-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M2zbO8ZqqHFUWEC8m/FyXVsWtBdSFbtUBjzqLOX03eJ0BNHAbZNRMS0viq7TZKzA a+9MFWyYYiChN9sImYGy7A== 0000950129-97-000271.txt : 19970128 0000950129-97-000271.hdr.sgml : 19970128 ACCESSION NUMBER: 0000950129-97-000271 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970321 FILED AS OF DATE: 19970127 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DANIEL INDUSTRIES INC CENTRAL INDEX KEY: 0000026821 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 741547355 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06098 FILM NUMBER: 97511588 BUSINESS ADDRESS: STREET 1: 9753 PINE LAKE DR CITY: HOUSTON STATE: TX ZIP: 77055 BUSINESS PHONE: 7134676000 MAIL ADDRESS: STREET 1: 9753 PINE LAKE DRIVE CITY: HOUSTON STATE: TX ZIP: 77055 DEF 14A 1 DANIEL INDUSTRIES, INC. - 3/21/97 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 DANIEL INDUSTRIES, 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: - -------------------------------------------------------------------------------- 2 [DANIEL INDUSTRIES, INC. LOGO] 9753 Pine Lake Drive - Houston, Texas 77055 - (713) 467-6000 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS MARCH 21, 1997 Notice is hereby given that the annual meeting of stockholders of Daniel Industries, Inc. ("Company") will be held at The Ritz Carlton Hotel, 1919 Briar Oaks Lane, Houston, Texas at 10:00 a.m. on Friday, March 21, 1997, for the following purposes: 1. To elect three Class I directors of the Company to hold office until the third succeeding annual meeting of stockholders after their election and until their respective successors shall have been elected and qualified. 2. To transact such other business as may properly be brought before the meeting or any adjournment thereof. Only holders of record of shares of Common Stock of the Company at the close of business on January 22, 1997, are entitled to notice of and to vote at the meeting or any adjournment thereof. All stockholders of the Company are cordially invited to attend the annual meeting. However, the Board of Directors requests that you promptly sign, date and mail the enclosed proxy even if you plan to be present at the meeting. Your proxy should be returned in the enclosed envelope, which requires no postage if mailed in the United States. By Order of the Board of Directors, /s/ MICHAEL R. YELLIN MICHAEL R. YELLIN Secretary January 28, 1997 PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY WITHOUT DELAY. 3 [DANIEL INDUSTRIES, INC. LOGO] 9753 Pine Lake Drive - Houston, Texas 77055 - (713) 467-6000 PROXY STATEMENT This proxy statement and the enclosed form of proxy ("Proxy")are being mailed or otherwise delivered on or about January 28, 1997, to record holders of shares of Common Stock, $1.25 par value ("Common Stock"), of Daniel Industries, Inc. ("Company") at the close of business on January 22, 1997. The Proxy is solicited by the Board of Directors of the Company ("Board") to be used at the annual meeting of stockholders of the Company to be held on March 21, 1997, and at any adjournment thereof. Any stockholder who executes and returns the Proxy may revoke it at any time before it is voted by notifying the holder thereof of revocation or by voting in person at the meeting. Otherwise, if received in time, it will be voted at the meeting. Holders of record of shares of Common Stock at the close of business on January 22, 1997, are entitled to notice of and to vote at the annual meeting. Such holders will be entitled to cast one vote for each share so held by them on each matter submitted to stockholders at the meeting. On the record date, there were issued and outstanding 17,063,705 shares of Common Stock. The holders of a majority of the total shares of Common Stock outstanding on the record date, whether present in person or represented by Proxy, will constitute a quorum for the transaction of business at the annual meeting. The shares held by each stockholder who signs and returns the Proxy will be counted for purposes of determining the presence of a quorum at the meeting. Abstentions are counted toward the calculation of a quorum. Any unvoted position in a brokerage account will be considered as not voted and will not be counted toward fulfillment of quorum requirements. The enclosed Proxy provides a means for a stockholder to vote for all of the nominees for director listed, to withhold authority to vote for one or more nominees, or to withhold authority to vote for all of such nominees. The Company's by-laws provide that directors are elected by a plurality of the votes cast. Accordingly, the withholding of authority by a stockholder will have no effect on the results of the election. Approval of any other matters as may properly come before the annual meeting would require the affirmative vote of a majority of the total shares of Common Stock present in person or represented by Proxy and entitled to vote at the annual meeting. Abstentions have the same effect as a vote against any proposal. The Annual Report to Stockholders of the Company for its fiscal year ended September 30, 1996, accompanies this proxy statement; however, the Annual Report does not constitute a part of the Proxy solicitation material. 1 4 OWNERSHIP OF COMMON STOCK PRINCIPAL STOCKHOLDERS The following table sets forth certain information with respect to each person who at January 22, 1997, was known by the Company to be the beneficial owner at that date of more than five percent of the outstanding shares of Common Stock. Except as otherwise set forth, such persons have sole voting and sole investment power with respect to the shares beneficially owned by them.
