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 <section> 240.14a-11(c) or <section>
240.14a-12
OMNI Energy Services, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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)(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 forth the amount on which
the filing fee is calculated and state how it was determined):
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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[ LOGO ]
OMNI ENERGY SERVICES CORP.
4500 NE EVANGELINE THRUWAY
CARENCRO, LOUISIANA 70520
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Shareholders of OMNI Energy Services Corp.:
The annual meeting of shareholders of OMNI Energy Services Corp. (the
"Company") will be held at the Company's principal executive offices at 4500 NE
Evangeline Thruway, Carencro, Louisiana 70520 on May 27, 1999, at 9:00 a.m.,
local time, to consider and vote on:
1. The election of directors;
2. An amendment to the Company's stock incentive plan to increase the
number of shares of common stock that may be issued under the plan;
and
3. Such other business as may properly come before the meeting or any
adjournments thereof.
Only holders of record of the Company's Common Stock at the close of
business on April 22, 1999, are entitled to notice of and to vote at the annual
meeting.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING
ENVELOPE AS PROMPTLY AS POSSIBLE. A PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE VOTING THEREOF.
By Order of the Board of Directors
Allen R. Woodard
Secretary
Carencro, Louisiana
April 27, 1999
OMNI ENERGY SERVICES CORP.
4500 NE EVANGELINE THRUWAY
CARENCRO, LOUISIANA 70520
APRIL 27, 1999
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of OMNI Energy Services
Corp. (the "Company") in connection with the solicitation on behalf of its
Board of Directors (the "Board") of proxies for use at the annual meeting of
shareholders of the Company to be held on May 27, 1999, at the time and place
set forth in the accompanying notice and at any adjournments thereof (the
"Meeting").
Only shareholders of record of the Company's common stock, $0.01 par value
per share ("Common Stock"), at the close of business on April 22, 1999 are
entitled to notice of and to vote at the Meeting. On that date, the Company
had 15,958,627 shares of Common Stock outstanding, each of which is entitled to
one vote.
The enclosed proxy may be revoked at any time prior to its exercise by
filing with the Secretary of the Company a written revocation or duly executed
proxy bearing a later date. The proxy will also be deemed revoked with respect
to any matter on which the shareholder votes in person at the Meeting.
Attendance at the Meeting will not in and of itself constitute a revocation of
a proxy. Unless otherwise marked, properly executed proxies in the form of the
accompanying proxy card will be voted for the election of the nominees to the
Board listed below and for the proposal to amend the Company's Stock Incentive
Plan (the "Plan").
This Proxy Statement is first being mailed to shareholders on or about
April 29, 1999. The cost of soliciting proxies hereunder will be borne by the
Company. Proxies may be solicited by mail, personal interview, telephone and
telegraph. Banks, brokerage houses and other nominees or fiduciaries will be
requested to forward the soliciting material to their principals and to obtain
authorization for the execution of proxies. The Company will, upon request,
reimburse them for their expenses in so acting.
ELECTION OF DIRECTORS
GENERAL
The Company's By-laws provide for a Board of Directors to be made up of
eight members, and proxies cannot be voted for more than eight nominees. Each
director elected at the Meeting will serve a one-year term expiring at the 2000
annual meeting of shareholders. The terms of each of the Company's current
directors will expire at the Meeting, and each of the Company's eight current
directors has been nominated for re-election to the Board.
Unless authority to vote for the election of directors is withheld, the
proxies solicited hereby will be voted FOR the election of each individual
named below. If any nominee should decline or be unable to serve for any
reason, votes will instead be cast for a substitute nominee designated by the
Board. The Board has no reason to believe that any nominee will decline to be
a candidate or, if elected, will be unable or unwilling to serve. Under the
Company's By-Laws, directors are elected by plurality vote.
The Board has nominated and urges you to vote FOR the re-election of the
individuals listed below.
INFORMATION ABOUT THE COMPANY'S DIRECTORS
The following table sets forth, as of April 1, 1999, certain information
about the Company's directors, all of which have been nominated for re-election
to the Board:
DIRECTORS AGE
David A. Jeansonne....................... 38
Robert F. Nash........................... 55
John H. Untereker........................ 49
Allen R. Woodard......................... 37
Roger E. Thomas.......................... 57
Steven T. Stull.......................... 40
Crichton W. Brown........................ 41
William W. Rucks, IV..................... 41
David A. Jeansonne founded the Company's operations in 1987 and has been
Chairman of the Board of the Company and each of its predecessors since their
respective inceptions. Additionally, Mr. Jeansonne served as Chief Executive
Officer of each of the Company's predecessors since their respective
inceptions, and of the Company from its inception until March 1999. Mr.
Jeansonne also served as President of the Company from January 1999 until
March 1999. Mr. Jeansonne has also been Chairman of the Board, President and
Chief Executive Officer of American Aviation Incorporated ("American Aviation")
which he co-founded, since its inception in 1995. Mr. Jeansonne has been a
director of the Company since September 1997.
Robert F. Nash joined the Company as its Chief Operating Officer in
September 1998 and has been President and Chief Executive Officer of the
Company since March 1999. Before joining the Company, Mr. Nash held executive
management positions with Halliburton Company, an energy services, engineering
and construction, and energy equipment provider, during his 26-year career
there. Mr. Nash is a member of PESA, SPE, and the International Association of
Drilling Contractors. Mr. Nash has been a director of the Company since
September 1998.
John H. Untereker is Executive Vice President and Chief Financial Officer
of the Company and joined the Company in August 1998. Prior to joining the
Company, Mr. Untereker was the senior financial officer at Petroleum
Helicopters, Inc. He has held senior management positions at Lend Lease
Trucks, Inc. and NL Industries, Inc. Mr. Untereker is a graduate of Williams
College (B.A.), Iona College (MBA) and is a CPA. Mr. Untereker has been a
director of the Company since August 1998.
Allen R. Woodard has served as Vice President-Marketing & Business
Development of the Company and has held this position with the Company and its
predecessor since July 1996. He was an exploration field inspector with The
Louisiana Land & Exploration Company, a natural resources company, from 1988 to
1996. Mr. Woodard is a professional land surveyor and graduated from Nicholls
State University in 1987 with a degree in engineering technology. Mr. Woodard
has been a director of the Company since September 1997.
Roger E. Thomas was President of the Company and its predecessor from July
1996 to December 31, 1998. Mr. Thomas was Chief Financial Officer of Gulf
Coast Marine Divers, Inc., a provider of offshore diving services, from 1995 to
1996. He was President of Toth Aluminum Corp., an aluminum processor, from
1994 to 1995. Mr. Thomas was President of Melamine Technologies, Inc., a
marketer and developer of technology, from 1992 to 1994. He was President of
Melamine Chemicals, Inc., a publicly-traded producer and seller of melamine
crystal, from 1987 to 1992. Mr. Thomas graduated from the University of
Florida in 1965 with a B.S. degree in chemical engineering. Mr. Thomas has
been a director of the Company since September 1997.
