<PAGE> 1
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 ss. 240.14a-11(c) or ss. 240.14a-12
GULFMARK OFFSHORE, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set for the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check the 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:
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(2) Form, Schedule or Registration No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
GULFMARK OFFSHORE, INC.
5 POST OAK PARK, SUITE 1170
HOUSTON, TEXAS 77027-3414
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of GulfMark
Offshore, Inc. (the "Company") will be held in the Envoy Room, The St. Regis
Hotel, 1919 Briar Oaks Lane, Houston, Texas 77027, on Thursday, May 6, 1999 at
3:30 P.M., Central Daylight Savings Time, for the following purposes:
1. To elect a Board of six (6) directors.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 26, 1999 as
the record date for the determination of stockholders entitled to notice of and
to vote at such meeting or any adjournment or adjournments thereof. Only
stockholders of record at the close of business on such record date are entitled
to notice of and to vote at such meeting.
You are cordially invited to attend the meeting. However, to ensure your
representation at the meeting, the Company requests that you return your signed
proxy card at your earliest convenience, whether or not you plan to attend the
meeting. Your proxy will be returned to you if you should be present at the
meeting and should request such a return.
TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. THE ENCLOSED RETURN ENVELOPE
MAY BE USED FOR THAT PURPOSE.
By Order of the Board of Directors
/s/ KEVIN D. MITCHELL
Kevin D. Mitchell
Assistant Secretary
Date: April 7, 1999
<PAGE> 3
GULFMARK OFFSHORE, INC.
5 POST OAK PARK, SUITE 1170
HOUSTON, TEXAS 77027-3414
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1999
The accompanying proxy is solicited by the Management of GulfMark Offshore,
Inc. (the "Company") at the direction of the Board of Directors for use at the
Annual Meeting of Stockholders of the Company to be held on Thursday, May 6,
1999 at the time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting and at any adjournment or adjournments thereof. When
proxies in the accompanying form are received and properly executed, the shares
will be voted by the persons named therein, unless contrary instructions are
given.
The proxy will not be used for the election as directors of all nominees if
authority to do so is withheld on the proxy and will not be used for the
election of any individuals whose names are written in the blank spaces on the
proxy. Where no instruction is indicated with respect to the election of
directors, the proxy will be voted FOR the election as directors of all
nominees. Where no instruction is indicated with respect to the election of all
nominees named in item (1) of the proxy, but names of one or more nominees are
listed in the blank spaces on the proxy, the proxy will be voted FOR the
election of all nominees not so listed.
Any stockholder of the Company has the right to revoke his or her proxy at
any time prior to its use by submitting a written revocation to the Secretary of
the Company.
Upon request, additional proxy material will be furnished without cost to
brokers and other nominees to forward to the beneficial owners of shares held in
their names. The Company will bear all costs in preparing, printing, assembling,
delivering and mailing the Notice of Annual Meeting, Proxy Statement, Proxy and
Annual Report. Copies of the Notice, Proxy Statement and Proxy will be mailed to
stockholders on or about April 7, 1999. In addition to the use of the mail,
proxies may be solicited by the directors, officers and employees of the
Company, without additional compensation, by personal interview, telephone,
telegram or otherwise.
<PAGE> 4
VOTING RIGHTS AND PRINCIPAL STOCKHOLDERS
The record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting to be held May 6, 1999 is the close of
business on March 26, 1999 (hereinafter called the "Record Date"). As of the
Record Date there were 8,123,365 shares of Common Stock issued and outstanding.
Each share of Common Stock is entitled to one vote on each matter to be acted
upon at the meeting.
The following table sets forth certain information with respect to each
person who at February 26, 1999, was known by the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NO. SHARES BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED (1) CLASS
- ---------------------------------------------------------------- ------------------------------ ------------
<S> <C> <C>
Lehman Brothers Holdings Inc.
3 World Financial Center
New York, New York 10285 2,030,226 24.99%
Estabrook Capital Management Inc. (2)
430 Park Avenue, Suite 1800
New York, New York 10022 1,554,283 19.13%
Mutual Beacon Fund (3)
c/o Franklin Mutual Advisers, Inc.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078 630,174 7.76%
- ----------------------------------------------------------------
</TABLE>
(1) Unless otherwise indicated below, the persons or group listed have sole
voting and investment power with respect to their shares of Common Stock.
