<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
CAMCO INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(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
[CAMCO LOGO]
Camco International Inc.
7030 Ardmore
Houston, Texas 77054
(713) 747-4000
March 27, 1998
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Camco International Inc. to be held at 10:00 a.m., C.T., on Tuesday, May 19,
1998, at the Wyndham Warwick Hotel, 5701 Main Street, Houston, Texas.
This year you will be asked to vote in favor of two proposals. The
proposals concern the election of three directors and the appointment of
independent public accountants for fiscal year 1998. These matters are more
fully explained in the attached proxy statement, which you are encouraged to
read.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU APPROVE THESE PROPOSALS AND
URGES THAT YOU RETURN YOUR SIGNED PROXY CARD AT YOUR EARLIEST CONVENIENCE,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
Thank you for your cooperation.
Sincerely,
/s/ GARY D. NICHOLSON
Gary D. Nicholson
Chairman of the Board
<PAGE> 3
[CAMCO LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 19, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Camco
International Inc., a Delaware corporation (the "Company"), will be held at the
Wyndham Warwick Hotel, 5701 Main Street, Houston, Texas, on May 19, 1998, at
10:00 a.m., C.T., for the following purposes:
(1) To elect three directors to serve until the 2001 Annual Meeting of
Stockholders;
(2) To consider and act upon a proposal to ratify the appointment of
Arthur Andersen LLP as independent public accountants for the
fiscal year ending December 31, 1998; and
(3) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Information with respect to the above matters is set forth in the Proxy
Statement that accompanies this Notice.
The Board of Directors has fixed the close of business on March 20, 1998,
as the record date for determining stockholders entitled to notice of and to
vote at the meeting. A complete list of the stockholders entitled to vote at the
meeting will be maintained at the Company's principal executive offices during
ordinary business hours for a period of ten days prior to the meeting. The list
will be open to the examination of any stockholder for any purpose germane to
the meeting during this time. The list will also be produced at the time and
place of the meeting and will be open during the whole time thereof.
Please execute and return the enclosed proxy card promptly. Your
designation of a proxy is revocable and will not affect your right to vote in
person if you find it convenient to attend the meeting.
The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1997, accompanies this Notice and the Proxy Statement.
By order of the Board of Directors,
/s/ RONALD R. RANDALL
Ronald R. Randall
Vice President, General Counsel
and Secretary
Houston, Texas
March 27, 1998
<PAGE> 4
[CAMCO LOGO]
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1998
This Proxy Statement and the accompanying form of Proxy are to be first
mailed on or about March 27, 1998, to all holders of record on March 20, 1998,
of the Common Stock, $.01 par value (the "Common Stock"), of Camco International
Inc., a Delaware corporation (the "Company"), and are furnished in connection
with the solicitation of proxies by the Board of Directors of the Company to be
used at the Annual Meeting of Stockholders to be held at 10:00 a.m., C.T., on
Tuesday, May 19, 1998, and at any adjournment or adjournments thereof (the
"Meeting"). The Common Stock is the only class of securities of the Company that
is entitled to vote at the Meeting. As of the close of business on March 20,
1998, the record date for determining stockholders who are entitled to receive
notice of and to vote at the Meeting, there were 37,810,583 shares of Common
Stock issued and outstanding. Each share is entitled to one vote. The Company's
Restated Certificate of Incorporation does not permit cumulative voting in the
election of directors. The presence at the Meeting, in person or by proxy, of
the holders of a majority of the shares of Common Stock is necessary to
constitute a quorum for the transaction of business at the Meeting.
Shares of Common Stock represented by any unrevoked proxy in the enclosed
form, if such proxy is properly executed and is received prior to the Meeting,
will be voted in accordance with the specifications made on such proxy. Proxies
on which no specifications have been made will be voted for the election as
directors of the nominees listed herein and the appointment of Arthur Andersen
LLP as independent public accountants for the fiscal year ending December 31,
1998. Proxies are revocable by written notice to the Secretary of the Company at
the address of the Company set forth below or by delivery of a later dated
proxy, at any time prior to their exercise. Proxies may also be revoked by a
stockholder attending and voting in person at the Meeting.
The cost of soliciting proxies will be borne by the Company. Solicitation
may be made personally or by mail, telephone or telegraph by officers, directors
and regular employees of the Company (who will not receive any additional
compensation for any solicitation of proxies). The Company will also reimburse
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses for sending proxy materials to the beneficial owners of
Common Stock. The mailing address of the Company's principal executive office is
7030 Ardmore, Houston, Texas 77054.
<PAGE> 5
MATTERS TO COME BEFORE THE MEETING
PROPOSAL 1: ELECTION OF THREE DIRECTORS
Three directors are to be elected at the Meeting. The Company's Restated
Certificate of Incorporation provides that the Board of Directors shall be
divided into three classes of directors, with the term of one class expiring at
each annual stockholders' meeting and each class serving three-year terms. The
terms of office of three directors, Messrs. Johnson, Stacy and Tausch expire at
the Meeting, and such persons are proposed as nominees for director for a term
expiring at the 2001 Annual Meeting. The respective terms of directors expire on
the dates set forth below.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES DIRECTOR
WITH THE COMPANY AGE SINCE
--------------------- --- --------
<S> <C> <C> <C>
NOMINEES FOR ELECTION FOR TERMS
EXPIRING
AT THE 2001 ANNUAL MEETING (CLASS
II)
- --------------------------------------
William J. Johnson.................... Director 63 1990
T. Don Stacy.......................... Director 64 1997
Gilbert H. Tausch..................... Director 71 1964
DIRECTORS WHOSE TERMS EXPIRE
AT THE 1999 ANNUAL MEETING (CLASS
III)
- --------------------------------------
William A. Krause..................... Director 67 1973
Lester Varn, Jr. ..................... Director 73 1997
DIRECTORS WHOSE TERMS EXPIRE
AT THE 2000 ANNUAL MEETING (CLASS I)
- --------------------------------------
Robert L. Howard...................... Director 61 1995
Gary D. Nicholson..................... Chairman of the Board, Director, 61 1992
President and Chief Executive Officer
Charles P. Siess, Jr.................. Director 71 1973
</TABLE>
William J. Johnson has been an independent consultant in the oil and gas
industry since 1994. From 1991 to 1994, Mr. Johnson was President and Chief
Operating Officer of Apache Corporation. Mr. Johnson is a director of Snyder Oil
Corporation, Tesoro Petroleum Corporation and J. Ray McDermott, S.A.
