<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
BJ SERVICES COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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:
- --------------------------------------------------------------------------------
<PAGE> 2
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1997
---------------------
The Annual Meeting of the Stockholders of BJ Services Company (the
"Company") will be held on Thursday, January 23, 1997, at 11:00 a.m. local time,
at The Houstonian Hotel and Conference Center located at 111 North Post Oak
Lane, Houston, Texas, for the following purposes:
1. To elect three Class I directors to serve a three-year term;
2. To transact such other business as may properly come before the
meeting and any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
All stockholders of record at the close of business on December 12, 1996
are entitled to notice of and to vote at said meeting or any adjournment
thereof. At least a majority of the outstanding shares of the Company are
required to be present at the meeting or represented by proxy to constitute a
quorum.
By order of the Board of Directors,
/s/ J.W. STEWART
J. W. Stewart
Chairman of the Board, President
and Chief Executive Officer
Houston, Texas
December 20, 1996
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN YOUR
PROXY AS PROMPTLY AS POSSIBLE. AN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.
<PAGE> 3
BJ SERVICES COMPANY
PROXY STATEMENT
This proxy statement is furnished to stockholders of BJ Services Company, a
Delaware corporation (the "Company"), in connection with the solicitation of
proxies on behalf of the Board of Directors of the Company to be voted at the
Annual Meeting of Stockholders of the Company to be held at The Houstonian Hotel
and Conference Center located at 111 North Post Oak Lane, Houston, Texas, on
Thursday, January 23, 1997, at 11:00 a.m. local time, and at any and all
adjournments thereof. Stockholders of record at the close of business on
December 12, 1996 will be entitled to notice of and to vote at such meeting and
at all adjournments thereof.
When a properly executed proxy is received prior to the meeting, the shares
represented thereby will be voted at the meeting in accordance with the
directions noted thereon. If no specification is made, the shares will be voted
FOR the election of nominees listed herein as directors. A proxy may be revoked
at any time before it is exercised by submitting a written revocation or a later
dated proxy to the Secretary of the Company, or by attending the meeting in
person and so notifying the meeting judges.
Management does not intend to present any business for a vote at the
meeting, other than the election of directors, and it has no information others
will do so. If other matters requiring the vote of stockholders properly come
before the meeting, it is the intention of the persons named in the attached
proxy card to vote proxies held by them in accordance with their judgment on
such matters.
The complete mailing address of the Company's executive offices is 5500
Northwest Central Drive, Houston, Texas 77092. The approximate date on which
this proxy statement and the accompanying proxy card were first sent or given to
the stockholders of the Company is December 20, 1996.
VOTING SECURITIES
On December 12, 1996, the record date, there were outstanding and entitled
to vote 38,004,000 shares of the Company's Common Stock, held of record by 709
persons. Stockholders are entitled to one vote, exercisable in person or by
proxy, for each share of Common Stock held on the record date. Cumulative voting
is not permitted under the Company's Certificate of Incorporation or Bylaws.
At the record date, management knew of no person that beneficially owned
more than 5% of the outstanding voting securities of the Company, other than as
set forth in the following table:
<TABLE>
<CAPTION>
TITLE OF NUMBER PERCENT
CLASS NAME AND ADDRESS OF BENEFICIAL OWNERS OF SHARES OF CLASS
- ------------- ----------------------------------------------------- --------- --------
<S> <C> <C> <C>
Common Stock FMR Corp. 4,873,780(a) 12.8%
82 Devonshire Street
Boston, Massachusetts 02109
Common Stock Equitable Companies (Alliance) 3,030,487(b) 8.0%
1345 Avenue of the Americas
New York, New York 10105
Common T. Rowe Price Associates, Inc. 2,180,700(c) 5.7%
Stock...... 100 East Pratt Street, 9th Floor
Baltimore, Maryland 21202
</TABLE>
- ---------------
(a) At November 30, 1996, based on information provided by FMR Corp. ("FMR"),
FMR, through its wholly owned subsidiary Fidelity Investments, was the
beneficial owner of 4,873,780 shares of Common Stock, including 4,002,063
shares beneficially owned by Fidelity Management & Research Company, 808,617
shares beneficially owned by Fidelity Management Trust Company, and 63,100
shares beneficially owned by Fidelity International Limited. Of those
shares, FMR had sole voting power with respect to 335,697 shares and sole
dispositive power with respect to 4,810,680 shares. Fidelity International
had sole voting and dispositive power with respect to all the shares it
beneficially owned.
<PAGE> 4
(b) At September 30, 1996, based on information provided by Equitable Companies
(Alliance) ("Equitable"), Equitable held 3,030,487 shares of the Company's
Common Stock.
(c) At November 1, 1996, based on information provided by T. Rowe Price
Associates, Inc. ("Price"), Price was the beneficial owner of 2,180,700
shares of the Company's Common Stock. Of those shares, Price had sole
dispositive power with respect to the entire holding of 2,180,700 shares and
sole voting power with respect to 273,900 shares.
