<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant x
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
x Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
UTI ENERGY CORP.
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(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):
N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
Fee paid previously with preliminary materials.
<PAGE> 2
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:
N/A
(2) Form, Schedule or Registration Statement No.:
N/A
(3) Filing Party:
N/A
(4) Date Filed:
N/A
<PAGE> 3
UTI ENERGY CORP.
16800 Greenspoint Park, Suite 225N
Houston, Texas 77060
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
- --------------------------------------------------------------------------------
The 1999 Annual Meeting of Stockholders (the "Meeting") of UTI Energy
Corp., a Delaware corporation (the "Company"), will be held in the Concorde I
room of the Hotel Sofitel, 425 Sam Houston Parkway, Houston, Texas 77060 at 9:00
a.m. on June 30, 1999, for the following purposes:
1. to elect two Class II directors for a three-year term to expire at
the 2002 Annual Meeting of Stockholders of the Company;
2. to approve an amendment to the UTI Energy Corp. 1997 Long-Term
Incentive Plan that would increase the number of shares available for issuance
under the plan; and
3. to take action upon any other matters which may properly come before
the Meeting.
Stockholders of record at the close of business on May 13, 1999, are
entitled to notice of and to vote at the Meeting and any adjournment thereof.
It is important that your shares be represented at the Meeting. I urge
you to sign, date and promptly return the enclosed proxy card in the enclosed
postage paid envelope.
BY ORDER OF THE BOARD OF DIRECTORS
John E. Vollmer III
Secretary
May 28, 1999
<PAGE> 4
UTI ENERGY CORP.
16800 Greenspoint Park, Suite 225N
Houston, Texas 77060
- --------------------------------------------------------------------------------
PROXY STATEMENT
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 30, 1999
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of UTI Energy Corp., a Delaware corporation (the
"Company"), of proxies to be voted at the Company's 1999 Annual Meeting of
Stockholders (the "Meeting") to be held in the Concorde I room of the Hotel
Sofitel, 425 North Sam Houston Parkway, Houston, Texas, on June 30, 1999, at
9:00 a.m., local time, and at any adjournment thereof. This Proxy Statement and
the accompanying proxy are being mailed to the Company's stockholders on or
about June 1, 1999.
Properly executed proxies received in time for the Meeting will be
voted as directed therein, unless revoked in the manner provided hereafter. As
to any matter for which no choice has been specified in a proxy, the shares
represented thereby will be voted by the persons named in the proxy (i) "FOR"
the election of the nominees to the Board of Directors, (ii) "FOR" the approval
of the amendment to the Company's 1997 Long-Term Incentive Plan (the "1997
Plan") that would increase the number of shares authorized for issuance under
the 1997 Plan, and (iii) in the discretion of such persons, "FOR" or "AGAINST"
any other proposals that may be submitted at the Meeting. A stockholder giving a
proxy may revoke it at any time before the proxy is voted by giving written
notice to the Secretary of the Company, by executing and delivering a proxy
bearing a later date, or by attending the Meeting and voting in person.
PERSONS MAKING THE SOLICITATION
This Proxy Statement solicits proxies on behalf of the Board of
Directors of the Company. The total expense of such solicitation, including the
cost of preparing, assembling, and mailing the proxy materials to stockholders,
will be borne by the Company. It is anticipated that solicitations of proxies
for the Meeting will be made only by use of the mails; however, the Company may
use the services of its directors, officers and employees to solicit proxies
personally or by telephone, without additional salary or compensation to them.
Brokerage houses, custodians, nominees and fiduciaries will be required to
forward the proxy soliciting materials to the beneficial owners of the Company's
shares held of record by such persons and the Company will reimburse such
persons for their reasonable out-of-pocket expenses incurred in that connection.
SHARES OUTSTANDING AND VOTING RIGHTS
Only stockholders of record of the Company's common stock, $.001 par
value ("Common Stock"), at the close of business on May 13, 1999 (the "Record
Date"), are entitled to notice of and to vote at the Meeting or any adjournment
thereof. At the close of business on the Record Date, there were 16,498,281
shares Common Stock issued and outstanding. Holders of record of the Common
Stock on the Record Date will be entitled to one vote per share on all matters
to come before the Meeting. A list of stockholders entitled to notice of and to
vote at the Meeting will be made available during regular business hours at the
offices of the Company, 16800 Greenspoint Park, Suite 225N, Houston, Texas
77060, from June 19, 1999, through June 29, 1999, and at the Meeting, for
inspection by any stockholder for any purpose regarding the Meeting.
A majority of the shares of Common Stock issued and outstanding on the
Record Date will constitute a quorum for the transaction of business at the
Meeting. The shares held by each stockholder who signs and returns the enclosed
form of proxy will be counted for purposes of determining the presence of a
quorum at the Meeting.
<PAGE> 5
PROPOSAL NO. 1
ELECTION OF CLASS II DIRECTORS
Two directors will be elected at the Meeting to serve as Class II
directors for three-year terms ending at the 2002 Annual Meeting of Stockholders
or until such person's successor shall be duly elected and qualified. The
enclosed form of proxy provides a means for stockholders to vote for all of the
director nominees listed herein, to withhold authority to vote for one or more
of such nominees or to withhold authority to vote for all of such nominees. The
withholding of authority by a stockholder will have no effect on the results of
the election of those directors for whom authority to vote is withheld because
the Company's bylaws provide that directors are elected by a plurality of the
votes cast at the Meeting. The Board of Directors recommends the election of Mr.
Mark S. Siegel and Mr. Kenneth N. Berns as the Class II Directors to serve for
such three-year terms. Mr. Siegel and Mr. Berns are currently directors of the
Company.
Unless contrary instructions are set forth in the proxies, it is intended
that the persons executing a proxy will vote all shares represented by such
proxy for the election as director of Mr. Siegel and Mr. Berns. Should Mr.
Siegel or Mr. Berns become unable or unwilling to accept nomination or election,
it is intended that the person acting under the proxy will vote for the election
of such other person as the Board of Directors of the Company may recommend.