NUMBER OF SHARES BENEFICIALLY PERCENT OWNED(1) OF CLASS ------------ -------- Dimensional Fund Advisors 1299 Ocean Avenue Santa Monica, CA 90401...................................... 875,368 5.1% State of Wisconsin Investment Board 121 East Wilson St. Madison, WI 53702........................................... 870,100 5.1% W. A. Griffin(2) 9753 Pine Lake Drive Houston, TX 77055........................................... 1,520,067 8.9%
- --------------- (1) Information with respect to beneficial ownership is based upon information furnished by each stockholder or contained in filings made with the Securities and Exchange Commission. (2) At January 22, 1997, W. A. Griffin, Chairman Emeritus of the Board, owned 980,792 shares of Common Stock (5.7%). Mr. Griffin is also considered to be the beneficial owner of 534,275 shares of Common Stock (3.1%) held in his capacity as trustee of a trust in which he has a vested beneficial interest. Mr. Griffin also is considered to be the beneficial owner of 5,000 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of an outstanding option. SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth, as of January 22, 1997 (except as otherwise noted), the shares of Common Stock beneficially owned by (i) each director and nominee for director of the Company, (ii) each executive officer of the Company listed in the Summary Compensation Table set forth below and (iii) all officers and directors of the Company as a group. Except as otherwise set forth, such persons have sole voting power and sole investment power with respect to the shares beneficially owned by them.
NUMBER OF SHARES BENEFICIALLY PERCENT OWNED OF CLASS ------------- -------- W. A. Griffin.............................................. 1,520,067 (1) 8.9% Leo E. Linbeck, Jr......................................... 5,000 (2) * Nathan M. Avery............................................ 197,150 (3) 1.2% Gibson Gayle, Jr........................................... 15,000 (2) * Ronald C. Lassiter......................................... 15,300 (2) * Thomas J. Keefe............................................ 9,956 (3) * Ralph F. Cox............................................... 10,000 (2) * Brian E. O'Neill........................................... 15,000 (4) * W. A. Griffin, III......................................... 78,388 (5) * W. C. Clingman............................................. 44,327 (6) * H. G. Schopfer, III........................................ 29,642 (7) * T. L. Sivak................................................ 15,169 (8) * M. R. Yellin............................................... 22,169 (9) * All officers and directors as a group (16 persons)......... 2,063,130(10) 11.9%
2 5 - --------------- * Less than 1%. (1) For further information concerning the shares of Common Stock beneficially owned by Mr. Griffin, see Note (2) to the table under "Principal Stockholders." (2) Includes 5,000 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of an outstanding option. (3) Includes 8,700 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of outstanding options. (4) Mr. O'Neill is considered to beneficially own 15,000 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of outstanding options. (5) At January 24, 1997, Mr. Griffin, III owned 73,519 shares of Common Stock. Mr. Griffin, III is also considered to beneficially own 4,869 shares which are attributable to him through his participation in the Company's profit sharing and savings plan. (6) At January 22, 1997, Mr. Clingman owned 2,559 shares of Common Stock and is considered to beneficially own 35,000 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of outstanding options and 6,768 shares which are attributable to him through his participation in the Company's profit sharing and savings plan. (7) At January 22, 1997, Mr. Schopfer owned 2,745 shares of Common Stock and is considered to beneficially own 25,834 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of outstanding options and 1,063 shares of Common Stock which are attributable to him through his participation in the Company's profit sharing and savings plan. (8) At January 22, 1997, Mr. Sivak owned 2,015 shares of Common Stock and is considered to beneficially own 11,167 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of outstanding options and 1,987 shares of Common Stock which are attributable to him through his participation in the Company's profit sharing and savings plan. (9) At January 22, 1997, Mr. Yellin owned 1,890 shares of Common Stock and is considered to beneficially own 17,667 shares of Common Stock that may be acquired within 60 days of January 22, 1997, through the exercise of outstanding options and 2,612 shares of Common Stock which are attributable to him through his participation in the Company's profit sharing and savings plan. (10) Of the shares of Common Stock attributable to all officers and directors of the Company as a group, 224,628 shares of Common Stock (1.3%) are considered to be beneficially owned by such persons because they may be acquired by them within 60 days of January 22, 1997, through the exercise of outstanding options and 18,451 shares of Common Stock (0.1%) are considered to be beneficially owned by such persons because such shares are attributable to them through their participation in the Company's profit sharing and savings plan. 3 6 ELECTION OF DIRECTORS At the annual meeting of stockholders, three Class I directors of the Company are to be elected. These directors will be elected to hold office until the third succeeding annual meeting of stockholders after their election and until their respective successors shall have been elected and qualified. The Proxy lists three persons nominated by the Board for election at the annual meeting of stockholders as Class I directors. Proxies may not be voted for more than three nominees for Class I director. The Board does not contemplate that any of its nominees will become unavailable for any reason. However, should any nominee of the Board become unavailable, Proxies which do not withhold authority to vote for that nominee will be voted for another nominee to be selected by the Board. DIRECTORS AND NOMINEES FOR DIRECTOR The following table sets forth for each nominee listed in the Proxy and each other person whose term of office as a director will continue after the annual meeting: (i) the name and age of such person; (ii) the principal occupation of such person for at least the last five years (unless otherwise noted); and (iii) the year during which such person first became a director. The table has been prepared from information obtained from such persons.