ELECTION OF DIRECTORS
The Company's Bylaws provide for the Board of Directors to serve in three
classes having staggered terms of three years each. Three Class I directors will
be elected at the 1997 Annual Meeting of Stockholders to serve for a three-year
term expiring at the Annual Meeting of Stockholders in the year 2000. Pursuant
to the Company's Bylaws, in case of a vacancy on the Board of Directors, a
majority of the remaining directors of the class in which the vacancy occurs
will be empowered to elect a successor, and the person so elected will hold
office for the remainder of the full term of the director whose death,
retirement, resignation, disqualification or other cause created the vacancy,
and thereafter until the election of a successor director.
The persons whose names are set forth as proxies in the enclosed proxy card
will vote all shares over which they have control "FOR" the election of the
nominees named below unless otherwise directed. Although the Board of Directors
of the Company does not anticipate that any of the nominees will be unable to
serve, if such a situation should arise prior to the meeting, the appointed
proxies will use their discretionary authority pursuant to the proxy and vote in
accordance with their best judgment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES NAMED
BELOW. THE AFFIRMATIVE VOTE OF HOLDERS OF A MAJORITY OF THE COMMON STOCK PRESENT
OR REPRESENTED BY PROXY AT THE MEETING AND ENTITLED TO VOTE IS REQUIRED TO ELECT
EACH DIRECTOR NOMINEE.
The following table sets forth, for each nominee for election as a Class I
director, his name, his principal occupation, his age and the year in which he
first became a director of the Company. The nominees have consented to be named
in this proxy statement and to serve as directors, if elected.
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
- ------------------------- ------------------------------------------------- --- --------
<S> <C> <C> <C>
John R. Huff............. Chairman, President and Chief Executive Officer 50 1992
of Oceaneering International, Inc., an oilfield
services corporation ("Oceaneering"). Mr. Huff
has been President, Chief Executive Officer and a
director of Oceaneering since 1986 and Chairman
of the Board since 1990. Mr. Huff is also a
director of Production Operators Corp. and Triton
Energy.
R. A. LeBlanc............ Mr. LeBlanc served in various executive positions 66 1994
with Keystone International, Inc., a manufacturer
of flow control products, including Chairman of
the Board, Chief Executive Officer and a
director, from 1959 until his retirement in 1995.
Mr. LeBlanc currently serves as an advisory
member of the board of directors of Texas
Commerce Bank National Association.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
- ------------------------- ------------------------------------------------- --- --------
<S> <C> <C> <C>
Michael E. Patrick....... Chief Investment Officer of The Meadows 52 1995
Foundation since December 1, 1995; consultant
from 1994 to 1995; President of Lomas Information
Systems, Inc., a subsidiary of Lomas Financial
Corporation, from 1993 to 1994; Executive Vice
President, Chief Financial Officer and a director
of Lomas Financial Corporation and President and
Chief Operating Officer of its Lomas Mortgage USA
subsidiary, both of which are engaged in mortgage
banking, real estate and information services,
from 1992 until 1994; Executive Vice Chancellor
for Asset Management of the University of Texas
System, where he was responsible for the
investment of all endowment funds, from 1984 to
1991; Mr. Patrick is also currently a director of
Cooper Cameron Corporation.
</TABLE>
INFORMATION CONCERNING OTHER DIRECTORS
The following table sets forth certain information for those directors
whose present terms will continue after the 1997 Annual Meeting. The terms of
the Class II and Class III directors will expire at the 1998 and 1999 Annual
Meetings of Stockholders, respectively.
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE CLASS
- -------------------------- --------------------------------------------- --- -------- -----
<S> <C> <C> <C> <C>
Don D. Jordan............. Chairman, Chief Executive Officer and a 64 1990 II
director of Houston Industries Incorporated,
a public utility holding company with
interests in the electric utilities, coal and
transportation businesses. Mr. Jordan has
been employed by various subsidiaries of
Houston Industries Incorporated since 1956.
He currently serves as a director of Texas
Commerce Bancshares, UTECH Joint Venture and
AEGIS Insurance Services.
Michael McShane........... Vice President -- Finance and Chief Financial 42 1990 II
Officer of the Company. Mr. McShane joined
the Company in 1987 from Reed Tool Company,
an oil field tool company, where he was
employed for seven years. At Reed Tool
Company, he held various financial management
positions including Corporate Controller and
Regional Controller of Far East Operations.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE CLASS
- -------------------------- --------------------------------------------- --- -------- -----
<S> <C> <C> <C> <C>
L. William Heiligbrodt.... President, Chief Operating Officer and a 55 1992 III
director of Service Corporation
International, a funeral services corporation
("SCI"). He has served in various management
positions with SCI since February 1990. Prior
to joining SCI, Mr. Heiligbrodt served as
President of Provident Services, Inc. from
March 1988 to February 1990. Prior to that,
he served for five years as Vice Chairman and
Chief Executive Officer of WEDGE Group,
Incorporated, a multi-industry holding
company.