T. Don Stacy was elected to the Board of Directors in July 1997. Mr. Stacy
retired from Amoco Corporation in 1997. He had served Amoco since 1956 in
various executive capacities including Chairman of the Board of Directors and
President of Amoco Canada Petroleum Company Ltd from 1986 to 1994 and Chairman
of the Board of Directors and President of Amoco Eurasia Petroleum Company from
1994 to 1997. Mr. Stacy is a director of Agrium Inc., a producer of farm related
products and services.
Gilbert H. Tausch retired as the Company's President and Chief Executive
Officer on January 1, 1993. Prior to that time, Mr. Tausch served the Company in
various executive capacities since 1959.
William A. Krause has been President of Krause, Inc. -- Engineers &
Architects since 1990.
Lester Varn, Jr. was elected to the Board of Directors in June 1997 in
connection with the acquisition by the Company of Production Operators Corp
where he had served as a director since 1964. Mr. Varn is a private investor who
has managed his and his family's investments for the past 52 years. He is an
executive in various family owned businesses including positions as President of
Varn Investment Company and Crescent Financial, Inc., which are investment
companies, and Vice President of Varn Turpentine & Cattle Co. and Varn Trading
Company, which are timber companies.
Robert L. Howard retired from Shell Oil Company in 1995 after 36 years of
service where he had served in various executive capacities. He last served
Shell Oil Company as Vice President of Domestic Operations for Exploration and
Production, and President of Shell Offshore, Inc. and Shell Western Inc. Mr.
Howard is a director of Southwestern Energy Company, United Meridian
Corporation, McDermott International, Inc. and J. Ray McDermott, S.A.
2
<PAGE> 6
Gary D. Nicholson is Chairman of the Board of Directors, President and
Chief Executive Officer of the Company. Mr. Nicholson joined the Company in
October 1992 as Executive Vice President and Chief Operating Officer, became
President and Chief Executive Officer on January 1, 1993 and Chairman of the
Board of Directors in October 1994.
Charles P. Siess, Jr. is Chairman of the Board of Directors and Chief
Executive Officer of Cabot Oil and Gas Corporation and has served in that
capacity since 1995. In addition to these offices, Mr. Siess also served Cabot
Oil and Gas Corporation as its President from 1995 to 1997 and as Chairman of
the Board of Directors, Chief Executive Officer and President from 1989 to 1992.
Mr. Siess was a Consultant to and General Manager of Bridas S.A.P.I.C., an
Argentine oil and gas company, from 1993 to 1994. Mr. Siess is a director of
Cabot Corporation and Rowan Companies, Inc.
It is the intention of the persons named in the enclosed form of proxy to
vote such proxy for the election of the three nominees for director named above,
unless otherwise directed by the stockholder. If a nominee should be unable to
serve or for good cause will not serve, and if any other person is nominated,
the persons designated on the accompanying form of proxy will have discretionary
authority to vote or refrain from voting in accordance with their judgment on
such other nominee unless authority to vote on such matter is withheld. In
accordance with Delaware law, a stockholder entitled to vote for the election of
directors can withhold authority to vote for all nominees for directors or can
withhold authority to vote for certain nominees for directors. The director
nominees receiving a plurality of the votes cast at the Meeting will be elected
as directors. Abstentions and broker nonvotes will not be treated as a vote for
or against any particular director nominee and will not affect the outcome of
the election.
The Company's By-laws provide that, subject to certain limitations
discussed below, nominations of persons for election to the Board of Directors
may be made at any annual meeting of stockholders (or at any special meeting of
stockholders called for the purpose of electing directors) by any stockholder of
the Company (a) who is a stockholder of record on the date of the giving of the
notice and on the record date for the determination of stockholders entitled to
vote at such meeting and (b) who complies with the notice procedures set forth
below. In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Company.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Company (a) in
the case of an annual meeting, not less than 90 days nor more than 120 days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the annual meeting is
called for a date that is not within 30 days before or after such anniversary
date, notice by the stockholder in order 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 annual meeting was mailed or public disclosure of
the date of the annual meeting was made, whichever first occurs, and (b) in the
case of a special meeting of stockholders called for the purpose of electing
directors, not later than the close of business on the tenth day following the
day on which public disclosure of the date of the special meeting was made.
To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Company which are owned beneficially or of record by the person and (iv) any
other information relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder and (b) as to the stockholder giving the
notice, (i) the name and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the Company which are owned
beneficially or of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder,
3
<PAGE> 7
(iv) a representation that such stockholder intends to appear in person or by
proxy at the meeting to nominate the persons named in its notice and (v) any
other information relating to such stockholder that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must also be accompanied by the proposed nominee's
written consent to being named as a nominee and to serve as a director if
elected.
COMMITTEES OF THE BOARD OF DIRECTORS
Pursuant to the Company's By-laws, the Board of Directors has established
two standing committees, an Audit Committee and an Executive Compensation
Committee. The Board of Directors has not established a nominating committee.
During the fiscal year ended December 31, 1997, the Board of Directors met nine
times, the Audit Committee met four times and the Executive Compensation
Committee met five times. All directors attended more than 75% of the combined
number of Board meetings and meetings of committees of which they are members.
Audit Committee
Messrs. Krause (chairman), Tausch and Varn are the current members of the
Audit Committee. The Audit Committee recommends the independent public
accountants appointed by the Board of Directors to audit the consolidated
financial statements of the Company and reviews issues raised by such
accountants as to the scope of their audit and their report thereon, including
any questions and recommendations that may arise relating to such audit and
report or the Company's internal accounting and auditing procedures.
Executive Compensation Committee
Messrs. Johnson (chairman), Howard, Siess and Stacy are the current members
of the Executive Compensation Committee. The Executive Compensation Committee
reviews and makes recommendations to the Board of Directors with respect to the
compensation of the officers of the Company and administers and makes awards
under the Company's Long-Term Incentive Plan.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company or its subsidiaries are not paid
any fees or additional compensation for service as members of the Board of
Directors or any committee thereof. In 1997, Directors who were not employees of
the Company or its subsidiaries ("Outside Directors") received an annual
retainer fee of $22,000, paid quarterly, and a fee of $1,250 for attendance at
each meeting of the Board of Directors. Additionally, Outside Directors who were
committee chairmen received a separate annual retainer of $2,000. Outside
Directors who were committee members, including the chairmen of committees,
received a fee of $1,250 for attendance at each committee meeting, except that a
meeting that occurred on the same day as a regularly scheduled Board of
Directors meeting entitled an Outside Director to receive a fee of $625.