DIRECTOR NAME AGE PRINCIPAL OCCUPATION SINCE ---- --- -------------------- -------- CLASS I -- NOMINEES FOR TERMS EXPIRING AT THE THIRD SUCCEEDING ANNUAL MEETING Leo E. Linbeck, Jr.(1)............ 62 Chairman of the Board and Chief Executive Officer 1988 of Linbeck Corporation Nathan M. Avery(2)................ 62 Chairman of the Board, President and Chief 1996 Executive Officer of Galveston-Houston Company Gibson Gayle, Jr.(3).............. 70 Retired Senior Partner, Fulbright & Jaworski 1985 L.L.P., a law firm CLASS II -- DIRECTORS WHOSE TERMS EXPIRE AT THE FIRST SUCCEEDING ANNUAL MEETING Ronald C. Lassiter(4)............. 64 Chairman of the Board and Acting President and 1985 Chief Executive Officer of the Company and Chairman of the Board of Directors and Chief Executive Officer of Zapata Protein, Inc. Thomas J. Keefe(5)................ 64 President and Chief Operating Officer of G.H. 1996 Hensley Industries, Inc. CLASS III -- DIRECTORS WHOSE TERMS EXPIRE AT THE SECOND SUCCEEDING ANNUAL MEETING W. A. Griffin(6).................. 81 Chairman Emeritus of the Board and Consultant to 1951 the Company Brian E. O Neill(7)............... 61 President and Chief Executive Officer of Williams 1994 Interstate Natural Gas Systems Ralph F. Cox(8)................... 64 Private Consultant (Petroleum Industry). Retired 1996 President and Chief Executive Officer of Greenhill Petroleum Corporation.
- --------------- (1) Mr. Linbeck, Jr. serves as a Life Director of the Associated General Contractors of America and as a director of GeoQuest International Holdings, Inc., John Hancock Advisers, Inc., and PanEnergy Corp (formerly Panhandle Eastern Corporation). He also serves as a director of The Bionomics Institute and the Texas Council on Economic Education. He is currently serving as Chairman, Texans for Lawsuit Reform. Mr. Linbeck is a member of the Executive Committee and the Compensation Committee. 4 7 (2) Pursuant to the merger of Bettis Corporation with a wholly-owned subsidiary of the Company, Mr. Avery was elected on December 12, 1996, to fill the term of Ralph H. Clemons, Jr. who retired from the Board effective that date. Mr. Avery is a member of the Executive Committee. (3) Mr. Gayle, Jr. was a partner in the law firm of Fulbright & Jaworski L.L.P., and he served as Chairman of that firm's Executive Committee from 1979 until 1992. Fulbright & Jaworski L.L.P. provides legal services to the Company on an ongoing basis, and the Company will continue to engage the firm during the current fiscal year. Mr. Gayle is a member of the Audit Committee. (4) Mr. Lassiter was elected Chairman of the Board on March 6, 1996. He became Acting President and Chief Executive Officer of the Company effective January 24, 1997, upon the resignation of W.A. Griffin, III. The Company intends to commence an executive search for a President and Chief Executive Officer. Mr. Lassiter is a member of the Executive Committee. (5) Pursuant to the merger of Bettis Corporation with a wholly-owned subsidiary of the Company, Mr. Keefe was elected on December 12, 1996, to fill the term of Richard L. O'Shields who retired from the Board effective that date. Mr. Keefe is a member of the Compensation Committee and the Audit Committee. (6) Mr. Griffin served as Chairman of the Board from 1957, and as Chief Executive Officer of the Company from 1985, until his retirement in February 1995. He now is a consultant to the Company. Mr. Griffin is a member of the Nominating Committee. (7) Prior to assuming his current position in January 1994, Mr. O'Neill served as President of Williams Natural Gas Company. Mr. O'Neill is also a director of the Gas Research Institute and the American Gas Association. Mr. O'Neill is a member of the Compensation Committee and the Nominating Committee. (8) Mr. Cox is a consultant on international petroleum activities. He is an independent Trustee for the Fidelity Group of Funds and a member of the Board of Directors of CH2M Hill, Ltd., USA Waste Services, Inc., and Rio Grand, Inc. Mr. Cox also serves on advisory Boards at Texas A&M University and the University of Texas. Mr. Cox is a former Vice Chairman of the Board of Atlantic Richfield Company and President and Chief Operating Officer of Champlin Petroleum Company (Union Pacific Resources Company). Mr. Cox is a member of the Audit Committee and the Nominating Committee. MEETINGS AND COMMITTEES OF THE BOARD During the fiscal year ended September 30, 1996, the Board held seven meetings. During fiscal 1996, each member attended at least 75% of the combined number of meetings of the Board and of the committees of the Board of which he was a member. The Audit Committee reviews with the Company's independent accountants the scope and results of the annual audit of the Company's consolidated financial statements. In addition, the Audit Committee reviews the independent accountants' management letter containing their recommendations for improvements to the Company's internal controls. The Audit Committee also recommends to the Board the selection of independent accountants. The Audit Committee currently is composed of Gibson Gayle, Jr., Ralph F. Cox and Thomas J. Keefe. During the