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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From .......... to ..........
Commission File No. 0-9827
PETROLEUM HELICOPTERS, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2121 Airline Highway Suite 400
P.O. Box 578, Metairie, Louisiana 70001-5979
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 828-3323
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Voting Common Stock
Non-Voting Common Stock
(Title of Each Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes No
State the aggregate market value of the voting stock held by non-
affiliates of the registrant.
Date Amount
July 18, 1996 $22,400,000
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Voting Common Stock.......2,799,761 shares outstanding as of July 19,1996.
Non-Voting Common Stock.. 2,276,093 shares outstanding as of July 19,1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to be used in
connection with its 1996 Annual Meeting of Shareholders will be, upon
filing with the Commission, incorporated by reference into Part III of
this Form 10-K.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
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<PAGE>
PART I
Item 1. Business.
General
The Company was incorporated as a Delaware corporation in 1949 and was
reincorporated as a Louisiana corporation on October 26, 1994. Since its
inception, the Company's primary business has been to transport personnel,
and to a lesser extent parts and equipment, to, from, and among offshore
platforms for customers engaged in the oil and gas exploration, development,
and production industry. During the most recent fiscal year, approximately
69% of the Company's operating revenues were generated by oil and gas
transportation services in federal and state waters offshore of the States
of Louisiana, Texas, Florida, Alabama, Mississippi, and California
("Domestic Oil and Gas Programs"). Approximately 67% and 71% of operating
revenues were derived from Domestic Oil and Gas Programs in fiscal 1995 and
1994, respectively.
The Company's aeromedical transportation services for hospitals and
medical programs ("Aeromedical Services Programs") accounted for 14% of
operating revenues in fiscal 1996. Aeromedical Services Programs generated
15% and 12% of operating revenues in fiscal 1995 and 1994, respectively.
The Company's international business consists of offshore and onshore
helicopter transportation services and fixed wing services to the global oil
and gas industry ("International Oil and Gas Programs"). International Oil
and Gas Programs contributed 9% of operating revenues in fiscal 1996, as
compared to 10% and 8% in fiscal 1995 and 1994, respectively.
Aircraft maintenance services provided to outside parties ("Technical
Services Programs") constituted the majority of the remaining 8% of fiscal
1996 operating revenues.
Demand for the Company's helicopter services is strongly influenced by
oil and gas exploration, development, and production activities. These
activities are greatly affected by federal leasing policies, regulations,
oil and gas prices. The Company's helicopters provide a safe, reliable,
efficient and fast method of transportation under a broad range of
operational and environmental conditions, especially offshore and in remote
areas. All of the Company's sixteen principal types of helicopters are
available under a variety of contractual arrangements.
The Company maintains master operating agreements with each of its major
oil industry customers, which set forth general rights and duties of the
Company and the customer. Although the Company is a party to a number of
oil and gas industry contracts with a term of one year or more, services are
generally provided pursuant to monthly extensions of these operating
agreements, and prices are fixed for each contract extension. Contracts for
aeromedical and foreign business are generally entered into for longer
terms.
Charges under operating agreements are generally based on fixed monthly
fees and additional hourly charges for actual flight time. Because the
Company is compensated in part by flight hour, prolonged adverse weather
conditions that result in reduced flight hours can adversely affect results
of operations. See "- Weather and Seasonal Aspects."
Weather and Seasonal Aspects
Poor visibility, high winds and heavy precipitation can affect the safe
use of helicopters and result in a reduced number of flight hours. Since
a significant portion of the Company's revenues is dependent on actual
flight hours and a substantial portion of the Company's costs is fixed,
prolonged periods of adverse weather can materially and adversely affect the
Company's operating revenues and net earnings.
In the Gulf of Mexico, the months of December through February have more
days of adverse weather conditions and fewer hours of daylight than the
other months of the year. Consequently, flight hours are generally lower
than at other times of the year, which typically results in a reduction in
revenues from operations during those months.
The Company currently operates 54 aircraft equipped to fly pursuant to
instrument flight rules (IFR) in the Gulf of Mexico, which enables these
aircraft, when manned by IFR rated pilots and co-pilots, to operate at
times when poor visibility prevents flights by aircraft that can fly only
by visual flight rules (VFR). Poor visibility is the most common of the
adverse weather conditions that affect the Company's operations.
Safety and Insurance
The operation of helicopters inherently involves a degree of risk.
Hazards, such as aircraft accidents, collisions, fire and adverse weather,
are inherent in the business of providing helicopter services to the
offshore oil and gas industry and others and may result in losses of
equipment and revenues. The Company's safety record is very favorable in
comparison to the record for all United States operators as reflected in
industry publications.
The Company is also subject to the Federal Occupational Safety and Health
Act ("OSHA") and similar state statutes. The Company has an extensive
safety and health program and employs a safety staff, including a certified
safety professional in the field of comprehensive practice, who is also a
registered environmental professional. The primary functions of the safety
staff are to develop Company policies that meet or exceed the safety
standards set by OSHA, train Company personnel and make daily inspections
of safety procedures to insure their compliance with Company policies on
safety. All personnel are required to attend safety training meetings at
which the importance of full compliance with safety procedures is
emphasized. The Company believes that it meets or exceeds all OSHA
requirements and that its operations do not expose its employees to unusual
health hazards.
The Company maintains hull and liability insurance on its aircraft, which
generally insures the Company against physical loss of, or damage to, its
helicopters and against certain legal liabilities to others. In addition,
the Company carries war risk, expropriation, confiscation and
nationalization insurance for its aircraft involved in international
operations. In some instances the Company is covered by indemnity
agreements from oil companies and hospitals and medical programs in lieu
of or in addition to its insurance. The Company's helicopters are not
insured for loss of use. While the Company believes it is adequately
covered by insurance and indemnification arrangements, the loss,
expropriation or confiscation of, or severe damage to, a material number of
its helicopters could adversely affect revenues and profits.
Government Regulation
As a commercial operator of helicopters, the Company's flight and
maintenance operations are subject to regulation by the Federal Aviation
Administration (the "FAA") pursuant to the Federal Aviation Act of 1958 (the
"Federal Aviation Act"). The FAA has authority to exercise jurisdiction
over personnel, aircraft, ground facilities and other aspects of the
Company's business.
The Company transports personnel and property in its helicopters pursuant
to an FAR 135 Air Taxi certificate granted by the FAA. This certificate
contains operating specifications that allow the Company to conduct its
present operations but are subject to amendment, suspension and revocation
in accordance with procedures set forth in the Federal Aviation Act. The
Company is not required to file tariffs showing rates, fares and other
charges with the FAA. The FAA's regulations, as currently in effect, also
require that not less than 75% of the Company's voting securities be owned
or controlled by citizens of the United States or one of its possessions,
and that the president and at least two-thirds of the directors of the
Company are United States citizens. The Company's president and all of its
directors are United States citizens and its organizational documents
provide for the automatic reduction in voting power of each share of voting
common stock owned or controlled by a non-United States citizen if necessary
to comply with these regulations.
The National Transportation Safety Board is authorized to investigate
aircraft accidents and to recommend improved safety standards.
The Company is also subject to the Communications Act of 1934 because of
its ownership and operation of a radio communications flight following
network throughout the Gulf of Mexico and off the coast of California.
Numerous federal statutes and rules regulate the offshore operations of
the Company and the Company's customers, pursuant to which the federal
government has the ability to suspend, curtail or modify certain or all
offshore operations. A suspension or substantial curtailment of offshore
oil and gas operations for any prolonged period would have an immediate and
materially adverse effect on the Company. A substantial modification of
current offshore operations could adversely affect the economics of such
operations and result in reduced demand for helicopter services.
Competition
The Company's business is highly competitive. Many of the Company's
contracts are awarded after competitive bidding, and the principal aspects
of competition are price, reliability, availability, safety, and service.
The Company believes it operates one of the largest commercial helicopter
fleets in the world. At April 30, 1996, the Company had 266 aircraft in
operation which includes 261 helicopters and five fixed wing aircraft. The
Company operated 233 helicopters in the United States, of which 196 were
operated in Domestic Oil and Gas Programs and 37 were operated in the
Company's Aeromedical Services Programs. The Company is the largest
operator of helicopters in the Gulf of Mexico and believes there are
approximately five competitors operating in the Gulf of Mexico market.
Certain of the Company's customers and potential customers in the oil
industry operate their own helicopter fleets; however, oil companies
traditionally contract for most specialty services associated with offshore
operations, including helicopter services.
Employees
As of April 30, 1996, the Company employed a total of 1,677 people. The
Company believes its employee relations to be excellent, and it has never
experienced a work stoppage. None of the Company's employees are covered
by union contracts.
Customers
The Company's principal customers are major oil companies. The Company
also serves independent exploration and production concerns, oil and gas
service companies, hospitals and medical programs, and government agencies.
The Company's largest customer, Shell Oil Company, accounted for more than
10% of the Company's operating revenues in fiscal 1996. The Company's five
largest customers accounted for 34% of operating revenues in fiscal 1996.
Division managers of customer oil companies, who are responsible for a
majority of contract services in connection with offshore oil activities,
generally contract for helicopter services. Many oil companies also employ
directors of aviation to evaluate the capabilities and safety performance
of companies providing helicopter services and make recommendations to
division managers. Company management and operations specialists are in
regular contact with division managers and directors of aviation in
connection with both existing service contracts and potential new business.
Environmental Matters
The Company is subject to federal, state, and local environmental laws
and regulations that impose limitations on the discharge of pollutants into
the environment and establish standards for the treatment, storage, and
disposal of toxic and hazardous wastes.
The Company believes that compliance with federal, state, and local
environmental laws and regulations will not have a material effect upon the
capital expenditures, earnings and competitive position of the Company. The
Company has established reserves for environmental costs, which are
discussed under Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Environmental Matters.
Item 2. Properties
Fleet Utilization
As of April 30, 1996, 86% of the Company's aircraft were actively
assigned as compared with 84% and 76% as of April 30, 1995 and 1994,
respectively.
Equipment
Certain information as of April 30, 1996 regarding the Company's owned
and leased fleet is set forth in the following table:
Number
Manufacturer Type in Fleet Engine Passengers Cruise Appr.
Speed Range
(mph) (miles)
Bell 206B-III 29 Turbine 4 120 300
206L-I 50 Turbine 6 130 310
206L-III 54 Turbine 6 130 310
206L-IV 4 Turbine 6 130 310
407 1 Turbine 6 144 420
212(1) 9 Twin Turbine 13 115 300
214ST(1) 3 Twin Turbine 18 155 450
230(1) 1 Twin Turbine 8 160 370
412(1) 19 Twin Turbine 13 135 335
Boelkow BK-117 11 Twin Turbine 6 135 255
BO-105 36 Twin Turbine 4 135 270
Aerospatiale
AS355F Twin Star 5 Twin Turbine 5 135 385
AS350 B2 7 Turbine 5 140 385
SA315B 2 Turbine 5 115 317
Sikorsky
S-76(1) 17 Twin Turbine 12 150 400
McDonnell-Douglas
MD900 2 Twin Turbine 6 155 336
___
Total Helicopters 250
Beechcraft
King Air 200(1) 3 Turboprop 8 300 1,380
Sabreliner
80SC(1) 1 Twin Turbo Jet 8 495 1,380
Hawker HS125-700(1) 1 Twin Turbo Jet 8 483 2,185
Sidley ___
Total Fixed Wing 5
___
Total Aircraft 255
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(1) Equipped to fly under instrument flight rules (IFR). All
other types listed can only fly under visual flight rules
(VFR). See Item 1. "Business - Weather and Seasonal
Aspects."
The following tables set forth additional information regarding the
helicopters owned and leased by the Company (in thousands, except the number
of helicopters):
Number of
Company Owned Net Book
Helicopters Cost Value
188 $ 170,297 $ 78,377(1)
Number of Total Rents
Company Leased Over Life Remaining
Helicopters of Lease Rents
62 $ 112,647 $ 67,970
_____________
(1) Information regarding the Company's depreciation policy is set forth
under Item 8. "Financial Statements and Supplementary Data -
Notes to Consolidated Financial Statements, Note 1(d)."
____________________
The Company operates eleven helicopters that are owned or leased by
customers which are not reflected in the foregoing tables. The Company also
owns five fixed-wing aircraft, three of which are currently under full or
part-time contract to customers.
As of April 30, 1996, the Company's commitment for principal payments and
lease payments for its present helicopter fleet averages $18 million each
year for the next five years and an aggregate of $17 million thereafter.
Under most leases the Company is responsible for all insurance, taxes and
maintenance expenses associated with the helicopters, and within certain
limitations, the Company can either substitute equipment or terminate the
leases in the event the leased equipment becomes obsolete or is no longer
suited for the Company's needs. All of the Company's leases are considered
operating leases for accounting and tax purposes.
The Company also maintains an inventory of fuel and an inventory of spare
parts and components for use in the repair and maintenance of the Company's
fleet. This inventory had a book value of approximately $26 million on
April 30, 1996. The Company is a distributor or dealer for many of these
parts and components, thereby allowing it to realize significant cost
savings for its purchases.
Equipment on Order
Subsequent to year end, the Company purchased six aircraft for an
aggregate of $ 4 million. In addition, the Company plans to purchase
twenty-two helicopters in fiscal 1997 for a total purchase price estimated
to be $21 million. These purchases are subject to PHI obtaining customer
commitments.
Equipment Sales
The Company sells aircraft whenever they (i) become obsolete, (ii) do not
fit into future fleet plans, or (iii) are surplus to the Company's needs.
The Company typically sells its helicopters for more than their book
value. The Company cannot predict, however, whether these results will
continue or whether such prices would be realized if the Company were to
sell a large number of helicopters in a short period of time.
Facilities
The Company currently leases its executive office space in Metairie,
Louisiana (Metropolitan New Orleans). The lease covers approximately 8,107
square feet and expires on July 31, 2000.
The Company's principal operating facility is located on property
leased from The Lafayette Airport Commission at the Lafayette Regional
Airport in Lafayette, Louisiana. The lease covers approximately 28.2
acres and 17 buildings, with an aggregate of approximately 135,000 square
feet, housing the Company's main operational and administrative office
and main repair and maintenance facility. The Company has extended
this lease until 2006.
The Company also leases property for 17 additional bases to service the
oil and gas industry throughout the Gulf of Mexico and one base in
California. Those bases that represent a significant investment by the
Company in leasehold improvements or which are particularly important to the
Company's operations are:
A. Morgan City Base (Louisiana) - containing approximately 53 acres,
is under a lease that expires June 30, 1998. The Company has built a
variety of operational and maintenance facilities on this property,
including landing pads for 46 helicopters. The Company believes that this
facility is the largest commercial heliport in the world. The Company will
evaluate plans to renegotiate the lease prior to its expiration.
B. Intracoastal City Base (Louisiana) - containing approximately 22.5
acres under several leases in Vermilion Parish, all with options to extend
through 2001. The Company has built a variety of operational and
maintenance facilities on this property, including landing pads for 45
helicopters.