James E. McCormick........ Mr. McCormick served in various executive 69 1990 III
positions with ORYX Energy Company, a
diversified energy company, including
President, Chief Operating Officer and a
director, from 1977 until his retirement in
1992. Mr. McCormick currently serves on the
board of directors of Lone Star Technology,
Snyder Oil Company and Texas Commerce Bank
National Association.
J. W. Stewart............. Chairman of the Board, President and Chief 52 1990 III
Executive Officer of the Company. Mr. Stewart
joined Hughes Tool Company in 1969 as Project
Engineer, served as Vice President-Legal and
Secretary of Hughes Tool Company and as Vice
President-Operations for a predecessor of the
Company prior to being named President of the
Company in 1986.
</TABLE>
The following table sets forth the beneficial ownership of Common Stock as
of November 1, 1996 by each current director and nominee, by each executive
officer named in the Summary Compensation Table and by all current directors and
officers as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NAME OR GROUP (1)(2)
------------- ---------
<S> <C>
L. William Heiligbrodt.................................................. 12,000
John R. Huff............................................................ 10,000
Don D. Jordan........................................................... 11,500
R. A. LeBlanc........................................................... 6,435
James E. McCormick...................................................... 12,000
Michael E. Patrick...................................................... 4,000
J. W. Stewart........................................................... 286,921
Michael McShane......................................................... 115,058
Kenneth A. Williams..................................................... 36,497
Thomas H. Koops......................................................... 74,941
Margaret B. Shannon..................................................... 22,701
All current directors and officers as a group (15 persons)(3)........... 703,124
</TABLE>
- ---------------
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock beneficially owned by them. As of
November 1, 1996, no officer or director owned in excess of 1% of the
Company's Common Stock.
4
<PAGE> 7
(2) Includes the following shares subject to options granted pursuant to the
Company's 1990 Stock Incentive Plan and 1995 Incentive Plan and exercisable
within 60 days: Mr. Heiligbrodt -- 10,000 shares; Mr. Huff -- 10,000 shares;
Mr. Jordan -- 11,000 shares; Mr. LeBlanc -- 6,000 shares; Mr.
McCormick -- 11,000 shares; Mr. Patrick -- 4,000 shares; Mr.
Stewart -- 225,935 shares; Mr. McShane -- 83,094 shares; Mr.
Williams -- 16,702 shares; Mr. Koops -- 57,181 shares; Ms. Shannon -- 8,115
shares.
(3) All current directors and officers as a group owned beneficially an
aggregate of approximately 2% of the Company's Common Stock.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During fiscal 1996, the Board of Directors held seven meetings of the full
Board and seven meetings of committees. During such fiscal year, or such portion
of such year during which such director served, each director attended at least
75% of the aggregate number of meetings of the Board of Directors and meetings
of committees of the Board on which he served. During fiscal 1996, directors who
were not employees of the Company were paid a monthly retainer of $2,500 for
service on the Board, an attendance fee of $1,250 for the first meeting of the
Board or any of its committees attended in one day, and $800 for each additional
meeting attended in the same day. Committee chairmen who are not Company
employees receive an additional 50% of the meeting fee. In addition, pursuant to
the terms of the Company's 1990 Stock Incentive Plan and 1995 Incentive Plan,
the non-employee directors receive annual automatic grants of options to
purchase 4,000 shares of Common Stock effective the fourth Thursday of October
each year. Employees of the Company are not paid any directors' fees. No member
of the Board of Directors was paid any compensation in the Company's 1996 fiscal
year for his service as a director of the Company other than pursuant to the
standard compensation arrangement for directors and expenses.
On January 25, 1996, the Board of Directors appointed members to serve on
the Audit Committee, the Executive Compensation Committee and the Nominating
Committee. The Nominating Committee held one meeting during fiscal 1996. The
Executive Compensation Committee met four times and the Audit Committee met two
times during that period.
The responsibilities of the Audit Committee, comprised of Messrs. McCormick
(Chairman), Jordan, Huff and LeBlanc, include reviewing the scope and results of
the annual audit of the Company's consolidated financial statements with the
independent auditors, internal auditors and management; reviewing the
independence of the independent auditors and the internal auditors; reviewing
actions by management on the independent and internal auditors' recommendations;
and meeting with management, the internal auditors and the independent auditors
to review the effectiveness of the Company's system of internal control and
internal audit procedures. To promote the independence of the audit, the Audit
Committee consults separately and jointly with the independent auditors, the
internal auditors and management.
The responsibilities of the Executive Compensation Committee, comprised of
Messrs. Jordan (Chairman), McCormick, Heiligbrodt, Huff and Patrick, include
reviewing the Company's executive salary and bonus structure; reviewing the
Company's employee stock incentive plans, thrift plan and employee stock
purchase plan as well as other incentive alternatives; reviewing the Company's
perquisite program; and recommending directors' fees.
The responsibilities of the Nominating Committee, comprised of Messrs.