Steven T. Stull is a founding partner of Advantage Capital Partners, a
series of institutional venture capital funds under common ownership and
control, founded in 1992 (collectively, "Advantage Capital"), and is an
executive officer and a director of each of the Advantage Capital companies.
From 1985 through 1993, Mr. Stull was employed by General American Life
Insurance Company in various positions, including Vice President of the
Securities Division. Mr. Stull graduated from Washington University in 1981
with a B.S. in Business Administration and in 1985 with an M.B.A. and is a
chartered financial analyst. Mr. Stull has been a director of the Company
since September 1997.
Crichton W. Brown is an executive officer and a director of each of the
Advantage Capital companies. From 1988 to 1994, Mr. Brown was Senior Vice
President and Director-Corporate Development of The Reily Companies, Inc., a
private holding company with interests in consumer goods manufacturing and
corporate venture capital investing. From 1984 to 1988, Mr. Brown served as
principal of Criterion Venture Partners, an institutional venture capital firm.
Mr. Brown graduated from Stanford University in 1980 with a B.A. in Business
Administration and a B.S. in Engineering Management. He subsequently graduated
from the University of Pennsylvania Wharton School of Finance in 1984 with an
M.B.A. Mr. Brown has been a director of the Company since September 1997.
William W. Rucks, IV has been a private venture capitalist-investor since
September 1996. He served as President and Vice Chairman of Ocean Energy, Inc.
(formerly Flores & Rucks, Inc.) from July 1995 until September 1996 and as
President and Chief Executive Officer from its inception in 1992 until July
1995. From 1985 to 1992, Mr. Rucks served as President of FloRuxco, Inc.
Prior thereto, Mr. Rucks worked as a petroleum landman with Union Oil Company
of California in its Southwest Louisiana District, serving as Area Land Manager
from 1981 to 1984. Mr. Rucks has been a director of the Company since
September 1997 and is also a director of Ocean Energy, Inc. and First Commerce
Corporation.
During 1998, the board held eight meetings. Each director attended at
least 75% of the aggregate number of meetings held during 1998 of the Board and
committees of which he was a member.
BOARD COMMITTEES
The Board has established an Audit Committee and a Compensation Committee.
The Company does not have a nominating committee. The Audit Committee reviews
the Company's financial statements and annual audit and meets with the
Company's independent public accountants to review the Company's internal
controls and financial management practices. The current members of the Audit
committee are Messrs. Brown and Stull. The Audit Committee met two times
during 1998.
The Compensation Committee recommends to the Board compensation for the
Company's executive officers and other key employees, administers the Plan and
performs such similar functions as may be prescribed by the Board. The current
members of the Compensation Committee are Messrs. Brown, Stull and Rucks. The
Compensation Committee met two times during 1998.
COMPENSATION OF DIRECTORS
Each non-employee director is paid an attendance fee of $2,000 for each
Board meeting attended and $500 for each committee meeting attended. All
directors are reimbursed for reasonable out-of-pocket expenses incurred in
attending Board and committee meetings.
Each person who becomes a non-employee director is granted an option to
purchase 10,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on the date such person becomes a director.
Additionally, in each year during which the Plan is in effect and a
sufficient number of shares of Common Stock are available thereunder, including
1999 if the amendment to the Plan is approved by the shareholders, each person
who is a non-employee director on the day following the annual meeting of the
Company's shareholders will be granted an option to purchase 5,000 shares of
Common Stock at an exercise price equal to the fair market value of the Common
Stock on such date. All such options shall become fully exercisable on the
first anniversary of their date of grant and shall expire on the tenth
anniversary thereof, unless the non-employee director ceases to be a director
of the Company, in which case the exercise periods will be shortened.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of April 22, 1999, certain information
regarding beneficial ownership of Common Stock by (i) each of the Named
Executive Officers, (ii) each director of the Company, (iii) all of the
Company's directors and executive officers as a group and (iv) each shareholder
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock. Unless otherwise indicated, the Company believes
that the shareholders listed below have sole investment and voting power with
respect to their shares based on information furnished to the Company by such
shareholders.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING COMMON
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED STOCK
- ----------------------- ------------------ ------------------
<S> <C> <C>
Steven T. Stull....................... 8,002,162(1) 48.0%
Advantage Capital..................... 7,987,162(2) 47.9%
Roger E. Thomas(3).................... 1,422,708(4) 8.5%
Allen R. Woodard (5).................. 1,386,773(6) 8.3%
David A. Jeansonne(5)................. 1,379,922 8.3%
Robert H. Chaney...................... 859,500(7) 5.2%
William W. Rucks, IV.................. 24,000(8) *
Crichton W. Brown..................... 15,000(9) *
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OUTSTANDING COMMON
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED STOCK
- ------------------------ ------------------ ------------------
<S> <C> <C>
Robert F. Nash........................ 8,360(10) *
John H. Untereker..................... 8,360(10) *
All directors and executive officers
as a group (8 persons)......... 12,246,285(11) 73.4%
</TABLE>
* Less than one percent.
(1) The address of Mr. Stull is c/o Advantage Capital, 909 Poydras Street,
Suite 2230, New Orleans, Louisiana 70112. Includes 7,987,162 shares held
by the Advantage Capital companies referred to in note (2). Mr. Stull is
the majority shareholder of each of the general partners referred to in
note (1). Also includes 15,000 shares issuable upon the exercise of options
currently exercisable or exercisable within sixty days.
(2) The address of Advantage Capital is 909 Poydras Street, Suite 2230, New
Orleans, Louisiana 70112. Of these shares, 293,983 are held by Advantage
Capital Partners Limited Partnership and 993,831 are held by Advantage
Capital Partners II Limited Partnership, of which Advantage Capital
Corporation is the general partner; 1,616,060 are held by Advantage Capital
Partners III Limited Partnership, of which Advantage Capital Management
Corporation is the general partner; 3,025,697 are held by Advantage Capital
Partners IV Limited Partnership, of which Advantage Capital Financial
Company, L.L.C. is the general partner; 1,857,591 are held by Advantage
Capital Partners V Limited Partnership, of which Advantage Capital
Advisors, L.L.C. is the general partner; and 200,000 are issuable upon the
exercise of warrants exercisable within sixty days. Of such warrants,
50,400 are held by Advantage Capital Partners VI Limited Partnership, of
which Advantage Capital NOLA VI, L.L.C. is the general partner; 116,000 are
held by Advantage Capital Partnership VII Limited Partnership, of which
Advantage Capital NOLA VII, L.L.C. is the general partner; and 33,600 are
held by Advantage Capital Partners VIII Limited Partnership, of which
Advantage Capital NOLA VIII, L.L.C. is the general partner.