C. Houma-Terrebonne Airport (Louisiana) - containing approximately
13.6 acres and certain buildings leased under four leases from the
Houma-Terrebonne Airport Commission, which have options allowing extension
of the leases through 1999. The Company will evaluate plans to renegotiate
the leases prior to their expiration. The Company has landing pads for 30
helicopters on this property.
D. Sabine Pass (Texas) - containing approximately 22 acres under two
leases, one of which, for 1.6 acres, will expire in July 1996 and will be
renegotiated at that time, and the other of which will expire September 30,
1997 with an option to extend through September 30, 2002. The Company has
built a variety of operational and maintenance facilities on this property,
including landing pads for 24 helicopters.
E. New Orleans (Louisiana) - containing approximately 1.5 acres, is
under a lease through April 30, 2004. The Company has made significant
leasehold improvements on this property, including landing pads for 14
helicopters.
F. Venice (Louisiana) - containing approximately 8 acres, is under a
lease expiring March 31, 1997. The original lease was executed April 1,
1973 for one year and has been extended annually since that time. The
location has landing pads for 27 helicopters.
G. Fourchon (Louisiana) - containing approximately 8 acres, is under
original lease expiring April 30, 2001. The property has 10 landing pads.
The Company's other operations-related bases in the United States are
located along the domestic Gulf of Mexico in Louisiana at Cameron and Lake
Charles; in Texas at Brazoria, Corpus Christi, Galveston, Port O'Connor and
Rockport; in Mississippi at Pascagoula; in Alabama at Theodore; in New
Jersey at Edison; and in California at Santa Barbara.
The Company operates from offshore platforms which are provided without
charge by the owners of the platforms, although in certain instances the
Company is required to indemnify the owners against loss in connection with
the Company's use thereof.
Bases of operations for the Company's foreign and aeromedical operations
are generally furnished by the customer. The Company's international
operations are currently conducted in Angola, Colombia, Ecuador, Ireland,
Kazakhstan, Peru, Philippines, Thailand, Uzbekistan, Venezuela, and Zaire.
Aeromedical operations are currently conducted in Arizona, Arkansas,
California, Florida, Illinois, Kentucky, Louisiana, Mississippi, North
Carolina, and Ohio.
Item 3. Legal Proceedings
The Company is not a party to, and its property is not the subject of,
any material pending legal proceedings, other than ordinary routine
litigation incidental to its business.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended April 30, 1996.
<PAGE>
Item 4. (a) Executive officers of the registrant
Certain information about the executive officers of PHI is set forth in
the following table and accompanying text:
Name Age Position
Carroll W. Suggs 57 Chairman of the Board of Directors,
President and Chief Executive Officer
Ben Schrick 55 Vice President and Chief Operating
Officer
Robert D. Cummiskey, Jr. 54 Vice President - Risk Management and
Secretary
Edward Gatza 53 Vice President - Human Resources
Gerald T. Golden 53 Vice President and Director of Operations
David P. Milling 52 Vice President and General Manager of IHTI
William P. Sorenson 46 Vice President - Aeromedical Services
Harold L. Summers 58 Vice President - Engineering/Quality
Assurance
John H. Untereker 46 Vice President, Chief Financial Officer
and Treasurer
Gary J. Weber 48 Vice President - International Operations
Mrs. Suggs became Chairman of the Board in March 1990, Chief Executive
Officer in July 1992, and President in October 1994.
Mr. Schrick has served as Chief Operating Officer since September
1994, as Vice President and General Manager since January 1993 and as Vice
President of Maintenance since 1990. Since 1984 Mr. Schrick has also served
as Vice President of Evangeline Airmotive, Inc., a wholly-owned subsidiary.
Mr. Cummiskey has served as Secretary since June 1992 and as Vice
President - Risk Management since October 1991. Prior to that time, he was
a Vice President/Account Executive of Johnson & Higgins (insurance brokers
and consultants).
Mr. Gatza was named Vice President - Human Resources in September 1994
after serving as Director of Human Resources since April 1990.
Mr. Golden was named Vice President and Director of Operations in
March 1993. Prior to that time he served as Vice President and Director of
Corporate Development since 1991 and as Director of Training since 1982.
Mr. Milling has served as Vice President since September 1989 and
General Manager of International Helicopter Transport, Inc. (IHTI), a
wholly-owned subsidiary, since 1988.
Mr. Sorenson has served as Vice President since November 30, 1995,
after serving as Director of Aeromedical Services since August 22, 1994.
From 1990 until 1994, Mr. Sorenson directed the Company's EMS Program.
<PAGE>
Mr. Summers has served as Vice President - Engineering/Quality
Assurance since 1990.
Mr. Untereker has served as Vice President, Chief Financial Officer,
and Treasurer since July 1992. From December 1987 until July 1992, he
served as Executive Vice President and Chief Financial Officer of Lend Lease
Trucks, Inc. (truck leasing, rental and finance)/Bastion Industries
(manufacturer and distributor of packaging materials). Prior to that time,
Mr. Untereker served as controller of NL Industries, Inc. and Vice
President-Finance of NL Baroid (petroleum services and products).
Mr. Weber has served as Vice President - International Operations
since September 1989.
Item 5. Market Price for Registrant's Common Equity and
Related Shareholder Matters
The Company's voting and non-voting common stock trades on The NASDAQ
Stock Market ("NASDAQ Small Cap Issuers") under the symbols PHEL and PHELK,
respectively. The following table sets forth the range of high and low per
share bid prices, as reported by NASDAQ, and dividend information for the
Company's voting and non-voting common stock for the fiscal quarters
indicated. The quotations represent prices in the over the counter market
between dealers in securities, do not include retail markup, markdown or
commission and may not necessarily represent actual transactions:
Voting Common Stock Non-Voting Common Stock Dividends
Fiscal Quarter High Low High Low Per Share
1994-95
1st Quarter 12 9 1/2 12 1/4 9 3/4 -
2nd Quarter 11 1/2 10 1/4 12 9 3/4 .02
3rd Quarter 11 3/8 8 5/8 11 1/4 8 1/4 .02
4th Quarter 11 1/4 8 11 8 .02
1995-96
1st Quarter 11 1/2 9 11 8 1/2 .02
2nd Quarter 11 1/2 9 1/4 11 8 3/4 .05
3rd Quarter 14 1/4 10 1/4 14 1/4 10 1/4 .05
4th Quarter 15 12 3/4 15 12 1/2 .05
The declaration and payment of dividends is at the discretion of the
Board of Directors, which evaluates the Company's dividend policy quarterly.
Future dividends are dependent upon, among other things, the Company's
results of operations, financial condition, cash requirements, future
prospects and other factors deemed relevant by the Board. A credit
agreement to which the Company is a party generally restricts the
declaration or payment of dividends to 20% of net earnings for the previous
four fiscal quarters. See Item 8. "Financial Statements and Supplementary
Data - Notes to Consolidated Financial Statements, Note 2."
As of July 19, 1996, there were approximately 1,518 holders of record of
the Company's voting common stock and 119 holders of record of the Company's
non-voting common stock.
<PAGE>
Item 6. Selected Financial Data
1996 1995 1994 1993 1992
(Thousands of Dollars, Except Per Share Amounts)
Year Ended April 30:
Operating revenues $ 185,865 $ 174,397 $ 178,697 $ 177,316 $ 195,190
Net earnings $ 6,466 $ 5,182 $ 3,333 $ 2,049 $ 1,290
Net earnings
per share $ 1.28 $ .96 $ .61 $ .37 $ .24
Cash dividends declared
per share $ .17 $ .06 $ - $ .01 $ .08
At April 30:
Total assets $ 161,315 $ 147,108 $ 146,312 $ 141,100 $ 142,173
Long-term debt $ 28,522 $ 27,060 $ 31,849 $ 30,950 $ 38,000
Working capital $ 26,543 $ 29,809 $ 31,601 $ 31,419 $ 38,590
Shareholders'
equity $ 81,401 $ 75,707 $ 75,309 $ 71,976 $ 69,982
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Background
The Company commenced operations forty-seven years ago on
February 11, 1949, with three helicopters. Its primary business was to
transport personnel, parts and equipment to, from, and among offshore
platforms for customers engaged in the domestic oil and gas exploration,
development, and production industry. When the oil and gas industry
expanded internationally, the Company began to focus efforts towards the
international markets.
During the early 1980's and again in the late 1980's, the
price per barrel of oil declined, which, together with increasing U.S.
environmental legislation, contributed to a decline in both the Gulf of
Mexico drilling rig count and the Company's Domestic Oil & Gas operating
revenues. In 1982 the Company operated 455 aircraft with 2,865 employees
and recorded the highest revenues in its history at $ 209 million. However,
by 1984, revenues had fallen to $ 166 million and aircraft and employees
totaled 403 and 2,482, respectively. In an effort to mitigate this impact,
the Company began dedicated aeromedical operations in 1984.
Following the death in 1989 of the Company's founder,
Robert L. Suggs, his wife, Carroll W. Suggs, assumed control of the Company
as Chairman of the Board. Since that time, the Company's focus has been
directed toward diversification of revenues within the helicopter industry.
The Company continued to maintain its leadership position in helicopter
transportation services to the domestic oil and gas industry, while
increasing its competitive position internationally in the oil and gas
industry and domestically in the aeromedical services industry.
<PAGE>
In the past six years, as the Company broadened its
revenue base, improved accountability measures have been implemented. The
Company organized into strategic business units: Domestic Oil and Gas,
Aeromedical, International, and Technical Services. Each unit was assigned
to and managed by experienced personnel with full decision-making authority
and accountability. The accountability process was refined through improved
planning, accounting, and control systems, combined with a new reporting
process that provides management with the tools for proactive decisions
using timely and pertinent financial information. During this
implementation, the Company retained critical operational control and the
quality and safety functions centrally. The improved structure and
reporting systems have permitted management to increase the Company's net
earnings through better cost containment and higher fleet utilization.
Today the Company maintains its position as the largest
provider of helicopter transportation services in the Gulf of Mexico.
Providing approximately 51% of all the contracted aircraft in the Gulf of
Mexico, the Company has 196 aircraft dedicated to this market.
Additionally, the Company is the fastest growing provider of aeromedical
services in the U.S. and international initiatives for serving the global
oil and gas industry have shown steady growth. The Company currently
operates 266 aircraft worldwide and has 1,677 employees.
The following discussion of the Company's Results of
Operations and Financial Condition should be read in conjunction with the
Company's consolidated financial statements and the notes thereto included
elsewhere in this Form 10-K.
Results of Operations
Revenues
The Company generates revenues from both ongoing service
contracts with established customers and non-contract flights referred to
as "Specials". Domestic Oil and Gas Program contracts are generally on a
month to month basis and consist of a fixed fee plus an hourly charge for
actual flight time. Specials are customer flights, primarily domestic oil
and gas, provided on an as needed basis that are not provided pursuant to
ongoing contracts and which generally carry higher rates.
International and aeromedical contracts also provide for
fixed and hourly charges, but are generally for longer terms and impose
early cancellation fees to encourage customers to fulfill the contract term
and cover the Company's additional upfront costs in the event of early
termination.
<PAGE>
Demand for the Company's Domestic Oil and Gas Programs is influenced
by offshore oil and gas exploration, development, and production activities
in the areas in which it operates, which in turn is affected primarily by
oil and gas prices. The following table reflects the five year trend in the
offshore drilling rig count compared to the Company's domestic oil and gas
revenues:
April April April April April
1996 1995 1994 1993 1992
Active Rigs in U.S. Gulf of Mexico 135 123 125 102 60
Domestic Oil and Gas Revenues
(millions) $128.8 $116.5 $126.1 $132.7 $157.3
Better economic conditions in the Gulf of Mexico caused oil and gas
activity to increase substantially in fiscal 1996. Active rig counts
increased to their highest level in five years. These factors coupled with
an increase in the Company's gulf coast oil & gas market share resulted in
an 11% increase in revenues and an 8% increase in domestic flight hours.
Revenues and domestic flight hours rose to $ 128.8 million and 162,377 in
fiscal 1996 from $ 116.5 million and 150,850 in fiscal 1995, respectively.
The Company's domestic market share increased to 51% from 49% in the current
year.
Management believes that these positive trends will continue and are
in large part attributable to the Company's dedication to safety and
service. Management intends to remain focused on these important aspects
of the Company's business.
The following table reflects the distribution of the Company's revenues by
market area:
Years Ended April 30
1996 1995 1994 1993
Domestic Oil & Gas. . . . 69% 67% 71% 75%
Aeromedical . . . . . . . . . 14 15 1 29
International . . . . . . . . . 9 10 8 7
Technical Services . . . . 8 8 9 9
Fiscal 1996 also saw positive trends in the Company's
Aeromedical Service Programs. Aeromedical revenues rose $ 1.4 million, or
6%, to $ 26.7 million. The increase resulted from the addition of two new
contracts and five additional aircraft bringing the total aeromedical
contracts and aircraft to 14 and 37, respectively.
International revenues decreased by $ .9 million, or 5%, to $ 16
million. International flight hours increased 6% to 21,276 due primarily
to increased oil and gas exploration activity. The flight hour increase was
produced primarily by existing contracts which utilize smaller aircraft with
moderate hourly rates. This increase in hourly revenue was offset primarily
by the cessation of one non-recurring contract with high fixed rates.
<PAGE>
Expenses
The Company's management accountability program has resulted in a
reduction of total expense ratios, improved gross margins, and better fleet
utilization. The program has focused management's attention on cost
containment throughout the Company.
The following table highlights the results of the accountability program:
1996 1995 1994 1993
Number of helicopters
owned/leased/operated at year end 261 254 266 268
Fleet utilization . . . . . . . . . 86% 84% 76% 76%
Number of employees at year end 1,677 1,649 1,697 1,838
Operating margin. . . . . . . . . 13% 12% 9% 9%
____________________
Direct expenses increased $ 8.5 million in fiscal 1996. Human
resource costs, including salaries and benefits, increased $ 2.8 million.
Salaries, including overtime, increased $ 1.8 million, or 3%, due primarily
to increased flight activity. Additionally, the Company increased its gain
sharing contribution by $ 1.1 million. Helicopter insurance declined $ 0.5
million primarily as a result of accident free years in 1996 and 1995 which
reduced premiums. Spare parts used increased by $ 4.4 million in fiscal
1996, due primarily to the increase in flight and flight related activity
in the Company's three major market areas. In addition, a $ 1.5 million
environmental provision was recorded in fiscal 1996 versus $ .2 million in
fiscal 1995. This is discussed in further detail under "- Environmental
Matters." The Company's safety program, implemented in 1992, combined with
its health awareness program have contributed significantly to reducing
helicopter and employee insurance costs and worker's compensation claims.
The Company intends to continue these programs.