Management has no reason to believe that Mr. Siegel or Mr. Berns will be unable
or are unwilling to serve if elected.
There are currently two Class II directorships up for election. Proxies
cannot be voted for other than such directorships. Pursuant to the Company's
bylaws, directors are elected to serve for three-year terms and until their
successors are elected or their earlier resignation or removal. Class II
directors' terms expire at the Meeting, Class III directors' terms expire in
2000 and Class I directors' terms expire in 2001.
There currently are seven board seats authorized under the Company's
bylaws. The following table sets forth information regarding the current
directors of the Company, including the nominees for Class II Directors included
herein. There are no family relationships among any of the directors or
executive officers of the Company, nor any arrangements or understandings
between any director and any other person pursuant to which such director was
selected as a director.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Mark S. Siegel 48 Chairman of the Board and Class II Director
(since 1995)
Vaughn E. Drum 53 President, Chief Executive Officer and Class III
Director (since 1986)
Kenneth N. Berns 39 Class II Director (since 1995)
Curtis W. Huff 41 Class I Director (since 1997)
Terry H. Hunt 51 Class I Director (since 1994)
Nadine C. Smith 41 Class I Director (since 1995)
Robert B. Spears 72 Class III Director (since 1994)
</TABLE>
- -----------------------
Mark S. Siegel - Mr. Siegel has served as Chairman of the Board of the
Company since March 14, 1995. Mr. Siegel has been President of Remy Investors
and Consultants, Incorporated ("Remy Investors") since 1993. From 1992 to 1993,
Mr. Siegel was President, Music Division, Blockbuster Entertainment Corp. From
1988 through 1992, Mr. Siegel was an Executive Vice President of Shamrock
Holdings, Inc. and Managing Director of Shamrock Capital Advisors, Incorporated.
Mr. Siegel is a Director of Variflex Inc. Mr. Siegel holds a B.A. from Colgate
University and a J.D. from Boalt Hall School of Law.
-2-
<PAGE> 6
Vaughn E. Drum - Mr. Drum has served as President, Chief Executive Officer
and a director of the Company since December 1986. From 1980 through November
1986, Mr. Drum served in various capacities for UGI Development Company
("UGIDC"), a subsidiary of UGI Corporation. Mr. Drum holds a B.S. in Petroleum
Engineering from Marietta College.
Kenneth N. Berns - Mr. Berns has served as a director of the Company since
May 24, 1995. Mr. Berns has been an employee of Remy Investors since 1994. From
1990 through 1994, Mr. Berns was employed by affiliated real estate development
and management companies, including Ridge Properties, Ltd., Ridge Development,
Ltd. and Spound Company. Prior to 1990, Mr. Berns was a senior manager of Spicer
& Oppenheim and a Vice President of Cantor Fitzgerald Financial Corporation. Mr.
Berns is the majority stockholder of RD Management, Inc., which is the general
partner of Ridge Properties, Ltd. Mr. Berns is a Certified Public Accountant and
holds a Bachelors Degree in Business Administration from San Diego State
University and a Masters Degree in Taxation from Golden Gate University.
Curtis W. Huff - Mr. Huff has served as a director of the Company since
December 1997. Mr. Huff has served as Senior Vice President and General Counsel
of Weatherford International, Inc. since June 1998. Prior to such time, Mr. Huff
was a partner at the law firm of Fulbright & Jaworski L.L.P., Houston, Texas.
Terry H. Hunt - Mr. Hunt is Senior Vice President - Strategic Planning of
PP&L Resources, Inc. Mr. Hunt served as the President and Chief Executive
Officer of Penn Fuel Gas, Inc., a natural gas and propane distribution company
from 1992 to April 1999. From 1989 to 1992, Mr. Hunt was the President and
Chairman of Carnegie Natural Gas Company, a gas distribution and transportation
company, and of Apollo Gas Company, a natural gas distributor. From 1984 through
1988, he served as Vice President of Delhi Gas Pipeline Corporation, an
intrastate pipeline company. Mr. Hunt holds a Bachelor of Engineering degree
from the University of Saskatchewan, Canada and a M.B.A. from Southern Methodist
University.
Nadine C. Smith - Ms. Smith is President and Chief Executive Officer of
Enidan Capital, an investment company that makes equity investments in public
and privately held companies, Prior to co-founding Enidan Capital in 1997, Ms.
Smith was an investment banker and principal with NC Smith & Co. and The First
Boston Corporation and a management consultant with McKinsey & Co. Ms. Smith
also is President and Chief Executive Officer of Sirrom Resource Funding LP,
which finances environmental companies. Ms. Smith is a director of American
Retirement Corporation, Sirrom Partners, L.P. and Carson Private Capital, G.P.,
L.L.C. and Shield Life Insurance Company. Ms. Smith earned a bachelors degree in
economics from Smith College and a Masters degree in business from Yale
University.
Robert B. Spears - Since 1989, Mr. Spears has served as the Chairman and
Vice President, Business Development of Spears & Associates, Inc., a firm which
he founded in 1965. Spears & Associates is a leading research-based consulting
firm to the oil and natural gas industry worldwide.
MEETING AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met seven times during the year ended December 31,
1998. Each director participated in at least 85% of all meetings of the Board of
Directors for which he or she was eligible and all meetings of each committee
for which he or she was eligible.
The Board of Directors has an Executive Committee, an Audit Committee and
a Compensation Committee. The Company does not have a nominating or other
similar committee.
The Executive Committee, which currently is composed of Messrs. Drum and
Siegel, has the authority to act for the Board in all matters arising between
regular and special meetings of the Board. The Executive Committee met
informally on numerous occasions during the year ended December 31, 1998.
The Audit Committee, which currently is composed of Messrs. Berns and
Spears and Ms. Smith, selects, subject to Board approval, the independent
accountants to audit the Company's books and records, and considers and acts
upon accounting matters as they arise. The Audit Committee met once during the
year ended December 31, 1998.