fiscal year ended September 30, 1996, the Audit Committee held three meetings. The Compensation Committee advises the Board concerning the compensation and benefits of the executive officers and certain operating officers of the Company. The Compensation Committee currently is composed of Brian E. O Neill, Leo E. Linbeck, Jr. and Thomas J. Keefe. During the fiscal year ended September 30, 1996, the Compensation Committee held three meetings. On December 12, 1996, the Board named W. A. Griffin, Brian E. O'Neill and Ralph F. Cox to serve on the Nominating Committee for the year ending December 31, 1997. The Nominating Committee will recommend to the Board the persons to nominate for election as Class II directors at the next annual meeting of stockholders of the Company. The Nominating Committee will not consider proposals submitted by security holders. 5 8 EXECUTIVE OFFICERS EXECUTIVE OFFICERS OF THE COMPANY The following table lists the name, age, current position and period of service with the Company of each executive officer of the Company. Each executive officer of the Company was elected by the Board and will hold office until the next annual meeting of the Board or until his/her successor shall have been elected and qualified.
OFFICER NAME AGE POSITION SINCE ---- --- -------- ------- Ronald C. Lassiter................ 64 Chairman of the Board and Acting President and 1997 Chief Executive Officer James M. Tidwell(1)............... 50 Executive Vice President and Chief Financial 1996 Officer W. Todd Bratton(2)................ 52 Executive Vice President 1996 W. C. Clingman.................... 62 Vice President, Information Services 1977 Michael R. Yellin................. 51 Vice President, Secretary and Treasurer 1981 Thomas L. Sivak................... 54 Vice President and General Counsel 1987 Mary R. Beshears(3)............... 39 Vice President, Controller and Chief Accounting 1995 Officer
- --------------- (1) Mr. Tidwell joined the Company in August 1996, as Vice President, Finance and Chief Financial Officer. Prior to joining the Company, Mr. Tidwell served as Vice President of Finance of Hydril Company from August 1992 through August 1996. Prior to that, Mr. Tidwell was Vice President Finance of ABB Vetco Gray, Inc. from 1988 until 1992 and was President of Vetco Gray, Inc. from 1986 to 1988. (2) Pursuant to the merger of Bettis Corporation with a wholly-owned subsidiary of the Company, Mr. Bratton was elected an Executive Vice President of the Company on December 12, 1996. Mr. Bratton served as President of Bettis Corporation from 1988 and as Chief Executive Officer from May 1994 until January 1997. Mr. Bratton served in varying capacities including Executive Vice President, Operations of Galveston-Houston Company, Bettis Corporation's parent company, from 1979 to May 1994. (3) Ms. Beshears joined the Company in 1984. She served as Internal Auditor from 1987 to 1991 and served as Manager of Financial Reporting from 1991 until 1995 when she was named Controller. 6 9 EXECUTIVE COMPENSATION REPORT OF THE COMPENSATION COMMITTEE WITH RESPECT TO COMPENSATION OF EXECUTIVE OFFICERS The Compensation Committee is responsible for advising the Board concerning the compensation and benefits of the executive officers of the Company. The Company's compensation program is designed to attract, motivate and retain management talent required to achieve corporate objectives and increase stockholder value. The program includes base salaries and annual and long-term incentives in the form of cash bonuses, stock awards and stock options. Salaries for executive officers are reviewed annually and revised, if appropriate, based on a variety of factors, including individual performance, general levels of market salary increases and the Company's overall financial results. The Compensation Committee's review and analysis of these matters are subjective, and no specific weight is given to any single performance factor. During the fiscal year ended September 30, 1996, the salary of the Chief Executive Officer was increased 4.0%, and the other executive officers' salaries were increased by an average of 9.5%. Incentive compensation in the form of cash bonuses is generally linked to the achievement of key financial and operational objectives for the Company, but amounts awarded for any fiscal year are not determined by any formula. During the fiscal year ended September 30, 1996, the Company established a Stock Award Plan pursuant to which awards of Common Stock, with limitations on vesting and transferability, may be awarded in lieu of a portion of the cash bonus. For the fiscal year ended September 30, 1996, total cash bonuses approved for certain executive officers named in the Summary Compensation Table were $35,250, and 2,611 shares of Common Stock were awarded under the Stock Award Plan to those executive officers. The former Chief Executive Officer did not receive a bonus for the fiscal year ended September 30, 1996. The Compensation Committee believes that by providing those persons who have substantial responsibility for the management and growth of the Company and its subsidiaries with an opportunity to increase their