Selling, general, and administrative expenses for fiscal 1996
increased 16%, or $ 1.6 million. The increase was primarily a result of
consulting fees related to information system upgrades which will be phased
in over the next three years. The Company is upgrading its workorder
system, inventory management system, and various other systems to remain a
leader in technological advances in the industry. Legal and accounting fees
decreased $ 0.6 million to $ 0.9 million in fiscal 1996. The decrease is
due primarily to costs incurred in fiscal 1995 relating to the
reincorporation of the Company from Delaware to Louisiana and the
investigation and preliminary negotiation of strategic acquisitions which
were either not successful or which the Company ultimately determined not
to pursue.
Interest Expense
The Company's borrowing cost remained constant in fiscal 1996. The
average interest rate paid decreased slightly by .28% to 8.16 from 8.44.
The lower interest rate was offset by higher average borrowings in the
fiscal period.
<PAGE>
Taxes
PHI's effective tax rate was 39%, 41%, and 40%, respectively, in 1996,
1995, and 1994. Current tax expense as a percent of pre-tax earnings for
the same fiscal periods was 11%, 18% and 19%, respectively. The Company
anticipates that its effective tax rate will remain at approximately 39%.
See Item 8. "Financial Statements and Supplemental Data - Notes to
Consolidated Financial Statements, Note 3."
Earnings
The Company's revenue expansion and accountability programs have
helped produce period to period increases in net earnings of 25% and 55%,
respectively, for the 1996 and 1995 fiscal years. Earnings per share for
the fiscal year ended April 30, 1996 and April 30, 1995 improved 33% and
57%, respectively, compared to the prior year periods.
The improved results are directly related to better economic
conditions in the Gulf of Mexico and expansion and growth in the aeromedical
and international markets. In addition, accountability placed on
management has permitted the Company to improve margins by lowering direct
expenses. Direct expenses as a percentage of operating revenues decreased
from 88% to 87% in fiscal 1996. The Company plans to continue its programs
of diversification and accountability and will continue to search for
opportunities to enhance earnings and shareholder value.
Liquidity and Capital Resources
The Company's 1996 year end cash position declined slightly to $ 1.9
million from $ 2.5 million at fiscal year end 1995.
Working capital in fiscal 1996 declined $ 3.3 million from $ 29.8
million in 1995 to $ 26.5 million. The decline is due primarily to the
decrease in cash on hand and an overall increase in accounts payable and
accrued liabilities.
The Company's primary credit facility consists of a $ 15 million
revolving credit facility available through October 31, 1997 (the "revolving
loan") and a capital loan facility of up to $ 40 million (subject to
compliance with certain collateral coverage ratios) designed to fund the
purchase of additional aircraft (the "term loan"). The term loan currently
functions as a capital equipment revolving line of credit, but with fixed
quarterly principal payments of $ 2 million. On October 31, 1997 it will
convert to a conventional term loan, after which no further borrowings or
reborrowings may be made. After conversion, principal will continue to be
paid in quarterly $ 2 million installments until maturity on October 31,
2002. Both the revolving and term loans bear floating interest rates tied
to the primary lender's prime rate and London InterBank Offered Rates
("LIBOR") chosen by the Company, plus an amount determined periodically
based on the Company's leverage ratio that can range from 0% to 0.5% above
such prime rate and from 1.5% to 2.25% above the applicable LIBOR rate.
<PAGE>
Total long-term debt increased $ 1.5 million in fiscal 1996. The
Company's current debt obligations for fiscal 1997 total $ 8.8 million, due
in equal quarterly installments, which the Company intends to pay with cash
flow from operations. Total debt obligation at year end was $37.3 million,
which the Company also plans to satisfy with future cash flow from
operations. As of July 1, 1996, the Company had $ 10.7 million and $ 6.6
million of credit capacity available under its term and revolving credit
facilities, respectively, reflecting the purchase, subsequent to year end,
of six aircraft for $ 4 million. In addition, the Company plans to purchase
a total of twenty- two helicopters in 1997 for a purchase price estimated
to be $ 21 million. These planned purchases are subject to PHI obtaining
customer commitments. Funds available under the Company's term facility
will be utilized to finance these purchases. At April 30, 1996, the Company
was in compliance with the provisions of its loan agreements.
Cash generated from operating activities in 1996 was $ 19.3 million
as compared to $ 14.7 million and $ 16.4 million in fiscal 1995 and 1994,
respectively. The $ 4.6 million increase in fiscal 1996 is primarily
attributable to the decrease in accounts receivable of $ 1.2 million and
increased net earnings of $ 1.3 million. Days sales outstanding decreased
to 55 days in fiscal 1996 from 58 days in fiscal 1995, and receivables
decreased with improved collections.
During fiscal 1996, the Company used its cash flow from operating
activities for $ 21 million in investing activities, primarily for the
purchase of nineteen aircraft for $ 15.2 million, $ 5.1 million in aircraft
capital improvements, and $ 3 million for the purchase of a 49% interest in
Irish Helicopters Limited. Additional cash of $ 1.5 million was provided
through financing activities primarily by term debt to fund the investing
activities and $ 0.6 million in dividend payments.
In response to increased earnings and improved operating cash flow
during the past three years, the Company resumed payment of quarterly
dividends beginning with the second quarter of fiscal 1995. The Board
declared dividends of $ 0.06 per share during fiscal 1995 and $0.17 per
share in fiscal 1996. Three dividends totaling $ 0.12 per share and one
dividend of $0.05 per share were distributed during fiscal 1996 and fiscal
1997, respectively. The Company anticipates that future dividend payments
will be declared provided that the current earnings trend continues and as
allowed by the Company's agreement with its lenders.
The Company believes its cash flow from operations in conjunction with
its credit capacity is sufficient to meet its planned requirements for the
forthcoming year.
New Accounting Pronouncements
The Financial Accounting Standards Board (the FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 121. "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." This statement is effective for fiscal years beginning after December
15, 1995. Management does not believe that this pronouncement will have a
material impact on its fiscal 1997 consolidated financial statements.<PAGE>
The FASB also issued SFAS No. 123. "Accounting for Stock Based
Compensation," effective also for fiscal years beginning after December 15,
1995. The new statement encourages, but does not require, companies to
measure stock-based compensation cost using a fair value method, rather than
the intrinsic value method prescribed by Accounting Principles Board (APB)
opinion No. 25. Companies choosing to continue to measure stock-based
compensation using the intrinsic value method must disclose on a pro forma
basis net earnings and net earnings per share as if the fair value method
were used. Management is currently evaluating the requirements of SFAS No.
123.
Environmental Matters
The Company is subject to federal, state and local environmental laws
and regulations that impose limitations on the discharge of pollutants into
the environment and establish standards for the treatment, storage and
disposal of toxic and hazardous wastes.
In the first quarter of fiscal 1996 the Company began an environmental
review at selected domestic bases. Based on this review, known or suspected
fuel contamination has been identified at eight of its bases. Management
now believes it is possible that similar fuel contamination will be found
at additional bases.
During fiscal 1996, initial assessments of the costs to remediate this
contamination were commenced and preliminary estimates of the costs
expected to be incurred at three of the Company's bases were received. The
Company is seeking additional information regarding these preliminary
estimates and further assessments are planned at all other bases at which
known or suspected fuel contamination has been identified. Depending in
part upon the results of these assessments, the Company also anticipates
that it will conduct additional studies at its other bases. Based on the
information currently available to management, an additional provision of
$1,500,000 has been made in the current year. The Company has expensed,
including reserve provisions for environmental costs, $ 1,797,000 for the
current year. The aggregate reserve for environmental related costs, at
April 30, 1996, is $1.7 million. The Company will make additional provisions
in future periods to the extent appropriate as further information regarding
these costs becomes available.
<PAGE>
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
The Board of Directors and Shareholders
Petroleum Helicopters, Inc.:
We have audited the consolidated balance sheets of Petroleum Helicopters,
Inc. and subsidiaries as of April 30, 1996 and 1995, and the related
consolidated statements of earnings, shareholders' equity, and cash flows
for each of the years in the three-year period ended April 30, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1996 and 1995,
and the results of their operations and their cash flows for each of the
years in the three-year period ended April 30, 1996, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
June 12, 1996
<PAGE>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
April 30, 1996 and 1995
(Thousands of dollars)
Assets 1996 1995
Current assets:
Cash and cash equivalents $ 1,899 $2,506
Accounts receivable - net of allowance:
Trade 27,305 28,655
Investee companies 298 950
Notes and other 1,122 888
Inventory of spare parts and aviation fuel -
at lower of average cost or market 25,947 25,560
Prepaid expenses 1,159 989
Refundable income taxes 737 -
Notes receivable - investee companies 1,166 -
Assets held for sale - 215
______ ______
Total current assets 59,633 59,763
______ ______
Notes receivable 358 -
______ ______
Investments 4,890 1,002
______ ______
Property and equipment, at cost:
Flight equipment 189,956 180,064
Other 22,845 19,752
_______ _______
212,801 199,816
Less accumulated depreciation (116,469) (113,568)
________ ________
96,332 86,248
________ ________
Other 102 95
________ ________
Total assets $ 161,315 $ 147,108
======== ========
(Continued)<PAGE>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of dollars)
Liabilities and Shareholders' Equity 1996 1995
Current liabilities:
Accounts payable - trade $ 8,209 $5,805
Accrued expenses 10,869 9,419
Accrued vacation pay 4,813 4,897
Income taxes payable - 331
Current portion of long-term debt 8,810 8,755
Other 389 747
______ ______
Total current liabilities 33,090 29,954
______ ______
Long-term debt 28,522 27,060
______ ______
Deferred income taxes 14,966 12,066
______ ______
Other long-term liabilities 3,336 2,321
______ ______
Shareholders' equity:
Voting common stock - par value of $.10;
authorized 12,500,000; issued shares of
2,799,761 and 2,864,760 in 1996 and 1995 280 286
Non-voting common stock - par value of $.10;
authorized 12,500,000; issued shares of 2,276,093
and 2,200,830 in 1996 and 1995 227 220
______ ______
Total common stock 507 506
Additional paid-in capital 10,220 10,118
Retained earnings 70,674 65,083
______ ______
81,401 75,707
Total liabilities and shareholders' ______ ______
equity $ 161,315 $ 147,108
======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings
Years ended April 30, 1996, 1995 and 1994
(Thousands of dollars and shares, except per share amounts)
1996 1995 1994
Revenues:
Operating revenues $ 185,865 $ 174,397 $ 178,697
Gain on equipment disposals 1,067 1,091 475
Equity in net earnings (losses) of
investee companies 397 (83) -
_______ _______ _______
187,329 175,405 179,172
_______ _______ _______
Expenses:
Direct expenses 161,807 153,282 162,227
Selling, general and administrative 11,871 10,237 8,715
Interest expense 3,098 3,098 2,676
_______ _______ _______
176,776 166,617 173,618
_______ _______ _______
Earnings before income taxes 10,553 8,788 5,554
Income taxes 4,087 3,606 2,221
_______ _______ _______
Net earnings $ 6,466 $ 5,182 $ 3,333
======= ======= =======
Net earnings per share $ 1.28 $ 0.96 $ 0.61
======= ======= =======
Weighted average common shares
outstanding 5,066 5,409 5,478
======= ======= =======
Dividends declared per common share $ 0.17 $ 0.06 $ -
======= ======= =======
See accompanying notes to consolidated financial statements.<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Thousands of dollars and shares)
<TABLE>
<CAPTION>
Voting
Voting Non-Voting Common Stock Additional
Common Stock Common Stock Held in Treasury Paid-in Retained
Shares Amount Shares Amount Shares Amount Capital Earnings
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
April 30, 1993 4,199 $ 350 2,200 $ 183 921 $ 77 $ 11,027 $ 60,493
Net earnings - - - - - - - 3,333
_____ _____ _____ _____ _____ _____ _____ _____
Balance
April 30, 1994 4,199 350 2,200 183 921 77 11,027 63,826
Change in par value - 70 - 37 - 15 (92) -
Purchase ONI shares - - - - 413 42 (824) (3,605)
Retire treasury
stock (1,334) (134) - - (1,334) (134) - -
Other - - 1 - - - 7 -
Net earnings - - - - - - - 5,182
Dividends - - - - - - - (320)
_____ _____ _____ _____ _____ _____ _____ _____
Balance
April 30, 1995 2,865 286 2,201 220 - - 10,118 65,083
Equity adjustment
on translation - - - - - - - (13)
Stock Options
Exercised 10 1 - - - - 99 -
Other (75) (7) 75 7 - - 3 -
Net Earnings - - - - - - - 6,466
Dividends - - - - - - - (862)
_____ _____ _____ _____ _____ _____ _____ _____
Balance
April 30, 1996 2,800 $ 280 2,276 $ 227 - - 10,220 $ 70,674
===== ===== ===== ===== ===== ===== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 1996, 1995 and 1994
(Thousands of dollars)
1996 1995 1994
Operating activities:
Net earnings $ 6,466 $ 5,182 $ 3,333
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation 8,344 8,413 8,573
Deferred income taxes 2,900 2,043 1,138
Gain on equipment disposals (1,067) (1,091) (475)
Equity in net (earnings) losses of
investee companies (397) 83 -
Changes in operating assets
and liabilities:
Decrease (increase)
in accounts receivable 1,217 (3,043) 3,156
Increase in inventory (387) (710) (258)
Decrease (increase) in
prepaid expenses and
refundable income taxes,
and notes receivable (2,080) 653 1,368
Increase (decrease) in
accounts payable -
trade and other accrued expenses 2,646 2,746 (312)
Increase (decrease) in
income taxes payable (325) 331 -
Other 2,032 59 (83)
______ ______ ______
Net cash provided by
operating activities 19,349 14,666 16,440
Investing activities:
Investments (3,303) - -
Purchase of property and equipment (23,808) (20,326) (14,330)
Proceeds from sales of property
and equipment 6,147 12,125 1,672
Other - - (290)
______ ______ ______
Net cash used in investing activities (20,964) (8,201) (12,948)
______ ______ ______
Financing activities:
Proceeds from long-term debt 23,303 13,000 32,780
Payments on long-term debt (21,787) (17,738) (33,011)
Issuance of common stock 100 - -
Purchase of treasury stock - (4,471) -
Dividends paid (608) (320) -
______ ______ ______
Net cash provided (used) in
financing activities 1,008 (9,529) (231)
______ ______ ______
Increase (decrease) in cash and
cash equivalents (607) (3,064) 3,261
Cash and cash equivalents at
beginning of year 2,506 5,570 2,309
______ ______ ______
Cash and cash equivalents at end of year $ 1,899 $ 2,506 $ 5,570
====== ====== ======
See accompanying notes to consolidated financial statements.<PAGE>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
April 30, 1996, 1995 and 1994
(1) Summary of Significant Accounting Policies
(a)Principles of Consolidation
The consolidated financial statements include the accounts of
Petroleum Helicopters, Inc. and its wholly-owned subsidiaries
(the Company) after the elimination of all significant
intercompany accounts and transactions. Investments in 20 to
50 percent owned affiliates are accounted for by the equity
method and consist primarily of investments in foreign
affiliates.