(2) The information shown above was obtained from the Schedule 13G
(Amendment No. 7) dated January 19, 1999 as filed with the SEC by Estabrook
Capital Management Inc. Estabrook Capital Management Inc. acts as an investment
advisor and in such capacity has shared voting power and sole investment power
over the shares.
(3) Mutual Beacon Fund ("Beacon") is a portfolio of Franklin Mutual Series
Fund Inc., a registered investment company for which Franklin Mutual Advisers,
Inc. ("FMAI") acts as investment advisor. Pursuant to contracts with Beacon,
FMAI has sole investment and voting power over the shares owned by Beacon. FMAI
disclaims any economic beneficial interest in these shares.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth, as of March 26, 1999, the number and
percentage of Common Stock beneficially owned by each of the Company's
directors, each executive officer named in the summary compensation table
included under "Executive Officers and Compensation", and all directors and
officers as a group:
2
<PAGE> 5
<TABLE>
<CAPTION>
NO. OF SHARES BENEFICIALLY
OWNED AS OF MARCH 26,
NAME 1999(1)(2) PERCENT OF CLASS(3)
- --------------------------------------------------- ------------------------------ -----------------------
<S> <C> <C>
David J. Butters 217,506 (4) 2.66%
Norman G. Cohen 97,688 (5) 1.20%
Marshall A. Crowe 40,938 --
Louis S. Gimbel, 3rd 180,444 (6) 2.22%
Robert B. Millard 237,506 2.92%
Bruce A. Streeter 101,729 1.24%
Frank R. Pierce 63,876 --
John E. (Gene) Leech 54,949 --
All directors and officers as a
group (9 persons) 1,004,854 12.00%
- ---------------------------------------------------
</TABLE>
(1) Unless otherwise indicated below, the persons listed have sole voting
and investment power with respect to their shares of Common Stock.
(2) The amounts set forth in this column include the following shares of
Common Stock considered to be beneficially owned through the holder's ability to
exercise stock options to purchase such shares within 60 days: Mr. Butters -
49,138 shares; Mr. Crowe - 37,138 shares; Mr. Streeter - 93,879 shares; Mr.
Pierce - 8,885 shares; Mr. Leech - 52,949 shares; and all directors and officers
as a group - 251,707 shares.
(3) Less than one percent unless otherwise indicated.
(4) Includes 43,400 shares of Common Stock owned by trusts of which Mr.
Butters is the co-trustee and 40,200 shares beneficially owned by Mr. Butters'
wife, and with respect to which shares Mr. Butters has shared voting and
dispositive power.
(5) Includes 11,991 shares beneficially owned by a limited partnership and
an additional 11,991 shares beneficially owned by Mr. Cohen's wife through her
interest in the limited partnership, and with respect to which shares Mr. Cohen
has shared voting and dispositive power.
(6) Includes 15,210 shares of Common Stock owned by trusts of which Mr.
Gimbel is the co-trustee, and with respect to which shares Mr. Gimbel has shared
voting and dispositive power.
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, each to hold office
until the next Annual Meeting or until his or her successor shall be duly
qualified and elected. The persons named in the enclosed proxy will vote the
shares covered thereby in favor of the nominees listed below unless specifically
instructed to the contrary. Although management of the Company does not
contemplate that any of the nominees will be unable to serve, if such a
situation arises prior to the meeting, the proxies will be voted for a
substitute to be named by the Board of Directors of the Company. The nominees
receiving a plurality of votes cast at the Annual Meeting will be elected as
directors. Abstentions and broker nonvotes will not be treated as a vote for or
against any particular director and will not affect the outcome of the election
of directors.
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME AGE YEAR FIRST BECAME DIRECTOR
- ------------------------------------ ----------- --------------------------------
<S> <C> <C>
David J. Butters 58 1989
Norman G. Cohen 77 1972
Marshall A. Crowe 78 1978
Louis S. Gimbel, 3rd 70 1970
Robert B. Millard 48 1989
Bruce A. Streeter 50 1997
</TABLE>
David J. Butters is Chairman of the Board and is a member of the Executive,
Compensation and Audit Committees. He is a Managing Director of Lehman Brothers,
an investment banking firm and division of Lehman Brothers, Inc., which is a
subsidiary of Lehman Brothers Holdings, Inc., where he has been employed for
more than the past five years. Mr. Butters is currently a director of the Board
of Weatherford International, Inc. and Anangel-American Shipholdings, Ltd., and
a member of the Board of Advisors of Energy International, N.V. Mr. Butters has
served as a director of the Company since its formation in 1996 and served as a
director of GulfMark International, Inc. (the "Predecessor") from 1989 until May
1, 1997 when GulfMark International, Inc. was merged into Energy Ventures, Inc.,
now known as Weatherford International, Inc (the "Merger").