Pursuant to the Camco International Inc. Amended and Restated Stock Option
Plan for Nonemployee Directors (the "Director Plan"), each Outside Director
serving on the Board of Directors on the 30th day following each annual meeting
of stockholders of the Company is currently granted an option to purchase 5,000
shares of Common Stock at the fair market value of such stock on the date the
option is granted. In addition, thirty days following the initial election to
the Board of Directors of any new Outside Director or the reelection of an
Outside Director, such Outside Director is granted an option to purchase 10,000
shares of Common Stock at the fair market value of such stock on the date of
grant.
Each stock option granted to an Outside Director under the Director Plan,
as currently in effect, has a ten year term and is exercisable in three equal
annual installments beginning on the first anniversary of the date of grant
assuming continued service on the Board of Directors. In the event of an Outside
Director's retirement, disability, or in the event of a change of control of the
Company (as described under "Change of Control"), options will become
immediately exercisable and will remain exercisable for a period of 36 months
following
4
<PAGE> 8
the date the director ceases to be a director. In the event of an Outside
Director's death prior to retirement or disability, options will become
immediately exercisable and will remain exercisable for a period of 12 months.
Options are subject to early termination in the event an Outside Director leaves
the Board of Directors for any other reason.
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
appointed the firm of Arthur Andersen LLP as independent public accountants for
the fiscal year ending December 31, 1998, subject to ratification by the
stockholders at the Meeting. Representatives of Arthur Andersen LLP are expected
to attend the Meeting, will be afforded an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions
by stockholders.
Ratification of the appointment of Arthur Andersen LLP requires the
affirmative vote of a majority of the votes cast by the holders of shares of
Common Stock entitled to vote at the Meeting. Abstentions and broker nonvotes
will not be considered as a vote for or against the proposal and therefore will
have no effect on the outcome of the proposal.
FURTHER INFORMATION
PRINCIPAL STOCKHOLDER
The following table sets forth as of February 27, 1998, the beneficial
ownership of each person who is known by the Company to be the beneficial owner
of more than five percent of the outstanding Common Stock. Such information is
based solely upon data provided to the Company by such persons.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OWNERSHIP OF CLASS(5)
---------------- ------------ -----------
<S> <C> <C>
FMR Corp.......................................... 2,107,310(1) 5.6%
82 Devonshire
Boston, Massachusetts 02109
T. Rowe Price Associates, Inc..................... 2,076,900(2) 5.5%
100 East Pratt Street
Baltimore, Maryland 21202
Dresdner RCM Global Investors LLC................. 2,057,084(3) 5.5%
Four Embarcadero Center
San Francisco, California 94111
Putnam Investments, Inc........................... 1,979,856(4) 5.3%
One Post Office Square
Boston, Massachusetts 02109
</TABLE>
- ---------------
(1) Fidelity Management & Research Company ("Fidelity"), a wholly owned
subsidiary of FMR Corp. ("FMR") and a registered investment adviser, is the
beneficial owner of 2,107,310 shares as a result of acting as investment
adviser to various registered investment companies (the "Funds"). Edward C.
Johnson 3d, the Chairman and principal stockholder of FMR, FMR, through its
control of Fidelity, and the Funds each has sole power to dispose of the
2,107,310 shares owned by the Funds; however, sole power to vote the shares
owned by the Funds resides with the Funds' Boards of Trustees. Fidelity
carries out the voting of the shares under written guidelines established by
the Funds' Board of Trustees. Members of Mr. Johnson's family and trusts for
their benefit are the predominant owners of Class B shares of common stock
of FMR. Mr. Johnson owns 12.0% and Abigail P. Johnson, Mr. Johnson's wife
and a Director of FMR owns 24.5% of the voting stock of FMR. The Johnson
family and all other Class B shareholders have entered into a shareholders'
voting agreement under which all Class B shares
5
<PAGE> 9
will be voted in accordance with the majority vote of Class B shares.
Accordingly, through their ownership of voting common stock and the
execution of the shareholders' voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of 1940, to form a
controlling group with respect to FMR.
(2) The shares are owned by various individual and institutional investors which
T. Rowe Price Associates, Inc. serves as investment adviser with power to
direct investments and/or sole power to vote the shares. For purposes of the
reporting requirements of the Exchange Act, Price Associates is deemed to be
a beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
(3) Dresdner RCM Global Investors LLC ("Dresdner RCM"), a wholly owned
subsidiary of Dresdner Bank AG ("Dresdner"), is a registered investment
advisor and the beneficial owner of 2,057,084 shares. RCM Limited L.P. ("RCM
Limited") is the Managing Agent of Dresdner RCM and RCM General Corporation
("RCM General") is the General Partner of RCM Limited. Each of Dresdner, RCM
Limited and RCM General may be deemed to have beneficial ownership of all
shares that are beneficially owned by Dresdner RCM. Of the 2,057,084 shares
beneficially owned by Dresdner RCM, Dresdner, Dresdner RCM, RCM Limited and
RCM General have sole voting power with respect to 1,404,009 of such shares,
sole dispositive power with respect to 2,029,144 of such shares and shared
dispositive power with respect to 26,700 of such shares. Additionally,
Dresdner has sole power to dispose and vote 1,240 of such shares.
(4) Putnam Investments, Inc. ("PI"), a wholly owned subsidiary of Marsh &
McLennan Companies, Inc. ("MMC"), is the beneficial owner of 1,979,856
shares. PI wholly owns two registered investment advisors, Putnam Investment
Management, Inc. ("PIM"), which is the investment advisor to the Putnam
family of mutual funds, and The Putnam Advisory Company, Inc. ("PAC"), which
is the investment advisor to Putnam's institutional clients. Both
subsidiaries have dispositive power over the shares as investment managers,
but each of the mutual fund's trustees have voting power over the shares
held by each fund, and PAC has shared voting power over the shares held by
the institutional clients. MMC and PI disclaim any beneficial ownership of
any shares, and further state that neither of them have any power to vote or
dispose of, or direct the voting or disposition of, any of the shares.