-3-
<PAGE> 7
The Compensation Committee, which currently is composed of Messrs. Hunt
and Spears, administers the employee stock option and similar plans of the
Company and determines the annual compensation to be paid to the executive
officers of the Company. The Compensation Committee did not meet during the year
ended December 31, 1998.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company do not receive any additional
compensation for serving as a director or as a member of a committee of the
Board of Directors. The Company's non-employee directors are each entitled to
receive an annual retainer fee of $5,000 and fees of $700 per meeting for their
attendance at regular and special Board of Directors meetings. Non-employee
committee members are entitled to additional fees of $500 for each committee
meeting attended. All directors have been and will be reimbursed for reasonable
out-of-pocket expenses incurred in connection with attendance at Board of
Directors meetings and committee meetings.
The Company currently maintains a Non-Employee Director Stock Option Plan
(the "Director Plan"). Under the Director Plan, options to purchase up to an
aggregate of 300,000 shares of Common Stock of the Company may be granted to
non-employee directors of the Company. Options granted pursuant to the Director
Plan stipulate that the purchase price per share be equal to the fair market
value of the Common Stock as of the date of grant. The Director Plan provides
for the grant of an option to purchase 7,500 shares of Common Stock to each
non-employee director as of the date he or she is first elected. The Director
Plan also provides that each non-employee director who has served for a period
of at least one year will automatically be granted, on December 31 of each year,
an option to purchase 3,750 shares of Common Stock. Options to purchase 15,000
shares of Common Stock were awarded pursuant to this provision in 1998. No
options under the Director Plan will be granted after December 18, 2005, and all
options issued expire five years from the date of grant.
Messrs. Siegel, Berns and Drum each participate in the Company's 1996
Employee Stock Option Plan (the "1996 Plan") and the 1997 Plan and receive
salaries in their capacities as employees of the Company.
PROPOSAL NO.2
AMENDMENT TO 1997 LONG-TERM INCENTIVE PLAN
GENERAL
At the Meeting, the stockholders of the Company will be asked to vote on a
proposal to approve an amendment to the 1997 Plan to increase the number of
shares of Common Stock authorized for issuance under the Plan. Approval of such
amendment requires the affirmative vote of the holders of a majority of the
shares of Common Stock that are present in person or by proxy and entitled to
vote at the Meeting. The amendment to the 1997 Plan increases the aggregate
number of shares of Common Stock available for grant under the 1997 Plan from
600,000 to 1,500,000.
REASONS FOR THE AMENDMENT TO THE 1997 PLAN
The 1997 Plan was initially adopted by the Board of Directors on July 23,
1997, and was approved by the stockholders of the Company at the annual meeting
held on August 28, 1997. The Board of Directors believes that the ability to
grant stock-based compensation to its employees is crucial to its continuing
ability to attract and retain qualified employees. Historically, the Board of
Directors has relied on stock option incentives as part of its compensation
philosophy and structure to recruit and retain certain key employees of the
Company and its subsidiaries.
The Board of Directors believes that the 1997 Plan advances the best
interests of the Company, its subsidiaries and its stockholders by attracting,
retaining and motivating key employees. The 1997 Plan provides for the grant of
awards to certain key employees of the Company and its subsidiaries, thereby
increasing the personal stake of such key employees in the continued success and
growth of the Company. There are approximately 60 key employees of the
-4-
<PAGE> 8
Company and its subsidiaries currently eligible to participate in the 1997 Plan,
including Messrs. Drum, Siegel and Drum.
Given the Company's high growth over the last several years, the number of
shares available under the 1997 Plan has been depleted. As of December 31, 1998,
only 65,375 shares of Common Stock remained available for grant under the 1997
Plan. The Board of Directors has determined that an increase in the number of
shares available for grant under the 1997 Plan is necessary in order for the
Board of Directors to continue to provide an adequate level of performance-based
incentive to the Company's management and other key employees and to continue
the Board of Director's ongoing philosophy of utilizing stock-based awards as
part of the Company's overall compensation structure. Therefore, the Board of
Directors has approved an amendment to the 1997 Plan to increase the number of
shares available for grant under the 1997 Plan by 900,000.
The Board of Directors may at any time amend the terms of the 1997 Plan or
any awards thereunder, provided no outstanding award may be amended in a manner
adverse to the holder of such award. Stockholder approval of the amendment,
however, is required by the rules of the American Stock Exchange.
The Board of Directors has allocated a total of 605,000 shares of Common
Stock authorized for issuance pursuant to the amendment to the 1997 Plan. The
following table summarizes the allocation of these new plan benefits to the
Company's employees. Each of the options summarized in the following table has
an exercise price of $9.8125 per share and is subject to five-year vesting. The
effectiveness of substantially all of the options summarized in the following
table is subject to the approval of the amendment to the 1997 Plan by the
Company's stockholders at the Meeting.
NEW PLAN BENEFITS
1997 LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
SHARES UNDERLYING
NAME AND POSITION OPTIONS
----------------------------------------------------------------------- -------------------------
<S> <C>
Vaughn E. Drum
President & Chief Executive Officer 85,000
Mark S. Siegel
Chairman of the Board 90,000
Royce W. Elliott
Vice President and Controller of Drilling
Operations 15,000
Executive Group 305,000
Non-Executive Director Group(1) 50,000
Non-Executive Officer Employee Group(1) 300,000
</TABLE>
- ---------------
(1) Includes options to purchase 50,000 shares granted to a director of the
Company who is employed by the Company in a non-executive officer capacity.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT TO
THE 1997 PLAN.
Approval of the amendment to the 1997 Plan requires the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
entitled to vote on the proposal and present in person or by proxy at the
Meeting. If not otherwise provided, proxies will be voted "FOR" approval of the
amendment to the 1997 Plan. Abstentions will be counted as shares entitled to
vote on the proposal, but will not be treated as a vote either for or against
the proposal.
-5-
<PAGE> 9
Therefore, an abstention will have the same effect as a vote against the
proposal. A broker non-vote will not be treated as a share entitled to vote on
the proposal and will not be considered as a vote for or against the proposal.