(b)Use of Estimates
In preparing the company's financial statements management
makes informed estimates and assumptions that affect the
amounts reported in the financial statements and related
disclosures. Actual results may differ from these estimates.
(c)Cash Equivalents
The Company considers cash equivalents to include demand
deposits and investments with original maturity dates of three
months or less.
(d)Property and Equipment
Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-
line method based upon estimated useful lives of ten years for
flight equipment and three to ten years for other equipment.
A residual value of 25% of cost is used in the calculation of
depreciation of flight equipment and other equipment. When
property and equipment is sold or otherwise disposed of, the
cost and accumulated depreciation are removed from the
accounts and any resulting gain or loss is reflected in
earnings at the time of sale or other disposition, except in
the case of long-term sale and leaseback transactions.
(e) Income Taxes
A consolidated federal income tax return is filed by the
Company and its subsidiaries. Income taxes have not been
provided on the undistributed net earnings of the investee
companies since, among other things, the amount of taxes
involved are not significant.
Income taxes are accounted for in accordance with the
provisions of Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes. Under the asset and
liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that included
the enactment date.
(f)Self-Insurance
The Company maintains a self-insurance program for a portion
of its health care costs. The Company is liable for claims up
to $200,000 per covered individual annually, and aggregate
claims up to $4,135,000 annually. Self-insurance costs are
accrued based upon the aggregate of the liability for reported
claims and the estimated liability for claims incurred but not
reported.
The Company does not presently have any significant
obligations for post employment benefits.
(g) Concentration of Credit Risk
The Company's financial instruments that are exposed to
concentrations of credit risk consist primarily of cash and
cash equivalents and trade accounts receivable. The Company
places its cash and temporary cash investments with high
quality financial institutions and currently invests primarily
in U.S. government obligations with maturities of less than
three months.
A majority of the Company's business is conducted with major
oil and gas exploration companies with operations in the Gulf
of Mexico. The Company continually evaluates the financial
strength of its customers but does not require collateral to
support the customer receivables. The Company establishes an
allowance for doubtful accounts based upon factors surrounding
the credit risk of specific customers, current market
conditions and other information.
(h)Earnings per Common and Common Equivalent Share
Primary earnings per share are computed based on the weighted
average number of shares and dilutive equivalent shares of
common stock (stock options) outstanding during each year
using the treasury stock method.
<PAGE>
(i)Reclassifications
Certain reclassifications have been made to the prior years
financial statements in order to conform with the
classifications adopted for reporting in 1996.
(j)Fair Value of Financial Instruments
Fair value of cash, cash equivalents, accounts receivable,
accounts payable and debt approximates book value at April 30,
1996.
(k)New Accounting Pronouncements
The Financial Accounting Standards Board (the FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 121.
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." This statement is
effective for fiscal years beginning after December 15, 1995.
Management does not believe that this pronouncement will have
a material impact on its fiscal 1997 consolidated financial
statements.
The FASB also issued SFAS No. 123. "Accounting for Stock Based
Compensation," effective also for fiscal years beginning after
December 15, 1995. The new statement encourages, but does
not require, companies to measure stock-based compensation
cost using a fair value method, rather than the intrinsic
value method prescribed by Accounting Principles Board (APB)
opinion No. 25. Companies choosing to continue to measure
stock-based compensation using the intrinsic value method must
disclose on a pro forma basis net earnings and net earnings
per share as if the fair value method were used. Management
is currently evaluating the requirements of SFAS No. 123.<PAGE>
(2) Long-Term Debt
1996 1995
(Thousands of dollars)
Secured term loan note due in quarterly
installments of $2,000,000 commencing
January 31, 1991, with interest (April 30,
1996 - 8.2% and April 30, 1995 - 8.4%)
fluctuating with libor and prime $ 25,562 $ 27,790
Secured note due October 31, 1997, under a
revolving credit facility totaling
$15,000,000 with interest (April 30, 1996 -
8.2% and April 30, 1995 - 8.4%) fluctuating
with libor and prime 4,500 -
Secured 10 year promissory notes due in
monthly installments of $107,747
commencing July 9, 1993 with a fixed
interest rate of 7.0% 7,270 8,025
______ ______
37,332 35,815
Less current portion 8,810 8,755
______ ______
Long-term portion $ 28,522 $ 27,060
====== ======
Scheduled maturities of long-term debt are as follows:
(Thousands of dollars)
1997 $ 8,810
1998 8,868
1999 8,931
2000 7,060
2001 1,070
Thereafter 2,593
______
$ 37,332
======
<PAGE>
At April 30, 1996, the following assets and their related book
values are pledged as collateral on notes aggregating $37.3 million:
(Thousands of dollars)
Equipment, net of depreciation $ 46,865
Inventory 25,595
Accounts receivable, net 26,144
______
$ 98,604
======
The secured term and revolving loan agreements require the Company
to maintain certain levels of working capital and shareholders'
equity and contain other provisions some of which restrict
expenditures for the purchase of the Company's stock, for capital
expenditures and for payment of dividends. Such agreements also
limit the creation, incurrence or assumption of Funded Debt (as
defined, which includes long-term debt), and the acquisition of
investments. At April 30, 1996, the Company's working capital
exceeded the amount required by approximately $ .7 million, and
shareholders' equity exceeded the required level by approximately $
5.9 million. Dividends are generally limited to 20% of net
earnings.
At April 30, 1996, the Company was in compliance with the provisions
of its loan agreements.
The secured term and revolving loan agreement permit both prime
rate based and London InterBank Offered Rate ("LIBOR") borrowings at
LIBOR rates plus a floating spread. The spread for LIBOR and prime
rate borrowings will float up or down based on the Company's
performance as determined by a leverage ratio. The spread can range
from 0% to 0.5% above the applicable prime rate and from 1.5% to
2.25% above LIBOR.
Interest paid was $3,351,000, $2,970,000, and $2,136,000 for the
years ended April 30, 1996, 1995 and 1994, respectively.
(3) Income Taxes
Income tax expense for the three years ended April 30, 1996, is
composed of the following:
1996 1995 1994
(Thousands of dollars)
Current:
Federal $ 757 $ 1,234 $ 853
State 344 270 148
Foreign 85 59 82
Deferred - principally Federal 2,901 2,043 1,138
______ ______ ______
$ 4,087 $ 3,606 $ 2,221
====== ====== ======
Deferred income tax expense (benefit) results from the following:
1996 1995 1994
(Thousands of dollars)
Accelerated depreciation $ 1,408 $ 2,564 $ 1,496
Accrued expenses and other liabilities (138) (2,353) (636)
Effect of tax credits 1,631 1,832 278
______ ______ ______
$ 2,901 $ 2,043 $ 1,138
====== ====== ======
Income tax expense as a percentage of pre-tax earnings varies from
the effective Federal statutory rate of 34% as a result of the
following:
Years ended April 30
1996 1995 1994
Amount % Amount % Amount %
(Thousands of dollars, except percentages)
Income taxes at
statutory rate $ 3,588 34 $ 2,988 34 $ 1,888 34
Increase (decrease) in taxes
resulting from:
Equity in net (earnings) losses
of consolidated
investee companies (134) (1) 28 - - -
Effect of state income
taxes 227 2 178 2 98 2
Other items - net 406 4 412 5 235 4
______ ___ ______ ___ ______ ___
$ 4,087 39 $ 3,606 41 $ 2,221 40
====== === ====== === ====== ===
For income tax purposes, the Company had approximately $ 81,000 of
general business tax credit carryforwards. These general business
tax credit carryforwards will expire between 1998 and 2001. The
Company also has approximately $ 564,000 of alternative minimum tax
credit carryforwards available to reduce future Federal regular
income taxes over an indefinite period.
The tax effects of temporary differences which give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at April 30, 1996 and 1995 are presented below:
1996 1995
(Thousands of dollars)
Deferred tax assets:
Tax credits $ 645 $ 2,276
Vacation accrual 1,774 1,812
Inventory valuation 881 792
Workman's compensation reserve 381 518
Other 2,678 2,423
_____ _____
Total deferred tax assets 6,359 7,821
_____ _____
Deferred tax liabilities:
Tax depreciation in excess of book
depreciation 20,840 19,432
Other 485 455
______ ______
Total deferred tax liabilities 21,325 19,887
______ ______
Net deferred tax liability $ 14,966 $ 12,066
====== ======
No valuation allowance was recorded against the net deferred tax
assets because management believes that the deferred tax assets will
more than likely be realized in full through future operating
results and the reversal of taxable temporary differences.
Income taxes paid were approximately $2,267,000, $1,168,000, and
$470,000 for the years ended April 30, 1996, 1995 and 1994,
respectively.
(4) Employee Benefit Plans
The Company established, effective July 1, 1989, an Employee Savings
Plan under Section 401(k) of the Internal Revenue Code. The Plan
provides that the Company match up to 3% of employee contributions.
The Company's contribution was $1,616,000, $1,586,000, and
$1,604,000 for the years ended April 30, 1996, 1995 and 1994,
respectively.
Effective September 1, 1994, the Company adopted a Supplemental
Executive Retirement Plan ("SERP"). The nonqualified and unfunded
plan provides senior management with supplemental retirement and
death benefits at age 65. Life insurance policies, of which the
Company is the sole owner and beneficiary, were purchased on
the lives of each of the participants. Supplemental retirement
benefits were based on one-third (1/3) of the participants'
monthly income at the time of adoption. Currently, there are
no SERP provisions for an increase in benefits, partial vesting
or early retirement. The assumed discount rate was 7.5%.
Expenses related to the plan were $ 308,000 for 1996 and $
197,000 for 1995.
During fiscal 1996, the Board of Directors approved an Officer
Deferred Compensation Plan and a Director Deferred Compensation
Plan. Both plans were effective May 31, 1995. The plans permit key
officers and all directors to defer a portion of their compensation.
The plans are nonqualified and unfunded.
(5) Stock Option Plans
Effective May 1, 1992, the Company's Board of Directors adopted the
Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option and
Stock Appreciation Rights Plan (the "Plan"). The Plan was approved
at the Annual Meeting of Shareholders on September 30, 1992. The
Company is authorized to grant non-qualified stock options and stock
appreciation rights (Sar) to selected employees to purchase up to
100,000 shares of the Company's non-voting common stock at an
exercise price of not less than 25% of their Fair Market Value at
the date of grant. The options may be exercised any time after one
year from the date of grant until their expiration at five years
from such date.
During fiscal 1993 an officer of the Company was granted non-
qualified options to purchase 15,000 shares of voting common stock
at the fair market value of the stock at the date of grant. The
options were not granted under the 1992 Plan. The options expire
five years from the date of grant.
Effective May, 1995 the Company's Board of Directors adopted the PHI
1995 Incentive Plan (the "1995 Plan"). The plan was approved at the
Annual Meeting of Shareholders on September 22, 1995. The Company
is authorized to issue a total of 175,000 shares of voting common
stock and 325,000 shares of non-voting common stock under the 1995
Plan. The Compensation Committee of the Board of Directors is
authorized under the 1995 Plan to grant stock options, restricted
stock, stock appreciation rights, performance shares, stock awards
and cash awards. During fiscal 1996, 23,200 and 58,000 non-
qualified stock options for voting and non-voting common stock,
respectively, were granted under the 1995 Plan. The exercise price
of the grants is equal to the fair market value of the underlying
stock at the date of grant. These options will vest on July 31,
1996 only to the extent certain 1996 performance targets are met.
In the event any of the stock options become vested, one-half become
exercisable on July 31, 1996 and one-half become exercisable on July
31, 1997. The stock options expire on May 31, 2005.
A summary of the Plans' activities for the years ended April 30, 1996, 1995,
and 1994 is as follows:
<TABLE>
(CAPTION>
1992 Plan Other 1995 Plan
Options Options Options
<C> <C> <C> <C> <C>
<S> Total Non-Voting Voting Voting Non-Voting
Balance outstanding at
April 30, 1993 15,000 - 15,000 - -
Options granted at $15.50 87,000 87,000 - - -
Options cancelled (6,000) (6,000) - - -
_______ _______ _______ _______ _______
Balance outstanding at
April 30, 1994 96,000 81,000 15,000 - -
Options cancelled (6,000) (6,000) - - -
_______ _______ _______ _______ _______
Balance outstanding at
April 30, 1995 90,000 75,000 15,000 - -
_______ _______ _______ _______ _______
Options granted at $9.75
(voting) and $8.50
(non-voting) 81,200 - - 23,200 58,000
Options exercised (10,000) - (10,000) - -
_______ _______ _______ _______ _______
Balance outstanding at
April 30, 1996 161,200 75,000 5,000 23,200 58,000
======= ======= ======= ======= =======
Shares exercisable at
April 30, 1994 - - - - -
======= ======= ======= ======= =======
Shares exercisable at
April 30, 1995 30,000 25,000 5,000 - -
======= ======= ======= ======= =======
Shares exercisable at
April 30, 1996 50,000 50,000 - - -
======= ======= ======= ======= =======
Shares available for
future grant at
April 30, 1996 443,800 25,000 - 151,800 267,000
======== ======= ======= ======= =======
</TABLE>
(6) Supplemental Cash Flow Information and Financing Activities
In 1996, the Company entered into agreements for the sale and
leaseback of two helicopters. The book values of the equipment
totalling $ 3.5 million were removed from the balance sheet, and the
gains realized on the sale transactions totalling $ 0.3 million were
deferred and are being credited to income as rent expense
adjustments over the lease term. Rentals on these transactions
average $ 0.4 million annually.
In 1994, the Company entered into an agreement to acquire up to 28%
of a corporate joint venture. In 1994 the Company acquired a 13.7%
interest in the corporate joint venture in exchange for a helicopter
and equipment with net values totalling $519,000. At April 30,
1994, the Company had a note receivable from the joint venture which
the Company had the option to convert into an additional 9.3% of
common stock of the corporate joint venture. In 1995 the Company
exercised the option and contributed equipment valued at $191,000 to
acquire an additional 5% of the corporate joint venture.
On July 13, 1995 the Company purchased 49% of Irish Helicopters
Limited (IHL) based in Dublin Ireland for $3 million. IHL operates
five aircraft which are engaged primarily in search and rescue
missions off the Irish Coast.
(7) Shareholders' Equity
In connection with the Company's reincorporation, which was approved
by the shareholders at the Company's September 28, 1994 annual
meeting of shareholders, the par value of the voting common stock
and non-voting common stock was changed from $ .08 1/3 per share to
$ .10 per share.
On February 28, 1995 the Company purchased 413,308 shares of the
Company's common voting stock at market value for $ 4.5 million from
Offshore Navigation, Inc. ("ONI"), an affiliate of the Company.
Prior to the acquisition, these shares represented approximately
12.6% of the Company's outstanding voting common stock. The shares
were placed in the Company's treasury.