(3) The address of Mr. Thomas is 1524 Applewood Road, Baton Rouge, Louisiana
70808.
(4) Includes 300,000 shares issuable upon the exercise of currently exercisable
options.
(5) The address of Messrs. Woodard and Jeansonne is c/o OMNI Energy Services
Corp., 4500 NE Evangeline Thruway, Carencro, Louisiana 70520.
(6) Includes 154,180 shares issuable upon the exercise of currently exercisable
options and 105,750 shares held by Mr. Woodard's children.
(7) Based on information set forth in a Schedule 13G filed by R. Chaney &
Partners IV L.P., ("Fund IV"), R. Chaney & Partners III L.P. ("Fund III"),
R. Chaney Investments, Inc. ("Investments"), R. Chaney & Partners, Inc.
("Partners") and Mr. Robert H. Chaney on February 8, 1999. Investments is
the sole general partner of Fund IV, Partners is the sole general partner
of Fund III, and Mr. Chaney is the sole shareholder of Investments and
Partners. Fund IV, Investments and Mr. Chaney have the sole power to vote
or to direct the vote, and the sole power to dispose or to direct the
disposition of, 237,500 shares. Fund III, Partners and Mr. Chaney have the
sole power to vote or to direct the vote, and the sole power to dispose or
direct the disposition of, 622,000 shares. The address of Mr. Chaney and
each of these entities is 909 Fannin Street, Suite 1275, Two Houston
Center, Houston, Texas 77010.
(8) Includes 15,000 shares issuable upon the exercise of options currently
exercisable or exercisable within sixty days.
(9) Consists of 15,000 shares issuable upon the exercise of options currently
exercisable or exercisable within sixty days.
(10 Consist of shares issuable upon the exercise of options currently
exercisable.
(11)See Notes (1), (4), (6), (8), (9) and (10) above.
EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
The following table sets forth all cash compensation and options granted
for the three years ended December 31, 1998, to the Company's Chief Executive
Officer and each of its two most highly compensated executive officers
(collectively, the "Named Executive Officers"). No other executive officer of
the Company was paid over $100,000 by the Company during 1998.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
--------------------------------------------- ------------
Other No. of Shares
Annual Underlying
Compen- Options/SARs All Other
Name and Principal Position Year Salary Bonus sation(1) Granted(2) Compensation
- ----------------------------- ------ ---------- ------------ ----------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David A. Jeansonne, former 1998 $ 143,750 $ --- $ --- --- $ ---
Chief Executive 1997 $ 130,208 $ 50,000 $ --- --- $ ---
Officer(3) 1996 $ 111,764 $ 1,163,478 $ --- --- $ ---
Allen R. Woodward, Vice 1998 $ 100,000 $ --- $ --- --- $ ---
President Marketing and 1997 $ 104,167 $ --- $ --- 300,000 $ ---
Business Development(3) 1996 $ 38,042 $ --- $ --- --- $ ---
Roger E. Thomas, former 1998 $ 150,000 4 --- $ --- 60,000(4) $ 81,250(5)
President(3) 1997 $ 143,750 $ --- $ --- 300,000 $ ---
1996 $ 78,125 $ --- $ --- --- $ ---
</TABLE>
(1) Perquisites and other personal benefits paid to each Named
Executive Officer in any of the years presented did not exceed
the lesser of $50,000 or 10% of such Named Executive Officer's
salary and bonus for that year.
(2) See the following tables for additional information.
(3) Mr. Jeansonne served as the Company's Chief Executive Officer
until March 1, 1999 and also served as the Company's President
from January 1, 1999 until March 1, 1999. Mr. Woodard joined
the Company's predecessor in July 1996. Mr. Thomas joined the
Company's predecessor in July 1996 and resigned on December 31,
1998. Mr. Robert F. Nash became President and Chief Executive
Officer of the Company effective March 1, 1999. See "Executive
Employment Agreements" below.
(4) Represents Stock Appreciation Rights ("SARs") granted to Mr.
Thomas in connection with his retirement, which replace Mr.
Thomas's right to receive cash payments in certain circumstances
upon the exercise of stock options.
(5) Represents amounts payable to Mr. Thomas through July 19, 1999
in connection with his resignation on December 31, 1998.
1998 STOCK OPTION AND STOCK APPRECIATION RIGHT GRANTS
The following table contains certain information concerning stock
options and SARs granted to the Named Executive Officers during 1998.
<TABLE>
<CAPTION>
% of Total Potential Realizable
No. of Shares Options/SARs Value at Assumed
Underlying Granted to Exercise Annual Rates of Stock
Options/SARs Employees or Expiration Price Appreciation for
Name Granted(1) in 1998 Base Price Date Option/SAR Term(2)
- -------------- ------------- ------------ ---------- ---------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
5% 10%
-------- ---------
David A. Jeansonne --- --- --- --- --- ---
Allen R. Woodard --- --- --- --- --- ---
Roger E. Thomas 60,000 17% $11.00 7/1/00 $0 $0
</TABLE>
(1) The information presented in this table reflect SARs granted to Mr.
Thomas in connection with his retirement on December 31, 1998, which
replace Mr. Thomas's right to receive cash payments in certain
circumstances upon the exercise of stock options. These SARs became
exercisable on the date of grant.
(2) Amounts reflect assumed rates of appreciation required by Securities
and Exchange Commission (the "Commission") executive compensation
disclosure rules. Actual gains, if any, on SARs depend on future
performance of the Common Stock and overall market conditions. The
fair market value of the Common Stock on the date of grant was $4.25
per share.
STOCK OPTION HOLDINGS
The following table sets forth information, as of December 31, 1998,
with respect to stock options and SARs held by the Named Executive
Officers. The Named Executive Officers did not exercise any options to
purchase Common Stock or SARs in 1998.
<TABLE>
<CAPTION>
AGGREGATE OPTION/SAR VALUES AT YEAR END
Number of Securities
Underlying Value of Unexercised
Unexercised Options/SARs at In-the-Money Options/SARs at
Year End Year End(1)
---------------------------------- -----------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
David A. Jeansonne............... --- --- --- ---
Allen R. Woodard(2).............. 150,000 150,000 -0- -0-
Roger E. Thomas(3)............... 360,000 0 -0- -0-
</TABLE>
(1) The closing sale price of the Common Stock on December 31, 1998 was
$4.25 per share, as reported by the Nasdaq National Market.
(2) Mr. Woodard has options to purchase 300,000 shares at an exercise
price of $11.00 per share, which vest in equal installments of
150,000 shares on each of July 18, 1998 and July 18, 1999. These
options expire on April 30, 2007, unless Mr. Woodard's employment is
terminated prior to such time, in which case the exercise period will
be shortened.
(3) Mr. Thomas has options to purchase 300,000 shares at an exercise
price of $11.00 per share and 60,000 SARs with a grant price of
$11.00. All such options and SARs are currently exercisable until
July 1, 2000.