Heiligbrodt (Chairman), McCormick and LeBlanc, include selecting candidates to
fill vacancies on the Board of Directors; reviewing the structure and
composition of the Board; and considering qualifications required for continued
Board service. The Committee also considers nominees recommended by
stockholders. Stockholders desiring to make such recommendations should submit
the candidate's name, together with biographical information and the candidate's
written consent to be nominated and, if elected, to serve to: Chairman,
Nominating Committee of the Board of Directors of BJ Services Company, P.O. Box
4442, Houston, Texas 77210-4442.
5
<PAGE> 8
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION COMMITTEE REPORT
The Executive Compensation Committee of the Company's Board of Directors
consists of five directors who are not employees of the Company. The Committee
reviews the Company's executive compensation program and policies each year and
determines the compensation of the executive officers.
The Committee's overall policy regarding compensation of the Company's
executive officers is to provide competitive salary levels and compensation
incentives that (i) attract and retain individuals of outstanding ability in
these key positions, (ii) recognize individual performance and the performance
of the Company relative to the performance of other companies of comparable
size, complexity and quality, and (iii) support both the short-term and
long-term goals of the Company. The Executive Compensation Committee believes
this approach closely links the compensation of the Company's executives to the
accomplishment of Company goals which coincide with shareholder objectives.
In addition, the Executive Compensation Committee considers the anticipated
tax treatment of the Company's executive compensation program. Section 162(m) of
the Internal Revenue Code generally limits the corporate tax deduction for
compensation paid to executive officers named in the Summary Compensation Table
to $1 million, unless certain conditions are met. The Company's policy is to
qualify all executive compensation for deduction under applicable tax laws to
the maximum extent possible. As the current compensation subject to the $1
million threshold of Section 162(m) for each of the named executive officers is
below such threshold, the Committee believes that the requirements of Section
162(m) will not affect the tax deductions available to the Company in connection
with its executive compensation for the 1996 fiscal year.
The executive compensation program includes four elements that, taken
together, constitute a flexible and balanced method of establishing total
compensation for the Company's executive officers. These elements are (i) base
salary, (ii) annual bonus plan awards, (iii) long-term incentive awards, and
(iv) stock option grants. These elements are further discussed below.
Providing Competitive Levels of Compensation. The Committee attempts to
provide the Company's executives with a total compensation package that is
targeted at the 75th percentile of the market for executives holding comparable
positions when the Company's performance justifies the payment of compensation
at such levels. The Committee determines a competitive level of compensation for
each executive based on information drawn from a variety of sources, including
proxy statements of other companies and surveys conducted by compensation
consultants. An independent consultant periodically reviews and provides survey
data to the Committee on the compensation of the chief executive officer and
other executives in comparison with compensation levels at companies in an
industry peer group.
While the targeted value of an executive's compensation package may be
competitive, its actual value may exceed or fall below competitive levels
depending on performance, as discussed below.
Base Salaries. The Committee periodically reviews and establishes executive
base salaries. Generally, base salaries are determined according to the
following factors: the individual's experience level, scope and complexity of
the position held and annual performance of the individual. In addition, the
Committee obtained an independent survey in the fall of 1995 for the purpose of
determining 1996 base salaries. The survey data compares the Company's
executives with those from both general industry and an industry peer group.
Based on the survey and 1995 performance, all executives received increases,
including Mr. Stewart.
The Annual Bonus Plan. The purpose of the Annual Bonus Plan is to provide
motivation toward and reward the accomplishment of corporate annual objectives
and to provide a competitive compensation package which will attract, reward and
retain individuals of the highest quality. As a pay-for-performance plan, cash
bonus awards are paid based upon the achievement of corporate performance
objectives established for the fiscal year.
6
<PAGE> 9
Targeted bonus award levels for the Company's executive officers are
established by the Committee each year. The Company's annual performance
measures are established jointly by the Committee and management. For 1996,
bonus targets for the Company's Chief Executive Officer and its other executive
officers were based on earnings per share objectives. These objectives are
established at three levels: entry level, expected value (target level) and over
achievement level. In addition, the bonus for the Company's Vice President of
North American Operations was based on value added profits relating to his area
of responsibility. The Committee chooses not to disclose the specific earnings
per share and value added profits objectives because it believes such disclosure
would be detrimental to the Company's position with respect to the industry.
Since the Company's 1996 earnings per share exceeded the over achievement level,
each of the named executive officers, including Mr. Stewart, received the
maximum eligible bonus.
Long-Term Incentive Program. The long-term incentive program was introduced
in fiscal 1993 to focus management attention on Company performance over a
period of time longer than one year in recognition of the long-term horizons for
return on investments and strategic decisions in the energy services industry.
The program is designed to motivate management to assist the Company in
achieving a high level of long-term performance and serves to link this portion
of executive compensation to long-term stockholder value. Pursuant to the
long-term incentive program, the Executive Compensation Committee may award
performance awards to executive officers on an annual basis. The numbers of
shares represented by such awards are designed to place the Chief Executive
Officer and other executive officers at the 75th percentile of the market for
total compensation when expected performance is met. Aggregate stock or option
holdings of the executive have no bearing on the size of a performance award.