Norman G. Cohen is Chairman of the Audit and Compensation Committees. He
has served as President of Norman G. Cohen, Inc., consultants and mortgage
lenders, for more than five years and is a director of Brewster Wallcovering
Co., Randolf, Massachusetts. Mr. Cohen is a retired Vice-President of Amerada
Hess Corporation, and former Chairman of the National Parks and Conservation
Association. Mr. Cohen has served as a director of the Company since its
formation in 1996 and served as a director of the Predecessor from 1972 until
the Merger.
Marshall A. Crowe serves as a member of the Audit Committee. Since January
1978, Mr. Crowe has served as President of M. A. Crowe Consultants, Inc.,
providing consulting services in the energy and financial fields. For four years
prior thereto, he was Chairman of the National Energy Board of Canada and was
previously Chairman of the Board of Canada Development Corporation, which was
engaged in the business of making equity investments in Canadian enterprises.
Mr. Crowe is also of counsel at Johnston & Buchan, barristers and solicitors,
Ottawa, Canada. Mr. Crowe has served as a director of the Company since its
formation in 1996 and served as a director of the Predecessor from 1978 until
the Merger. Mr. Crowe is a Canadian citizen.
Louis S. Gimbel, 3rd is a member of the Executive Committee. He is
President, Chief Executive Officer and a Director of S. S. Steiner, Inc.,
Chairman of the Board of Hops Extract Corporation and Co-Manager of Stadelman
Fruit LLC. He has been employed by S.S. Steiner, Inc. for more than the past
five years. S. S. Steiner, Inc. is engaged in the farming, trading, processing,
importing and exporting of hops and other specialty crops. Mr. Gimbel has served
as a director of the Company since its formation in 1996 and served as a
director of the Predecessor from 1970 until the Merger.
Robert B. Millard is a member of the Executive and Compensation Committees.
He is a Managing Director of Lehman Brothers Inc., where he has been employed
for more than the past five years. Mr. Millard also serves as a Director of
Weatherford International, Inc. and L-3 Communications Corporation. Mr. Millard
has served as a director of the Company since its formation in 1996 and served
as a director of the Predecessor from 1989 until the Merger.
4
<PAGE> 7
Bruce A. Streeter has served as President and Chief Operating Officer of
the Company since January 1997. He was elected as director of the Company in
April 1997. He served as President of the Predecessor's Marine Division from
November 1990 until the Merger. Prior to November 1990, Mr. Streeter was with
Offshore Logistics, Inc. for a period of twelve years serving in a number of
capacities including General Manager Marine Division.
COMMITTEES AND MEETINGS OF DIRECTORS
Pursuant to the Company's By-Laws, the Board of Directors has established
several committees, including an Executive Committee, an Audit Committee and a
Compensation Committee. During the year ended December 31, 1998, the Board of
Directors met five times, the Audit Committee met two times, and the
Compensation Committee met twice. During 1998 each director attended 100% of the
combined Board of Directors meetings and meetings of committees of the Board on
which he served, except that Mr. Millard missed one Board meeting and one
Compensation Committee meeting.
Messrs. Butters, Cohen and Crowe are the current members of the Audit
Committee. The Audit Committee makes recommendations to the Board concerning the
selection and discharge of the Company's independent auditors, reviews
professional services performed by the auditors, the plan and results of their
audit engagement and the fees charged for audit and non-audit services by the
auditors, and evaluates the Company's system of internal accounting controls.
Messrs. Butters, Cohen and Millard are the current members of the
Compensation Committee, the principal functions of which are to recommend to the
Board of Directors the salaries to be paid to the officers of the Company and
administer compensation and benefit plans of the Company.
Messrs. Butters, Gimbel and Millard are the current members of the
Executive Committee, which acts on behalf of the full Board of Directors between
regularly scheduled meetings of the Board of Directors.
The Company has no standing Nominating Committee.
DIRECTOR COMPENSATION
Each non-employee director of the Company is paid $1,000 for each meeting
of the Board of Directors and $500 for each Committee meeting of the Board of
Directors he attends in person. In addition, a $2,000 retainer is paid to each
non-employee director of the Company for each quarter of the year in which such
director serves as a director. The Company also has a retainer arrangement with
Mr. Butters pursuant to which he receives a retainer of $6,250 per month for
serving as Chairman of the Board. Total compensation paid in 1998 to the
non-employee directors who have been nominated, including director fees and
retainers, was $89,000 for Mr. Butters, $14,000 for Mr. Cohen, $13,000 for Mr.
