SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934
Filed by the Registrant [x]
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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 Corp.
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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
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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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3) Filing Party:
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4) Date Filed:
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<PAGE>
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 Thursday,
September 7, 2000, at 9:00 a.m., local time, to consider and vote on:
1. The election of directors; and
2. 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 August 9, 2000, 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
/s/ Allen R. Woodard
Allen R. Woodard
SECRETARY
Carencro, Louisiana
August 10, 2000
<PAGE>
OMNI ENERGY SERVICES CORP.
4500 NE EVANGELINE THRUWAY
CARENCRO, LOUISIANA 70520
AUGUST 10, 2000
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 September 7,
2000, 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 August 9,
2000 are entitled to notice of and to vote at the Meeting. On that date,
the Company had 16,008,755 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.
This Proxy Statement is first being mailed to shareholders on or about
August 10, 2000. 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 state that the Board shall be comprised of up to
eight members, with the exact number to be set by the Board. The Board has
currently set the number of directors at six and proxies cannot be voted
for more than six nominees. Each director elected at the Meeting will
serve a one-year term expiring at the 2001 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 six 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.
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<PAGE>
Article IV E of the Company's Amended and Restated Articles of
Incorporation provides certain procedures that shareholders must follow in
making 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 must 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. No such shareholder nominations have been received for the Meeting.
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 August 9, 2000, certain
information about the Company's directors, all of which have been nominated
for re-election to the Board:
<TABLE>
<CAPTION>
DIRECTORS AGE
--------- ---
<S> <C>
David A. Jeansonne .................. 39
John H. Untereker ................... 50
Allen R. Woodard .................... 38
Steven T. Stull ..................... 41
Crichton W. Brown ................... 42
William W. Rucks, IV ................ 43
</TABLE>
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.
JOHN H. UNTEREKER has been the President and Chief Executive Officer
of the Company since July 1999. Previously, he served as the Executive
Vice President and Chief Financial Officer of the Company from August 1998
to July 1999. 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
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<PAGE>
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.
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, the "Advantage Capital Entities"),
and is an executive officer and a director of each of the Advantage Capital
Entities. 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 Entities. 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.
During 1999, the Board held eight meetings. Each director attended at
least 75% of the aggregate number of meetings held during 1999 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, Stull and Rucks.
The Audit Committee met one time during 1999.
The Compensation Committee recommends to the Board compensation for
the Company's executive officers and other key employees, administers the
Company's Stock Incentive Plan (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 one time during 1999.
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. All directors have foregone
their attendance fees for Board and committee meetings since September
1999.
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.
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<PAGE>
Additionally, in each year during which the Plan is in effect and a
sufficient number of shares of Common Stock are available thereunder, 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 become fully
exercisable on the first anniversary of their date of grant and 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 July 14, 2000, certain
information regarding beneficial ownership of Common Stock by (i) each of
the Named Executive Officers (as defined below in "Executive
Compensation"), (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, all as in accordance with Rule 13d-3 under
the Securities Exchange Act of 1934. 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 ........................ 10,532,995(1) 58.9%
Advantage Capital Entities ............. 10,517,995(2)(3) 58.8%
Wellington Management Company, LLP ..... 1,190,000(4) 7.4%
Allen R. Woodard ....................... 1,480,463(5) 9.1%
David A. Jeansonne ..................... 957,722 6.0%
Robert H. Chaney ....................... 859,500(6) 5.4%
William W. Rucks, IV ................... 15,000(7) *
Crichton W. Brown ...................... 15,000(7) *
Robert F. Nash ......................... 8,360(7) *
John H. Untereker ...................... 62,970(7) *
All directors and executive officers
as a group (8 persons) ............. 13,072,510(8) 71.4%
</TABLE>
------------------------
* Less than one percent.
(1) Includes 8,647,162 shares held by the Advantage Capital Entities
referred to in notes (2) and (3). Mr. Stull is the majority shareholder
of each of the general partners referred to in note (2). Also includes
1,885,833 shares issuable upon the exercise of options and warrants
currently exercisable or exercisable within sixty days, of which
1,870,833 are held by the Advantage Capital Entities referred to in note
(2).