EXECUTIVE EMPLOYMENT AGREEMENTS
All of the Company's Named Executive Officers have entered into
employment agreements with the Company. All such contracts contain
agreements of each of the Named Executive Officers to refrain from using or
disclosing proprietary information of the Company, as defined therein, and
to refrain from competing with the Company in specified geographic areas
during such officer's employment and for two years thereafter with respect
to Mr. Jeansonne and for five years thereafter with respect to Messrs.
Thomas and Woodard.
The term of Mr. Jeansonne's employment agreement is from July 1, 1997 to
June 30, 2003. The agreement provides that Mr. Jeansonne will serve as
Chairman of the Board of the Company during such term at a base salary of
$150,000 per year, and that Mr. Jeansonne's employment may be terminated at
any time by the Company for cause or for breach of the agreement by Mr.
Jeansonne.
The term of Mr. Woodard's employment agreement is from July 19, 1996 to
July 19, 1999. The agreement provides that he will serve as Vice President
- - Marketing & Business Development, Secretary and a director of the Company
and will perform such other duties as may be assigned to him by the Board
at a base salary that was reduced effective April 1, 1999 to $50,000 per
year throughout the term of the agreement. Mr. Woodard's employment
agreement may be terminated at any time by the Company for cause or for
breach of the agreement by Mr. Woodard. Depending upon the circumstances
of termination, Mr. Woodard may be entitled to additional payments related
to certain exercises of stock options by Mr. Woodard following termination.
Robert F. Nash, who became the Company's President and Chief Executive
Officer as of March 1, 1999, has entered into an employment agreement with
the Company, the term of which is from March 1, 1999 through March 1, 2002.
The agreement provides that Mr. Nash will serve as the Company's Chief
Executive Officer and President during such term at a base salary of
$225,000 per year with a guaranteed bonus of $75,000 per year. Mr. Nash's
agreement may be terminated at any time by the Company for cause and for
breach of the agreement by Mr. Nash. In the event of termination following
a change of control of the Company, Mr. Nash will be entitled to receive a
lump sum payment of $100,000 and an additional payment of up to $200,000 in
connection with the surrender of certain options.
John H. Untereker, who became the Company's Chief Financial Officer as
of March 1, 1999, has entered into an employment agreement with the
Company, the term of which is from August 4, 1998 through August 4, 2001.
The agreement provides that Mr. Untereker will serve as Executive Vice
President with responsibilities to include all accounting and financial
reporting functions at a base salary of $150,000 per year with a guaranteed
bonus of $75,000 per year. Mr. Untereker's agreement may be terminated at
any time by the Company for cause or breach of the agreement by Mr.
Untereker. In the event of a change of control, Mr. Untereker's employment
term shall be automatically extended to expire on the third anniversary of
such change of control.
Mr. Thomas resigned as an employee of the Company as of December 31,
1998. In connection with his resignation, the Company agreed to continue
to pay Mr. Thomas's salary at the rate of $150,000 per year until July 19,
1999 and provide Mr. Thomas with certain "piggy-back" registration rights
as to a minimum of 10% of the Common Stock held by him in the event of a
public offering of Common Stock by the Company prior to July 19, 1999. Mr.
Thomas was also granted 60,000 SARs, which replace certain rights in his
employment agreement to receive additional cash payments in certain
circumstances upon the exercise of stock options. See "Executive
Compensation - 1998 Stock Option and Stock Appreciation Right Grants,"
above.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On March 31, 1998, the Company sold its remaining fixed-wing aircraft
and related equipment to American Aviation Charters, L.L.C., a limited
liability company controlled by Advantage Capital and Mr. Jeansonne
("AAC"), for $2,617,000. The Company also agreed to provide consulting
services to AAC related to its application for a Federal Aviation
Administration ("FAA") operating certificate and limited operational
support until June 28, 1998 for an additional $300,000. Mr. Stull is an
executive officer, director and majority shareholder, and Mr. Brown is an
executive officer and director of Advantage Capital. Messrs. Stull and
Brown are members of the Company's Compensation Committee.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee was established in connection with the
Company's initial public offering in December 1997. The Committee is
authorized to review and analyze the compensation of the Company's
executive officers, review and provide general guidance as to compensation
of the Company's other managers, evaluate the performance of the Company's
executive officers and administer the Plan. The current members of the
Committee are Messrs. Stull, Brown and Rucks. None of the members of the
Committee is an officer or employee of the Company.
The Company's executive compensation is comprised primarily of (i)
salaries and (ii) long-term incentive compensation in the form of stock
options granted under the Plan.
The Company entered into employment agreements with certain of its
executive officers and certain other officers and key employees prior to
its initial public offering and formation of the Compensation Committee.
The terms of such agreements were the results of arms-length negotiations
between each such person and Advantage Capital, as the principal investor
in the Company, and in general, establish the base salary for each such
person during the term of the agreement. Since its initial public
offering, the Company has entered into employment agreements with
additional executive officers with the approval of the Compensation
Committee. Further information regarding the employment agreements of the
Named Executive Officers and these additional executive officers is set
forth under "Executive Employment Agreements," above. Salaries of such
persons were determined based in part on compensation levels necessary to
obtain officers of the Company and over-all competitive and market
conditions.
The Company also provides long-term incentives to executive officers in
the form of stock options granted under the Plan. The stock option awards
are intended to reinforce the relationship between compensation and
increases in the market price of the Company's common stock and to align
the executive officers' financial interests with that of the Company's
shareholders. The size of awards is based upon the position of each
participating officer and a subjective assessment of each participant's
individual performance.
Historically, the Company and its predecessors have paid year end cash
bonuses to Company officers and employees. In order to conserve working
capital and to link the compensation of a broad base of the Company's
employees to shareholder returns, the Committee determined to pay year-end
1998 bonuses to employees through the grant of stock options. In February
1999, the Committee granted 58,520 options to five officers in payment of
this bonus. The Committee also granted 122,042 options to 307 non-officer
employees pursuant to the Company's 1999 Stock Option Plan, which was
adopted by the Board in January 1999 specifically for purposes of the 1998
year end stock option bonus. These options have an exercise price of $5.00
and become exercisable as to one-half of the shares underlying the options
on the date of grant February 8, 1999 and as to the other one-half on
February 8, 2000.
Section 162(m) of the Internal Revenue Code limits the tax deduction to
$1 million for compensation paid to certain highly compensated executive
officers. Generally, compensation granted by privately-held companies and
qualified performance-based compensation is excluded from this deduction
limitation if certain requirements are met. No executive officer of the
Company reached the deductibility limitation for 1998. The Compensation
Committee believes that the stock options granted to executive officers, as
discussed above, qualify for the exclusions from the deduction limitation
under Section 162(m). The Compensation Committee anticipates that the
remaining components of individual executive compensation that do not
qualify for an exclusion from Section 162(m) should not exceed $1 million
in any year and therefore will continue to qualify for deductibility.