The awards generally vest over a three-year period of time, based on Company
performance over such time period measured against pre-established objectives.
For fiscal 1996, awards under the long-term incentive program consisted of
performance units granted under the Company's 1990 Stock Incentive Plan. These
awards will vest at the end of three years according to the Company's three year
stock price performance as compared to an industry peer group index. Such
performance must exceed peer group performance by predetermined percentages in
order for the performance units to vest in full. Notwithstanding the foregoing,
the Executive Compensation Committee is permitted by the terms of the 1990 Stock
Incentive Plan to amend the performance objectives or the vesting period for any
performance award with the consent of the employee grantee. In addition, the
performance awards will vest in full upon the occurrence of a "change of
control". For fiscal 1996, Mr. Stewart was awarded performance units, based on
the criteria described above.
Stock Option Grants. Pursuant to the Company's 1990 Stock Incentive Plan
and the 1995 Incentive Plan, the Committee may make grants of stock options to
the Company's executive officers. The plans allow the Committee to promote the
interests of the Company and its stockholders by encouraging the executive
officers to increase their equity interest in the Company, thereby giving them
added incentive to work toward the continued growth and success of the Company.
Stock option grants to each executive officer for 1996 were made under the 1995
Incentive Plan and were primarily based on the executive's degree of
responsibility for and contribution to the growth and success of the Company, as
well as on survey data provided by an independent consultant to the Committee
regarding stock option grants at companies of similar size and in an industry
peer group. Aggregate stock or option holdings of the executive officers have
not been considered in determining the size of the option grants. For fiscal
1996, Mr. Stewart was granted options to purchase shares of Common Stock, based
on the criteria described above.
This report of the Executive Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such acts.
Don D. Jordan, Chairman
L. William Heiligbrodt
John R. Huff
James E. McCormick
Michael E. Patrick
7
<PAGE> 10
PERFORMANCE GRAPH -- TOTAL STOCKHOLDER RETURN
SEPTEMBER 1991 THROUGH SEPTEMBER 1996
The Securities and Exchange Commission (the "SEC") requires that the
Company include in its proxy statement a line graph presentation comparing
cumulative, five year total shareholder return with a general market index (S&P
500) and either an industry index or custom group of peers as selected by the
Company. In the past, the Company has compared its performance against a group
of companies (the "Former Peer Group") that for 1995 included: Nowsco Well
Service Ltd.; Smith International, Inc.; Energy Ventures, Inc.; Enterra
Corporation; Oceaneering International, Inc.; Pool Energy Services Co.;
Tuboscope Vetco International Corporation; Varco International, Inc.; and
Weatherford International Incorporated. With the acquisition of Nowsco Well
Service Ltd., the Company believes the Former Peer Group is no longer
representative of its larger market capitalization, and has selected a new group
of companies (the "Current Peer Group"). The Current Peer Group more accurately
reflects the industry representation at comparable levels of market
capitalization. The Current Peer Group consists of: Baker-Hughes Incorporated;
Camco International Inc.; Dresser Industries, Inc.; Halliburton Company;
Schlumberger N.V.; Smith International, Inc.; and Western Atlas Inc.
As required by the SEC, both the Former Peer Group and the Current Peer
Group data is presented in the following charts. The Former Peer Group has been
revised to exclude Enterra Corporation due to its merger with Weatherford
International Incorporated and Nowsco Well Service Ltd. due to its acquisition
by the Company.
The graph assumes investments of $100 on September 30, 1991, and
reinvestment of all dividends.
This performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such acts.
INDEXED TOTAL STOCKHOLDER RETURN
SEPTEMBER 1991 -- SEPTEMBER 1996
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
9/91 9/92 9/93 9/94 9/95 9/96
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BJ Services $100 $ 94 $118 $106 $136 $196
S & P 500 $100 $111 $125 $130 $169 $203
Current Peer Group $100 $102 $107 $ 93 $113 $151
Former Peer Group $100 $103 $131 $130 $147 $231
</TABLE>
8
<PAGE> 11
The following information relates to compensation paid by the Company for
fiscal 1994, 1995 and 1996 to the Company's Chief Executive Officer and each of
the other four (4) most highly compensated executive officers in 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ ----------------------- ----------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPENSA- STOCK OPTIONS/ LTIP COMPENSA-
NAME AND SALARY BONUS(1) TION(2)(3) AWARDS(4) SARS(5) PAYOUTS(6) TION(2)(7)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------------------- ---- ------- -------- --------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. W. Stewart.................... 1996 504,168 708,750 42,787 0 34,563
President and Chief 1995 400,008 560,000 165,865 1,803,511
Executive Officer 1994 395,840 0 41,026 0
Michael McShane.................. 1996 231,674 246,750 14,364 0 13,800
Vice President -- Finance 1995 213,338 229,000 61,749 986,070
and Chief Financial Officer 1994 202,508 0 15,795 0
Kenneth A. Williams.............. 1996 191,834 146,250 9,932 0 8,813
Vice President -- North 1995 174,670 50,000 42,239 606,489
American Operations 1994 166,668 0 10,769 0
Thomas H. Koops.................. 1996 186,334 127,575 9,627 0 12,025
Vice President -- Technology 1995 171,504 152,850 41,934 589,466
and Logistics 1994 162,504 0 10,769 0
Margaret B. Shannon.............. 1996 185,270 126,900 9,576 0 11,944
Vice President -- General 1995 169,668 151,950 40,962 547,786
Counsel 1994 103,134 0 10,462 0
</TABLE>
- ---------------
(1) Includes bonuses earned in the reported fiscal year and paid in the
following fiscal year.