(5) Based on a total of 37,680,539 shares of Common Stock issued and outstanding
as of February 27, 1998.
6
<PAGE> 10
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth as of February 27, 1998, the beneficial
ownership of the outstanding Common Stock by each nominee and current director
of the Company, each executive officer of the Company named in the Summary
Compensation Table below and all directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS(2)
---- ------------ -----------
<S> <C> <C>
William J. Johnson................................. 12,314 *
T. Don Stacy....................................... 1,000 *
Gilbert H. Tausch.................................. 14,998 *
William A. Krause.................................. 9,832 *
Lester Varn, Jr.................................... 302,921(3) *
Robert L. Howard................................... 8,999 *
Gary D. Nicholson.................................. 89,413 *
Charles P. Siess, Jr............................... 10,999 *
Merle C. Muckleroy................................. 43,969 *
Robert J. Caldwell................................. 41,768 *
Herbert S. Yates................................... 25,778 *
Stephen D. Smith................................... 23,110 *
Others Not Listed.................................. 218,681 *
------- ----
All Directors and Executive Officers as a Group (16
persons)......................................... 803,782 2.13%
======= ====
</TABLE>
- ---------------
* Less than 1%.
(1) Beneficial ownership by a person includes both outstanding shares of Common
Stock owned and shares of Common Stock which such person has a right to
acquire within 60 days upon the exercise of outstanding options. Except for
Mr. Varn, directors and executive officers have sole voting and investment
power with respect to the shares they own. Includes 30,291, 18,333, 8,000,
8,000 and 228,205 shares of Common Stock beneficially owned by Messrs.
Muckleroy, Caldwell, Yates, Smith and all directors and executive officers
of the Company as a group, respectively, pursuant to outstanding options
that are exercisable within 60 days.
(2) Based on a total of 37,680,539 shares of Common Stock issued and outstanding
as of February 27, 1998.
(3) All of such shares of Common Stock are held by a family limited partnership
and may be deemed to be indirectly beneficially owned by Mr. Varn as a
limited partner; provided, however, Mr. Varn only has sole voting power with
respect to 98,727 shares and shared voting power with respect to 97,092
shares of Common Stock.
7
<PAGE> 11
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the current
executive officers of the Company. The executive officers are elected by the
Board of Directors and serve at the discretion of the Board. 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>
Gary D. Nicholson.............. 61 Chairman of the Board of Directors,
Director, President and Chief Executive
Officer
Herbert S. Yates............... 55 Senior Vice President -- Finance, Chief
Financial Officer and Treasurer
Ronald R. Randall.............. 58 Vice President, General Counsel and
Secretary
Thomas W. Everitt.............. 52 Vice President -- Human Resources
Bruce F. Longaker, Jr.......... 44 Vice President -- Finance and Corporate
Controller
Merle C. Muckleroy............. 63 President, Camco Products and Services Group
Robert J. Caldwell............. 58 President, Camco Drilling Group
Stephen D. Smith............... 53 President, Reda Group
D. John Ogren.................. 54 President, Production Operators Group
</TABLE>
Herbert S. Yates joined the Company in 1980 as Director -- Internal Audit
and was elected Controller in 1981. Mr. Yates was elected Vice
President -- Finance, and Chief Financial Officer in 1983, Treasurer in 1984 and
Senior Vice President -- Finance in 1992.
Ronald R. Randall joined the Company as General Counsel and Secretary in
1990 and was elected Vice President in 1992. Prior to joining the Company, Mr.
Randall was employed by Smith International, Inc., an oilfield service company,
from 1979 until 1990 where he last served as General Counsel and Secretary.
Thomas W. Everitt joined the Company in 1991 as Vice President -- Human
Resources. Prior to coming to the Company, Mr. Everitt was Vice
President -- Human Resources with Pearson, Inc., a subsidiary of Pearson plc, a
diversified holding company based in the United Kingdom and former parent of the
Company, from 1988 until his transfer to the Company in 1991.
Bruce F. Longaker, Jr. was elected Vice President -- Finance in 1992. Mr.
Longaker joined the Company in 1981 and held various positions in the accounting
department. He has served as Controller since 1986.
Merle C. Muckleroy has served as President of the Camco Products and
Services Group, which includes Camco Products, Camco Coiled Tubing Services and
Camco Wireline, since 1989. Mr. Muckleroy joined the Company in 1963 in the
field sales organization and served as Senior Vice President -- Sales and
Service from 1981 to 1989.
Robert J. Caldwell has served as President of the Camco Drilling Group,
which includes Reed Tool, Hycalog and Drilling & Services, since 1987. Mr.
Caldwell joined the Company in 1969 in the Camco Products manufacturing
organization. He served the Camco Products and Services Group as Vice
President -- Engineering and Research from 1982 to 1985 and Senior Vice
President -- Operations from 1985 to 1987.
Stephen D. Smith has served as President of Reda Group since February 1996.
Mr. Smith joined the Company in 1977 as Vice President -- Materials for the
Camco Products and Services Group and has since served in various executive
positions in that group where he was last Senior Vice President -- Operations
from 1989 to 1996.
D. John Ogren has served as President of the Production Operators Group
since the acquisition of Production Operators Corp by the Company in 1997. Mr.
Ogren joined Production Operators Corp in 1994 as President and a Director.
Prior to joining Production Operators Corp, Mr. Ogren served E. I. Du Pont de
8
<PAGE> 12
Nemours and Company ("Dupont") for 30 years in various management positions and
last held the positions of Senior Vice President of Dupont and Conoco, Inc., a
subsidiary of Dupont, and President and Chief Executive Officer of Dupont
Canada.
EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Members of the Executive Compensation Committee are Messrs. Johnson,
Howard, Siess and Stacy each of whom is an Outside Director.
EXECUTIVE COMPENSATION COMMITTEE REPORT
The Executive Compensation Committee is responsible for making all
compensation decisions for the named executives including determining base
salary and annual incentive compensation amounts and granting stock options and
other stock based compensation under the Company's 1997 Long-Term Incentive Plan
(the "1997 Incentive Plan").