THE COMPENSATION COMMITTEE
Steven T. Stull Crichton W. Brown William W. Rucks IV
PERFORMANCE GRAPH
The graph below compares the total shareholder return on the Common
Stock since the Offering on December 5, 1997 until December 31, 1998 with
the total return on the S&P 500 Index and the Company's Peer Group Index
for the same period, in each case assuming the investment of $100 on
December 5, 1997 at the initial public offering price ($11.00 per share).
The Company's Peer Group Index consists of Petroleum Geo-Services ASA
(NYSE:PGO), Dawson Geophysical Co. (NASDAQ:DWSN), SEITEL, Inc. (NYSE:SEI),
3D Geophysical, Inc. (NASDAQ: TDGO), Veritas DGC, Inc. (NYSE:VTS) and
Western Atlas, Inc. (NYSE:WAI).
<TABLE>
<CAPTION>
TOTAL RETURN
---------------------------------------------------------------
DECEMBER 5, 1997 DECEMBER 31, 1997 DECEMBER 31, 1998
---------------- ----------------- -----------------
<S> <C> <C> <C>
OMNI 100 100 36
S&P 500 100 96 33
Peer Group Index 100 99 127
</TABLE>
CERTAIN TRANSACTIONS
The business of the Company was founded in 1987 by Mr. Jeansonne. In
July 1996, the successor to this business, OMNI Geophysical Corporation
("OGC"), of which Mr. Jeansonne is a director, executive officer and
principal shareholder, sold substantially all of its assets, other than the
land and building on which the Company's headquarters were then located, to
OMNI Geophysical, L.L.C., the Company's predecessor ("OMNI Geophysical").
At the time of this transaction, Mr. Jeansonne also retained certain assets
used primarily to entertain clients of the business. Since that time, OMNI
Geophysical and the Company have leased the former headquarters building
from OGC under an agreement that also contained an option to purchase.
OMNI Geophysical and the Company have also used the assets retained by Mr.
Jeansonne, and in return have borne substantially all of the direct costs
of entertainment at these facilities.
During 1998, the Company paid OGC $50,000 under the lease of the former
headquarters building and in November 1998, the Company exercised its
option to purchase this property for $500,000. As of December 31, 1998,
Mr. Jeansonne owed the Company approximately $52,000 for advances by the
Company related to entertainment at the facilities retained by Mr.
Jeansonne that the Company has determined are not directly related to its
clients. In November 1998, the Company also purchased these assets from
Mr. Jeansonne for $400,000. In an effort to conserve working capital, the
Company and Mr. Jeansonne have agreed to defer payment of the purchase
prices for both the former headquarters building and Mr. Jeansonne's
assets. The Company anticipates that it will pay these amounts in 1999,
and at such time, any advances remaining outstanding to Mr. Jeansonne will
be offset against the amount paid to Mr. Jeansonne.
In December 1997, OGC advanced to the Company approximately $100,000 for
use in compensating employees. This advance was expensed in 1998, but in
order to conserve working capital, the Company and Mr. Jeansonne have
agreed to defer reimbursement of OGC. The Company anticipates that this
advance will be repaid to OGC in 1999.
On March 31, 1998, the Company sold its remaining fixed-wing aircraft
and related equipment to AAC, a limited liability company controlled by
Advantage Capital and Mr. Jeansonne, for $2,617,000. The Company also
agreed to provide consulting services to AAC related to its application for
an FAA operating certificate and limited operational support until June 28,
1998 for an additional $300,000. Management believes that these
transactions were completed at prices that approximate those the Company
would have been paid by unaffiliated third parties for similar assets and
services.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and 10% shareholders to file with
the Commission reports of ownership and changes in ownership of equity
securities of the Company. During 1998, Messrs. Stull, Brown and Rucks
each inadvertently filed one such report late, reporting the annual grant
of options to non-employee directors, and Messrs. Nash and Untereker each
filed one such report late, reporting their appointment as executive
officers and an initial grant of stock options.
PROPOSED AMENDMENT TO THE STOCK INCENTIVE PLAN
GENERAL
The Board believes that the growth of the Company depends significantly
upon the efforts of its officers and key employees and that such
individuals are best motivated to put forth maximum effort on behalf of the
Company if they own an equity interest in the Company. In accordance with
this philosophy, in 1997 the Board adopted and the shareholders approved
the Plan.
Under the Plan, key employees, officers, directors who are employees of
the Company and consultants and advisors to the Company (the "Eligible
Persons") are eligible to receive (i) incentive and non-qualified stock
options; (ii) restricted stock; and (iii) other stock-based awards
("Incentives") when designated by the Compensation Committee. Non-employee
directors receive option grants under the Plan as described under "Stock
Options for Outside Directors," below, without action by the Compensation
Committee. Presently, 72 employees of the Company, including its executive
officers, and three non-employee directors participate in the Plan.
THE PROPOSED AMENDMENT
The Board has amended the Plan, subject to shareholder approval at the
Meeting, to increase the number of shares of Common Stock subject to the
Plan to 2,000,000 from 1,500,000 (the "Amendment") and has directed that
the Amendment be submitted for approval by the shareholders at the Meeting.
The Board recommends that the shareholders approve the Amendment. The
Board is committed to creating and maintaining a compensation system based
to a significant extent on grants of equity-based incentive awards. The
Board considers equity-based incentives an important component of its
efforts to attract and retain talented individuals and an increasing need
as the Company requires additional executive talent. In addition, the
Board believes that option grants help the Company attain its long-term
goals by linking the compensation of key employees to shareholder returns.
The Board believes that approval of the Amendment will allow the Company to
continue to provide management and employees with a proprietary interest in
the growth and performance of the Company.
SHARES ISSUABLE THROUGH THE PLAN
The 2,000,000 shares of Common Stock authorized to be issued under the
Plan pursuant to the Amendment represent approximately 12.5% of the shares
of Common Stock outstanding on April 22, 1999. As of April 22, 1999,
options to acquire 1,324,831 shares of Common Stock had been granted under
the Plan to officers, directors and employees. In addition, options to
acquire 175,000 shares of Common Stock were granted subject to approval of
the Amendment at the Meeting. Of the options outstanding under the Plan,
an aggregate of 600,000 were granted to Mr. Thomas, the former President of
the Company, and Mr. Woodard, Vice President of Marketing and Business
Development, both of whom are also significant shareholders of the Company,
in connection with a transaction prior to the Company's initial public
offering unrelated to executive compensation. See "Executive Compensation
- - Stock Option Holdings," above.
Proportionate adjustments will be made to the number of shares of Common
Stock subject to the Plan, including shares subject to outstanding
Incentives, in the event of any recapitalization, stock dividend, stock
split, combination of shares or other change in the Common Stock. In the
event of such adjustments, the purchase price of any outstanding option,
the performance objectives of any Incentive, and the shares of Common Stock
issuable pursuant to any Incentive will be adjusted as and to the extent
appropriate, in the reasonable discretion of the Compensation Committee, to
provide participants with the same relative rights before and after such
adjustment.