Therefore, a broker non-vote will have no effect on the outcome of the proposal.
EXECUTIVE OFFICERS
Set forth below is certain information concerning the executive
officers of the Company, each of whom serves at the pleasure of the Board of
Directors. There is no family relationship between any of these individuals or
any of the Company's directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Mark S. Siegel 48 Chairman of the Board and Class II Director
Vaughn E. Drum 53 President, Chief Executive Officer and Class III
Director
John E. Vollmer III 43 Senior Vice President, Secretary, Treasurer and
Chief Financial Officer
Bruce Sauers 35 Vice President and Corporate Controller
Royce W. Elliott 48 Vice President and Controller of Drilling Operations
</TABLE>
For additional information regarding Mr. Siegel and Mr. Drum, see
"Directors" above.
John E. Vollmer III - Mr. Vollmer has served as Chief Financial Officer of
the Company since July 1998. Mr. Vollmer was a financial consultant from October
1997 until joining the Company in 1998. From 1992 until October 1997, Mr.
Vollmer served in a variety of capacities at Blockbuster Entertainment,
including Senior Vice President-Finance and Chief Financial Officer of
Blockbuster Entertainments' Music Division. Mr. Vollmer is a Certified Public
Accountant and holds a B. A., Accounting from Michigan State University.
Bruce Sauers - Mr. Sauers has served as Vice President of the Company
since August 1998 and as Corporate Controller since December 1996. Prior to
joining the Company in 1996, Mr. Sauers was a Manager in a regional public
accounting firm. Mr. Sauers is a Certified Public Accountant and holds a B.S. in
Business Administration from Shippensburg University of Pennsylvania.
Royce W. Elliott - Mr. Elliott has served as Vice President and Controller
of Drilling Operations since August of 1998. From December 1986 through July of
1998, Mr. Elliott was Division Controller for UTI drilling operations. From 1981
through November 1986, he was a Division Controller for UGI Development Company,
a subsidiary of UGI Corporation. Mr. Elliott is a Certified Public Accountant
and holds a B.S. in Business Administration from Wichita State University.
-6-
<PAGE> 10
Summary Compensation Table
The following table sets forth information concerning compensation for
1998, 1997 and 1996 earned by or paid to the Company's Chief Executive Officer
and the Company's other executive officers whose total annual salary and bonus
exceeded $100,000 in 1998 (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
------------------------------------------- --------------------------------------------
ALL OTHER
OTHER ANNUAL RESTRICTED SECURITIES COMPENSATION
NAME AND PRINCIPAL COMPENSATION STOCK UNDERLYING OPTIONS
POSITION YEAR SALARY $ BONUS $ (1) $ AWARD(S) SARS(#)(2) (3) $
- --------------------------- --------- ------------ ------------ ---------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Vaughn E. Drum 1998 170,040 200,000 -- -- 12,500(4) 3,229
President and Chief 1997 156,530 115,681 -- -- 42,500 5,959
Executive Officer 1996 144,950 58,912 -- -- 291,960(5) 2,899
Mark S. Siegel 1998 100,000 -- -- -- 385,000(4) --
Chairman of the Board 1997 -- -- -- -- 550,000 --
1996 -- -- -- -- -- --
Royce W. Elliott(6) 1998 84,085 36,706 -- -- 7,500(4) 2,303
Vice President and 1997 73,292 28,158 -- -- 8,000 3,054
Controller of Drilling 1996 58,974 20,401 -- -- -- 1,876
Operations
</TABLE>
- --------------------------
(1) The aggregate amounts of perquisites and other personal benefits,
securities or property is less than 10% of each executive officer's
combined annual salary and bonus during the applicable year.
(2) Share amounts have been adjusted to reflect the Company's three-for-one
stock dividend effected in September 1997.
(3) Amounts set forth for 1998, 1997 and 1996 reflect the Company's
contributions or other allocations to defined contribution plans.
(4) In August 1998, the Board of Directors of the Company approved the
repricing of options to purchase an aggregate of 743,375 shares granted to
employees of the Company during 1997 and 1998. Pursuant to such action,
Messrs. Drum, Siegel and Elliott had options repriced to purchase 12,500,
385,000 and 5,000 shares of Common Stock, respectively, which are included
in this table as new grants during 1998 although no new options actually
were granted as a result of such repricing.
(5) Relates to stock options repriced during 1995 and approved by the
stockholders of the Company during 1996.
(6) Mr. Elliott became an officer of the Company in August, 1998. Prior to such
time he was an employee of the Company.
Compensation Pursuant to Employee Benefit Plans
The Company maintains several plans intended to provide incentives to its
key employees. These plans are described below.
Incentive Compensation Plan. The Company maintains an Incentive
Compensation Plan established in 1987 (the "ICP"). Under the ICP, specified
management employees of the Company or any subsidiary with at least 90 days of
service may be eligible to receive a cash bonus following each plan year based
on a comparison of financial performance against targets established for each
plan year.
1996 Employee Stock Option Plan. In August 1996, the Company's
shareholders approved the Company's 1996 Employee Stock Option Plan (the "1996
Plan"). Under the 1996 Plan, the Company can award options on up to
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<PAGE> 11
900,000 shares of Common Stock to certain employees at a price equal to the fair
market value of the stock at the date the option is granted. During 1997 and
1998, the Company awarded options to purchase 813,700 shares of Common Stock
under the 1996 Plan. The 1996 Plan currently is administered by the Company's
Compensation Committee. There are currently only 86,300 shares of Common Stock
available for grant under the 1996 Plan.
1997 Long-Term Incentive Plan. In August 1997, the stockholders approved
the 1997 Plan. Under the 1997 Plan, the Company may grant stock options, stock
appreciation rights issued independent or in tandem with such options ("SAR"),
restricted stock awards and performance awards to key employees of the Company
and its subsidiaries. Currently, there are 600,000 shares of Common Stock
authorized for issuance under the 1997 Plan. Options are to be granted at a
price not less than the fair market value of the Common Stock on the date the
option is granted. During 1997 and 1998, the Company awarded options, net of
forfeitures, to purchase 534,625 shares of Common Stock pursuant to the 1997
Plan. The options that have been granted under the 1997 Plan vest over zero to
five years. The 1997 Plan currently is administered by the Company's
Compensation Committee. There are currently only 65,375 shares of Common Stock
available for grant under the 1997 Plan.