Crowe, $12,000 for Mr. Gimbel and $11,500 for Mr. Millard. In addition, the
Company furnishes Messrs. Cohen, Crowe and Gimbel with a $250,000 life insurance
policy. Premiums paid during 1998 for such policies were $12,757 for Mr. Cohen,
$18,632 for Mr. Crowe and $8,186 for Mr. Gimbel.
On December 8, 1993, each of the Company's current directors received
options to purchase shares of the Predecessor's common stock under the Amended
and Restated 1993 Non-Employee Director Stock Option Plan (the "Director Plan").
An additional grant of stock options was made to each director serving on the
Predecessor's Board of Directors on March 18, 1996.
In order to accomplish the separation of the Company's offshore marine
services business from operations of the Predecessor, the Predecessor
transferred the assets, liabilities and operations of its offshore marine
services business to the Company. The separation was then effectuated through
the distribution of all of the then outstanding common stock of the Company to
the Predecessor's common stockholders (the "Distribution"). The Company assumed
the Director Plan on the date of the Distribution. Pursuant to the equitable
adjustment provisions of the Director Plan, each outstanding stock option
previously granted pursuant to the Director Plan was converted to an option to
acquire shares of the Company's Common Stock and was adjusted to preserve the
aggregate intrinsic value of each option and the ratio of the exercise price to
market value per share. In addition, the number of shares of Common Stock
covered by the automatic grant provisions of the Director Plan was doubled to
reflect the Distribution. Accordingly, each non-
5
<PAGE> 8
employee director will receive the option to purchase 10,000 shares of Common
Stock at an exercise price equal to the fair market value of such shares of
Common Stock on the date of grant, upon his re-election as a director at the
Company's annual stockholders' meeting in 1999, 2002 and 2005. As of March 26,
1999, there were 86,276 option shares outstanding under the Director Plan and
300,000 shares available for grant upon the election of a new director or under
the automatic grant provisions discussed above.
In 1988, the Predecessor adopted the 1988 Non-Employee Director Option
Policy (the "Director Policy"), under which each non-employee director of the
Predecessor was granted options to purchase shares of Common Stock of the
Predecessor. Each of the Company's current directors, except Mr. Streeter, has
received options under this arrangement. As of the effective time of the
Distribution, the Company assumed and adjusted the outstanding stock options
issued pursuant to this policy to preserve the aggregate intrinsic value of each
option and the ratio of exercise price to market value per share. As of March
26, 1999, there were no option shares outstanding under the Director Policy.
There are no further option shares available for grant under the Director
Policy.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee of the Company is or was an officer
or employee of the Company or had any relationship requiring disclosure under
applicable rules, except that Mr. Butters has a retainer arrangement with the
Company described above pursuant to which Mr. Butters receives $6,250 per month
for serving as Chairman of the Board of the Company. In 1998 Mr. Butters
received $89,000 in director fees and retainers. During the 1998 fiscal year, no
executive officer of the Company served as (a) a member of the compensation
committee of another entity, one of whose executive officers served on the
Compensation Committee of the Company, (b) a director of another entity, one of
whose executive officers served on the Compensation Committee of the Company, or
(c) a member of the compensation committee of another entity, one of whose
executive officers served as a director of the Company.
EXECUTIVE OFFICERS AND COMPENSATION
The following are executive officers and key employees of the Company, who
serve at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
NAME POSITION AGE
- ----------------------------------- ----------------------------------------------------- -------------
<S> <C> <C>
Bruce A. Streeter President and Chief Operating Officer 50
Frank R. Pierce Executive Vice President, Secretary and Treasurer 49
John E. (Gene) Leech Vice President 46
Kevin D. Mitchell Controller and Assistant Secretary 30
</TABLE>
Bruce A. Streeter has served as President and Chief Operating Officer of
the Company since January 1997. He was elected as director of the Company in
April 1997. He served as President of the Predecessor's Marine Division from
November 1990 until the Merger. Prior to November 1990, Mr. Streeter was with
Offshore Logistics, Inc. for a period of twelve years serving in a number of
capacities including General Manager Marine Division.
Frank R. Pierce was elected Executive Vice President, Secretary and
Treasurer of the Company in January 1997. He served as Executive Vice President,
Secretary and Treasurer of the Predecessor from December 1990 until the Merger.