(2) The address of the Advantage Capital Entities 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 1,870,833 are issuable upon
the exercise of warrants exercisable within sixty days. Of such
warrants, 16,000 are held by Advantage Capital Partners V Limited
Partnership; 1,106,831 are held by Advantage Capital Partners VI
Limited Partnership, of which Advantage Capital NOLA VI, L.L.C. is
the general partner; 607,737 are held by Advantage Capital Partnership
VII Limited Partnership, of which Advantage Capital NOLA VII, L.L.C.
5
<PAGE>
is the general partner; 138,390 are held by Advantage Capital Partners
VIII Limited Partnership, of which Advantage Capital NOLA VIII, L.L.C.
is the general partner; and 1,875 are held by Advantage Capital
Technology Fund, L.L.C., of which Advantage Capital Technology Advisors,
L.L.C. is the managing member.
(3) Includes 860,000 shares of Common Stock that may be issued upon
conversion of 2,150 shares of the Company's Series A 8% Convertible
Preferred Stock, 1,850 shares of which was issued to Advantage Capital
Partners VI Limited Partnership in April 2000 and 300 shares of which
was issued to Advantage Capital Partners VI Limited Partnership in May
2000. See "Certain Relationships and Related Transactions."
(4) Based on information set forth in a Schedule 13G filed by Wellington
Management Company, LLP ("WMC") on February 21, 2000, WMC reported
shared power to vote or to direct the vote of 710,000 shares and the
shared power to dispose or direct the disposition of 1,190,000 shares as
a result of WMC acting as investment advisor to its own clients. The
address of WMC is 75 State Street, Boston, Massachusetts 02109.
(5) Includes 313,360 shares issuable upon the exercise of currently
exercisable options or options exercisable within sixty days and 105,750
shares held by Mr. Woodard's children.
(6) 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.
(7) Represents shares issuable upon the exercise of options currently
exercisable or exercisable within sixty days.
(8) Includes 2,305,523 shares issuable upon the exercise of options
currently exercisable or exercisable within sixty days.
--------------------
6
<PAGE>
EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
The following table sets forth all cash compensation and options
granted for the three years ended December 31, 1999, to the Company's Chief
Executive Officer and each of its three other 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 1999.
<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 COMPENSATION(3)
------------------------------------ ------ -------- ------- ---------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
John H. Untereker(4) .................. 1999 $156,250 $61,875 --- 66,720 $ 9,711
President and Chief 1998 67,500 --- --- 55,000 ---
Executive Officer
Robert F. Nash(5) ..................... 1999 $111,539 $41,346 --- 166,720 $ 6,136
Former President and Chief 1998 75,000 --- --- 15,000 ---
Executive Officer
David A. Jeansonne(6) ................. 1999 $121,875 --- --- --- ---
Chairman of the Board, 1998 143,750 --- --- --- ---
Former President and Chief 1997 130,208 $50,000 --- --- ---
Executive Officer
Allen R. Woodward ..................... 1999 $108,254 --- --- 28,360 $ 3,980
Vice President Marketing 1998 100,000 --- --- --- ---
and Business Development 1997 104,167 --- --- 300,000 ---
</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) Consists of the Company's matching contributions to the 401(k) plan and
premiums on life and health insurance.
(4) Mr. Untereker has served as the Company's President and Chief Executive
Officer since July 16, 1999. Previously, from August 1998 until July 6,
1999, Mr. Untereker served as Executive Vice President and Chief
Financial Officer of the Company.
(5) Mr. Nash served as the Company's President and Chief Executive Officer
from March 4, 1999 until July 16, 1999.
(6) 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.
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<PAGE>
1999 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 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
OPTION/SAR TERM(1)
% OF TOTAL -----------------
NO. OF SHARES OPTIONS/SARs
UNDERLYING GRANTED TO
OPTIONS/SARs EMPLOYEES EXERCISE OR EXPIRATION
NAME GRANTED IN 1999 BASE PRICE DATE 5% 10%
---------------------- ------------- ----------- ------------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
John H. Untereker ...... 16,720 2.3% $5.00 2/08/09 $52,576 $133,237
25,000 3.4% 4.00 3/11/09 62,889 159,374
25,000 3.4% 1.50 12/15/09 23,584 59,765
Robert F. Nash ......... 16,720 2.3% 5.00 2/05/01 52,576 133,237
150,000 20.5% 4.00 2/05/01 377,337 956,245
David A. Jeansonne ..... --- --- --- ---
Allen R. Woodard ....... 8,360 1.1% 5.00 2/08/09 26,288 66,618
10,000 1.4% 3.00 12/15/09 18,867 47,812
10,000 1.4% 1.50 12/15/09 9,433 23,906
</TABLE>
-------------------------
(1) 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.