The following table sets forth information regarding grants of stock
options to the Named Executive Officers during 1998. Except for options to
purchase 2,500 shares of Common Stock granted to Mr. Elliott in connection with
his promotion to Vice President and Controller of Drilling Operations in August
1998, all stock options reflected in this table relate to the repricing of stock
options originally granted in 1997 rather than to actual grants of additional
options.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------- ------------ ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Vaughn E. Drum .......... 12,500 1.2% 9.875 8/12/03 34,104 75,360
Mark S. Siegel .......... 385,000 38.3% 9.875 8/12/03 1,050,388 2,321,083
Royce W. Elliott ........ 7,500 0.8% 9.875 8/12/03 20,462 45,216
</TABLE>
-8-
<PAGE> 12
The following table sets forth information concerning stock options
exercised in 1998 and stock options unexercised at December 31, 1998 for the
Named Executive Officers:
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND VALUE TABLE AT DECEMBER 31,1998
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ACQUIRED VALUE OPTIONS/SARS AT AT DECEMBER 31,1998
ON REALIZED DECEMBER 31, 1998 EXERCISABLE/UNEXERCISABLE
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE ($)
- ------------------------ ----------- ----------- ---------------------------- ---------------------------
<S> <C> <C> <C> <C>
Vaughn E. Drum 50,000 342,710 271,960 / 12,500 1,292,657 / 0
Mark S. Siegel -- -- 350,000 / 200,000 242,970 / 0
Royce W. Elliott -- -- 3,000 / 7,500 0 / 0
</TABLE>
Option Repricings
On August 19, 1998, the Board of Directors approved the repricing of, and
amendment to (collectively, the "Repricing"), stock options to purchase an
aggregate of 743,375 shares granted to employees of the Company during 1997 and
1998. Such repricing was in lieu of annual grants of stock options during 1998.
The options were originally granted pursuant to the 1997 Plan to align the
interests of the Company's employees with those of the Company's stockholders by
providing them with a proprietary interest in the Company. The options were
initially granted at exercise prices ranging from $11.375 per share to $31.63
per share, which were reduced to $9.875 per share as a result of the repricing.
With respect to repriced options, the Board of Directors required that the
employees agree to extend the initial vesting periods for such option by one
year. Due to the repricing of options during 1998, the Board of Directors did
not grant additional options to its employees during the year other than options
in connection with promotions and the hiring of certain employees.
In determining to approve the repricing of options, the Board of Directors
considered the substantial decline in the market value of the Common Stock that
began in December 1997, which the Board believes was caused primarily by
substantial decreases in the price of oil and natural gas and not from a lack of
performance on the part of the Company's employees. The Board believes that the
substantial decline in market value shortly after the grant of the options in
1997 removed the incentives contemplated to be provided by those options. The
Board of Directors believes that the repricing of the options granted in 1997
brings such grants more in line with current market conditions and was a
reasonable substitute to granting additional options during 1998. The Board of
Directors believes that the Repricing also serves to further align the
proprietary interests of the Company's employees with those of the Company's
stockholders.
Kenneth N. Berns
Vaughn E. Drum
Curtis W. Huff
* Terry H. Hunt
Mark S. Siegel
Nadine C. Smith
* Robert B. Spears
* Member of the Compensation Committee.
-9-
<PAGE> 13
The following table summarizes the repricing and amendment of options
for each of the Named Executive Officers during fiscal 1998:
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET EXERCISE OPTION TERM
UNDERLYING PRICE PRICE AT TIME REMAINING AT
OPTIONS/SARS OF STOCK AT TIME OF REPRICING NEW DATE OF
REPRICED OR OF REPRICING OR OR AMENDMENT EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT($) ($) PRICE ($) AMENDMENT
---- ---- ------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Vaughn E. Drum
President and Chief
Executive Officer 8/19/98 12,500 9.875 31.63 9.875 4.3 years
Mark S. Siegel
Chairman of the 8/19/98 250,000 9.875 31.63 9.875 4.3 years
Board 8/19/98 135,000 9.875 20.00 9.875 3.9 years
Royce Elliott
Vice President and
Controller of Drilling
Operations 8/19/98 5,000 9.875 31.63 9.875 4.3 years
</TABLE>
Employment Contracts
The Company has an employment agreement with Mr. Drum. The annual salary
currently payable under such agreement is $170,000, which may be increased by
the Company's Board of Directors or the Compensation Committee. The agreement
has an initial term of five years continuing through December 2000, and
automatically extends for an additional year upon the completion of the
five-year term unless either party provides notice to the other of the intention
to terminate such contract 120 days prior to the termination date. In addition,
the employment agreement entitles Mr. Drum to receive four weeks paid vacation
per year and to participate fully in all employee plans and fringe benefit
programs established by the Company after the date of the contract in which
other senior executives of the Company are eligible to participate.
In the event of a termination due to Mr. Drum's death or disability, his
estate is entitled to receive unused vacation pay, a pro-rated portion of the
bonus (the "Pro-rated Bonus") which would have been payable to Mr. Drum under
the ICP Plan had he been employed at the end of the year in which the
termination occurred (the "Annual Bonus"), and a separation payment equal to the
product of Mr. Drum's compensation in the most recent calendar year (such amount
is referred to herein as a "Year's Compensation"), and a fraction, the
denominator of which is 260, and the numerator of which is the number of months
of Mr. Drum's service with the Company and a previous parent, UGI Corporation,
but, in any event, not more than six months of compensation (the "Separation
Payment"). Additionally, Mr. Drum is entitled to the vesting of all of Mr.