Mr. Pierce had been employed by the Predecessor since July 1987, serving as its
Vice President, Finance until December 1990. Mr. Pierce has resigned as an
officer and employee of the Company effective April 8, 1999.
John E. (Gene) Leech was elected Vice President of the Company in January
1997. He served as Vice President of the Predecessor's Marine Division from its
formation in November 1990 until the Merger. Prior to November 1990,
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<PAGE> 9
Mr. Leech was with Offshore Logistics, Inc. for a period of fifteen years
serving in a number of capacities, including Manager Domestic Operations and
International Operations Manager.
Kevin D. Mitchell was elected Controller and Assistant Secretary of the
Company in January 1997. He served as Controller and Assistant Secretary of the
Predecessor from September 1996 until the Merger. Prior to that, Mr. Mitchell
served as Controller for one year with E-Stamp Corporation, a start-up software
company, having previously completed five years with Arthur Andersen LLP.
The aggregate compensation paid by the Company for services rendered during
the last three years in all capacities to the highest paid executive officers
whose total annual salary and bonus exceeded $100,000 during the year ended
December 31, 1998 was as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------------------------------- AWARDS
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS(2) COMPENSATION
------------------------------ ------- ----------- ------------ ---------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Bruce A. Streeter 1998 $195,000 $145,000 $ -- 30,000 $ 3,092(3)
President and Chief 1997 180,000 100,000 -- 30,000 2,916
Operating Officer 1996 175,000 75,000 -- 39,310 2,848
Frank R. Pierce 1998 $140,000 $25,000 $ -- 3,000 $ 3,285(3)
Executive Vice President, 1997 135,000 20,000 2,000 2,912
Secretary, and Treasurer 1996 135,000 25,000 9,828 2,672
John E. (Gene) Leech 1998 $135,000 $ 80,000 $ -- 12,000 $ 2,858(3)
Vice President 1997 125,000 65,000 12,000 2,701
1996 120,000 50,000 -- 19,656 2,623
----------------------------------------
</TABLE>
(1) The aggregate amount of perquisites and other benefits is excluded
from other annual compensation because such compensation was less than 10% of
the combined total for salary and bonus for each named executive officer.
(2) As adjusted to preserve intrinsic value of the options and the ratio of
exercise price to market value per share on the date of the Distribution.
(3) Includes matching contributions made by the Company pursuant to its
401(k) savings plan of $2,000 for each Messrs. Streeter, Pierce and Leech, and
life insurance premiums of $1,092, $1,285 and $858 for Messrs. Streeter, Pierce
and Leech, respectively.
A subsidiary of the Company entered into employment agreements with Messrs.
Streeter and Leech, effective as of January 1, 1998, pursuant to which Mr.
Streeter is entitled to be employed as President of the Company and certain of
its subsidiaries and to receive from a subsidiary of the Company an annual
salary of not less than $180,000 for each year during the two and one-half-year
term of his agreement and Mr. Leech is entitled to be employed as a Vice
President of the Company and certain of its subsidiaries and to receive from a
subsidiary of the Company an annual salary of not less than $125,000 for each
year during the one and one-half-year term of his agreement. In addition to
annual salary, Messrs. Streeter and Leech may receive a discretionary bonus.
Prior to a change of control of the Company or after twelve months after a
change of control of the Company, any termination of Messrs. Streeter's or
Leech's employment without cause, or their respective resignations in certain
circumstances, would entitle the terminated or resigning officer to the payment
of his annual salary for the time remaining under
7
<PAGE> 10
the term of his employment agreement and the proportionate share of his
annualized bonus for the previous fiscal year for the time remaining under the
term of his employment agreement, together with certain other benefits and any
unpaid salary, bonus amount, deferred compensation and vacation pay accrued to
the date of termination. Within twelve months after a change of control of the
Company, any termination of Messrs. Streeter's or Leech's employment without
cause, or their respective resignation in certain circumstances, would entitle
the terminated or resigning officer to the payment of two times his annual
salary and two times his annualized bonus for the previous fiscal year, together
with certain other benefits and any unpaid salary, bonus amount, deferred
compensation and vacation pay accrued to the date of termination, less any
amount paid under the agreement upon the change of control. Pursuant to the
agreements, the Company is responsible for the payment and performance of the
subsidiary's obligations under the agreements.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM
--------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/SARS(1) EMPLOYEES IN OR BASE EXPIRATION
NAME GRANTED (#) FISCAL YEAR PRICE($/SH) DATE 5% ($) 10% ($)
---------------------------- --------------- -------------- ------------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bruce A. Streeter 30,000 60.6% $32.625 05/14/08 $ 615,530 $1,559,875
Frank R. Pierce 3,000 6.1% 32.625 05/14/08 61,553 155,988
John E. (Gene) Leech 12,000 24.2% 32.625 05/14/08 246,212 623,950
-----------------------------------------------
</TABLE>
(1) One-third of the options granted became exercisable at each of one year, two
years and three years, respectively, from the date of grant.