(2) In accordance with Securities and Exchange Commission ("SEC") regulations,
information for prior years is not required to be disclosed in this column.
(3) Perquisites and other personal benefits paid or distributed during 1996 to
the persons listed in the compensation table above did not exceed, with
respect to any individual, the lesser of $50,000 or 10 percent of such
individual's total salary and bonus.
(4) See table entitled "Long-Term Incentive Plans -- Awards in Last Fiscal Year"
for information regarding performance units granted for fiscal years 1995
and 1996.
(5) Includes options earned in the reported fiscal year and granted subsequent
to the end of the fiscal year.
(6) Reflects payments in respect of performance awards granted under the 1990
Stock Incentive Plan. Also includes cash awards to offset the federal income
tax payable by the recipients of such payments in respect of performance
awards.
(7) The amount shown in this column is the annual Company contribution to the
Company's 401(k) defined contribution plan on behalf of each executive
officer.
9
<PAGE> 12
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ---------------------------------------------------------------------------------------------------- --------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/ EXERCISE
OPTIONS/ SARS GRANTED OR BASE
SARS TO EMPLOYEES PRICE EXPIRATION
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------------------------------ ------------- -------------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
J.W. Stewart.............................. 22,281(2) 8.4% 47.13 12/12/06 660,334 1,673,417
20,506(3) 32.5% 47.13 12/12/06 607,729 1,540,105
Michael McShane........................... 7,480(2) 2.8% 47.13 12/12/06 221,682 561,786
6,884(3) 10.9% 47.13 12/12/06 204,019 517,024
Kenneth A. Williams....................... 5,172(2) 1.9% 47.13 12/12/06 153,281 388,444
4,760(3) 7.6% 47.13 12/12/06 141,070 357,500
Thomas H. Koops........................... 5,013(2) 1.9% 47.13 12/12/06 148,569 376,502
4,614(3) 7.3% 47.13 12/12/06 136,744 346,535
Margaret B. Shannon....................... 4,987(2) 1.9% 47.13 12/12/06 147,798 374,549
4,589(3) 7.3% 47.13 12/12/06 136,003 344,657
</TABLE>
- ---------------
(1) All options reflected in this table were earned in fiscal 1996. The options
reflected in this table do not include options earned in fiscal 1995 and
granted on December 7, 1995. No stock appreciation rights ("SARs") were
granted in tandem with the options reflected in this table.
(2) Includes options granted on December 12, 1996. Such options will become
exercisable ratably over a three-year period, with one-third of each grant
vesting on each of the first, second and third anniversaries of the date of
grant. Such options will become exercisable after six months from the date
of grant if at any time the price per share of the Company's Common Stock
reaches $75.00. In addition, such options will become exercisable upon the
occurrence of a change in control.
(3) Includes options granted on December 12, 1996. Such options will become
exercisable after six months from the date of grant on the earlier of (a)
the date the price per share reaches $60.00 if within one year following the
date of grant, (b) the date the price per share reaches $75.00 if within
five years following the date of grant or (c) the eighth anniversary of the
date of grant. In addition, such options will become exercisable upon the
occurrence of a change in control.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
SHARES AT FY-END(#) AT FY-END($)
ACQUIRED ON VALUE ------------------------------- -------------------------------
NAME EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE(1) EXERCISABLE UNEXERCISABLE(1)
- ----------------------------- ----------- ----------- ----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
J.W. Stewart................. -0- -0- 200,355 247,908 3,362,306 3,534,749
Michael McShane.............. 12,154 218,705 73,003 91,469 1,221,796 1,339,968
Kenneth A. Williams.......... 24,487 410,807 9,937 62,526 160,169 913,421
Thomas H. Koops.............. 11,056 204,490 50,515 61,817 851,099 908,303
Margaret B. Shannon.......... 6,859 115,313 2,326 63,815 76,926 865,731
</TABLE>
- ---------------
(1) Includes options earned in fiscal 1996 and granted on December 12, 1996.
