 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(5) Includes 16,000 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(6) Includes 14,000 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(7) Includes 13,000 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(8) Includes 21,564 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
-19-
<PAGE> 23
(9) Includes 68,312 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(10) Includes 100,071 shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(11) Includes 51,118 shares which may be acquired through the exercise of
stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
(12) Includes 484,400 shares which may be acquired through the exercise
of stock options that are currently exercisable or will become
exercisable within 60 days after February 1, 1999.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1998
were filed on a timely basis, except that one report filed on behalf of W. H.
Mobley with respect to a 5,000 share sale in March 1998 was filed after the due
date.
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, 1999. 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 1999. A
non-ratification would, however, be considered by the Audit/Finance Committee
in selecting the Company's independent auditors for 2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
-20-
<PAGE> 24
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.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Although it is expected that the proposed Nabors Merger will have
occurred, if there is an Annual Meeting of Shareholders of the Company in 2000
it would be held on May 4, 2000. A shareholder intending to present a proposal
at such Annual Meeting would be required to deliver such proposal, along with
any supporting statement, in writing, to the Corporate Secretary at the
Company's principal offices no later than December 4, 1999 in order for such
proposal to be considered for inclusion in the Company's Proxy Statement and
form of proxy relating to the meeting. If such proposal is received by the
Company 45 days or less prior to the anniversary of the mailing date of this
Proxy Statement, the persons named as proxy in the Company's 2000 proxy
materials will have the discretionary authority to vote on the proposal in
accordance with their best judgment without disclosure in the Proxy Statement
of how they intend to vote on the proposal.
A copy of the Company's Annual Report for the year ended December 31,
1998 as filed with the Securities and Exchange Commission 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,
/s/ Geoffrey Arms
Geoffrey Arms
Corporate Secretary
DATED: April 6, 1999
-21-
<PAGE> 25
DETACH HERE
PROXY
POOL ENERGY SERVICES CO.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 6, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J.T. Jongebloed, J.R. Musolino and J.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, Houston, Texas at 10:00 a.m., Houston
time, on Thursday, May 6, 1999, and at any adjournment thereof, in accordance
with the instructions noted 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> 26
DETACH HERE
- --- PLEASE MARK ____
X 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: Dennis R. Hendrix, John F. Lauletta
FOR WITHHELD
[ ] [ ]
[ ]
----------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. PROPOSAL TO RATIFY THE
APPOINTMENT OF DELOITTE & [ ] [ ] [ ]
TOUCHE LLP AS INDEPENDENT
AUDITORS FOR THE YEAR 1999.
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 L.L.P.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
MARK HERE MARK HERE
FOR ADDRESS [ ] IF YOU PLAN TO [ ]
CHANGE AND ATTEND THE
NOTE AT LEFT MEETING
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:
------------------------------- ------------------