Subsequent to the purchase of the ONI shares, all shares of voting
common stock held in treasury were retired.
(8) Commitments and Contingencies
The Company leases certain aircraft used in its operations. The
Company generally pays all insurance, taxes and maintenance expenses
associated with these aircraft and some of these leases contain
renewal and purchase options.
Aggregate rental commitments to lease aircraft under operating
leases are due in years subsequent to April 30, 1996, as follows:
(Thousands of dollars)
1997 $ 11,079
1998 10,742
1999 10,641
2000 10,425
2001 10,181
Thereafter 14,903
______
$ 67,971
======
Rental expense consisted of the following:
(Thousands of dollars)
(Years ended April 30)
1996 1995 1994
Aircraft $ 12,145 $ 11,364 $ 12,369
Other 1,690 1,745 1,637
______ ______ ______
$ 13,835 $ 13,109 $ 14,006
====== ====== ======
Subsequent to year end, the Company purchased six aircraft for an
aggregate of $ 4 million. In addition, the Company plans to
purchase twenty-two helicopters in 1997. The total purchase price is
estimated to be $ 21 million. These purchases are subject to
obtaining customer commitments.
In the first quarter of fiscal 1996 the Company began an
environmental review at selected domestic bases. Based on this
review, known or suspected fuel contamination has been identified at
eight of its bases. Management now believes it is possible that
similar fuel contamination will be found at additional bases.
<PAGE>
During the prior year, initial assessments of the costs to remediate
this contamination were commenced and a preliminary estimate of the
costs expected to be incurred at three of the Company's bases was
received. The Company is seeking additional information regarding
this preliminary estimate, and further assessments are planned at
all other bases at which known or suspected fuel contamination has
been identified. Depending in part upon the results of these
assessments, the Company also anticipates that it will conduct
additional studies at its other bases. Based on the information
currently available to management, an additional provision of
$1,500,000 has been made in the current year. The Company has
expensed, including reserve provisions for environmental costs,
$1,797,000 for the current year. The aggregate reserve for
environmental related costs, at April 30, 1996, is $1.7 million.
The Company will make additional provisions in future periods to the
extent appropriate as further information regarding these costs
becomes available.
A director of the Company serves as Chairman of the Board of Aviall,
Inc., a supplier of parts to the Company. During fiscal 1996, total
purchases from Aviall were $ 6 million. The Company believes that
the prices paid for such parts were representative of that which
would have been paid in an arms length transaction.
The Company is named as a defendant in various legal actions which
have arisen in the ordinary course of its business and have not been
finally adjudicated. The amount, if any, of ultimate liability with
respect to such matters cannot be determined; however, after
consulting with legal counsel, the Company has established accruals
which it believes adequately provide for the settlement of such
litigation which have not had a material effect on the Company's
financial condition.
(9) Supplementary Data - Quarterly Financial Data (Unaudited)
The summarized quarterly results of operations for the years ended
April 30,1996 and 1995 (in thousands of dollars, except per share data)
are as follows:
Quarter Ended
July 31, October 31, January 31, April 30,
1995 1995 1996 1996
Revenues $ 46,710 $ 48,418 $ 45,712 $ 46,489
Gross profit $ 5,307 $ 6,406 $ 5,644 $ 6,701
Net earnings $ 1,391 $ 1,934 $ 1,339 $ 1,802
Net earnings per share $ .27 $ .39 $ .26 $ .36
<PAGE>
Quarter Ended
July 31, October 31, January 31, April 30,
1994 1994 1995 1995
Revenues $ 44,390 $ 45,045 $ 41,903 $ 44,067
Gross profit $ 4,307 $ 5,574 $ 5,131 $ 6,103
Net earnings $ 1,161 $ 1,455 $ 810 $ 1,756
Net earnings per share $ .21 $ .27 $ .15 $ .33
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
There were no disagreements between the Company and its independent
certified public accountants on accounting and financial disclosure matters.
Part III
Item 10. Directors and Executive Officers of the Registrant
Information concerning Directors required by this item will be
included in the Company's definitive proxy statement in connection with its
1996 Annual Meeting of Shareholders and is incorporated herein by reference.
Information concerning Executive Officers is included as Item 4.(a)
"Executive officers of the registrant."
Item 11. Executive Compensation
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1996 Annual Meeting of
Shareholders and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1996 Annual Meeting of
Shareholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1996 Annual Meeting of
Shareholders and is incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements
Included in Part II of this report:
Independent Auditors' Report
Consolidated Balance Sheets at April 30, 1996 and 1995
Consolidated Statements of Earnings for each of the years in
the three year period ended April 30, 1996
Consolidated Statements of Shareholders' Equity for each of
the years in the three year period ended April 30, 1996
Consolidated Statements of Cash Flows for each of the years
in the three year period ended April 30, 1996
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
Schedules are omitted because they are either not required or not
applicable, or because the required information is shown in the
Consolidated Financial Statements
or Notes thereto.
3. Exhibits
3.1 (i) Article of Incorporation of the Company
(incorported) by reference to Exhibibt No.
3.1(i) to PHI's Reporton Form 10-Q for the
quarterly period ended January 31, 1996.
(ii) By-laws of the Company (incorporated by
reference to Exhibit No. 3.1(ii) to PHI's
Report on Form 10-Q for the quarterly period
ended January 31, 1996).
10.1 Master Helicopter Lease Agreement dated May 29,
1991 between AT&T Systems Leasing Corporation and
PHI (incorporated by reference to Exhibit No. 10.1
(2) to PHI's Report on Form 10-K dated April 30,
1992).
10.2 Master Helicopter Lease Agreement dated February
14, 1991 between General Electric Capital
Corporation and PHI (incorporated by reference to
Exhibit No. 10.1 (1) to PHI's Report on Form 10-K
dated April 30, 1991).
10.3 (i) Amended and Restated Loan Agreement
originally dated as of January 31, 1986
Amended and Restated in its entirety as of
July 9, 1993 among Petroleum Helicopters,
Inc., Whitney National Bank, First National
Bank of Commerce, and NationsBank of Texas,
N.A., as agent (incorporated by reference to
Exhibit No. 10.3 to PHI's Report on Form 10-K
dated April 30, 1993).
(ii) First Amendment to Amended and Restated Loan
Agreement, dated as of October 31, 1993
(incorporated by reference to Exhibit No.
10.4 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(iii) Second Amendment to Amended and Restated Loan
Agreement, dated as of April 15, 1994
(incorporated by 10.5 to PHI's Report on Form
10-Q for the quarterly period ended January
31, 1995).
(iv) Third Amendment to Amended and Restated Loan
Agreement, dated as of July 31, 1994
(incorporated by reference to Exhibit No.
10.6 to PHI's Report on Form 10-Q or the
quarterly period ended January 31, 1995).
(v) Fourth Amendment and Limited Waiver to
Amended and Restated Loan Agreement, dated as
of October 25, 1994 (incorporated by
reference to Exhibit No. 10.7 to PHI's Report
on Form 10-Q for the quarterly period ended
January 31, 1995).
(vi) Fifth Amendment to Amended and Restated Loan
Agreement, dated as of October 31, 1994
(incorporated by reference to Exhibit No.
10.8 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(vii) Sixth Amendment to Amended and Restated Loan
Agreement, dated as of February 27, 1995.
(viii) Seventh Amendment to Amended and Restated
Loan Agreement, dated as of October 31, 1995.
10.4 Installment promissory note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,122,441.56,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No. 10.4
to PHI's Report on Form 10-K dated April 30, 1993).
10.5 Installment Promissory Note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,078,695.58,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No. 10.5
to PHI's Report on Form 10-K dated April 30, 1993).
10.6 Installment Promissory Note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,078,695.58,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No. 10.6
to PHI's Report on Form 10-K dated April 30, 1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement
Plan effective July 1, 1989 (incorporated by
reference to Exhibit No. 10.4 to PHI's Report on
Form 10-K dated April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified
Stock Option and Stock Appreciation Rights Plan
adopted by PHI's Board effective May 1, 1992 and
approved by the shareholders of PHI on September
30, 1992 (incorporated by reference to Exhibit No.
10.8 to PHI's Report on Form 10-K dated April 30,
1993).
10.9 Form of Stock Option Agreement for the Grant of
Non-Qualified Stock Options Under the Petroleum
Helicopters, Inc. 1992 Non-Qualified Stock Option
and Stock Appreciation Rights Plan dated June 2,
1993 between PHI and certain of its key employees
(incorporated by reference to Exhibit No. 10.9 to
PHI's Report on Form 10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H.
Untereker dated June 15, 1992 (incorporated by
reference to Exhibit No. 10.10 to PHI's Report on
Form 10-K dated April 30, 1993).
10.11 Stock Option Agreement between PHI and John H.
Untereker dated April 12, 1993, but effective as of
July 20, 1992 (incorporated by reference to Exhibit
No. 10.11 to PHI's Report on Form 10-K dated April
30, 1993).
10.12 Amended and Restated Petroleum Helicopters, Inc.
1995 Incentive Compensation Plan adopted by PHI's
Board effective July 11, 1995 and approved by the
shareholders of PHI on September 22, 1995.
10.13 Form of Non-Qualified Stock Option Agreement under
the Petroleum Helicopters, Inc. 1995 Incentive
Compensation Plan between PHI and certain of its
key employees.
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit No. 21 to PHI's Report on Form
10-K dated April 30, 1993).
23.1 Consent of KPMG Peat Marwick LLP
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company
during the fourth quarter of fiscal 1996.
(d) Financial Statement Schedules
Financial statements or information regarding 50%
or less owned entities accounted for by the equity
method have been omitted because such entities,
considered in the aggregate as a single subsidiary,
would not constitute a significant subsidiary.
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PETROLEUM HELICOPTERS, INC.
By: /s/_________________________
Carroll W. Suggs
Chairman of the Board,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/_________________________ Chairman of the Board,
Carroll W. Suggs Chief Executive Officer
and Director (Principal
Executive Officer)
/s/ _________________________ Vice President and
John H. Untereker Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/_________________________ Director
Leonard M. Horner
/s/ _________________________ Director
Robert G. Lambert
357\60106\013
EXHIBITS
3.1 (i) Articles of Incorporation of the Company (incorporated by
reference to Exhibit No. 3.1(i) to PHI's Report on Form 10-Q
for the quarterly period ended October 31, 1994).
(ii) By-laws of the Company (incorporated by reference to Exhibit
No. 3.1(ii) to PHI's Report on Form 10-Q for the quarterly
period ended January 31, 1996).
10.1 Master Helicopter Lease Agreement dated May 29, 1991 between
AT&T Systems Leasing Corporation and PHI (incorporated by
reference to Exhibit No. 10.1 (2) to PHI's Report on Form
10-K dated April 30, 1992).
10.2 Master Helicopter Lease Agreement dated February 14, 1991
between General Electric Capital Corporation and PHI
(incorporated by reference to Exhibit No. 10.1 (1) to PHI's
Report on Form 10-K dated April 30, 1991).
10.3(i)Amended and Restated Loan Agreement originally dated as
of January 31, 1986 Amended and Restated in its entirety
as of July 9, 1993 among Petroleum Helicopters, Inc.,
Whitney National Bank, First National Bank of Commerce,
NationsBank of Texas, N.A. and NationsBank of Texas,
N.A., as agent (incorporated by reference to Exhibit No.
10.3 PHI's Report on Form 10-K dated April 30, 1993).
(ii) First Amendment to Amended and Restated Loan Agreement,
dated as of October 31,1993 (incorporated by reference
to Exhibit No. 10.4 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(iii) Second Amendment to Amended and Restated Loan Agreement,
dated as of April 15, 1994 (incorporated by reference to
Exhibit No. 10.5 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(iv) Third Amendment to Amended and Restated Loan Agreement,
dated as of July 31, 1994 (incorporated by reference to
Exhibit No. 10.6 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(v) Fourth Amendment and Limited Waiver to Amended and
Restated Loan Agreement, dated as of October 25, 1994
(incorporated by reference to Exhibit No. 10.7 to PHI's
Report on Form 10-Q for the quarterly period ended January
31, 1995).
(vi) Fifth Amendment to Amended and Restated Loan Agreement,
dated as of October 31, 1994 (incorporated by reference
to Exhibit No. 10.8 to PHI's Report on Form 10-Q for the
quarterly period ended January 31, 1995).
(vii) Sixth Amendment to Amended and Restated Loan Agreement,
dated as of February 27, 1995.
(viii) Seventh Amendment to Amended and Restated Loan
Agreement, dated as of October 31, 1995.
10.4 Installment promissory note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,122,441.56, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.4 to PHI's Report on Form
10-K dated April 30, 1993).
10.5 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.5 to PHI's Report on Form
10-K dated April 30, 1993).
10.6 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.6 to PHI's Report on Form
10-K dated April 30, 1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan
effective July 1, 1989 (incorporated by reference to
Exhibit No. 10.4 to PHI's Report on Form 10-K dated
April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock
Option and Stock Appreciation Rights Plan adopted by
PHI's Board effective May 1, 1992 and approved by the
shareholders of PHI on September 30, 1992 (incorporated
by reference to Exhibit No. 10.8 to PHI's Report on Form
10-K dated April 30, 1993).
10.9 Form of Stock Option Agreement for the Grant of Non-
Qualified Stock Options Under the Petroleum Helicopters,
Inc. 1992 Non-Qualified Stock Option and Stock
Appreciation Rights Plan dated June 2, 1993 between PHI
and certain of its key employees (incorporated by
reference to Exhibit No. 10.9 to PHI's Report on Form
10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H. Untereker
dated June 15, 1992 (incorporated by reference to
Exhibit No. 10.10 to PHI's Report on Form 10-K dated
April 30, 1993).
10.11 Stock Option Agreement between PHI and John H. Untereker
dated April 12, 1993, but effective as of July 20, 1992
(incorporated by reference to Exhibit No. 10.11 to PHI's
Report on Form 10-K dated April 30, 1993).
10.12 Amended and Restated Petroleum Helicopters, Inc. 1995
Incentive Compensation Plan adopted by PHI's Board
effective July 11, 1995 and approved by the shareholders
of PHI on September 22, 1995.
10.13 Form of Non-Qualified Stock Option Agreement under the
Petroleum Helicopters, Inc. 1995 Incentive Compensation
Plan between PHI and certain of its key employees.
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit No. 21 to PHI's Report on Form 10-K
dated April 30, 1993).