10
<PAGE> 13
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED PLANS
-------------------------------------
(A) (B) (C) (D) (E) (F)
NUMBER OF PERFORMANCE
SHARES, UNITS OR OTHER
OR OTHER PERIOD UNTIL
RIGHTS MATURATION OR
NAME (#)(1)(2) PAYOUT(3) THRESHOLD(#) TARGET(#) MAXIMUM(#)
- ------------------------------------ ------------- ------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
J.W. Stewart........................ 5,570 3 Years 891 3,676 5,570
Michael McShane..................... 2,493 3 Years 399 1,645 2,493
Kenneth A. Williams................. 2,069 3 Years 331 1,366 2,069
Thomas H. Koops..................... 2,005 3 Years 321 1,323 2,005
Margaret B. Shannon................. 1,995 3 Years 319 1,317 1,995
</TABLE>
- ---------------
(1) Awards reflected in this table represent performance units awarded under the
Company's 1990 Stock Incentive Plan. These awards were earned during fiscal
1996 and granted on December 12, 1996. For additional information regarding
these awards, see the Executive Compensation Committee Report -- Long-Term
Incentive Program elsewhere in this Proxy Statement.
(2) Excludes the following awards earned during fiscal 1995 and granted on
December 7, 1995: Mr. Stewart -- 30,434 units; Mr. McShane -- 13,623 units;
Mr. Williams -- 11,304 units; Mr. Koops -- 10,937 units; Ms.
Shannon -- 10,899 units.
(3) Under the terms of the grant, the performance period is deemed to begin on
October 1, 1996. The performance period is three fiscal years unless a
change of control occurs, in which case the performance units would vest
immediately.
SEVERANCE AGREEMENTS
The Company entered into severance agreements with certain executive
officers, including each of the named executive officers shown in the Summary
Compensation Table, as well as with Matthew D. Fitzgerald, Taylor M. Whichard
III, David Dunlap and Stephen A. Wright. The severance agreements were effective
August 27, 1993, except for Ms. Shannon's agreement, which was effective
February 14, 1994 and Mr. Dunlap's agreement which was effective November 27,
1995. The agreements have initial terms of approximately three years and are
automatically extended for an additional year at the end of each year of the
agreements unless the Company has given one year's prior notice of termination.
These agreements are intended to provide for continuity of management in the
event of a change in control of the Company. The agreements provide that covered
executive officers could be entitled to certain severance benefits following a
change in control of the Company. If, following a change in control, the
executive is terminated by the Company for any reason, other than for death,
disability or for cause, or if such executive officer terminates his or her
employment for good reason (as this term is defined in the agreements), then the
executive officer is entitled to a severance payment that will be three times
the sum of the executive officer's base salary and bonus amount, as defined in
the agreements. The severance payment is generally made in the form of a lump
sum. For a period of up to one year, the Company would also provide life,
disability, accident and health insurance coverage substantially similar to the
benefits provided before termination.
If a change in control occurs, the severance agreements are effective for a
period of two years from the date of such change in control. Under the severance
agreements, a change in control would generally include any of the following
events: (i) any "person" as defined in the Securities Exchange Act of 1934, as
amended, acquires 25 percent or more of the Company's voting securities; (ii) a
majority of the Company's directors are replaced during a two-year period; (iii)
stockholders approve a merger, resulting in (a) 60% or less of the common stock
and voting securities of the surviving corporation being owned by the same
persons that owned the common stock of the Company immediately prior to such
merger, (b) a person owning 25% or more of the surviving corporation's common
stock or voting securities, or (c) replacement of a majority of the members of
the Company's board of directors; or (iv) the Company's stockholders approve a
liquidation or sale of the
11
<PAGE> 14
Company's assets. In the event that any payments made in connection with a
change in control would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code, the Company would pay an additional payment (a
"gross-up" payment) sufficient to satisfy such excise tax obligations and any
additional taxes imposed with respect to such gross-up payment.
A change in control (as defined in the agreements) resulted from the 1995
merger of the Western Company of North America with and into the Company (the
"Merger"), but no payments will be made unless a covered employee's employment
with the Company is terminated under circumstances described below during the
two-year period following the Merger.
Prior to the Merger, when it was not known whether a "change in control"
would result from the Merger, and as consideration for executing waivers with
regard to change in control acceleration rights in the 1990 Stock Incentive
Plan, each executive officer of the Company who was a party to a severance
agreement entered into an agreement modifying such agreement (i) to stipulate
that consummation of the Merger constituted a "change in control" under the
terms of such agreement and (ii) to permit a greater change in such person's
responsibilities without constituting "good reason" under such agreement.
Pursuant to such modification, if any such person's employment with the Company
is terminated by the Company (other than for "cause") or by such person for
"good reason" within 24 months following the consummation of the Merger, the
vesting of stock options granted to such person prior to 1995 will be
accelerated and such officer will receive (i) a cash payment with respect to all
of such person's awards granted under the Company's 1990 Stock Incentive Plan
and 1995 Incentive Plan after 1994 (other than stock options granted in February
1995, which will then terminate), which will be deemed fully vested or earned,
and (ii) a lump sum cash payment equal to three times such person's salary and
bonus.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of reports on Forms 3 and 4 and amendments
thereto furnished to the Company during its most recent fiscal year and reports
on Form 5 and amendments thereto furnished to the Company with respect to its
most recent fiscal year, and written representations from reporting persons that
no Form 5 was required, the Company believes that all filing requirements
applicable to its officers, directors and beneficial owners under Section 16(a)
of the Securities Exchange Act of 1934, as amended, were complied with during
fiscal 1996, except a late report was filed on an amended Form 4 for Mr. McShane
and a late Form 4 was filed for Mr. Williams with respect to two transactions.