The following table represents the total number of options to purchase the
Company's Common Stock held by the named executive officers of the Company at
December 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT OPTIONS/SARS AT
ACQUIRED FISCAL YEAR END FISCAL YEAR END
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE(1) UNEXERCISABLE(2)
- ------------------------------ ---------- ------------- ------------------- --------------------------
<S> <C> <C> <C> <C>
Bruce A. Streeter -- $ -- 60,776 / 63,103 $ 604,057 / $ 176,042
Frank R. Pierce 47,991 1,421,531(3) 3,942 / 7,610 35,345 / 36,681
John E. (Gene) Leech -- -- 41,673 / 26,552 439,181 / 75,609
- ---------------------------------------------
</TABLE>
8
<PAGE> 11
(1) As adjusted to preserve aggregate intrinsic value of the options and
the ratio of exercise price to market value per share on the date of the
Distribution.
(2) Value based on the difference between the market value of the common
stock on December 31, 1998 and the exercise price. The actual value, if any, of
the unexercised option will be dependent upon the market price of Common Stock
at the time of exercise.
(3) None of these shares were sold upon exercise. This value was computed
based on the difference between the market value of the common stock on the date
of exercise and the exercise price. The actual value to be recognized, if any,
will be dependent upon the market price of Common Stock at the time the shares
are sold.
The Company also has outstanding options granted to non-employee directors
to purchase shares of its Common Stock, which is further described under the
caption "Election of Directors-Director Compensation".
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of GulfMark Offshore,
Inc. (the "Committee") is pleased to present this report on the compensation
policies of the Company for its executive officers. This report sets forth the
major components of executive compensation and the basis by which 1999
compensation determinations were made by the Committee with respect to the
executive officers of the Company, including the executive officers who are
named in the compensation tables shown above. The Committee is comprised of
three directors who are not employees of the Company.
Compensation Policy and Guidelines
In recent years, the Company has undergone substantial operational changes
following a decision by the Board of Directors to redeploy the Company's assets
in a manner that would build a competitive oilfield equipment and services
company. This decision resulted in a need to attract and retain key executive
officers and employees who would be instrumental in the success of these new
operations. Accordingly, the Company's compensation policy and practices are
aimed at achieving this objective. The Company's executive compensation program
combines what the Committee considers to be competitive but reasonable base
salaries with incentive programs linked to the success of the Company's
operations and stock performance. As part of the executive compensation program,
the Company entered into employment agreements with its President and Vice
President effective January 1, 1998. The Committee's decisions regarding
compensation take into account individual performance and the relationship of
that performance to the progress of the Company in obtaining strategic
objectives for the benefit of stockholders.
Compensation Program Components
The compensation programs of the Company for its executive officers and key
employees are generally administered by or under the direction of the Committee
and are reviewed on an annual basis to ensure that remuneration levels and
benefits are competitive and reasonable using the guidelines described above.
The Committee reviews and recommends the specific base salary and bonus
compensation of the Company's executive officers and the principal operating
officers of each of its units. The particular elements of the compensation
programs for such persons are set forth in more detail below.
Base Salary - Base salary levels are primarily determined by the Committee
at levels the Committee deems necessary or appropriate to attract the level of
competence needed for the position. Base salary levels are reviewed annually
based on individual performance, industry conditions and market considerations.
The Committee believes that base salary levels for the Company's executive
officers are competitive within a range that is considered to be reasonable and
necessary.
Annual Performance Compensation - The Company provides incentive
compensation to its executive officers and key employees in the form of annual
cash bonuses relating to financial and operational achievements during the prior
9
<PAGE> 12
year. The amount and form of such bonuses is determined by the Committee based
primarily upon an analysis of the officer's job performance and the specific
accomplishments of the officer during the preceding calendar year. In the case
of corporate financial officers, incentive compensation decisions are made
primarily on the basis of the assistance and performance of the officer in
implementing corporate objectives within the scope of his or her
responsibilities. In the case of operational officers, incentive compensation
decisions are made primarily on the basis of the operational results of the
business operations for which the officer is responsible. Although the
achievement of certain financial objectives as measured by a business segment's
earnings are considered in determining incentive compensation, other subjective
and less quantifiable criteria are also considered. In this regard, the
Committee takes into account specific operational achievements that are expected
to affect future earnings and results or that had an identifiable impact on the
prior year's results.