Overall Objectives of the Executive Compensation Program
The purpose of the Company's compensation plan is to attract, retain and
motivate key management employees. It is the philosophy of the Company to pay
its executives at levels commensurate with both Company and individual
performance. A primary consideration in developing the Company's executive
compensation programs is to link the long-term financial interests of executives
with those of the Company and its stockholders. Throughout 1997, the Executive
Compensation Committee reviewed compensation surveys, evaluated proxy statements
for comparable organizations and took advice from compensation consultants in
order to establish the Company's total compensation program and determine awards
under the 1997 Incentive Plan.
In 1997, the total compensation program for the Company's top executives,
approved by the Company's Board of Directors, consisted of a base salary, an
award under the Annual Incentive Compensation Plan and an award under the 1997
Incentive Plan for each of such executives.
Base Salary Program
It is the Company's policy to establish salaries at a level approximating
the average of the competitive levels in comparable organizations and to provide
annual salary increases reflective of the executive's performance, level of
responsibility and position with the Company. Based on a review of comparable
organizations, including certain of the companies in the Company's peer group
index used for the performance graph contained elsewhere herein, Mr. Nicholson's
base annual salary was increased from $440,000 in 1996 to $460,000 in 1997.
Annual Incentive Compensation Plan
The Company has an Annual Incentive Compensation Plan. Under the plan, the
Company provides executives with the opportunity to earn additional compensation
based on the Company's financial performance. The maximum award levels for
executives participating in this plan range from 30% to 150% of the executive's
base salary at the end of the calendar year. This level of award, while not
expected to be earned every year, is intended to provide executives an average
annual total compensation level approximating the 75th percentile of the total
compensation levels in comparable organizations, including those companies in
the Company's peer group index used for the performance graph, when measured
over time. The awards earned in 1997 were based on the achievement of financial
goals established and approved by the Company's Board of Directors. These goals
included both the attainment by the Company of certain profit goals and cash
flow from operations as well as a comparison of the Company's financial
performance relative to its peer group. Mr. Nicholson was eligible to
participate in the Annual Incentive Compensation Plan and received an incentive
award payment of $666,000 for his contribution to the Company's financial
performance in 1997.
9
<PAGE> 13
Long-Term Incentive Plan
In 1997, the Company adopted the 1997 Incentive Plan that permits the
Company to make grants of stock options, restricted stock, performance shares
and other awards to employees as part of the Company's overall incentive
compensation program. The 1997 Incentive Plan, which was adopted to replace the
Company's 1993 Long Term Incentive Plan (the "1993 Incentive Plan"), is intended
to attract, retain and motivate key management personnel and to align the
interest of the executives with those of stockholders. The overall long-term
incentive grant levels are established by reviewing the number of shares
reserved for such plans by comparable organizations, including companies in the
Company's peer group index used for the performance graph. Individual long-term
incentive grants are based on the employee's position in the Company and
responsibility level. In 1997, stock option grants for an aggregate of 522,213
shares of Common Stock were made to employees. In addition, grants of service
based restricted stock awards were made in respect of 72,550 shares. The number
of shares subject to the awards was established at a level that was believed to
be approximately the 75th percentile for comparable organizations based on
reports provided to the Executive Compensation Committee. Performance related
restricted stock awards were made to certain executives in connection with the
acquisition of Production Operators Corp in 1997. The terms of the award provide
for one-half of any earned shares to vest in each of February 1999 and February
2000. Mr. Nicholson received a grant of 12,000 shares under this award. Mr.
Nicholson was also granted options to acquire 110,000 shares of Common Stock and
8,000 shares of restricted stock in 1997. The restricted stock will vest three
years from the date of the award provided Mr. Nicholson is still employed by the
Company. The number of shares subject to these awards was fixed at a level
considered to be appropriate to provide a meaningful long-term incentive to Mr.
Nicholson.
Section 162(m)
Section 162(m) of the Internal Revenue Code, as amended, currently imposes
a $1 million limitation on the deductibility of certain compensation paid to
each of the Company's five highest paid executives. Excluded from this
limitation is compensation that is "performance based". For compensation to be
performance based it must meet certain criteria, including being based on
predetermined objective standards approved by shareholders. In general, the
Company believes that compensation relating to options granted under the 1993
Incentive Plan should be excluded from the $1 million limitation calculation.
Compensation relating to the Company's restricted stock awards and incentive
compensation awards under the 1993 Incentive Plan do not currently qualify for
exclusion from the limitation, given the discretion that is provided to the
Committee under the Company's plans in establishing the performance goals for
such awards. However, the 1997 Incentive Plan is intended to meet the
requirements of Section 162(m) of the Code for performance awards involving
restricted stock and other incentive compensation. The Committee believes that
maintaining the discretion to evaluate the performance of the Company's
management is an important part of its responsibilities and inures to the
benefit of the Company's stockholders. The Committee, however, intends to take
into account the potential application of Section 162(m) with respect to
incentive compensation awards and other compensation decisions made by it in the
future.
EXECUTIVE COMPENSATION COMMITTEE
William J. Johnson, Chairman
Robert L. Howard
Charles P. Siess, Jr.
T. Don Stacy
10
<PAGE> 14
EXECUTIVE COMPENSATION
The following table sets forth information concerning the cash compensation
and additional incentive compensation paid by the Company to the Chief Executive
Officer and each of its four other most highly compensated executive officers
for the fiscal year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------- -------------------------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING COMPEN-
POSITION WITH THE COMPANY YEAR SALARY BONUS SATION(1) AWARDS(2)(3) OPTIONS SATION(4)
------------------------- ---- -------- -------- --------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Gary D. Nicholson........................... 1997 $460,000 $666,000 $ -- $982,500 110,000 $2,481
Chairman of the Board of 1996 440,000 660,000 -- 348,000 90,000 2,494
Directors, President and 1995 400,000 500,000 -- -- -- 2,133
Chief Executive Officer
Merle C. Muckleroy.......................... 1997 $218,000 $253,000 $ -- $147,375 15,000 $2,481
President, Camco Products 1996 208,000 280,000 -- 116,000 10,000 2,494
and Services Group 1995 193,000 195,000 -- -- -- 2,133
Robert J. Caldwell.......................... 1997 $214,000 $210,000 $ -- $147,375 15,000 $2,481
President, Camco Drilling Group 1996 207,000 218,000 -- 116,000 10,000 2,494
1995 195,000 195,000 -- -- -- 2,133
Herbert S. Yates............................ 1997 $204,000 $217,000 $ -- $383,175 15,000 $2,481
Senior Vice President -- Finance, 1996 194,000 214,000 -- 116,000 10,000 2,494
Chief Financial Officer and 1995 180,000 155,000 -- -- -- 2,133
Treasurer
Stephen D. Smith............................ 1997 $175,000 $163,000 $ -- $147,375 15,000 $2,481
President, Reda Group 1996 163,750 158,000 60,946(5) 116,000 10,000 2,494
1995 145,700 112,560 -- -- -- 2,133
</TABLE>
- ---------------
(1) The dollar value of perquisites and other personal benefits were less than
the lesser of $50,000 and 10% of the total annual salary and bonus for each
named executive officer, except as noted for Mr. Smith who received
reimbursement for certain relocation expenses in 1996.