-----------------------
STOCK OPTION HOLDINGS
The following table sets forth information, as of December 31, 1999,
with respect to stock options and SARs held by the Named Executive Officers.
None of the Named Executive Officers exercised any options to purchase Common
Stock or SARs in 1999.
AGGREGATE OPTION/SAR VALUES AT YEAR END
<TABLE>
<CAPTION>
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>
John H. Untereker .................... 22,110 99,610 -0- -0-
Robert F. Nash ....................... 8,360 --- -0- -0-
David A. Jeansonne ................... --- 24,180 -0- -0-
Allen R. Woodard ..................... 304,180 30,000 -0- -0-
</TABLE>
----------------------------
(1) The closing sale price of the Common Stock on December 31, 1999 was
$1.13 per share, as reported by the Nasdaq National Market.
--------------------
8
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company had employment agreements with all the Named Executive
Officers during fiscal year 1999. All such contracts contain or contained,
as the case may be, 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 Mr. Untereker, and for five
years thereafter with respect to Mr. 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
$75,000 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.
John H. Untereker, who became the Company's President and Chief
Executive Officer as of July 16, 1999, has 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 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 will be automatically extended to
expire on the third anniversary of such change of control.
The term of Mr. Woodard's employment agreement was from July 19, 1996 to
July 19, 2000. The agreement provided that he would serve as Vice President
- Marketing & Business Development, Secretary and a director of the Company
and would perform such other duties as may be assigned to him by the Board.
The agreement also provided for a base salary of $50,000 per year throughout
the term of the agreement. This agreement was not renewed at its term, but
Mr. Woodard continues to serve in the same position and compensation level.
Robert F. Nash resigned as the Company's President and Chief Executive
Officer as of July 16, 1999 and his employment agreement was terminated at
that time, and he resigned as a director of the Company in May 2000.
Pursuant to his employment agreement, Mr. Nash was paid a base salary of
$225,000 per year with a guaranteed bonus of $75,000 per year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee served as an officer or employee
of the Company or any of our subsidiaries prior to or while serving on the
Compensation Committee. In 1999, none of our executive officers served as a
director or member of the compensation committee of another entity, any of
whose executive officers served on our Board or on our 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
9
<PAGE>
were the results of arms-length negotiations between each such person and
the Advantage Capital Entities, as the principal investor in the Company,
and in general, established 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
1999 bonuses to employees through the grant of stock options. In December
1999, the Committee granted 45,000 options to three officers in payment of
this bonus. The Committee also granted 125,500 options to 293 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 paying stock option
bonuses. These options have an exercise price of $1.50 and become
exercisable as to one-half of the shares underlying the options on January
31, 2000 and as to the other one-half on January 31, 2001.
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 1999. 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
<PAGE>
PERFORMANCE GRAPH
The graph below compares the total shareholder return on the Common
Stock since the Company's initial public offering on December 5, 1997 until
December 31, 1999 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 Dawson
Geophysical Co. (NASDAQ:DWSN), Compagnie Generale de Geophysique (NYSE:GGY),
Veritas DGC, Inc. (NYSE:VTS) and the Company.
[Performance Graph]
<TABLE>
<CAPTION>
TOTAL RETURN
----------------
DECEMBER 5, 1997 DECEMBER 31, 1997 DECEMBER 31, 1998 DECEMBER 31, 1999
---------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
OMNI 100 107 39 10
Peer Group Index 100 98 34 32
S&P 500 100 99 127 154
</TABLE>
---------------------
11
<PAGE>
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.
In November 1998, the Company exercised its option to purchase the
former headquarters building 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 paid $99,000 of OGC debt in 1999 and $40,143 for
expenses relating to clients of the Company.
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 or offset to OGC in 2000.