SOLICITATION
The Company will bear the cost of the solicitation of proxies. In addition
to solicitation by mail, certain of the directors, officers or regular employees
of the Company may, without extra compensation, solicit the return of proxies by
telephone or telegram. Arrangements will be made with brokerage houses,
custodians and other fiduciaries to send proxy material to their principals, and
they will be reimbursed by the Company for any out-of-pocket expenses.
VOTING PROCEDURES
A majority of the outstanding shares of Common Stock present or represented
by proxy at the meeting constitutes a quorum for the transaction of business.
The inspector of elections appointed by the Company will count all votes cast,
in person or by submission of a properly executed proxy, before the closing of
the polls at the meeting. The affirmative vote of holders of a majority of the
Common Stock present or represented by proxy at the meeting and entitled to vote
is required for the election of each director nominee. Therefore, abstentions
have the effect of a negative vote. In accordance with Delaware law, broker
non-votes will not be treated as entitled to vote with respect to the election
of directors.
12
<PAGE> 15
INDEPENDENT AUDITORS
Deloitte & Touche LLP, independent public accountants, audited the
Company's consolidated financial statements for fiscal 1996, and have advised
the Company that they will have a representative available at the 1997 Annual
Meeting to respond to appropriate questions. Such representative will be
permitted to make a statement if he desires to do so. The Company has not yet
selected independent public accountants to audit its 1997 consolidated financial
statements; however, the Company intends to engage its accountants for such
purpose in May 1997.
PROPOSALS OF STOCKHOLDERS
Pursuant to the Company's Bylaws, proposals of stockholders intended to be
presented at the 1998 Annual Meeting of Stockholders must be received by the
Secretary of the Company by October 25, 1997 to be considered for inclusion in
the proxy statement and form of proxy relating to the 1998 Annual Meeting.
The Annual Report of the Company for the year ended September 30, 1996,
including audited financial statements, is enclosed with this proxy statement
but does not constitute a part of the proxy soliciting material. Additional
copies of the Annual Report are available without charge, upon request.
BJ SERVICES COMPANY WILL FURNISH A COPY OF ITS ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1996, WITHOUT EXHIBITS, WITHOUT CHARGE TO EACH
PERSON WHO FORWARDS A WRITTEN REQUEST TO ROBERT C. COONS, CORPORATE
COMMUNICATIONS MANAGER, BJ SERVICES COMPANY, 5500 NORTHWEST CENTRAL DRIVE,
HOUSTON, TEXAS 77092-2036.
13
<PAGE> 16
- -------------------------------------------------------------------------------
BJ SERVICES COMPANY
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON JANUARY 23, 1997
R
The undersigned hereby constitutes and appoints J.W. Stewart, Michael
O McShane, and Margaret B. Shannon, or any of them, true and lawful
agents and proxies with power of substitution in each to represent and
X to vote all of the shares of Common Stock owned of record on December
12, 1996 by the undersigned at the Annual Meeting of Stockholders of BJ
Y Services Company to be held on January 23, 1997, at 11:00 a.m., at The
Houstonian Hotel and Conference Center, 111 North Post Oak Lane,
Houston, Texas, and at any and all adjournments thereof, hereby
revoking any instruction previously given.
COMMENTS: CHANGE OF ADDRESS:
------------------------------------- -------------------------------
------------------------------------- -------------------------------
------------------------------------- -------------------------------
------------------------------------- -------------------------------
(If you have written in the above space, please mark the corresponding
box on the reverse side of this card)
You are encouraged to specify your choices by marking the appropriate
box (SEE REVERSE SIDE) but you need not mark any box if you wish to
vote in accordance with the Board of Directors' recommendations. This
proxy cannot be voted unless you sign and return it.
-------------
SEE REVERSE
SIDE
-------------
- -------------------------------------------------------------------------------
<PAGE> 17
- -------------------------------------------------------------------------------
/X/ Please mark your
votes as in this
example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR the election of the
nominees for Director.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Proposal 1.
- -------------------------------------------------------------------------------
FOR WITHHOLD AUTHORITY
1. Election of / / / / Nominees for election as Class 1
Nominees Directors: John R. Huff, R.A.
LeBlanc and Michael E. Patrick
For, except authority to vote is withheld
for the following nominees:
- ----------------------------------------
2. To vote upon such other business
as may properly come before the
meeting and any adjournment
thereof.
- --------------------------------------------------------------------------------
Change of Address/ / /
Comments on
Reverse Side
NOTE: Please sign, date and return your
instruction promptly in the enclosed
envelope. Sign exactly as name(s)
appear(s) hereon. Joint owners should
each sign. When signing as attorney,
executor, administrator, trustee, or
guardian or other fiduciary, please give
full title as such.
----------------------------------------
----------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