(2) Pursuant to the 1997 Incentive Plan, Messrs. Nicholson, Muckleroy, Caldwell,
Yates and Smith were awarded 8,000, 3,000, 3,000, 3,000 and 3,000 shares,
respectively, of service based restricted Common Stock ("Service Based
Restricted Stock") on May 20, 1997. The vesting of the Service Based
Restricted Stock pursuant to this grant is based upon the employee's
continued employment for a three year period at which time all of the shares
will vest. On February 20, 1996, Messrs. Nicholson, Muckleroy, Caldwell,
Yates and Smith were awarded 12,000, 4,000, 4,000, 4,000, and 4,000 shares,
respectively of Service Based Restricted Stock under the Company's 1993
Incentive Plan. The vesting of all shares under this award is based upon the
employees' continued employment for a three year period at which time all of
the shares will vest.
Pursuant to the 1997 Incentive Plan, Messrs. Nicholson and Yates were
awarded 12,000 and 4,800 shares, respectively, of performance based
restricted Common Stock ("Performance Based Restricted Stock"). Under the
terms of this grant, the shares will be earned based on the Company and
Production Operators reaching certain financial goals during 1998. The
shares, if earned, will be paid in two equal installments in February 1999
and February 2000, provided the employees remain employed by the Company.
As of December 31, 1997, the aggregate number of all unvested restricted
stock holdings awarded to Messrs. Nicholson, Muckleroy, Caldwell, Yates and
Smith were 47,705, 16,052, 16,052, 15,718 and 7,667 shares respectively. The
aggregate value of all unvested restricted stock holdings awarded to Messrs.
Nicholson, Muckleroy, Caldwell, Yates and Smith were $3,038,212, $1,022,312,
$1,022,312,
(Notes continued on following page)
11
<PAGE> 15
$1,001,040 and $488,292, respectively, based on the closing market price of
the Common Stock on that date.
(3) Recipients of restricted stock are not entitled to any dividends, voting or
other rights with respect thereto until such stock vests and the
restrictions are removed.
(4) Represents matching contributions of $1,500 made by the Company in 1997
under the Company's Thrift Plan, and life insurance premiums of $981 paid by
the Company.
(5) Payment of expenses in connection with Mr. Smith's relocation from Texas to
Oklahoma.
The following table sets forth information concerning stock options granted
by the Company under the Incentive Plan to the Chief Executive Officer and each
of the four other most highly compensated executive officers during the fiscal
year ended December 31, 1997.
OPTIONS GRANTED
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE(2)
OPTIONS % OF EXERCISE -----------------------
GRANTED(1) TOTAL PRICE EXPIRATION DATE 5% 10%
---------- ----- -------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Gary D. Nicholson........... 110,000 19.07% $49.06 May 20, 2007 $3,394,066 $8,601,229
Merle C. Muckleroy.......... 15,000 2.60 49.06 May 20, 2007 462,827 1,172,895
Robert J. Caldwell.......... 15,000 2.60 49.06 May 20, 2007 462,827 1,172,895
Herbert S. Yates............ 15,000 2.60 49.06 May 20, 2007 462,827 1,172,895
Stephen D. Smith............ 15,000 2.60 49.06 May 20, 2007 462,827 1,172,895
</TABLE>
- ---------------
(1) Represents options granted on May 20, 1997, under the 1997 Incentive Plan.
(2) Potential realizable values are based on the assumption that the Common
Stock will appreciate in value from the date of grant to the end of the
option terms at the stated annualized rates. Such assumed rates of
appreciation and potential realizable values are not necessarily indicative
of future appreciation, if any, which may be realized in future periods.
The following table sets forth information concerning the exercises of
options during the fiscal year ended December 31, 1997, and the number and value
of unexercised options held as of December 31, 1997, by the Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company.
AGGREGATED OPTION EXERCISES
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED,
ACQUIRED ON VALUE OPTIONS AT IN-THE-MONEY OPTIONS
EXERCISE REALIZED(1) FISCAL YEAR-END AT FISCAL YEAR-END(2)
----------- ----------- --------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary D. Nicholson.... 69,165 $1,619,640 46,665 224,170 $2,227,002 $6,202,714
Merle C. Muckleroy... -- -- 27,791 33,709 1,299,606 1,021,613
Robert J. Caldwell... 13,638 672,469 15,833 33,834 632,682 1,027,418
Herbert S. Yates..... 18,335 719,222 8,500 34,665 401,469 1,062,252
Stephen D. Smith..... 3,583 140,412 5,500 26,584 243,438 678,371
</TABLE>
- ---------------
(1) Represents the difference between the exercise price of the options
exercised and the market price of the shares acquired on the exercise date.
(2) Value based on the difference between (i) the fair market value of Common
Stock on December 31, 1997, and (ii) the exercise price.
12
<PAGE> 16
RETIREMENT PLANS
The Company maintains a pension plan and a Supplemental Executive
Retirement Plan (the "SERP") for the benefit of its executive officers. The SERP
provides for a supplement to the retirement benefits payable under the Pension
Plan. The estimated annual benefits payable upon retirement at normal retirement
age for Messrs. Nicholson, Muckleroy, Caldwell, Yates and Smith under the
Pension Plan, as supplemented by the SERP, are $377,147, $157,583, $199,006,
$210,060 and $197,882, respectively.