ownership of Company stock, the interests of stockholders and those persons will be more closely aligned. Accordingly, officers and other key employees of the Company and its subsidiaries are eligible to receive stock options from time to time, giving them the right to purchase shares of Common Stock at a specified price. However, during the year ended September 30, 1996, no options were granted to the named executive officers. Compensation Committee of the Board of Directors Brian E. O'Neill Leo E. Linbeck, Jr. Thomas J. Keefe 7 10 CASH COMPENSATION The following table sets forth certain information regarding cash compensation paid for services rendered during the last three fiscal years to each of the Company's executive officers whose total annual salary and bonus for the last fiscal year exceeded $100,000, including the former Chief Executive Officer, and to the Company's former Chief Financial Officer, who served for a period in fiscal 1996: SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ------------ ANNUAL COMPENSATION SECURITIES RESTRICTED -------------------- UNDERLYING ALL OTHER STOCK NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(1) AWARDS($)(2) --------------------------- ---- --------- -------- ------------ ------------------ ------------ W. A. Griffin, III(3), former 1996 265,900 -- -- 54,206(4) -- President and Chief Executive 1995 242,200 62,500 60,000 31,031 62,500(5) Officer 1994 189,400 36,000 -- 7,648 -- W. C. Clingman, Vice President, 1996 129,626 13,250 -- 15,822 13,250(6) Information Services 1995 119,525 21,000 30,000 21,226 21,000(5) 1994 115,775 13,500 -- 4,691 -- H. G. Schopfer, III(7) 1996 103,600 -- -- 8,040 -- former Vice President, Finance 1995 124,160 24,000 40,000 14,051 24,000(5) and Chief Financial Officer 1994 103,275 9,000 -- 3,798 -- T. L. Sivak, Vice President 1996 125,350 11,000 -- 11,818 11,000(6) and General Counsel 1995 116,035 16,500 20,000 17,231 16,500(5) 1994 101,400 6,750 -- 4,155 -- M. R. Yellin, Vice President, 1996 119,890 11,000 -- 9,320 11,000(6) Secretary and Treasurer 1995 107,650 16,500 20,000 13,863 16,500(5) 1994 97,650 9,000 -- 4,108 --
- --------------- (1) For 1994, represents the vested amount of the Company's contribution to the Company's profit sharing and savings plan that was allocated to each employee's account. For 1995, includes $8,027, $5,499, $5,352, $4,924 and $4,815, as the vested amount of the Company's contribution to the Company's profit sharing and savings plan, and $23,004, $15,727, $8,699, $12,307 and $9,048, as the Company's contribution to the Company's supplemental retirement plan in each case, allocated to the accounts of Messrs. Griffin, III; Clingman; Schopfer, III; Sivak and Yellin, respectively. For 1996, includes $8,196, $5,750, $5,754, $5,387 and $5,416 as the vested amount of the Company's contribution to the Company's profit sharing and savings plan, and $11,010, $10,072, $2,286, $6,431, and $3,904 relating to the Company's supplemental retirement plan in each case, allocated to the accounts of Messrs. Griffin III; Clingman; Schopfer, III; Sivak and Yellin, respectively. The amounts relating to the supplemental retirement plan represent balances payable under such plan as of September 30, 1996, as the plan was terminated effective that date. Amounts reported for 1995 relating to such plan are unvested amounts which will not be paid due to the plan termination. (2) As of September 30, 1996, Messrs. Griffin III, Clingman, Schopfer, III, Sivak, and Yellin held 4,545, 1,527, 1,745, 1,200 and 1,200 shares of Common Stock, respectively, subject to restriction, having a value of $57,949, $19,469, $22,248, $15,300 and $15,300, respectively. On December 12, 1996, Messrs. Clingman, Sivak and Yellin were granted an additional 981, 815 and 815 shares of Common Stock, respectively, subject to restriction. (3) Mr. Griffin, III resigned as President and Chief Executive Officer effective January 24, 1997. (4) Includes $35,000 initiation fee for a club membership. (5) Award was granted in fiscal 1996 in lieu of a portion of the cash bonus earned in fiscal 1995. (6) Award was granted in December 1996 in lieu of a portion of the cash bonus earned in fiscal 1996. (7) H. G. Schopfer, III served as Chief Financial Officer of the Company from October 1, 1995 to June 18, 1996. 8 11 OPTION EXERCISES The following table sets forth the aggregate option exercises during the fiscal year ended September 30, 1996 and the value of outstanding options at the end of that year held by the named executive officers. AGGREGATE OPTION EXERCISES IN FISCAL 1996 AND OPTION VALUES AT SEPTEMBER 30, 1996
NUMBER OF SECURITIES VALUE OF UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY UNEXERCISED OPTIONS AT YEAR END(#) AT YEAR END -------------- ------------- SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/ NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE ---- --------------- ----------- -------------- ------------- W. A. Griffin, III.................. None None 95,807/40,000 $22,844/$0 W. C. Clingman...................... 3,307 $28,936 35,000/20,000 $0/$0 H. G. Schopfer, III................. None None 25,834/26,666 $0/$0 T. L. Sivak......................... None None 14,667/13,333 $20,125/$0 M. R. Yellin........................ None None 17,667/13,333 $0/$0