Drum's interests, if any, under the Company's stock option plans and any other
employee plans of the Company ("Plan Vesting"). In the event Mr. Drum retires in
accordance with the Company's retirement policies, he is entitled to receive
unused vacation pay, Pro-rated Bonus, Separation Payment and Plan Vesting (but
only to the extent provided in the Company's employee benefit plans for retiring
employees).
If Mr. Drum is terminated by the Company without cause, he is entitled to
receive termination pay of one year's salary, unused vacation pay, Separation
Payment, Annual Bonus and Plan Vesting. In addition, Mr. Drum is entitled to the
continuation of all employee benefits, without any increase in cost to him, for
a period of 18 months following termination.
In connection with the Company's relocation of its corporate headquarters
from Wayne, Pennsylvania to Houston, Texas, the Company agreed in January 1997
to increase Mr. Drum's annual salary to $170,000 per year, accelerated
-10-
<PAGE> 14
vesting on any unvested options held by him, and agreed to provide relocation
assistance if and when Mr. Drum's employment with the Company is terminated.
In 1997, the Compensation Committee approved employment arrangements with
Mr. Siegel and Mr. Berns providing for annual salaries of $100,000 and $50,000
for a period of five years. In the event of a change in control of the Company,
the Company's obligation to pay such salaries would end and Mr. Siegel and Mr.
Berns would each be entitled to payment of one year's salary and vesting of all
options granted in connection with such employment arrangements. Both Mr. Siegel
and Mr. Berns are entitled to receive bonuses for extraordinary services solely
within the discretion of the Board of Directors and Compensation Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to November 1997, grants of stock options to the Company's executive
officers and Mr. Berns as well as salary levels of the Company's executive
officers were approved by the full Board of Directors. In November 1997, the
Board of Directors delegated these responsibilities to the Compensation
Committee, which is comprised of Messrs. Hunt and Spears. Although the full
Board of Directors authorized the repricing of options during 1998 (with Messrs.
Siegel, Drum and Berns abstaining), it is intended that the Compensation
Committee will determine compensation awarded to the Company's executive
officers, as well as Mr. Berns, in the future. The following section sets forth
certain transactions between members of the Board of Directors and the Company.
CERTAIN TRANSACTIONS
In connection with Remy Capital Partners III, L.P.'s ("Remy") acquisition
of its ownership interest in the Company in March 1995, Remy succeeded to a
registration rights agreement with the Company (the "Registration Agreement")
which provides Remy with the right to require the Company to use its best
efforts to register shares held by Remy under the Securities Act. In the event
that such rights are exercised in connection with a primary offering proposed by
the Company (or a secondary offering with which the Company agrees to
participate), Remy would bear its pro-rata share of the costs of the offering,
other than legal, accounting and printing costs which are to be borne by the
Company. In the event that Remy elects to exercise such rights otherwise than in
connection with an offering proposed by the Company, all costs of the offering
will be borne by it. These rights continue so long as Remy continues to own
Common Stock acquired by it. The right to a demand registration may be exercised
three times.
Mr. Mark S. Siegel, Chairman of the Company, is President and sole
stockholder of Remy Investors, which is the General Partner of Remy. Kenneth N.
Berns, a director and employee of the Company, is an employee of Remy Investors.
The law firm of Fulbright & Jaworski L.L.P., of which Mr. Huff, a director
of the Company, was a partner until June 1998, acted as the Company's principal
outside legal counsel in 1998 and is continuing to do so in 1999. Mr. Huff is
currently Of-Counsel to Fulbright & Jaworski L.L.P.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Annual Salaries and Other Cash Compensation
The Company's continuing policies regarding cash compensation for its
executives were, to a great extent, established by the Board of Directors in
1990 following a comprehensive study performed for the Company by the Hay Group.
That report furnished information on the compensation practices of both firms
similar in size to the Company and firms engaged in similar businesses. Prior to
1996, the salaries of the Named Executive Officers and their salary rates
remained the same as were established in 1990 based on the Hay Group's report.
Likewise, the Incentive Compensation Plan for participating management personnel
was established in 1990 based on that report, and has not subsequently changed.
In November 1997, the Board of Directors delegated to the Compensation Committee
the
-11-
<PAGE> 15
responsibility to administer the Company's stock option plans and to determine
compensation levels for the Named Executive Officers, as well as any
compensation to be paid to Mr. Berns. Prior to such time, the Board of Directors
had administered the Company's stock option plans and had approved compensation
levels for the Named Executive Officers and Mr. Berns based upon recommendations
of the Compensation Committee.
In considering the amount and form of compensation to be provided for the
Named Executive Officers of the Company, the Board of Directors took into
consideration the size of the Company, its financial results and condition, the
nature of the Company's business, business conditions in the oil and gas field
services and supplies industries, the Company's competitive position in the
labor market for skilled executives and amounts paid by other firms to attract
and retain executives of comparable competence and experience. The Company has
sought to provide salaries that are competitive but not excessive and to provide
incentive compensation, in the form of performance related bonuses under the
ICP, to encourage executive performance. The ICP, which is described above, is
also intended to diminish, for successful employees, any potential competitive
shortfall in their cash compensation.
The compensation of Mr. Drum, the Company's President and Chief Executive
Officer, was established to reflect the views of the Board of Directors
regarding his experience and performance and the performance of the Company in
light of prevailing competitive conditions. The Board believes that Mr. Drum is
primarily responsible for the implementation of Board policies. Mr. Drum has
been effective in integrating acquisitions and positioning the Company to take
advantage of improvements in demand and prices for the Company's services as
they occur. Mr. Drum's compensation is intended to reflect these views and to
provide him incentives to continue his successful leadership of the Company.
During 1998, no changes were made to the annual salary payable to Mr. Drum.
Compensation Pursuant to Employee Benefit Plans
It is the general policy of the Company to review stock-based compensation
on an annual basis. Awards of stock-based compensation reflect the Board's and
Compensation Committee's desire to provide the Company's employees who have
substantial responsibility for the Company's management and growth with
additional incentive by increasing their proprietary interest in the success of
the Company. The decision whether to grant stock options to any particular
employee is based upon a variety of factors, including position, performance,
current share and stock option ownership and the need to insure the continued
employment of the employee with the Company. No grants of stock options were
made to the Company's employees during 1998, except options in connection with
promotions and the hiring of certain employees. In lieu of new grants in 1998,
the Board of Directors elected to reprice certain previously granted options.