Compensation for the purposes of the plans consists of all remuneration
paid to a participant (other than relocation expense reimbursement, educational
assistance, cost of living allowances, mortgage assistance and overseas hardship
bonuses and inducements and bonus payments in excess of 20% of base pay) for the
relevant period. Benefits are reduced for early retirement. Benefits are
determined based on the average of the participant's highest five consecutive
years out of the last ten consecutive years before retirement. The benefits
shown above are computed on the basis of a ten year certain and life annuity and
are not subject to reduction for social security. Other forms of benefits are
available. Benefits are also reduced for the present value of benefits under
Company tax qualified pension plans as well as tax qualified pension plans
sponsored by the participant's former employers.
Upon the occurrence of a "Change of Control" (as defined below under
"Change of Control"), all benefits under the SERP will fully and immediately
vest, including eligibility for the early retirement benefit, and each
participant will receive additional service credit equal to a minimum of five
years (however, not to exceed the service that would have been achieved by the
participant's normal retirement date) or, for executives who have not yet
reached age 50, a minimum benefit equal to that which would have been achieved
had they been employed until age 55. An amount equal to the present value of the
accrued benefits, as determined through actuarial calculations, is required to
be deposited in the rabbi trust that is established for the SERP. To the extent
that payments to a participant under the SERP would result in the receipt of an
amount in excess of the amount permitted to be paid without penalty under
Section 4999 of the Code, the amount of payments to be made under the SERP will
be reduced if such reduction would increase the after-tax payments to the
participant. The estimated present value of the benefits that would have been
payable (before any reduction with respect to Section 4999 of the Code) under
the SERP if a Change of Control had occurred on December 31, 1997, is
$2,357,140, $574,091, $698,788, $501,712 and $333,441 for Messrs. Nicholson,
Muckleroy, Caldwell, Yates and Smith, respectively. No contributions were made
to the SERP by the Company in 1997.
NICHOLSON EMPLOYMENT AGREEMENT
The Company has entered into an agreement with Mr. Nicholson to employ him
as President and Chief Executive Officer. Pursuant to the agreement, Mr.
Nicholson will receive a base annual salary of $520,000 in 1998. In addition,
the agreement provides that Mr. Nicholson will be eligible for participation in
the 1993 and 1997 Incentive Plans and the SERP. In the event of termination of
his employment without cause, Mr. Nicholson will receive (a) an amount equal to
two times his base salary in effect at the time of his termination, (b) full
vesting of his accrued benefit under the SERP and (c) accelerated vesting in any
non-vested stock options or other awards granted under the 1993 and 1997
Incentive Plans.
EXECUTIVE SEVERANCE AGREEMENTS
The Company has entered into severance agreements with its executive
officers (the "Executive Severance Agreements"). The agreements provide that if
the executive's employment is terminated within three years after a Change of
Control , either (a) by the Company for reasons other than "cause" (as defined
in the Executive Severance Agreements) or other than as a consequence of death,
disability, retirement at age 65 or voluntary retirement before age 65 or (b) by
the executive for reasons relating to a diminution of responsibilities or
compensation or if relocation of the executive is required by the Company to a
location other than that of a major operating unit or facility of the Company
(but in no event upon termination for cause), the executive will receive: (1) a
lump-sum payment equal to three times the highest cash compensation earned
(i.e., annual base salary plus annual bonus earned for the year's performance)
during
13
<PAGE> 17
any period of 12 months during the five years ending with the date on which
employment is terminated (such lump sum payment to be reduced pro rata to the
extent there are less than 36 months until the executive reaches age 65); and
(2) life, medical, dental and accident and disability insurance as provided in
the Company's insurance programs or, in certain circumstances, substantially
equivalent insurance to be provided by the Company for a period of 36 months
after termination of employment (or until age 65 or when comparable coverage is
obtained through another employer, whichever is sooner). To the extent that
payments to an executive under his agreement would result in the receipt of an
amount in excess of the amount permitted to be paid without penalty under
Section 4999 of the Code, the amount of payments to be made under the agreement
will be reduced if such reduction would increase the after-tax payments to the
executive. Had the named executive officers terminated employment on December
31, 1997, in a manner entitling them to benefits under the Executive Severance
Agreements, the respective executive officers would have received the following
cash lump-sum payments pursuant to item (1) above: Mr. Nicholson, $3,378,000;
Mr. Muckleroy, $1,464,000; Mr. Caldwell, $1,275,000; Mr. Yates, $1,263,000 and
Mr. Smith, $1,014,000.
CHANGE OF CONTROL
The Company intends that certain of the benefit plans described above will
provide for the acceleration of certain benefits in the event of a "Change of
Control" of the Company. Under such plans, a Change of Control will be deemed to
have occurred if either (1) any person or group acquires beneficial ownership
(as defined therein) of 30% or more of the Company's voting securities, (2)
there is a change in the composition of a majority of the Company's Board within
any period of four consecutive years which change was not approved by a majority
of the Board as constituted immediately prior to the commencement of such
four-year period, (3) at any meeting of stockholders of the Company called for
the purpose of electing directors, more than one of the persons nominated by the
Board fails to be elected or (4) the stockholders of the Company approve a
merger, consolidation, sale of substantially all assets or other reorganization
of the Company, other than a reincorporation, in which the Company does not
survive. A Change of Control will be deemed not to occur in respect to an
employee if such employee is the person or part of the group referred to in
clause (1) above.
Upon the occurrence of a Change of Control of the Company, all outstanding
shares of restricted stock and performance awards will immediately vest. All
stock options and all stock appreciation rights granted under the 1993 and 1997
Incentive Plans and held by then-current employees will become immediately
exercisable and will remain exercisable for three years (but not beyond their
expiration date) following the employee's termination of employment for any
reason other than dishonesty, conviction of a felony, willful unauthorized
disclosure of confidential information or willful refusal to perform the duties
of such employee's position ("cause"). All stock options granted to Outside
Directors under the Director Plan will become immediately exercisable and will
remain exercisable for the remainder of their term. In addition, each
participant in the 1997 Incentive Plan will receive the maximum performance
awards he or she could have earned for the proportionate part of the performance
period prior to the Change of Control, and will retain the right to earn any
additional portion of his or her award if he or she remains in the Company's
employ. Under the terms of the 1993 and 1997 Incentive Plans and Director Plan,
no director or executive officer will be entitled to receive any payment under
that plan that is in excess of the amount permitted to be paid without penalty
under Section 4999 of the Code.