On April 22, 1998, the closing sale price of a share of Common Stock, as
reported on the Nasdaq National Market, was $3.75.
ADMINISTRATION OF THE PLAN
The Compensation Committee administers the Plan and has authority to
award Incentives under the Plan, to interpret the Plan, to establish rules
or regulations relating to the Plan, to make any other determination that
it believes necessary or advisable for the proper administration of the
Plan and to delegate its authority as appropriate. With respect to
participants not subject to Section 16 of the Securities Exchange Act of
1934 or Section 162(m) of the Code, the Compensation Committee may delegate
its authority to grant Incentives under the Plan to appropriate personnel
of the Company.
AMENDMENTS TO THE PLAN
The Board may amend or discontinue the Plan at any time, except that any
amendment that would materially increase the benefits under the Plan,
materially increase the number of securities that may be issued through the
Plan or materially modify the eligibility requirements must be approved by
the shareholders. Except in limited circumstances no amendment or
discontinuance of the Plan may change or impair any previously-granted
Incentive without the consent of the recipient thereof.
TYPES OF INCENTIVES
Stock Options. A stock option is a right to purchase Common Stock from
the Company. The Compensation Committee may grant non-qualified stock
options or incentive stock options to purchase shares of Common Stock. The
Committee will determine the number and exercise price of the options,
provided that the option exercise price may not be less than the fair
market value of the Common Stock on the date of grant. The term of the
options, and the time or times that the options become exercisable, will
also be determined by the Committee, provided that the term of an incentive
stock option may not exceed 10 years.
The option exercise price may be paid in cash, check, in shares of
Common Stock that, unless otherwise permitted by the Compensation
Committee, have been held for a least six months, or through a broker-
assisted exercise.
Incentive stock options will be subject to certain additional
requirements necessary in order to qualify as incentive stock options under
Section 422 of the Code.
Restricted Stock. Restricted stock consists of shares of Common Stock
that are transferred to a participant for past services but subject to
restrictions regarding their sale, pledge or other transfer by the
participant for a specified period (the "Restricted Period"). The
Compensation Committee has the power to determine the number of shares to
be transferred to a participant as restricted stock. All shares of
restricted stock will be subject to such restrictions as the Compensation
Committee may designate in the incentive agreement with the participant,
including, among other things, that the shares of Common Stock are required
to be forfeited or resold to the Company in the event of termination of
employment or in the event specified performance goals or targets are not
met. A Restricted Period of at least three years is required, except that
if vesting is subject to the attainment of performance goals, a minimum
Restricted Period of one year is required. Subject to the restrictions
provided in the incentive agreement, each participant receiving restricted
stock will have the rights of a shareholder with respect thereto, including
voting rights and rights to receive dividends. To the extent that
restricted stock is intended to vest based upon the achievement of pre-
established performance goals rather than solely upon continued employment
over a period of time, the performance goals pursuant to which the
restricted stock shall vest must be any or a combination of the following
performance measures: earnings per share, return on assets, an economic
value added measure, shareholder return, earnings, stock price, return on
equity, return on total capital, safety performance, reduction of expenses
or increase in cash flow of the Company, a division of the Company or a
subsidiary. For any performance period, such performance objectives may be
measured on an absolute basis or relative to a group of peer companies
selected by the Compensation Committee, relative to internal goals or
relative to levels attained in prior years.
Other Stock-Based Awards. The Compensation Committee is authorized to
grant to Eligible Persons an other stock-based award ("Other Stock-Based
Award"), which consists of an award, the value of which is based in whole
or in part on the value of shares of Common Stock, other than a stock
option or a share of restricted stock. Other Stock-Based Awards may be
awards of shares of Common Stock or may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or
related to, shares of Common Stock. The Compensation Committee determines
the terms and conditions of any such Other Stock-Based Award and may
provide that such awards would be payable in whole or in part in cash.
Except in the case of an Other Stock-Based Award granted in assumption of
or in substitution for an outstanding award of a company acquired by the
Company or with which the Company combines, the price at which securities
may be purchased pursuant to any Other Stock-Based Award or the provision,
if any, of any such award that is analogous to the purchase or exercise
price, may not be less than 100% of the fair market value of the securities
to which such award relates on the date of grant. An Other Stock-Based
Award may provide the holder thereof with dividends or dividend
equivalents, payable in cash or shares of Common Stock on a current or
deferred basis. Other Stock-Based Awards intended to qualify as
"performance-based compensation" must be paid based upon the achievement of
pre-established performance goals. The performance goals pursuant to which
Other Stock-Based Awards may be earned must be any or a combination of the
following performance measures: earnings per share, return on assets, an
economic value added measure, shareholder return, earnings, stock price,
return on equity, return on total capital, safety performance, reduction of
expenses or increase in cash flow of the Company, a division of the Company
or a subsidiary. For any performance period, such performance goals may be
measured on an absolute basis or relative to a group of peer companies
selected by the Compensation Committee, relative to internal goals or
relative to levels attained in prior years. The grant of an Other Stock-
Based Award to a participant will not create any rights in such participant
as a shareholder of the Company, until the issuance of shares of Common
Stock with respect to such Other Stock-Based Award.
STOCK OPTIONS FOR OUTSIDE DIRECTORS
Upon completion of the Company's initial public offering of its Common
Stock in December 1997, each director who was not also an employee of the
Company (an "Outside Director") was granted non-qualified options to
purchase 10,000 shares of Common Stock. Each new Outside Director will
also be granted non-qualified options to purchase 10,000 shares of Common
Stock at such time as he first becomes a member of the Board. In addition,
for as long as the Plan remains in effect and shares of Common Stock remain
available for issuance thereunder, including 1999 if the Amendment is
approved by the shareholders at the Annual Meeting, each Outside Director
will be automatically granted a non-qualified stock option to purchase
5,000 shares of Common Stock on the date following the annual meeting of
shareholders of the Company, without action on the part of the Compensation
Committee. These options become exercisable one year after grant and have
exercise prices equal to the fair market value of a share of Common Stock
on the date of grant. Director options expire ten years after the date of
grant, except that to the extent otherwise exercisable, director options
must be exercised within three months from termination of Board service or,
in the event of death, disability or retirement on or after reaching age
65, within eighteen months thereafter.