For a further discussion of this repricing, see "Option Repricings" beginning on
page 9 of this Proxy Statement.
Section 162(m) Deduction Limitation
Section 162(m) of the Code imposes a limitation on deductions that can be
taken by a publicly held corporation for compensation paid to certain of its
executive officers. Under Section 162(m), a deduction is denied for compensation
paid in a tax year beginning on or after January 1, 1994, to the Named Executive
Officers to the extent that such compensation exceeds $1 million per individual.
Stock option grants pursuant to the Company's employee benefit plans may be
exempt from the deduction limit if certain requirements are met. The Board of
Directors and the Compensation Committee have considered the effect of Section
162(m) on the Company's existing compensation program.
Kenneth N. Berns
Vaughn E. Drum
Curtis W. Huff
* Terry H. Hunt
Mark S. Siegel
Nadine C. Smith
* Robert B. Spears
* Member of the Compensation Committee.
-12-
<PAGE> 16
PERFORMANCE GRAPH
The following graph compares the cumulative stockholder return on the
Common Stock of the Company, for the period from December 31, 1993, the date on
which the Company's Common Stock was first registered under Section 12 of the
Securities Exchange Act of 1934, as amended, through December 31, 1998, with the
cumulative total return of the Standard and Poor's 500 Stock Index and a
Company-determined peer group. The Company's peer group consists of Grey Wolf,
Inc., Nabors Industries, Inc., Key Energy Services, Inc., Patterson Energy, Inc.
and TMBR/SHARP Drilling Inc. All of the companies in the Company's peer group
are providers of contract oil and gas land drilling services. The graph assumes
investment of $100 on December 31, 1993 and reinvestment of all dividends.
[INSERT GRAPH]
<TABLE>
<CAPTION>
December 31,
------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
------------- ---------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
UTI Energy Corp. $100 $44.91 $76.28 $479.74 $1052.69 $294.96
S&P 500 100 101.32 139.40 171.40 228.59 293.91
Peer Group Index 100 82.64 138.26 243.67 430.32 142.61
</TABLE>
The foregoing graph is based on historical data and is not necessarily
indicative of future performance. This graph shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission or subject to the Regulations of 14A or 14C under the Exchange Act or
to the liabilities of Section 18 under such act.
-13-
<PAGE> 17
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of the Record Date, the stock
ownership of the Company's named executive officers and directors individually,
all directors and executive officers as a group, and each person known by the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ----------------------------------------------------- --------------------------- --------------------
<S> <C> <C>
Other Beneficial Owners:
REMY Capital Partners III, L.P. 3,514,762(1) 21.9%
1801 Century Park East, Suite 1111
Los Angeles, CA 90067
REMY Investors & Consultants, Incorporated 3,580,762(1) 22.3
1801 Century Park East, Suite 1111
Los Angeles, CA 90067
Pilgrim Baxter &Associates Ltd. 1,289,200(2) 7.8
825 Duportail Road
Wayne, PA 19087
Directors and Named Executive Officers:
Mark S. Siegel 3,930,762(1) 23.9
Vaughn E. Drum 398,360(3) 2.4
Kenneth N. Berns 67,000(4) *
Curtis W. Huff 7,500(5) *
Terry H. Hunt 18,000 (6) *
Nadine C. Smith 19,000(6) *
Robert B. Spears 15,900(6) *
Royce W. Elliott 5,500(3) *
(All Directors and Executive Officers as a group -- 4,462,022(7) 25.8
10 persons)
</TABLE>
* indicates less than 1.0%
- ------------------------------
(1) The Common Stock beneficially owned by Remy Investors, which is the
general partner of Remy, includes the 3,514,762 shares of Common Stock
owned by Remy as well as presently exercisable options to purchase
66,000 shares of Common Stock held by Remy Investors. The Common Stock
beneficially owned by Mr. Siegel, who is the President and sole
stockholder of Remy Investors, includes the 3,580,762 shares of Common
Stock and warrants beneficially owned by Remy Investors as well as
presently exercisable options to purchase 350,000 shares of Common
Stock held by Mr. Siegel, but does not include 200,000 shares
underlying stock options held by Mr. Siegel, which options are not
presently exercisable and will not become exercisable within sixty days
from the date of this Proxy Statement.
-14-
<PAGE> 18
(2) Based solely upon Schedule 13G filed with the Securities and Exchange
Commission.
(3) Includes shares underlying presently exercisable stock options to
purchase 271,960 shares held by Mr. Drum and presently exercisable
stock options to purchase 3,000 shares held by Mr. Elliott. Does not
include shares underlying stock options to purchase 12,500 shares held
by Mr. Drum and stock options to purchase 7,500 shares held by Mr.
Elliott that are not presently exercisable and will not become
exercisable within sixty days from the date of this Proxy Statement.
(4) Represents presently exercisable warrants and options to purchase
67,000 shares owned by Mr. Berns. Does not include 40,000 shares
underlying options that are not presently exercisable within 60 days
from the date of this Proxy Statement and does not include shares of
Common Stock or warrants beneficially owned by Remy Investors by whom
Mr. Berns is employed. Mr. Berns disclaims beneficial ownership of
shares and warrants beneficially owned by Remy Investors.
(5) Includes presently exercisable options to purchase 7,500 shares owned
by Mr. Huff. Does not include 3,750 shares underlying stock options
held by Mr. Huff that are not presently exercisable and will not become
exercisable within sixty days from the date of this Proxy Statement.
(6) Includes presently exercisable options to purchase 15,000 shares owned
by each of Mr. Hunt, Ms. Smith and Mr. Spears. Does not include options
to purchase 3,750 shares owned by each of such individuals that are not
exercisable within sixty days from the date of this Proxy Statement.