23.1 Consent of KPMG Peat Marwick LLP
<PAGE>
Consent of Independent Auditors
The Board of Directors
Petroleum Helicopters, Inc.:
We consent to incorporation by reference in registration statements No. 33-
51617 on Form S-8 and No. 333-02025 on Form S-8 of Petroleum Helicopters,
Inc. of our report dated June 12, 1996, relating to the consolidated balance
sheets of Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1996,
and 1995, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for each of the years in the three-year period ended
April 30, 1996, which report appears in the April 30, 1996 annual report on
Form 10-K of Petroleum Helicopters, Inc.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
July 22, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<CASH> 1,899
<SECURITIES> 0
<RECEIVABLES> 28,725
<ALLOWANCES> 0
<INVENTORY> 25,947
<CURRENT-ASSETS> 59,633
<PP&E> 212,801
<DEPRECIATION> 116,469
<TOTAL-ASSETS> 161,315
<CURRENT-LIABILITIES> 33,090
<BONDS> 0
0
0
<COMMON> 507
<OTHER-SE> 81,401
<TOTAL-LIABILITY-AND-EQUITY> 161,315
<SALES> 185,865
<TOTAL-REVENUES> 187,329
<CGS> 161,807
<TOTAL-COSTS> 173,678
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,098
<INCOME-PRETAX> 10,553
<INCOME-TAX> 4,087
<INCOME-CONTINUING> 6,466
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,466
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
</TABLE>
AMENDED AND RESTATED
PETROLEUM HELICOPTERS, INC.
1995 INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of the 1995 Incentive Compensation
Plan (the "Plan") of Petroleum Helicopters, Inc. ("PHI") is to
increase shareholder value and to advance the interests of PHI
and its subsidiaries (collectively, the "Company") by furnishing
a variety of economic incentives (the "Incentives") designed to
attract, retain and motivate key employees and officers and to
strengthen the mutuality of interests between such employees and
officers and PHI's shareholders. Incentives may consist of
opportunities to purchase or receive voting and non-voting shares
of common stock, $.10 par value per share, of PHI (the "Common
Stock"), on terms determined under the Plan. As used in the
Plan, the term "subsidiary" means any corporation of which PHI
owns (directly or indirectly) within the meaning of Section
425(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), 50% or more of the total combined voting power of all
classes of stock. Any Incentives granted hereunder prior to
shareholder approval of the Plan by the shareholders of PHI,
shall be granted subject to such approval.
2. Administration.
2.1 Composition. The Plan shall be administered by the
compensation committee of the Board of Directors of PHI (the
"Committee"). The Committee shall consist of not fewer than
two members of the Board of Directors, each of whom shall (a)
qualify as a "disinterested person" under Rule 16b-3 under
the Securities Exchange Act of 1934 (the "1934 Act"), as
currently in effect or any successor rule, and (b) qualify as
"outside directors" under Section 162(m) of the Code.
2.2 Authority. The Committee shall have plenary
authority to award Incentives under the Plan, to interpret
the Plan, to establish any rules or regulations relating to
the Plan that it determines to be appropriate, to enter into
agreements with participants as to the terms of the
Incentives (the "Incentive Agreements") and to make any other
determination that it believes necessary or advisable for the
proper administration of the Plan. Its decisions in matters
relating to the Plan shall be final and conclusive on the
Company and participants. The Committee may delegate its
authority hereunder to the extent provided in Section 3
hereof. The Committee shall not have authority to award
Incentives under the Plan to directors in their capacities as
such.
3. Eligible Participants. Key employees and officers of the
Company (including officers who also serve as directors of the
Company) and persons providing services as consultants or
advisors to the Company shall become eligible to receive
Incentives under the Plan when designated by the Committee. Only
Carroll W. Suggs may be granted Incentives with respect to voting
Common Stock. Employees may be designated individually or by
groups or categories, as the Committee deems appropriate. With
respect to participants not subject to Section 16 of the 1934
Act, the Committee may delegate to appropriate personnel of the
Company its authority to designate participants, to determine the
size and type of Incentives to be received by those participants
and to determine or modify performance objectives for those
participants.
4. Types of Incentives. Incentives may be granted under the
Plan to eligible participants in any of the following forms,
either individually or in combination, (a) incentive stock
options and non-qualified stock options; (b) stock appreciation
rights ("SARs") (c) restricted stock; (d) performance shares; (e)
stock awards; and (f) cash awards.
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as
provided in Section 10.6, a total of 500,000 shares of Common
Stock are authorized to be issued under the Plan, 175,000
shares of which shall be voting Common Stock and 325,000
shares of which shall be non-voting Common Stock. Incentives
with respect to no more than 100,000 shares of Common Stock
may be granted through the Plan to a single participant in
one calendar year. In the event that a stock option, SAR or
performance share granted hereunder expires or is terminated
or cancelled prior to exercise or payment, any shares of
Common Stock that were issuable thereunder may again be
issued under the Plan. In the event that shares of Common
Stock are issued as Incentives under the Plan and thereafter
are forfeited or reacquired by the Company pursuant to rights
reserved upon issuance thereof, such forfeited and reacquired
shares may again be issued under the Plan. If an Incentive
is to be paid in cash by its terms, the Committee need not
make a deduction from the shares of Common Stock issuable
under the Plan with respect thereto. If and to the extent
that an Incentive may be paid in cash or shares of Common
Stock, the total number of shares available for issuance
hereunder shall be debited by the number of shares payable
under such Incentive, provided that upon any payment of all
or part of such Incentive in cash, the total number of shares
available for issuance hereunder shall be credited with the
appropriate number of shares represented by the cash payment,
as determined in the sole discretion of the Committee.
Additional rules for determining the number of shares granted
under the Plan may be made by the Committee, as it deems
necessary or appropriate.
5.2. Type of Common Stock. Common Stock issued under
the Plan may be authorized and unissued shares or issued
shares held as treasury shares.
6. Stock Options. A stock option is a right to purchase
shares of Common Stock from PHI. Stock options granted under
this Plan may be incentive stock options or non-qualified stock
options. Any option that is designated as a non-qualified stock
option shall not be treated as an incentive stock option. Each
stock option granted by the Committee under this Plan shall be
subject to the following terms and conditions:
6.1. Price. The exercise price per share shall be
determined by the Committee, subject to adjustment under
Section 12.6; provided that in no event shall the exercise
price be less than the Fair Market Value of a share of Common
Stock on the date of grant.
6.2. Number. The number of shares of Common Stock
subject to the option shall be determined by the Committee,
subject to Section 5.1 and subject to adjustment as provided
in Section 12.6.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 12.4, the term of each
stock option shall be determined by the Committee. Subject
to Section 12.12, each stock option shall become exercisable
at such time or times during its term as shall be determined
by the Committee, provided, however, that, except as provided
below, no stock option granted to an officer or director of
PHI who is subject to Section 16 of the 1934 Act (an
"Insider") shall be exercisable within the six-month period
immediately following the date of grant. Notwithstanding the
foregoing, the Committee may accelerate the exercisability of
any stock option at any time, in addition to the automatic
acceleration of stock options under Section 12.12.
6.4. Repurchase. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from
a participant by mutual agreement before such option has been
exercised by payment to the participant of the amount per
share by which: (i) the Fair Market Value (as defined in
Section 12.13) of the Common Stock subject to the option on
the business day immediately preceding the date of purchase
exceeds (ii) the exercise price.
6.5. Manner of Exercise. A stock option may be exer-
cised, in whole or in part, by giving written notice to the
Company, specifying the number of shares of Common Stock to
be purchased. The exercise notice shall be accompanied by
the full purchase price for such shares. The option price
shall be payable in United States dollars and may be paid by
(a) cash; (b) uncertified or certified check; (c) unless
otherwise determined by the Committee, by delivery of shares
of Common Stock held by the optionee for at least six months,
which shares shall be valued for this purpose at the Fair
Market Value on the business day immediately preceding the
date such option is exercised; (d) by delivering a properly
executed exercise notice together with irrevocable
instructions to a broker approved by PHI (with a copy to PHI)
to promptly deliver to PHI the amount of sale or loan
proceeds to pay the exercise price; (e) in such other manner
as may be authorized from time to time by the Committee. In
the case of delivery of an uncertified check upon exercise of
a stock option, no shares shall be issued until the check has
been paid in full. Prior to the issuance of shares of Common
Stock upon the exercise of a stock option, a participant
shall have no rights as a shareholder.
6.6. Incentive Stock Options. Notwithstanding anything
in the Plan to the contrary, the following additional
provisions shall apply to the grant of stock options that are
intended to qualify as Incentive Stock Options (as such term
is defined in Section 422 of the Code):
(a) Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events
be consistent with and contain or be deemed to contain
all provisions required in order to qualify the options
as Incentive Stock Options.
(b) All Incentive Stock Options must be granted
within ten years from the date on which this Plan is
adopted by the Board of Directors.
(c) Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the
date of grant.
(d) No Incentive Stock Options shall be granted to
any participant who, at the time such option is granted,
would own (within the meaning of Section 422 of the Code)
stock possessing more than 10% of the total combined
voting power of all classes of stock of the employer
corporation or of its parent or subsidiary corporation.
(e) The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time
such Incentive Stock Option is granted) of the Common
Stock with respect to which Incentive Stock Options are
exercisable for the first time by a participant during
any calendar year (under the Plan or any other plan of
PHI or any of its subsidiaries) shall not exceed
$100,000. To the extent that such limitation is
exceeded, such options shall not be treated, for federal
income tax purposes, as Incentive Stock Options.
6.7 Equity Maintenance. If a participant exercises an
option during the term of his employment with the Company,
and pays the exercise price (or any portion thereof) through
the surrender of shares of outstanding Common Stock owned by
the participant, the Committee may, in its discretion, grant
to such participant an additional option to purchase the
number of shares of Common Stock equal to the shares of
Common Stock so surrendered by such participant. Any such
additional options granted by the Committee shall be
exercisable at the Fair Market Value of the Common Stock
determined as of the business day immediately preceding the
respective dates such additional options may be granted. As
stated above, such additional options may be granted only in
connection with the exercise of options by the participant
during the term of his active employment with the Company.
The grant of such additional options under this Section 6.7
shall be made upon such other terms and conditions as the
Committee may from time to time determine.
7. Restricted Stock
7.1 Grant of Restricted Stock. The Committee may award
shares of restricted stock to such officers and key employees
as the Committee determines pursuant to the terms of Section
3. An award of restricted stock may be subject to the
attainment of specified performance goals or targets,
restrictions on transfer, forfeitability provisions and such
other terms and conditions as the Committee may determine,
subject to the provisions of the Plan. To the extent
restricted stock is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
7.2 The Restricted Period. At the time an award of
restricted stock is made, the Committee shall establish a
period of time during which the transfer of the shares of
restricted stock shall be restricted (the "Restricted
Period"). Each award of restricted stock may have a
different Restricted Period. In addition, any participant
subject to Section 16 of the 1934 Act shall be prohibited
from selling or otherwise transferring shares of restricted
stock for a period of six months from the grant thereof. The
expiration of the Restricted Period shall also occur as
provided under Section 12.4 and under the conditions
described in Section 12.12 hereof.
7.3 Escrow. The participant receiving restricted stock
shall enter into an Incentive Agreement with the Company
setting forth the conditions of the grant. Certificates
representing shares of restricted stock shall be registered
in the name of the participant and deposited with the
Company, together with a stock power endorsed in blank by the
participant. Each such certificate shall bear a legend in
substantially the following form:
The transferability of this certificate and the
shares of Common Stock represented by it are subject
to the terms and conditions (including conditions of
forfeiture) contained in the Petroleum Helicopters,
Inc. 1995 Incentive Compensation Plan (the "Plan"),
and an agreement entered into between the registered
owner and Petroleum Helicopters, Inc. thereunder.
Copies of the Plan and the agreement are on file at
the principal office of the Company.
7.4 Dividends on Restricted Stock. Any and all cash and
stock dividends paid with respect to the shares of restricted
stock shall be subject to any restrictions on transfer,
forfeitability provisions or reinvestment requirements as the
Committee may, in its discretion, prescribe in the Incentive
Agreement.
7.5 Forfeiture. In the event of the forfeiture of any
shares of restricted stock under the terms provided in the
Incentive Agreement (including any additional shares of
restricted stock that may result from the reinvestment of
cash and stock dividends, if so provided in the Incentive
Agreement), such forfeited shares shall be surrendered and
the certificates cancelled. The participants shall have the
same rights and privileges, and be subject to the same
forfeiture provisions, with respect to any additional shares
received pursuant to Section 12.6 due to a recapitalization,
merger or other change in capitalization.
7.6 Expiration of Restricted Period. Upon the
expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided for in Section
7.2 and in the Incentive Agreement or an amendment thereto,
the restrictions applicable to the restricted stock shall
lapse and a stock certificate for the number of shares of
restricted stock with respect to which the restrictions have
lapsed shall be delivered, free of all such restrictions and
legends, except any that may be imposed by law, to the
participant or the participant's estate, as the case may be.
7.7 Rights as a Shareholder. Subject to the terms and
conditions of the Plan and subject to any restrictions on the
receipt of dividends that may be imposed in the Incentive
Agreement, each participant receiving restricted stock shall
have all the rights of a shareholder with respect to shares
of stock during any period in which such shares are subject
to forfeiture and restrictions on transfer, including without
limitation, the right to vote any shares of voting Common
Stock.
8. Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares of Common
Stock, cash or any combination thereof, the amount of which is
determined pursuant to the formula set forth in Section 8.4. A
SAR may be granted (a) with respect to any stock option granted
under the Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as
to all or any portion of the shares of Common Stock subject to
the stock option), or (b) alone, without reference to any related
stock option. Each SAR granted by the Committee under the Plan
shall be subject to the following terms and conditions:
8.1 Number. Each SAR granted to any participant shall
relate to such number of shares of Common Stock as shall be
determined by the Committee, subject to Section 5.1 and
subject to adjustment as provided in Section 12.6. In the
case of a SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains
shall be reduced in the same proportion that the holder of
the option exercises the related stock option.
8.2 Duration and Time for Exercise. Subject to Section
12.12, the term and exercisability of each SAR shall be
determined by the Committee. Unless otherwise provided by
the Committee in the Incentive Agreement, each SAR issued in
connection with a stock option shall become exercisable at
the same time or times, to the same extent and upon the same
conditions as the related stock option. No SAR granted to a
person subject to Section 16 of the 1934 Act may be exercised
during the first six months of its term. Notwithstanding the
foregoing, the Committee may in its discretion accelerate the
exercisability of any SAR at any time in addition to
automatic acceleration of SARs under Section 12.12.
8.3 Exercise. A SAR may be exercised, in whole or in
part, by giving written notice to the Company, specifying the
number of SARs that the holder wishes to exercise. The
Company shall, within 30 days of receipt of notice of
exercise by the Company, deliver to the exercising holder
certificates for the shares of Common Stock or cash or both,
as determined by the Committee, to which the holder is
entitled pursuant to Section 8.4.
8.4 Payment. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock, the number of
shares of Common Stock that shall be issuable upon the
exercise of an SAR shall be determined by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the dollar amount of
the appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair
Market Value of the shares of Common Stock subject to the
SAR on the Exercise Date exceeds (1) in the case of a SAR
related to a stock option, the purchase price of the
shares of Common Stock under the stock option or (2) in
the case of a SAR granted alone, without reference to a
related stock option, an amount equal to the Fair Market
Value of a share of Common Stock on the date of grant,
which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 12.6); by
(b) the Fair Market Value of a share of Common Stock
on the Exercise Date.