CHANGE OF CONTROL AND OTHER AGREEMENTS In connection with his resignation and agreement to provide reasonable assistance to the Company with respect to unfinished business, Mr. Griffin, III and the Company entered into an agreement whereby the Company would pay Mr. Griffin, III a lump sum of $2,000,000, would remove the restrictions on 3,030 shares of Common Stock previously granted under the Stock Award Plan and would pay the cost of COBRA coverage for Mr. Griffin, III under the Company's programs for up to 18 months, but only to the extent similar benefits are not covered by any subsequent employer's plans or programs. Effective March 15, 1995, the Company entered into Change of Control Agreements with the executive officers named in the summary compensation table and certain of its operating officers. On August 23, 1996 and August 30, 1996, the Company entered into like agreements with James M. Tidwell and Mary R. Beshears. Each Change of Control Agreement is for a term of three years from the later of the effective date of the agreement or the last Change in Control (hereinafter defined) of the Company, and is automatically renewable for successive one-year terms if notice of termination is not given by the Company. Each Change of Control Agreement is subject to earlier termination upon (i) the employee's death, disability or retirement or (ii) termination by the employee or the Company of the employee's employment by the Company. Under each Change of Control Agreement, a "change in control" of the Company shall have occurred if (i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission disclosing that any person (or group of persons acting in concert), other than the Company, one of its subsidiaries or any employee benefit plan of the Company, is the beneficial owner of 20 percent of the outstanding securities of the Company entitled to vote for directors ("Voting Stock"); (ii) any person (or group of persons acting in concert), other than the Company, one of its subsidiaries or any employee benefit plan of the Company, shall purchase securities pursuant to a tender offer or exchange offer to acquire any Voting Stock and, immediately thereafter, is the beneficial owner of 20 percent of the Voting Stock; (iii) the stockholders of the Company shall approve (w) a merger or consolidation of the Company with any other person, (x) any sale or other transfer of all or substantially all the assets of the Company, (y) the dissolution of the Company, or (z) a transaction immediately after the consummation of which any person (or group of persons acting in concert) would be the beneficial owner of 50 percent of the outstanding Voting Stock; or (iv) during any 12-month period, individuals who at the beginning of that period constituted the Board of Directors cease to constitute a majority thereof. Under each Change of Control Agreement, in the event the employee terminates his employment as a result of an event of termination for good reason or is terminated by the Company other than as a result of an event of termination for cause, in each case following a change in control, the Company would pay such individual a cash lump sum payment equal to two and one-half times the sum of (i) the amount of base salary the employee would have been paid during the fiscal year of termination, (ii) the amount of any cash bonus paid or payable to the employee for services rendered in the prior fiscal year, and (iii) the amount of any 9 12 income that (y) is includable in the employee's gross income for tax purposes or (z) is attributable to the exercise of options exercised by the employee within the one-year period prior to the termination date. Each agreement also obligates the Company to maintain, during the three-year period following termination (or such earlier date that the employee becomes a full-time employee of another person), in effect other benefit plans (including life insurance, medical and disability) for the benefit of such employee or to provide substantially similar benefits. If all or any part of a payment under a Change of Control Agreement would not be deductible for federal income tax purposes by the Company or one of its tax affiliates, the amount would be reduced such that no portion of any change of control payment to such employee (whether under the Change of Control Agreement or otherwise) is not deductible by the Company or a tax affiliate thereof. Each Change of Control Agreement provides generally that an event of termination for good reason shall have occurred if the Company shall (i) assign the employee duties inconsistent with his or her position in effect immediately prior to the first Change in Control of the Company; (ii) remove or fail to re-elect or re-appoint the employee to any position with the Company held immediately prior to the first Change in Control; (iii) take any other action that results in a material diminution in such position, authority, duties or responsibilities; (iv) reduce the employee's annual base salary as in effect immediately