In February and June 1999, the Company privately placed a total of
$3.0 million in subordinated debentures with the Advantage Capital
Entities. The notes bear interest at 12% per annum and mature on March 1,
2004. In connection with these debentures, the Company issued warrants to
the Advantage Capital Entities to purchase up to 960,000 shares of the
Company's Common Stock at an exercise price of $5.00 per share. The
warrants vest in one-fourth increments in the year issued and on March 1 of
each year thereafter until 2002, unless the debentures are paid in full, in
which case, those warrants that have not become exercisable will become
void. All warrants that become exercisable will expire on March 1, 2004.
In July and September 1999, the Company collectively issued an
additional $2.0 million in subordinated debentures to the Advantage Capital
Entities. The notes bear interest at 12% per annum, with $1.0 million
maturing on March 1, 2004 and $1.0 million maturing on March 1, 2005. In
connection with these debentures, the Company issued warrants to the
Advantage Capital Entities to purchase up to 640,000 shares of the
Company's Common Stock at an exercise price of $5.00 per share. The
warrants vest in one-fourth increments in the year issued and on March 1 of
each year thereafter until 2002, unless the debentures are paid in full, in
which case, those warrants that have not become exercisable will become
void. All warrants that become exercisable will expire on March 1, 2004.
In October 1999, the Company issued $2.5 million in subordinated
debentures to the Advantage Capital Entities. The notes bear interest at
12.5% per annum until December 31, 1999, at which time the rate will
increase by 0.5% per month, not to exceed 20% per annum. The notes mature
on March 1, 2005, with interest payable March 1 of each year. In
connection with these debentures, the Company issued warrants to the
Advantage Capital Entities to purchase up to 300,000 and 37,500 shares of
the Company's Common Stock at an exercise price of $3.00 and $2.00,
respectively. These warrants vest immediately and expire on March 1, 2005.
In December 1999, February 2000 and April 2000, the Company received
from the Advantage Capital Entities $1,000,000, $500,000, and $350,000,
respectively, related to preferred stock subscription agreements for an
aggregate of 1,850 shares of preferred stock that was issued on
April 26, 2000. An additional 300 shares of preferred stock was
12
<PAGE>
issued to the Advantage Capital Entities on May 3, 2000 for $300,000.
The preferred stock has an 8% cumulative dividend rate, is convertible into
common stock with an initial conversion rate of $2.50, is redeemable at the
option of the Company at par plus unpaid dividends, contains liquidation
preferences and contains voting rights only with respect to matters that
would reduce the ranking of the stock compared to other classes of stock.
The funds were used for debt service and to fund operations.
In May 2000, June 2000 and July 2000, the Company issued an additional
$400,000, $600,000 and $250,000, respectively, in subordinated debentures
to the Advantage Capital Entities. The notes bear interest at 12.5% per
annum until June 30, 2000, June 30, 2000 and July 31, 2000, respectively,
at which time the rate will increase by 0.5% per month, not to exceed 20%
per annum. The notes mature on June 1, 2005, July 1, 2005 and August 1,
2005, respectively, with interest payable July 1 of each year. In
connection with the June 2000 and July 2000 debentures, the Company issued
warrants to the Advantage Capital Entities to purchase up to 400,000 and
333,333 shares of the Company's Common Stock at an exercise price of $1.50
and $.75, respectively. These warrants vest immediately and expire on July
1, 2005 and August 1, 2005, respectively.
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 1999, a report covering a sale of Common
Stock by Mr. Thomas and four reports by the Advantage Capital Entities and
Mr. Stull covering the acquisition of warrants to purchase Common Stock
were inadvertently filed late. In addition, four reports by Mr. Woodard
covering four sales of Common Stock and three grants of stock options in
1999 were inadvertently filed late, and one report by Mr. Untereker
reporting four grants of stock options in 1999 was inadvertently filed
late.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
The Company's consolidated financial statements for the year ended
December 31, 1999 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. 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. 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
13
<PAGE>
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
Eligible shareholders who desire to present a proposal for inclusion
in the proxy materials relating to the Company's 2001 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 April 13, 2001.
By Order of the Board of Directors
/s/ Allen R. Woodard
Allen R. Woodard
SECRETARY
Carencro, Louisiana
August 10, 2000