In lieu of issuing shares of Common Stock upon the
exercise of a SAR, the Committee may elect to pay the holder
of the SAR cash equal to the Fair Market Value on the
Exercise Date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock
shall be issued upon the exercise of a SAR; instead, the
holder of a SAR shall be entitled to receive a cash
adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the Exercise Date or to
purchase the portion necessary to make a whole share at its
Fair Market Value on the Exercise Date.
9. Performance Shares. A performance share consists of an
award that may be paid in shares of Common Stock or in cash, as
described below. The award of performance shares shall be
subject to such terms and conditions as the Committee deems
appropriate.
9.1 Performance Objectives. Each performance share
will be subject to performance objectives for PHI or one of
its subsidiaries, divisions or departments to be achieved by
the end of a specified period. The number of performance
shares awarded shall be determined by the Committee and may
be subject to such terms and conditions as the Committee
shall determine. If the performance objectives are achieved,
each participant will be paid (a) a number of shares of
Common Stock equal to the number of performance shares
initially granted to that participant; (b) a cash payment
equal to the Fair Market Value of such number of shares of
Common Stock on the date the performance objectives are met
or such other date as may be provided by the Committee or (c)
a combination of shares of Common Stock and cash, as may be
provided by the Committee. If such objectives are not met,
each award of performance shares may provide for lesser
payments in accordance with a pre-established formula set
forth in the Incentive Agreement. To the extent a
performance share is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
9.2 Not a Shareholder. The award of performance shares
to a participant shall not create any rights in such partic-
ipant as a shareholder of the Company, until the payment of
shares of Common Stock with respect to an award, at which
time such stock shall be considered issued and outstanding.
9.3 Dividend Equivalent Payments. A performance share
award may be granted by the Committee in conjunction with
dividend equivalent payment rights or other such rights.
Dividend equivalent payments may be made to the participant
at the time of the payment of the dividend or issuance of the
other right or at the end of the specified performance period
or may be deemed to be invested in additional performance
shares at the Fair Market Value of a share of Common Stock on
the date of payment of the dividend or issuance of the right.
10. Stock Awards. A stock award consists of the transfer by
the Company to a participant of shares of Common Stock,
without other payment therefore, as additional compensation
for services previously provided to the Company. The number
of shares to be transferred by the Company to a participant
pursuant to a stock award shall be determined by the
Committee.
11. Cash Awards. A cash award consists of a monetary payment
made by the Company to a participant as additional
compensation for his services to the Company. Payment of a
cash award may relate to the tax liability of a participant
in connection with the grant, exercise, or payment of an
Incentive or may depend on achievement of performance
objectives by the Company or by individuals. The amount of
any monetary payment constituting a cash award shall be
determined by the Committee in its sole discretion. Cash
awards may be subject to other terms and conditions, which
may vary from time to time among participants, as the
Committee determines to be appropriate.
12. General.
12.1. Duration. Subject to Section 12.11, the Plan
shall remain in effect until all Incentives granted under the
Plan have either been satisfied by the issuance of shares of
Common Stock or the payment of cash or been terminated under
the terms of the Plan and all restrictions imposed on shares
of Common Stock in connection with their issuance under the
Plan have lapsed.
12.2 Transferability of Incentives. Options, SARs and
performance shares granted under the Plan shall not be
transferable except: (a) by will; (b) by the laws of descent
and distribution; (c) to family members, to a trust for the
benefit of family members or to charitable institutions, if
permitted by the Committee and provided in the Incentive
Agreement, after a determination that the ability to transfer
the Incentive will not result in the grant of the Incentive
being taxable and, with respect to such Incentives granted to
Insiders, if permitted by Rule 16b-3 under the 1934 Act; or
(d) pursuant to a domestic relations order, as defined by the
Code. Options or SARs may be exercised during the lifetime
of a participant only by the participant or by the
participant's guardian or legal representative. Any
attempted assignment, transfer, pledge, hypothecation or
other disposition of an Incentive, or levy of attachment or
similar process upon the Incentive not specifically permitted
herein, shall be null and void and without effect.
12.3. Non-transferability of Common Stock. Any shares
of Common Stock awarded to an Insider as restricted stock, a
stock award or in payment of a performance share award must
be held for a period of six months from the date of grant,
unless transfer would not result in the loss of the exemption
under Rule 16b-3 under the 1934 Act for the grant of the
Incentive.
12.4. Effect of Termination of Employment or Death. In
the event that a participant ceases to be an employee of the
Company for any reason, including death, disability, early
retirement or normal retirement, any Incentives may be
exercised, shall vest or shall expire at such times as may be
determined by the Committee in the Incentive Agreement. The
Committee has complete authority to modify the treatment of
an Incentive in the event of termination of employment of a
participant by means of an amendment to the Incentive
Agreement. Consent of the participant to the modification is
required only if the modification impairs the rights
previously provided to the participant in the Incentive
Agreement.
12.5. Additional Condition. Anything in this Plan to
the contrary notwithstanding: (a) the Company may, if it
shall determine it necessary or desirable for any reason, at
the time of award of any Incentive or the issuance of any
shares of Common Stock pursuant to any Incentive, require the
recipient of the Incentive, as a condition to the receipt
thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written
representation of present intention to acquire the Incentive
or the shares of Common Stock issued pursuant thereto for his
own account for investment and not for distribution; and (b)
if at any time the Company further determines, in its sole
discretion, that the listing, registration or qualification
(or any updating of any such document) of any Incentive or
the shares of Common Stock issuable pursuant thereto is
necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the award
of any Incentive, the issuance of shares of Common Stock
pursuant thereto, or the removal of any restrictions imposed
on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restric-
tions shall not be removed, as the case may be, in whole or
in part, unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free
of any conditions not acceptable to the Company.
12.6. Adjustment. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common
Stock then subject to the Plan, including shares subject to
outstanding Incentives, shall be adjusted in proportion to
the change in outstanding shares of Common Stock. In the
event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the
shares of Common Stock issuable pursuant to any Incentive
shall be adjusted as and to the extent appropriate, in the
reasonable discretion of the Committee, to provide partici-
pants with the same relative rights before and after such
adjustment.
12.7. Incentive Agreements. The terms of each Incentive
shall be stated in an agreement approved by the Committee.
The Committee may also determine to enter into agreements
with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as
Incentive Stock Options or as non-qualified stock options.
12.8. Withholding. The Company shall have the right to
withhold from any payments made under the Plan or to collect
as a condition of payment, any taxes required by law to be
withheld.
(a) The Company shall have the right to withhold
from any payments made under the Plan or to collect as a
condition of payment, any taxes required by law to be
withheld. At any time that a participant is required to
pay to the Company an amount required to be withheld
under applicable income tax laws in connection with the
issuance of Common Stock, the lapse of restrictions on
Common Stock or the exercise of an option, the
participant may, subject to the approval of the
Committee, satisfy this obligation in whole or in part by
electing (the "Election") to have the Company withhold
shares of Common Stock having a value equal to the amount
required to be withheld. The value of the shares to be
withheld shall be based on the Fair Market Value of the
Common Stock on the date that the amount of tax to be
withheld shall be determined ("Tax Date").
(b) Each Election must be made prior to the Tax
Date. The Committee may disapprove of any Election, may
suspend or terminate the right to make Elections, or may
provide with respect to any Incentive that the right to
make Elections shall not apply to such Incentive. If a
participant makes an election under Section 83(b) of the
Internal Revenue Code with respect to shares of
restricted stock, an Election is not permitted to be
made.
(c) If a participant is subject to Section 16 under
the 1934 Act, then the exemption provided by Rule 16b-
3(e) under the 1934 Act for the stock withholding
transaction will only be available if the Election meets
the following additional requirements:
(1) No Election shall be effective for a Tax
Date that occurs within six months of the grant of
the award.
(2) The Election must be made either (i) six
months prior to the Tax Date or (ii) during a period
beginning on the third business day following the
date of release for publication of the Company's
quarterly or annual summary statements of earnings
and ending on the twelfth business day following such
date (a "window period"). If the Election is made
under (2)(ii) hereof and relates to the exercise of
an option, the exercise must also occur during a
window period.
(3) An Election is irrevocable except upon six
months' advance written notice to the Company.
12.9. No Continued Employment. No participant under the
Plan shall have any right, because of his or her par-
ticipation, to continue in the employ of the Company for any
period of time or to any right to continue his or her present
or any other rate of compensation.
12.10. Deferral Permitted. Payment of cash or distribu-
tion of any shares of Common Stock to which a participant is
entitled under any Incentive shall be made as provided in the
Incentive Agreement. Payment may be deferred at the option
of the participant if provided in the Incentive Agreement.
12.11. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time. In addition, no amendment
or discontinuance shall, subject to adjustments permitted
under Section 12.6, change or impair, without the consent of
the recipient, an Incentive previously granted, except that
the Company retains the right to (a) convert any outstanding
Incentive Stock Option to a non-qualified stock option, (b)
require the forfeiture of an Incentive if a participant's
employment is terminated for cause, and (c) exercise all
rights under Section 12.12.
12.12 Change of Control. Notwithstanding anything to
the contrary in the Plan or any related Incentive Agreement,
if (i) PHI shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a
subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company), (ii) the Company sells, leases or
exchanges all or substantially all of its assets to any other
person or entity (other than a wholly-owned subsidiary of the
Company), (iii) PHI is to be dissolved or liquidated, (iv)
any person or entity, including a "group" as contemplated by
section 13(d)(3) of the 1934 Act, other than an employee
benefit plan of the Company or a related trust, acquires or
gains ownership or control (including, without limitation,
power to vote) of more than 30% of the outstanding shares of
PHI's voting stock, or (v) as a result of or in connection
with a contested election of directors, the persons who were
directors of PHI before such election shall cease to
constitute a majority of the Board of Directors of PHI (each
such event is referred to herein as a "Corporate Change"),
then upon the approval by the Board of Directors of PHI of
any Corporate Change of the type described in clause (i) to
(iii) or upon a Corporate Change described in clause (iv) or
(v), all outstanding options and SARs shall automatically
become fully exercisable, all restrictions or limitations on
any Incentives shall lapse and all performance criteria and
other conditions relating to the payment of Incentives shall
be deemed to be achieved or waived by the Company, without
the necessity of any action by any person. In addition, no
later than (a) 30 days after the approval by the Board of
Directors of PHI of any Corporate Change of the type
described in clauses (i) to (iii) or (b) 30 days after a
Corporate Change of the type described in clause (iv) or (v),
the Committee, acting in its sole discretion without the
consent or approval of any participant (and notwithstanding
any removal or attempted removal of some or all of the
members thereof as directors or committee members), may act
to effect one or more of the following alternatives, which
may vary among individual participants and which may vary
among Incentives held by any individual participant: (1)
require that all outstanding options and/or SARs be exercised
on or before a specified date (before or after such Corporate
Change) fixed by the Committee, after which specified date
all unexercised options and SARs and all rights of
participants thereunder shall terminate, (2) provide for
mandatory conversion of some or all of the outstanding
options and SARs held by some or all participants as of a
date, before or after such Corporate Change, specified by the
Committee, in which event such options and SARs shall be
deemed automatically cancelled and the Company shall pay, or
cause to be paid, to each such participant an amount of cash
per share equal to the excess, if any, of the Change of
Control Value of the shares subject to such option or SAR, as
defined and calculated below, over the exercise price(s) of
such options or SARs, or, in lieu of such cash payment, the
issuance of Common Stock having a Fair Market Value equal to
such excess, (3) make such equitable adjustments to
Incentives then outstanding as the Committee deems
appropriate to reflect such Corporate Change (provided,
however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Incentives then
outstanding) or (4) provide that thereafter upon any exercise
of an option or SAR theretofore granted the participant shall
be entitled to purchase under such option or SAR, in lieu of
the number of shares of Common Stock then covered by such
option or SAR, the number and class of shares of stock or
other securities or property (including, without limitation,
cash) to which the participant would have been entitled
pursuant to the terms of the agreement providing for the
merger, consolidation, asset sale, dissolution or other
Corporate Change of the type described in clause (i) to (iii)
above, if, immediately prior to such Corporate Change, the
participant had been the holder of record of the number of
shares of Common Stock then covered by such options or SARs.
For the purposes of clause (2) above, the "Change of Control
Value" shall equal the amount determined by whichever of the
following items is applicable: (i) the per share price
offered to shareholders of PHI in any such merger,
consolidation or other reorganization, determined as of the
date of the definitive agreement providing for such
transaction, (ii) the price per share offered to shareholders
of PHI in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) in all other events,
the Fair Market Value per share of Common Stock into which
such options or SARs being converted are exercisable, as
determined by the Committee as of the date determined by the
Committee to be the date of conversion of such options or
SARs. In the event that the consideration offered to
shareholders of PHI in any transaction described herein
consists of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
12.13. Definition of Fair Market Value. Whenever "Fair
Market Value" of Common Stock shall be determined for pur-
poses of this Plan, it shall be determined by the Committee
in good faith based on a review and evaluation of recent
trading activity of the Common Stock.
12.14. Compliance with Section 16. It is the intent of
the Company that the Plan and Incentives hereunder satisfy
and be interpreted in a manner, that, in the case of
participants who are or may be Insiders, satisfies the
applicable requirements of Rule 16b-3, so that such persons
will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the 1934 Act and will not
be subjected to avoidable liability thereunder. If any
provision of the Plan or of any Incentives would otherwise
frustrate or conflict with the intent expressed in this
Section 12.14, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with
such intent, the provision shall be deemed void as applicable
to Insiders.
12.15. Loans. In order to assist a participant to
satisfy his tax liabilities arising in connection with an
Incentive granted under the Plan, the Committee may
authorize, subject to the provisions of Regulation G of the
Board of Governors of the Federal Reserve System, at either
the time of the grant of the Incentive, at the time of the
acquisition of Common Stock pursuant to the Incentive, or at
the time of the lapse of restrictions on shares of restricted
stock granted under the Plan, the extension of a loan to the
participant by the Company. The terms of any loans,
including the interest rate, collateral and terms of
repayment, will be subject to the discretion of the
Committee. The maximum credit available hereunder shall be
equal to the maximum tax liability that may be incurred in
connection with the Incentive.
Amendment and Restatement Adopted by the Board of Directors:
July 11, 1995
Approved by the Shareholders: September 22, 1995
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE
PETROLEUM HELICOPTERS, INC.
1995 INCENTIVE COMPENSATION PLAN
THIS AGREEMENT is entered into as of May 31, 1995, by and
between Petroleum Helicopters, Inc., a Louisiana corporation
("PHI"), and Carroll W. Suggs ("Optionee").