prior to the first Change in Control of the Company or as may be increased thereafter; (v) relocate the employee's principal office outside of Houston, Texas; (vi) fail to continue his or her participation, on substantially the same basis, in any benefit plan in which the employee participated prior to the first Change in Control, unless an equitable arrangement shall have been made; (vii) materially reduce any other benefits that were provided to the employee by the Company prior to the first Change in Control, including any material fringe benefits, or (viii) reduce the employee's number of paid vacation days. An event of termination for cause shall have occurred if the employee willfully and continuously fails to substantially perform his or her duties or willfully engages in conduct known to be injurious to the Company. On July 30, 1996 and August 30, 1996, the Company entered into severance agreements with James M. Tidwell and Mary R. Beshears providing for payment of one year's net salary if either is terminated other than for defined cause. Ms. Beshear's compensation would be reduced in the event she gains other employment. Effective July 1, 1996, the Company entered into a Limited Employment Agreement with Henry G. Schopfer, III, who resigned as Vice President and Chief Financial Officer. The agreement provides for among other things, six quarterly payments of $37,500 less applicable taxes. The payments will be reduced by the gross amount of Mr. Schopfer's wages from other employment. COMPENSATION OF DIRECTORS Directors who are also employees of the Company do not receive fees for attending meetings of the Board. Each non-employee director of the Company receives fees of (i)$1,000 for each meeting of the Board and for each committee meeting thereof that he attends, subject to a maximum daily fee of $1,000, and (ii) a quarterly fee of $3,000 for each quarter he serves as a director. In addition, pursuant to the Company's 1995 Non-Employee Directors' Stock Option Plan ("Plan"), on February 1, 1996, each non-employee director received an option to purchase 15,000 shares of Common Stock. The options become exercisable with respect to one third of the shares on the first through third anniversaries of the date of grant. The exercise price is the closing price of the Common Stock on February 1, 1996, the date of the grant. So long as shares remain available under the Plan, each person elected a director who is not an employee of the Company will receive a similar option. Mr. Lassiter has a deferred compensation agreement with the Company pursuant to which he will receive $100,000, inclusive of standard director's fees, for services performed as Chairman of the Board from March through December 1996. In connection with an option for 10,000 shares of Common Stock granted on August 22, 1989, Mr. Linbeck was paid a lump sum of $45,000 in January 1997 to compensate him for the difference between $12.75, the exercise price of the option (equal to the market price of the Common Stock on the date of grant), and $8.375, the price at which the option would have been exercisable had it been granted to him on the day Mr. Linbeck became a director of the Company, as was intended and agreed and as was customary for similar options granted to other new directors of the Company. The option has since expired. 10 13 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION With the exception of Ralph H. Clemons, Jr., no member of the Compensation Committee of the Board during the fiscal year ended September 30, 1996, was an officer or employee of the Company or any of its subsidiaries, or was formerly an officer of the Company or any of its subsidiaries. During the fiscal year ended September 30, 1996, no executive officer of the Company served as (i) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one of whose executive officers served on the Compensation Committee, (ii) a director of another entity, one of whose executive officers served on the Compensation Committee, or (iii) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one of whose executive officers served as a director of the Company. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE The Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires that the Company's directors, executive officers and 10% stockholders report to the Securities and Exchange Commission certain transactions involving Common Stock. Based solely upon a review of Forms 3, 4 and 5 furnished to the Company and representations received from persons subject to such reporting requirements, all filings were timely during the fiscal year ended September 30, 1996. PERFORMANCE GRAPH The following graph compares, as of each of the dates indicated, the performance of the Common Stock to the Standard & Poor's 500 Stock Index ("S&P 500") and the Standard & Poor's Oil Composite Index ("S&P Oil Composite") for the Company's last five fiscal years. The graph assumes that the value of the investment in the Common Stock and each index was $100 at September 30, 1991, and that all dividends were reinvested. COMPARISON OF 5 YEAR CUMULATIVE RETURN S&P OIL SEPTEMBER 30 DANIEL INDUSTRIES S&P 500 COMPOSITE 1991 100.00 100.00 100.00 1992 71.27 111.05 106.64 1993 90.12 125.49 123.38 1994 68.81 130.11 121.58 1995 91.14 168.82 145.09 1996 79.16 203.14 182.48