CHANGE OF CONTROL
All outstanding stock options granted under the Plan will automatically
become fully exercisable, all restrictions or limitations on any Incentives
will lapse and all performance criteria and other conditions relating to
the payment of Incentives will be deemed to be achieved or waived by the
Company upon (i) approval by the shareholders of the Company of a
reorganization, merger or consolidation of the Company or sale of all or
substantially all of the assets of the Company, unless (x) all or
substantially all of the individuals and entities who were the beneficial
owners of the Company's outstanding Common Stock and voting securities
entitled to vote generally in the election of directors immediately prior
to such transaction have direct or indirect beneficial ownership,
respectively, of more than 50% of the then outstanding shares of common
stock and more than 50% of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the resulting corporation; (y) except to the extent that such
ownership existed prior to the transaction, no person (excluding any
corporation resulting from the transaction or any employee benefit plan or
related trust of the Company or the resulting corporation) beneficially
owns, directly or indirectly, 30% or more of the then outstanding shares of
common stock of the resulting corporation or 30% or more of the combined
voting power of the then outstanding voting securities of the resulting
corporation; or (z) a majority of the board of directors of the resulting
corporation were members of the Company's board of directors at the time of
the execution of the initial agreement or of the action of the Board
providing for the transaction; (ii) approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company; (iii) a
person or group of persons becoming the beneficial owner of more than 50%
of the Company's Common Stock (subject to certain exceptions); or (iv) the
individuals who as of the adoption of the Plan constitute the Board (the
"Incumbent Board") or who subsequently become a member of the Board with
the approval of at least a majority of the directors then comprising the
Incumbent Board other than in connection with an actual or threatened
election contest cease to constitute at least a majority of the Board
(each, a "Significant Transaction").
The Compensation Committee also has the authority to take several
actions regarding outstanding Incentives upon the occurrence of a
Significant Transaction, including (i) requiring that all outstanding
options remain exercisable only for a limited time, (ii) making equitable
adjustments to Incentives as the Compensation Committee deems in its
discretion necessary to reflect the Significant Transaction or (iii)
providing that an option under the Plan shall become an option relating to
the number and class of shares of stock or other securities or property
(including cash) to which the participant would have been entitled in
connection with the Significant Transaction if the participant had been
immediately prior to the Significant Transaction the holder of record of
the number of shares of Common Stock then covered by such options.
TRANSFERABILITY OF INCENTIVES
Incentives are transferable only by will and by the laws of descent and
distribution, except that stock options may also be transferred pursuant to
a domestic relations order, to immediate family members, to a family
partnership, to a family limited liability company or to a trust for the
sole benefit of immediate family members, if permitted by the Compensation
Committee and if provided in the Incentive agreement or an amendment
thereto.
PAYMENT OF WITHHOLDING TAXES IN STOCK
A participant may, but is not required to, satisfy his or her
withholding tax obligation by electing to have the Company withhold, from
the shares the participant would otherwise receive upon exercise or vesting
of an Incentive, shares of Common Stock having a value equal to the amount
required to be withheld. This election must be made prior to the date on
which the amount of tax to be withheld is determined and is subject to the
Compensation Committee's right of disapproval.
AWARDS TO BE GRANTED
The grant of awards to officers and employees under the Plan is entirely
in the discretion of the Compensation Committee. The Compensation
Committee has granted, subject to approval of the Amendment at the Meeting,
options to purchase an aggregate of 175,000 shares of Common Stock to the
two executive officers of the Company set forth in the following table.
The exercise price of each such option is $4.00. Of these options, the
150,000 granted to Mr. Nash vest in one year and the 25,000 granted to Mr.
Untereker vest in four equal increments, over 4 years.
The following table sets forth information with respect to benefits
under the Plan, as proposed to be amended, that were granted subject to
shareholder approval of the Amendment, by (i) each of the officers
identified as a "Named Executive Officer," Mr. Nash and Mr. Untereker, (ii)
all executive officers as a group, (iii) all directors, other than
executive officers, as a group, and (iv) all employees, other than
executive officers, as a group.
AMENDED PLAN BENEFITS
<TABLE>
<CAPTION>
Number of Securities
Name and Position Underlying Options
- ------------------ ----------------------
<S> <C>
David A. Jeansonne
former Chief Executive Officer................................... 0
Allen R. Woodard
Vice President Marketing and Business Development ............... 0
Roger E. Thomas
former President................................................. 0
Robert F. Nash
Chief Executive Officer and President............................ 150,000
John H. Untereker
Executive Vice President and Chief Financial Officer............. 25,000
Executive Officer Group.............................................. 175,000
Non-Executive Officer Director Group................................. 0
Non-Executive Officer Employee Group................................. 0
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
Under existing federal income tax provisions, a participant who
receives stock options or who receives shares of restricted stock that are
subject to restrictions that create a "substantial risk of forfeiture"
(within the meaning of Section 83 of the Code) will not normally realize
any income, nor will the Company normally receive any deduction for federal
income tax purposes, in the year such Incentive is granted.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the employee will realize ordinary income measured by the
difference between the aggregate fair market value of the shares of Common
Stock on the exercise date and the aggregate purchase price of the shares
of Common Stock as to which the option is exercised, and, subject to
Section 162(m) of the Code, the Company will be entitled to a deduction in
the year the option is exercised equal to the amount the employee is
required to treat as ordinary income.
An employee generally will not recognize any income upon the exercise
of any incentive stock option, but the excess of the fair market value of
the shares at the time of exercise over the option price will be an item of
adjustment, which may, depending on particular factors relating to the
employee, subject the employee to the alternative minimum tax imposed by
Section 55 of the Code. An employee will recognize capital gain or loss in
the amount of the difference between the exercise price and the sale price
on the sale or exchange of stock acquired pursuant to the exercise of an
incentive stock option, provided the employee does not dispose of such
stock within either two years from the date of grant or one year from the
date of exercise of the incentive stock option (the "required holding
periods"). An employee disposing of such shares before the expiration of
the required holding period will recognize ordinary income generally equal
to the difference between the option price and the fair market value of the
stock on the date of exercise. The remaining gain, if any, will be capital
gain. The Company will not be entitled to a federal income tax deduction
in connection with the exercise of an incentive stock option, except where
the employee disposes of the Common Stock received upon exercise before the
expiration of the required holding periods.
An employee who receives restricted stock will normally recognize
taxable income on the date the shares become transferable or no longer
subject to substantial risk of forfeiture or on the date of their earlier
disposition. The amount of such taxable income will be equal to the amount
by which the fair market value of the shares of Common Stock on the date
such restrictions lapse (or any earlier date on which the shares are
disposed of) exceeds their purchase price, if any. An employee may elect,
however, to include in income in the year of purchase or grant the excess
of the fair market value of the shares of Common Stock (without regard to
any restrictions) on the date of purchase or grant over its purchase price.
Subject to the limitations imposed by Section 162(m) of the Code, the
Company will be entitled to a deduction for compensation paid in the same
year and in the same amount as income is realized by the employee.
Dividends currently paid to the participant will be taxable compensation
income to the participant and deductible by the Company.