Stock Option Program - The Company also provides long-term incentive
compensation to its executive officers and key employees through stock options.
The use of stock options is intended to provide incentives to the Company's
executive officers and key employees to work toward the long-term growth of the
Company by providing them with a benefit that will increase only to the extent
the value of the Common Stock increases. Options are not granted by the
Committee as a matter of course as part of the regular compensation of any
executive or key employee. The decision to grant an option is based on the
perceived incentive that the grant will provide and the benefits that the grant
may have on long-term stockholder value. The determination of the number of
shares granted is based on the level and contribution of the employee.
Consideration is also given to the anticipated contribution of the business
operations for which the optionee has responsibility to overall stockholder
value. The stock options which are currently outstanding are subject to vesting
over a number of years and have exercise prices based on the market price of the
Common Stock at the date of grant. Stock options were granted in 1990 after the
acquisition of the offshore marine services segment, on two occasions in 1996,
after the successful completion of the spin-off in 1997, and again in mid-1998.
Discussion of 1998 Compensation for the Executive Officers Named in the Tables
Above
The Company does not have a Chief Executive Officer. Mr. Bruce Streeter
serves as the President and Chief Operating Officer of the Company. The base
salary for Mr. Streeter was increased in 1998 based on individual performance,
increased responsibilities and the increasing complexity and size of the
Company's operations as well as a review of compensation for executives in
similar positions with industry peers. Mr. Streeter's 1998 bonus was determined
following a review of the financial results of the Company and specific
achievements by Mr. Streeter in managing the Company's operations in 1998.
The base salary for Mr. Pierce, Executive Vice President of Finance,
Secretary and Treasurer, is primarily based on the Committee's general
understanding of ranges of compensation for financial executives of companies
similar in size and complexity to the Company. Mr. Pierce's bonus for 1998 was
based on the Committee's evaluation of his individual performance in assisting
the Company to achieve its corporate and strategic objectives during 1998.
The base salary for Mr. Leech, Vice President, was increased in 1998 based
on individual performance, increased responsibilities and the increasing
complexity and size of the Company's operations as well as a review of
compensation for executives in similar positions with industry peers. Mr.
Leech's 1998 bonus was determined following a review of the financial results of
the Company's operations for which Mr. Leech has responsibility and the specific
achievements by Mr. Leech in meeting the Company's objectives in 1998.
Tax Considerations
During 1993, Congress enacted legislation that could have the effect of
limiting the deductibility of executive compensation paid to each of the five
highest paid executive officers. This legislation provides that compensation
paid to any one executive in excess of $1,000,000 will not be deductible unless
it is performance-based and paid under a plan that has been approved by
stockholders. The Committee considers the application of this legislation when
reviewing executive compensation; however, the limitation on deductibility of
executive compensation has not had any impact on the Company to date.
10
<PAGE> 13
Summary
After review of the Company's existing programs, the Committee believes
that the Company's executive compensation program is reasonable and provides a
mechanism by which compensation is appropriately related to corporate and
individual performance so as to align the interest of the Company's executive
officers with the interest of stockholders on both a long and short-term basis.
Compensation Committee of the Board of Directors:
David J. Butters
Norman G. Cohen
Robert B. Millard
PERFORMANCE GRAPH
The following performance graph and table compare the cumulative return on
the Company's Common Stock to the Dow Jones Equity Market Index and the Dow
Jones Oilfield Equipment and Services Index (which consists of Baker Hughes
Inc., Dresser Industries, Inc., Halliburton Co., McDermott International, Inc.,
Schlumberger Ltd. N.V. and Western Atlas, Inc.) for the periods indicated. The
graph assumes (i) the reinvestment of dividends, if any, and (ii) the value of
the investment of the Company's Common Stock and each index to have been $100 at
May 1, 1997 (A), for the Company's Common Stock and December 31, 1996 for each
index.