(7) Includes presently exercisable options to purchase 810,460 shares of
Common Stock. Does not include options to purchase 407,500 shares owned
by such individuals that are not exercisable within 60 days from the
date of this Proxy Statement.
Except as stated herein, there are no arrangements known to the Company
that may result in a change in control of the Company and each shareholder has
sole voting and investment power with respect to the Company's Common Stock
included in the above table.
-15-
<PAGE> 19
OTHER MATTERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's officers and directors, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten percent shareholders are required by
the regulations promulgated under Section 16(a) to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1998 through December 31, 1998, all officers, directors and greater
than ten percent shareholders complied with all filing requirements applicable
to each of them, except that Mr. Drum reported the exercise of a stock option to
purchase 50,000 shares on Form 5 rather than on Form 4 and Mr. Hunt did not
report the acquisition of 3,000 shares.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was
not aware of any matter to be presented at the Meeting other than as set forth
herein. If any other matters are properly brought before the Meeting, however,
the shares represented by valid proxies will be voted with respect to such
matters in accordance with the judgment of the persons voting them.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any proposal by a stockholder to be presented at the Company's 2000
Annual Meeting of Stockholders (the "2000 Annual Meeting") must be received by
the Company no later than March 2, 2000, in order to be eligible for inclusion
in the Company's Proxy Statement and proxy used in connection with the 2000
Annual Meeting. In addition, the Company's bylaws provide that in order for
business to be properly brought before the 2000 Annual Meeting, such business
must be (i) specified in the notice of the 2000 Annual Meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the 2000 Annual Meeting by or at the direction
of the Board of Directors or (iii) otherwise properly brought before the 2000
Annual Meeting by a stockholder who (A) is a stockholder of record on the date
of the giving of the notice provided for below and on the record date for the
determination of stockholders entitled to vote at the 2000 Annual Meeting and
(B) gives timely notice of such business in writing to the Secretary of the
Company. For purposes of the preceding sentence, to be timely, a stockholder's
notice must be delivered to or mailed and received at the principal executive
offices of the Company no earlier than March 2, 2000 and no later than April 1,
2000; provided, however, that in the event the 2000 Annual Meeting is called for
date that is not within 30 days of June 30, 2000, notice by a stockholder to be
timely must be so received not later than the close of business on the tenth day
following the day on which such notice of the date of the 2000 Annual Meeting
was mailed or public disclosure of the 2000 Annual Meeting date was made,
whichever occurs first. A stockholder's notice to the Secretary of the Company
shall set forth (i) a brief description of the each matter desired to be brought
before the 2000 Annual Meeting and the reasons for conducting such business at
the 2000 Annual Meeting, (ii) the name and record address of the stockholder
proposing such business, (iii) the class and number of shares of the Company
that are beneficially owned by the stockholder, (iv) any material interest of
the stockholder in such business and (v) a representation that such stockholder
intends to appear in person or by proxy at the 2000 Annual Meeting to bring such
business before the 2000 Annual Meeting.
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP has served as the Company's independent accountants
for at least the past five years. It is anticipated that a representative of
Ernst & Young LLP will be present at the Meeting and will be entitled to make a
statement should he so desire and will be available to answer appropriate
questions.
-16-
<PAGE> 20
ANNUAL REPORT
The Company has elected to satisfy its obligation to furnish an Annual
Report to stockholders by providing stockholders with a copy of its Annual
Report on Form 10-K for the year ended December 31, 1998, as filed with the
Securities and Exchange Commission, less exhibits. The financial statements and
related information contained therein are incorporated by reference into this
Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
John E. Vollmer III
Secretary
May 28, 1999
-17-
<PAGE> 21
<TABLE>
<S> <C> <C> <C>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED Please mark
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. your votes as [X]
indicated in
this example
1. ELECTION OF DIRECTORS 3. In their discretion, the proxies are
authorized to vote upon any other matter
as may properly come before the meeting.
FOR all nominees listed WITHHOLD AUTHORITY
below (except as to vote for all nominees
marked to the contrary) listed below
[ ] [ ] I PLAN TO ATTEND THE MEETING. [ ]
Class I: Mark S. Siegel, Kenneth N. Berns
(INSTRUCTIONS: To withhold authority to vote for any Please sign exactly as name appears
individual nominee, write that nominee's name in the below. When shares are held by joint
space provided below.) tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or
2. Amendment to the UTI Energy Corp. 1997 guardian, please give full title as such. If a
Long-Term Incentive Plan corporation, please sign in full corporate name
by President or other authorized officer. If a
FOR AGAINST ABSTAIN partnership, please sign in partnership name by
authorized person.
[ ] [ ] [ ]
Dated: ______________________ , 1999
-------------------------------------
(Signature)
-------------------------------------
(Signature if held jointly)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
- -----------------------------------------------------------------------------------------------------------------------------
[FOLD AND DETACH HERE]
</TABLE>
-18-
<PAGE> 22
ANNUAL MEETING
OF
UTI ENERGY CORP.
WEDNESDAY, JUNE 30, 1999
9:00 A.M.
HOTEL SOFITEL
425 NORTH SAM HOUSTON PARKWAY
HOUSTON, TX 77060
================================================================================
AGENDA
o Election of Directors
o Approval of Amendment to the 1997 Incentive Plan
o Any other matter as may properly come before the meeting
================================================================================
-19-
<PAGE> 23
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UTI ENERGY CORP.
The undersigned hereby appoints Vaughn E. Drum and John E. Vollmer, III
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated on
the other side, all the shares of stock of UTI Energy Corp. standing in the name
of the undersigned with all powers which the undersigned would possess if
present at the Annual Meeting of Stockholders of the Company to be held June 30,
1999 or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
[FOLD AND DETACH HERE]
UTI ENERGY CORP. ANNUAL
MEETING OF
STOCKHOLDERS
JUNE 30, 1999 9:00 A.M.
HOTEL SOFITEL
425 NORTH SAM HOUSTON PARKWAY
HOUSTON, TX 77060
-20-