A participant who receives a stock award under the Plan will realize
ordinary income in the year of the award equal to the fair market value of
the shares of Common Stock covered by the award on the date it is made and,
subject to Section 162(m) of the Code, the Company will be entitled to a
deduction equal to the amount the employee is required to treat as ordinary
income.
When the exercisability or vesting of an Incentive granted under the
Plan is accelerated upon a change of control, any excess on the date of the
change in control of the fair market value of the shares or cash issued
under Incentives over the purchase price of such shares may be
characterized as "parachute payments" (within the meaning of Section 280G
of the Code) if the sum of such amounts and any other such contingent
payments received by the employee exceeds an amount equal to three times
the "base amount" for such employee. The base amount generally is the
average of the annual compensation of such employee for the five years
preceding such change in ownership or control. An "excess parachute
payment" with respect to any employee, is the excess of the present value
of the parachute payments to such person, in the aggregate, over and above
such person's base amount. If the amounts received by an employee upon a
change in control are characterized as parachute payments, such employee
will be subject to a 20% excise tax on the excess parachute payments
pursuant to Section 4999 of the Code, and the Company will be denied any
deduction with respect to such excess parachute payments.
This summary of federal income tax consequences does not purport to be
complete. Reference should be made to the applicable provisions of the
Code. There also may be state and local income tax consequences applicable
to transactions involving Incentives.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes
actually cast at the Meeting is required for approval of the Amendment.
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
PROPOSED AMENDMENT.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
The Company's consolidated financial statements for the year ended
December 31, 1998 were audited by the firm of Arthur Andersen LLP. Under
the resolution appointing Arthur Andersen LLP to audit the Company's
financial statements, such firm will remain as the Company's auditors until
replaced by the Board. Representatives of Arthur Andersen LLP are expected
to be present at the Meeting, with the opportunity to make any statement
they desire at that time, and will be available to respond to appropriate
questions.
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum. Shareholders
voting or abstaining from voting by proxy on any issue will be counted as
present for purposes of constituting a quorum. If a quorum is present, the
election of directors is determined by plurality vote and a majority of the
votes actually cast is required for approval of the Amendment. The
affirmative vote of a majority of the votes cast at the Meeting is
generally required to approve other proposals that may properly be brought
before the Meeting. If brokers do not receive instructions from beneficial
owners as to the granting or withholding of proxies and may not or do not
exercise discretionary power to grant a proxy with respect to such shares
(a "broker non-vote") on a proposal, then shares not voted on such proposal
as a result will be counted as not present and not cast with respect to
such proposal.
All proxies received by the Company in the form enclosed will be voted
as specified and, in the absence of instructions to the contrary, will be
voted for the election of the nominees named herein and for the Amendment.
The Company does not know of any matters to be presented at the Meeting
other than those described herein. However, if any other matters properly
come before the Meeting, it is the intention of the persons named in the
enclosed proxy to vote the shares represented by them in accordance with
their best judgment.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
For any person other than a person nominated by the Board to be
eligible for nomination for election as a director, advance notice must be
provided to the Secretary of the Company at the Company's principal office
not more than 90 days and not less than 45 days in advance of the annual
meeting of shareholders; provided, however, that in the event that less
than 55 days notice or prior public disclosure of the date of the meeting
is given or made to shareholders, such notice will be deemed timely if
received at the Company's principal office no later than the close of
business on the tenth day following the day on which notice of the date of
the meeting was mailed or such public disclosure was made. This notice
shall state (a) for each nominating shareholder, such shareholder's name
and business and residential addresses, the number of shares of Common
Stock beneficially owned by such shareholder, and, if requested by the
Secretary of the Company, whether such shareholder is the sole beneficial
owner of such Common Stock and, if not, the name and address of any other
beneficial owner of such Common Stock, and (b) for each proposed nominee,
the proposed nominee's name, age and business and residential addresses,
the proposed nominee's principal occupation or employment and the number of
shares of Common Stock beneficially owned by the proposed nominee, the
proposed nominee's written consent to being named in the proxy statement as
a nominee and to serving as a director if elected, along with such other
information regarding the proposed nominee as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Commission, had the nominee been proposed by the Board.
Eligible shareholders who desire to present a proposal for inclusion
in the proxy materials relating to the Company's 2000 annual meeting of
shareholders pursuant to regulations of the Commission must forward such
proposals to the Secretary of the Company at the address listed on the
first page of this Proxy Statement in time to arrive at the Company prior
to December 28, 1999.
By Order of the Board of Directors
Allen R. Woodard
Secretary
Carencro, Louisiana
April 27, 1999
OMNI ENERGY SERVICES CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 27, 1999
The undersigned hereby appoints Robert F. Nash and John H. Untereker, or
either of them, as proxy for the undersigned, each with full power of
substitution, and hereby authorizes each of them to represent and to vote all
shares of common stock of OMNI Energy Services Corp. (the "Company") that the
undersigned is entitled to vote at the annual meeting of shareholders to be
held May 27, 1999, and any adjournments thereof, with respect to the following
matters:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. Election of Directors: 2. An amendment to the Company's
stock incentive plan to increase
Crichton W. Brown John H. Untereker David A. Jeansonne the number of shares of common
William W. Rucks, IV Steven T. Stull Roger E. Thomas stock that may be issued under
Allen R. Woodard Robert F. Nash the plan.
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3. In his discretion to transact such other business as may properly come
before the meeting and any adjournments thereof.
PLEASE SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON THE REVERSE
SIDE. IF NO SPECIFIC DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED ABOVE AND FOR PROPOSAL 2. YOUR SHARES CAN NOT BE VOTED UNLESS
YOU SIGN, DATE AND RETURN THIS PROXY.
- -------------------------------------------------------------------------------
SEE REVERSE SIDE
OMNI ENERGY SERVICES CORP.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
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<CAPTION>
<S> <C> <C> <C> <C>
The Board of Directors recommends a vote for the Nominees FOR WITHHOLD FOR all nominees except vote
listed below and for Proposal 2. Nominees AUTHORITY withheld for persons named below:
to vote for
all nominees
1. Election of Directors [] [] [] _______________ 3. In his discretion, to
Nominee Exceptions: transact such other
Nominees: Crichton W. Brown, David A. Jeansonne, business as may
Robert F. Nash, William W. Rucks, IV, Steven T. Stull, properly come before
Roger E. Thomas, John H. Untereker, Allen R. Woodard the meeting and any
adjournments thereof.
2. An amendment to the Company's stock incentive plan to FOR AGAINST ABSTAIN Check this []
increase the number of shares of common stock that may [] [] [] box to note
be issued under the plan. change of address.
The signer hereby
revokes all
authorizations
heretofore given
by the signer to
vote at the meeting
or any adjournments
thereof.
Signature __________ Date _____
Signature __________ Date _____
NOTE Please sign exactly as name
appears hereon. When signing as
attorney, executor,administrator,
trustee, or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
persons.
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* FOLD AND DETACH HERE *
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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