------------------------------------------------------------------------------
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
GulfMark Offshore, Inc. 100(A) 228 109
Dow Jones Equity Market Index 100 134 172
Dow Jones Oilfield Equipment and Services Index 100 152 81
</TABLE>
(A) In lieu of December 31, 1996, the first day of active trading, May 1,
1997, was used for GulfMark Offshore, Inc.
------------------------------------------------------------------------------
11
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SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater-than-ten percent stockholders are required by
the regulation to furnish the Company with copies of all Section 16 (a) forms
they file.
Based solely on the Company's review of the copies of such forms received
by it, or written representations from certain reporting persons that no Form 5
reports were required for those persons, the Company believes that all filing
requirements applicable to its officers and directors and greater-than ten
percent beneficial owners during the 1998 fiscal year were complied with, except
that Mr. Norman G. Cohen, a director of the Company, filed one late report
reflecting two transactions that were reported on an untimely basis.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP, independent public accountants, served as
the Company's auditors for the fiscal year ended December 31, 1998. Arthur
Andersen LLP has served as the Company's auditors since 1961 except for the year
ended December 31, 1983. A representative of Arthur Andersen LLP will be present
at the Annual Meeting and will be afforded an opportunity to make a statement if
he or she so desires and be available to respond to appropriate questions.
PROPOSALS BY STOCKHOLDERS
The Company currently anticipates that its 1999 Annual Meeting will be held
May 11, 2000. Any stockholder wishing to present a proposal for consideration at
the meeting must submit it in sufficient time so that it will be received by the
Company not later than December 18, 1999. Such proposal must comply with the
proxy rules promulgated by the SEC in order to be included in the Company's
proxy statement and form of proxy related to the meeting and should be sent to
the Company's principal executive offices at the address set forth on the cover
of this Proxy Statement.
The proxy card pertaining to the next Annual Meeting will grant the proxy
holders discretionary authority to vote on any matter raised at the meeting. If
a shareholder intends to submit a proposal at such meeting which is not eligible
for inclusion in the proxy statement and form of proxy relating to that meeting,
the shareholder must give written notice to the Secretary of the Company no
later than February 20, 2000. If such shareholder fails to comply with the
foregoing notice provision, the proxy holders will be allowed to use their
discretionary voting authority on such shareholder proposal when the matter is
raised at such meeting.
OTHER BUSINESS
The Board of Directors for the Company knows of no other business that will
be brought before the meeting. If, however, any other matters are properly
presented, it is the intention of the persons named in the accompanying form of
proxy to vote the shares covered thereby as in their discretion they may deem
advisable.
By Order of the Board of Directors
/s/ KEVIN D. MITCHELL
Kevin D. Mitchell
Assistant Secretary
Houston, Texas
Date: April 7, 1999
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<PAGE> 15
PLEASE SIGN, DATE AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
GULFMARK OFFSHORE, INC.
MAY 6, 1999
A [X] Please mark your votes as in this example
PLEASE MARK, SIGN, DATE AND RETURN USING THE ENCLOSED ENVELOPE
(1) Election of Directors
NOMINEES: FOR AGAINST ABSTAIN
---------
David J. Butters Louis S. Gimbel 3rd
Norman G. Cohen Robert B. Millard [ ] [ ] [ ]
Marshall A. Crowe Bruce A. Streeter
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- -------------------------------------------------
(2) To consider and take action upon any other matter which may properly come
before the meeting or any adjournment or postponement thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted "for" Proposal 1. Receipt of the Proxy Statement dated April 7, 1999 is
hereby acknowledged.
Signature of Stockholder(s) Dated: 1999
---------------- --------------- --------
Note: Please sign exactly your name exactly as it appears hereon. Joint
owners must each sign. When signing as attorney, executor,
administrator, trustee or guardian please give your full title as it
appears thereon.
<PAGE> 16
GULFMARK OFFSHORE, INC.
ANNUAL MEETING OF STOCKHOLDERS
May 6, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Gulfmark Offshore, Inc. ("GulfMark") hereby
appoints David J. Butters and Robert B. Millard, or either of them, as proxies,
each with power to act without the other and with full power of substitution,
for the undersigned to vote the number of shares of Common Stock of GulfMark
that the undersigned would be entitled to vote if personally present at the
Annual Meeting of Stockholders of GulfMark to be held on May 6, 1999, at
3:30 p.m., CST, at The St. Regis Hotel, 1919 Briar Oaks Lane, Houston,
Texas 77027, and at any adjournment or postponement thereof, on the following
matters that are more particularly described in the Proxy Statement dated
April 7, 1999:
(Continued and to be signed on other side)