11 14 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 Regulations 14A and 14C under the Exchange Act or to the liabilities of Section 18 under the Exchange Act. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Effective February 3, 1995, W. A. Griffin entered into a two-year Consulting Agreement with the Company under which he provides services and counsel on business matters as requested by the Chief Executive Officer. Under the Consulting Agreement, the Company will pay Mr. Griffin a fee of $135,000 per year for those services and will reimburse him for certain expenses. INDEPENDENT ACCOUNTANTS Upon the recommendation of the Audit Committee, the Board of Directors of the Company has selected Price Waterhouse LLP, to audit the consolidated financial statements of the Company and its subsidiaries for the year ending December 31, 1997. Price Waterhouse LLP has served as the Company's independent accountants for the past 40 years. Neither Price Waterhouse LLP nor any of its partners has any financial interest in or any connection with the Company, other than as independent accountants. Representatives of Price Waterhouse LLP are expected to be available at the annual meeting of stockholders to respond to appropriate questions, and they will be permitted to make a statement if they so desire. PROPOSALS FOR NEXT ANNUAL MEETING Any proposals of holders of shares of Common Stock intended to be presented at the annual meeting of stockholders of the Company to be held in 1998 must be received by the Company at its principal executive offices, 9753 Pine Lake Drive, Houston, Texas 77055, no later than September 30, 1997 in order to be considered for inclusion in the proxy statement and Proxy relating to that meeting. OTHER INFORMATION At the date of this proxy statement, the Board knows of no other matters to be presented for consideration at the annual meeting. However, if any other matters should properly come before the meeting or any adjournment thereof, the persons named in the Proxy will have discretionary authority to vote the shares of Common Stock represented by the Proxy with respect to such matters. The shares represented by the Proxy will also be voted with respect to matters incident to the conduct of the meeting. The cost of solicitation of the Proxies will be borne by the Company. Certain officers and regular employees of the Company may solicit the return of Proxies by telephone, telegram or personal interview. In addition, the Company has employed Morrow & Co. to assist in the solicitation of Proxies. The fees and expenses of that firm in connection with such solicitation are not expected to exceed $10,000. By Order of the Board of Directors, /s/ MICHAEL R. YELLIN MICHAEL R. YELLIN Secretary 12 15 DANIEL INDUSTRIES, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 21, 1997 The undersigned stockholder of Daniel Industries, Inc. (the "Company") hereby appoints James M. Tidwell and Michael R. Yellin, or either of them, attorneys and proxies of the undersigned, with full power of substitution, to vote, as designated below, the number of votes which the undersigned would be entitled to cast if personally present at the Annual Meeting of Stockholders of the Company to be held at The Ritz Carlton Hotel, 1919 Briar Oaks Lane, Houston, Texas, at 10:00 a.m. on Friday, March 21, 1997, and at any adjournment thereof. THIS PROXY WILL BE VOTED AS DIRECTED. IF YOU EXECUTE AND RETURN THIS PROXY BUT DO DOT SPECIFY OTHERWISE, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED HEREIN OR IF ANY ONE OR MORE OF THE NOMINEES BECOMES UNAVAILABLE, FOR ANOTHER NOMINEE OR OTHER NOMINEES TO BE SELECTED BY THE BOARD OF DIRECTORS. 16 /X/ PLEASE MARK VOTES AS IN THIS EXAMPLE 1. FOR all of the nominees for Class I director listed below. WITHHOLD AUTHORITY to vote for election of directors. For With- For All _____________________________ FOR ALL EXCEPT any nominee whose name is listed on hold Except the line below. DANIEL INDUSTRIES INC. / / / / / / _____________________________ Nominees: LEO E. LINBECK, JR. NATHAN M. AVERY GIBSON GAYLE, JR. ___________________________________________________________________________________ RECORD DATE SHARES: INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL EXCEPT" BOX AND WRITE THAT PERSON'S NAME IN THE SPACE PROVIDED ABOVE. 2. In their discretion, the above-named proxies are authorized to vote upon such other matters as may properly come before the meeting or at any adjournment thereof and upon matters incident to the conduct of the meeting. Your signature should correspond with your name as it appears hereon. Joint ________________ owners should each sign. When signing as attorney, executor, administrator, Date trustee or guardian, please set forth your full title as it appears hereon. PLEASE ______________________________________ MARK, SIGN, DATE AND RETURN IMMEDIATELY. PLEASE NOTE ANY CHANGE OF ADDRESS. ______Signature of Stockholder(s)_____ DETACH CARD DETACH CARD
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