14
<PAGE> 18
PERFORMANCE PRESENTATION
The following performance graph compares the performance of the Common
Stock to the Standard & Poor's 500 Composite Stock Index (the "S&P 500") and the
Simmons Composite Oil Service Index. Information with respect to the Common
Stock and the S&P 500 is from December 10, 1993, the date upon which the Common
Stock first began public trading. The Simmons Composite Oil Service Index
information is from November 30, 1993. The graph assumes that the value of the
investment in the Common Stock and each index was $100 at December 10, 1993, and
that all dividends were reinvested.
CAMCO INTERNATIONAL INC.
PROXY PERFORMANCE PRESENTATION
AS OF DECEMBER 31, 1997
CHART
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
To the Company's knowledge and except as set forth below, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during fiscal year 1997 all
Section 16(a) filing requirements were complied with.
On February 18, 1997, Mr. Goerner exercised stock options, and, on February
24, 1997 Messrs. Everitt, Nicholson, Randall and Yates exercised stock options
and delivered shares of Common Stock in payment of the exercise price. A Form 4
was required to be filed by such persons on March 10, 1997. However, such Form
4s were filed on March 17, 1997. On July 17, 1997, Mr. Longaker exercised a
stock option and delivered shares of Common Stock to the Company in payment of
the exercise price. A Form 4 was required to be filed for Mr. Longaker on August
11, 1997. However, such exercise and delivery of shares were reported on Form 5
filed on February 13, 1998. At various times between October 23-29, 1997,
Messrs. Caldwell, Everitt and Longaker exercised stock options and sold the
shares of Common Stock received from such exercises. A Form 4 was required to be
filed for each of such persons on November 10, 1997. However, such Form 4s were
filed on November 12, 1997. On November 6 and 10, 1997, Messrs. Yates and Smith,
respectively, exercised stock options and sold shares of Common Stock. A Form 4
was required to be filed for each of such persons on December 10, 1997. However,
such Form 4s were filed on December 11, 1997. On December 31, 1997, Mr. Yates
exercised a stock option. A Form 4 was required to be filed for Mr. Yates on
January 12, 1998. However, such Form 4 was filed on January 16, 1998.
15
<PAGE> 19
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Company at its principal
executive offices at 7030 Ardmore, Houston, Texas 77054 by November 27, 1998,
for inclusion in the Company's proxy statement and form of proxy relating to
that meeting.
In addition, the Company's By-laws provide that no business may be
transacted at an annual meeting of stockholders other than business that is
properly brought before the annual meeting by any stockholder of the Company (a)
who is a stockholder of record on the date of the giving of the notice and on
the record date for the determination of stockholders entitled to vote at such
annual meeting and (b) who complies with the notice procedures set forth below.
In addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, such stockholder must have
given timely notice thereof in proper written form to the Secretary of the
Company.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Company not
less than 90 days nor more than 120 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders; provided, however, that in
the event that the annual meeting is called for a date that is not within 30
days before or after such anniversary date, notice by the stockholder in order
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 annual
meeting was mailed or public disclosure of the date of the annual meeting was
made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the annual
meeting (a) a brief description of the business described to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and record address of such stockholder, (c) the class or
series and number of shares of capital stock of the Company which are owned
beneficially or of record by such stockholder, (d) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (e) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.
No business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the procedures set
forth above. If the Chairman of an annual meeting determines that business was
not properly brought before the annual meeting in accordance with the foregoing
procedures, the Chairman shall declare to the meeting that the business was not
properly brought before the meeting and such business shall not be transacted or
discussed.
16
<PAGE> 20
OTHER MATTERS
At the date of this proxy statement, management does not intend to present
any other items of business and is not aware of any matters to be presented for
action at the Meeting other than those described above. However, if any other
matters should come before the Meeting, it is the intention of the persons named
as proxies in the accompanying proxy card to vote in accordance with their best
judgment on such matters.
By order of the Board of Directors,
/s/ RONALD R. RANDALL
Ronald R. Randall
Vice President, General Counsel
and Secretary
Houston, Texas
March 27, 1998
17
<PAGE> 21
[CAMCO LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
TUESDAY, MAY 19, 1998
10:00 A.M.
WYNDHAM WARWICK HOTEL
5701 MAIN STREET
HOUSTON, TEXAS
<PAGE> 22
CAMCO INTERNATIONAL INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder of Camco International Inc., a Delaware
corporation (the "Company"), hereby constitutes and appoints Gary D.
P Nicholson and Ronald R. Randall, and each of them, his true and lawful
R agents and proxies, with full power of substitution in each, to vote, as
O designated below, all of the shares of Common Stock, $.01 par value, of the
X Company which the undersigned would be entitled to vote at the Annual
Y Meeting of Stockholders of the Company to be held at the Wyndham Warwick
Hotel, 5701 Main Street, Houston, TX on May 19, 1998 at 10:00 A.M., C.T.,
and at any adjournment(s) thereof, on the following matters more
particularly described in the Proxy Statement dated March 27, 1998.
(Change of address/Comments)
The election of three directors to ------------------------------------
serve until their respective successors
are elected and shall qualify. ------------------------------------
------------------------------------
(If you have written in the above
space, please mark the corresponding
box on the reverse side of this card)
Nominees: William J. Johnson
T. Don Stacy
Gilbert H. Tausch
SEE REVERSE
SIDE
* FOLD AND DETACH HERE *
<PAGE> 23
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
This proxy when properly executed and dated will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made, this
proxy will be voted FOR the election of the nominees listed herein or any
substitute for them and FOR Proposal 2.
1. Election of Directors (see reverse side).
FOR all nominees WITHHOLD AUTHORITY
listed herein (except as to vote for all nominees
marked to the contrary) listed herein
[ ] [ ]
(Instructions: To withhold authority to vote for any indicated nominee, write
that nominee's name on the line provided below.)
- --------------------------------------------------------------------------------
2. Approval of Arthur Andersen LLP as independent public accountants of the
Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion the proxies are authorized to vote upon such other
matters that may properly come before the meeting of any adjournment(s)
thereof.
COMMENTS [ ]
CHANGE OF
ADDRESS [ ]
SIGNATURE(S) DATE
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NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
* FOLD AND DETACH HERE *
