UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 6, 2004 (July 1, 2004)
HELMERICH & PAYNE, INC.
State of Incorporation: Delaware
COMMISSION FILE NUMBER 1-4221
Internal Revenue Service — Employer Identification No. 73-0679879
1437 South Boulder Avenue, Suite 1400, Tulsa, Oklahoma 74119
(918)742-5531
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT | ||||||||
| ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| Annual Bonus Plan | ||||||||
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 30, 2004, the Human Resources Committee of the Board of Directors of Helmerich & Payne, Inc. (“Registrant”) approved certain annual bonus awards under the Registrant’s 2004 Annual Bonus Plan adopted by the Human Resources Committee on July 1, 2004. The attached Exhibit 10.1, incorporated herein by reference, is the form of Annual Bonus Plan so approved.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No.
Description
Helmerich & Payne, Inc. Annual Bonus Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly authorized the undersigned to sign this report on its behalf.
HELMERICH & PAYNE, INC.
(Registrant)
/s/ Steven R. Mackey
Steven R. Mackey
Vice President
DATE: December 6, 2004
EXHIBIT INDEX
Exhibit No.
Description
Helmerich & Payne, Inc. Annual Bonus Plan
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Exhibit 10.1
Helmerich & Payne, Inc.
Annual Bonus Plan
Overview
Annual bonus awards are available to certain Executives to recognize and reward desired performance. Each year the Human Resources Committee (the “Committee”) approves the performance measures, and the specific financial and strategic objectives. An Executive’s bonus award opportunity is determined primarily by the individual’s position and level of responsibility.
Participation
The participants in the Plan are as follows:
Hans Helmerich,
Bonus Award Opportunity
Participants are assigned target bonus awards expressed as percentages of base
salary. These bonus awards are earned when performance objectives are
achieved. The award percentages are as follows:
Financial Performance Objectives
The performance objectives selected align management with shareholders. When
these objectives are met, shareholders will realize greater value in their
Company ownership. A participant’s bonus award will be based upon three
disproportionately weighted financial measures being:
George Dotson,
Doug Fears, and
Steve Mackey.
Threshold
Target
Reach
40
%
80
%
120
%
25
%
50
%
75
%
20
%
45
%
70
%
20
%
45
%
70
%
Financial Measure
Weighting
35
%
35
%
30
%
The Board of Directors annually approves an operating and capital budget at its September meeting. Each financial measure would be assigned threshold, target and reach numbers based upon this approved budget. Actual financial results would be compared to the budgeted numbers for each of the financial measures to determine the amount of any bonus. Based on the fiscal year budget, the following financial performance benchmarks have been developed for each financial measure:
| Prior | ||||||||||||||||
| Fiscal | ||||||||||||||||
| Year | ||||||||||||||||
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Threshold
|
Target
|
Reach
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Actual
|
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Earnings Per Share
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Return on Invested Capital
|
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|
Operating EBITDA*
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*millions
|
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| Current | Prior | |||||||
| Fiscal | Fiscal | |||||||
| Year | Year | |||||||
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Assumptions
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Target
|
Actual
|
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Revenue Days - U.S. Land:
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Revenue Per Day - U.S. Land:
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U.S. Land Rig Utilization:
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U.S. Offshore Utilization:
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International Utilization:
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Strategic Performance Objectives
The bonus, if any, derived from the Company’s financial performance would then be increased or decreased by the Committee pursuant to a 30% adjustment factor. Seventy-five percent of this adjustment factor is based upon the Committee’s assessment of the Company’s total shareholder return, using a three-year rolling average relative to an industry peer group. The remaining 25% of the bonus adjustment factor is based upon the Committee’s evaluation of the Company’s success in attaining higher than industry average utilization and premium day rates.
This bonus adjustment factor will be subject to a pre-determined safety performance threshold. For the fiscal year, in order to meet that threshold, the Company’s OSHA and DAWFC rates must be percent below IADC averages. If this safety performance threshold is not met, then the bonus would not be increased by the adjustment factor. The bonus would not be decreased by the adjustment factor solely for the reason that safety performance threshold was not met. However, if the adjustment factor resulted in a decrease to the bonus, then the bonus would be decreased even if the safety performance threshold is met.
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