WHEREAS Optionee is a key employee of PHI or one of its
subsidiaries (collectively, the "Company") and PHI considers it
desirable and in its best interest that Optionee be given an
inducement to acquire a proprietary interest in PHI and an
incentive to advance the interests of PHI by possessing an option
to purchase shares of the voting common stock, $.10 par value per
share, of PHI (the "Common Stock") under the Petroleum
Helicopters, Inc. 1995 Incentive Compensation Plan (the "Plan"),
which was adopted by the Board of Directors of PHI on May 31,
1995, and will be submitted to the shareholders for approval at
PHI's next annual meeting of shareholders;
NOW, THEREFORE, in consideration of the premises, it is
agreed as follows:
1.
Grant of Option
1 PHI hereby grants to Optionee effective May 31, 1995
(the "Date of Grant") the right, privilege and option to purchase
23,200 shares of Common Stock (the "Option") at an exercise
prices of $9.75 per share (the "Exercise Price"). The Option
shall vest, become exercisable and expire as provided in Sections
2 and 3 below.
2 The Option is a non-qualified stock option and shall
not be treated as an incentive stock option under Section 422 of
the Internal Revenue Code of 1986, as amended.
2.
Vesting of Option
1 Effective July 31, 1996, the Compensation Committee of
the Board of Directors of PHI (the "Committee") shall make a
determination as to the portion of the Option that is vested as
follows:
(a) Company Performance Goals
(1) If the Company's consolidated earnings before
income taxes for the fiscal year ending April 30, 1996, as
adjusted by the Committee for extraordinary items ("Actual
Operating Income"), equals the consolidated earnings before
income taxes reflected in the Company's annual budget for
the fiscal year ending April 30, 1996 ("Budgeted Operating
Income"), the Option shall vest with respect to 16,000 of
the shares covered thereby.
(2) If Actual Operating Income exceeds Budgeted
Operating Income, the Option shall vest with respect to an
additional 160 shares for each 1% by which Actual Operating
Income exceeds Budgeted Operating Income, up to a maximum of
3,200 additional shares.
(3) If Actual Operating Income is less than
Budgeted Operating Income, but is between 90% and 100% of
Budgeted Operating Income, then the Option shall vest with
respect to 16,000 shares, less 320 shares for each 1% or
fraction of 1% by which Actual Operating Income is less than
Budgeted Operating Income.
(4) If Actual Operating Income is less than 90%
of Budgeted Operating Income, no portion of the Option shall
vest based upon Company performance.
(b) Individual Performance
The Option may vest with respect to up to an additional
4,000 shares in the discretion of the Compensation Committee
based on an evaluation of the Optionee's performance for the
year.
2 All unvested Options or portions thereof shall be
forfeited.
3.
Time of Exercise
1 Subject to the provisions of the Plan and Section 2
hereof, the Optionee shall be entitled to exercise the vested
portion of the Option with respect to 50% of the shares beginning
July 31, 1996 and with respect to the remaining 50% of the shares
beginning July 31, 1997.
2 The Option shall expire and may not be exercised later
than ten years following the Date of Grant.
3 Notwithstanding the foregoing, the Option shall become
accelerated and immediately exercisable to the extent vested if
(a.) Optionee dies while he is employed by the Company (b.)
Optionee becomes disabled within the meaning of Section 22(e)(3)
of the Code ("Disability") while he is employed by the Company,
(c.) Optionee retires from employment with the Company on or
after attaining the age of 65 or is granted early retirement by a
vote of the Board of Directors ("Retirement") or (d.) pursuant to
the provisions of the Plan.
4.
Conditions for Exercise of Option
During Optionee's lifetime, the Option may be exercised only
by him or by his guardian or legal representative. The Option
must be exercised while Optionee is employed by the Company, or,
to the extent exercisable at the time of termination of
employment, within 190 days of the date on which he ceases to be
an employee, except that (a.) if he ceases to be an employee
because of Retirement or Disability, the Option may be exercised
within three years from the date on which he ceases to be an
employee, (b.) if an Optionee's employment is terminated for
cause, the unexercised portion of the Option is immediately
terminated, and (c.) in the event of Optionee's death, the Option
may be exercised by his estate, or by the person to whom such
right devolves from him by reason of his death within two years
after the date of his death; provided, however, that no Option
may be exercised later than 10 years after the Date of Grant.
5.
Additional Conditions
Anything in this Agreement to the contrary notwithstanding,
if at any time PHI further determines, in its sole discretion,
that the listing, registration or qualification (or any updating
of any such document) of the shares of Common Stock issuable
pursuant to the exercise of an Option is necessary on any
securities exchange or under any federal or state securities or
blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or
in connection with the issuance of shares of Common Stock
pursuant thereto, or the removal of any restrictions imposed on
such shares, such shares of Common Stock shall not be issued, in
whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to PHI.
6.
No Contract of Employment Intended
Nothing in this Agreement shall confer upon Optionee any
right to continue in the employ of the Company or to interfere in
any way with the right of PHI to terminate Optionee's employment
relationship with the Company at any time.
7.
Taxes
The Company may make such provisions as it may deem
appropriate for the withholding of any federal, state and local
taxes that it determines are required to be withheld on the
exercise of the Option.
8.
Binding Effect
This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators and successors.
9.
Inconsistent Provisions
The Option granted hereby is subject to the provisions of
the Plan. If any provision of this Agreement conflicts with a
provision of the Plan, the Plan provision shall control.
10.
Adjustments to Options
Appropriate adjustments shall be made to the number and
class of shares of Common Stock subject to the Option and to the
exercise price in certain situations described in Section 12.6 of
the Plan.
11.
Termination of Option
The Committee, in its sole discretion, may terminate the
Option. However, no termination may adversely affect the rights
of Optionee to the extent that the Option is currently vested on
the date of such termination.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
PETROLEUM HELICOPTERS, INC.
By: /s/ Leonard M. Horner
______________________________
Leonard M. Horner, Chairman,
Compensation Committee
/s/ Carroll W. Suggs
______________________________
Carroll W. Suggs
Optionee
SIXTH AMENDMENT TO AMENDED AND
RESTATED LOAN AGREEMENT
This SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN
AGREEMENT (this "Amendment") is being entered into as of the 27th
day of February, 1995, by and among PETROLEUM HELICOPTERS, INC.,
a Louisiana corporation (successor by merger to Petroleum
Helicopters, Inc., a Delaware corporation) (the "Company"),
NATIONSBANK OF TEXAS, N.A., a national banking association
("NationsBank"), WHITNEY NATIONAL BANK, a national banking
association ("Whitney"), FIRST NATIONAL BANK OF COMMERCE, a
national banking association ("FNBC", and together with
NationsBank and Whitney, being hereinafter referred to
collectively as the "Banks"), and NationsBank as agent for the
Banks (in such capacity, the "Agent").
PRELIMINARY STATEMENTS
(1) The Company, the Banks, and the Agent have entered
into that certain Amended and Restated Loan Agreement, originally
made as of January 31, 1986, as amended and restated in its
entirety as of July 9, 1993, and as further amended by that
certain First Amendment to Amended and Restated Loan Agreement,
dated as of October 31, 1993, that certain Second Amendment to
Amended and Restated Loan Agreement, dated as of April 15, 1994,
that certain Third Amendment to Amended and Restated Loan
Agreement, dated as of July 31, 1994, that certain Fourth
Amendment and Limited Waiver to Amended and Restated Loan
Agreement, dated as of October 25, 1994, and that certain Fifth
Amendment to Amended and Restated Loan Agreement, dated as of
October 31, 1994 (such Loan Agreement, as amended and restated as
aforesaid and as the same may be further amended from time to
time, being hereinafter referred to as the "Loan Agreement").
Terms used herein, unless otherwise defined herein, shall have
the meanings set forth in the Loan Agreement.
(2) The Company, the Banks, and the Agent now wish to
amend the Loan Agreement to provide, among other things, that the
acquisition by the Company of certain of its stock be permitted,
that certain transfers of Aviation Units that comprise portions
of the Aircraft in exchange for other Aviation Units be
permitted, that the acquisition by the Company of 49% of the
Capital Stock of Irish Helicopters, Limited be permitted, and
that a change in the address of the chief executive office of the
Company be reflected, all subject to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the
Banks, and the Agent hereby agree as follows:
1. Amendment of Section 1.01 of the Loan Agreement -
"Louisiana UCC-1 Financing Statement". Section 1.01 of the Loan
Agreement is hereby amended by deletiong the definition of
"Louisiana UCC-1 Financing Stattmetement" in its entirety and
replacing said definition with the following definition:
"Louisiana UCC-1 Financing Statement""" shall
mean, collectively, (a) that certain form UCC-1 financing
statement, filed for recordation as of October 3, 1990,
(Original File No. 26-163010) executed by the Company, as
Debtor, an d by the Agent, as Secured Party, for the equal
and ratable benefit of the Banks and recorded with the Clerk
of Court of Jefferson Parish, Louisiana, together with any
and all supplements, modifications or amendments tthereto or
restatements thereof, including, without
limiationlimitation, any UCC-3 Financing Statement Change
Forms executed and filed in connection wtherewith, and; and
(b) that certain form UCC-1 financing statement , filed for
recordation as of October 28, 1994, (Original File No. 36-
88428) executed by the Company, as Debtor, and by the Agent,
as Secured Party, for the equal and ratable benefit of the
Banks and recrorded with the Clerk of Court of Orleans
Parish , Louisiana, together with any and all supplements,
modifications or amendments thereto or restatements thereof,
including, woithout limitation, any UCC-3 Financing
Statement Change Forms executed and filed in connection
therewith.
2. Additional Amendment of Section 1.01 of the Loan
Agreement - "Security Documents". Section 1.01 of the Loan
Agreement is hereby further amended by deleting from the
definition of "Security Documents" the word "and" immediately
preceding the phrase "the Financing Statement (Change Form- -
Amendment)", replacing said word with a comma, and adding the
following phrase immediately preceding the period at the end of
tsaid definition:
"and the Texas UCC-1 Financing Statement"
n . 3. Additional Amendment of Section 1.01 of the Loan
Agreement - New Definitions. Section 1.01 of the Loan Agreement
is amended by adding the following definitions thereto:
"Stock Repurchase" shall have the meaning specified in
Section 8.02(c) hereof.
"Texas UCC-1 financFinancing Statement" shall mean
that certain form UCC-1 financing statement, filed for
recordation as of October 28, 1994, (Original File
No. 94-211465) executed by the Company, as Debtor, and
by the Agent, as Secured Party, for the equal and
ratable benefit of the bBanks and recorded with the
Secretary of State of Texas, together with any and all
supplements, modifications or amendments thereto or
resetatements thereof, including, without
limiationlimitation, any UCC-23 fFinancing Statement
Change Forms executed and filed in connection
therewith;
4. Amendment of Section 5.14 of the Loan Agreement.
Section 5.14 of the Loan Agreement is hereby amended by deleting
said Section in its entirety and replacing said Section with the
following section:
5.14 Registered Office of Company, Etc. The
registered office of the Company (as shown on the
records of the Secretary of State of the State of
Louisiana) and its chief executive office is, from the
date hereof until August 18, 9951995, 5728 Jefferson
Highway, Harahan, Louisiana 70183, and, on and after
August 19, 1995, is 2121 Airline Highway, Suite 400,
Metairie, Louisiana 70001-5979.
5. Amendment of Section 8.01 of the Loan Agreement.
Section 8.01 of the Loan Agreement is hereby amended by deleting
clauses (c) and (d) from said Section in their entirety and
replacing said clauses with the following clauses:
(c) $70,000,000 at the end of the fiscal quarter
of the Company ending April 30, 1994, and (d) at the
end of each fiscal quarter thereafter, an amount equal
to the greater of (i) $70,000,000, or (ii) the sum of
$70,000,000 plus 50% of Consolidated Net Income for the
period commencing on May 1, 1994 and terminating at the
end of the fiscal quarter most recently ended.
6. Amendment of Section 8.02 of the Loan Agreement.
Section 8.02 of the Loan Agreement is hereby amended by deleting
the word "and" between clauses (a) and (b) of the proviso
thereto, and adding the following clause (c) immediately
preceding the period at the end of said clause (b):
", and (c) on or before March 5, 1995, purchase up to
413,308 shares of the voting stock of the Company from
Offshore Navigation, Inc. at a purchase price not to
exceed $10.50 per share (the "Stock Repurchase")
7. Amendment of Section 8.07 of Loan Agreement.
Section 8.07 of the Loan Agreement is hereby amended by adding,
immediately after the phrase "one or more joint ventures" in
clause (i) of said Section, the phrase ", other than that
described in clause (iii) of this Section 8.07,". Section 8.07
of the Loan Agreement is hereby further amended by deleting the
word "or" immediately preceding clause (ii) of said Section, and
adding the following clause (iii) immediately preceding the
period at the end of said Section:
, or (iii) the investment by the Company in up to 49%
of the capital stock (or comparable equity securities)
of Irish Helicopters, Limited, a corporation organized
under the laws of the Republic of Ireland, the amount
of such investment not to exceed $4,000,000.
8. Amendment of Section 8.14 of the Loan Agreement.
Section 8.14 of the Loan Agreement is hereby amended by adding
the phrase ", or the Stock Repurchase" immediately preceding the
period at the end of said Section.
9. Additional Amendment of the Loan Agreement -
Addition of Section 9.06. The Loan Agreement is hereby further
amended by adding thereto the following Section:
9.06 Aircraft Exchange Transactions.
(a) If the Company determines that it is in the
best interest of the Company to transfer ownership of
one or more Aviation Units that comprise a portion of
the Aircraft in exchange for one or more other Aviation
Units (whether or not the sale price of the Aviation
Unit to be transferred by the Company includes cash in
addition to the Aviation Unit to be received by the
Company in exchange therefor), then upon the delivery
of an Officers' Certificate stating the United States
registration number of the Aviation Unit to be
transferred and the date (which shall not be less than
14 nor more than 90 days from the date of such
Officers' Certificate) that the Company intends to
consummate such transaction, the Company may request
that the Agent, on behalf of the Banks, release the
Aircraft to be transferred from the Security Interest
and the Agent, on behalf of the Banks, within a
reasonable time after such request and in any event on
or before the date on which the Company consummates
such transaction, shall execute all documents
(including all appropriate termination statements and
releases) required to effect such release, provided
that (i) the Company shall provide the Aviation Unit to
be received by it for inclusion in the Security
Interest pursuant to Subsection 9.06(b), and the sum of
the Appraised Value of said Aviation Unit, as reflected
on a certificate of an Independent Appraiser, in form
and substance acceptable to the Agent, plus the amount
of any cash to be received by the Company as additional
consideration for the Aviation Unit being transferred,
shall be greater than or equal to the Appraised Value,
as reflected on a certificate of an Independent
Appraiser, in form and substance acceptable to the
Agent, of the Aviation Unit to be released, (ii) the
Company shall pay to the Agent for the ratable benefit
of the Banks, to be applied in the same manner as
proceeds of a sale under Section 9.03(c)(i), all cash
proceeds, if any, from such sale, upon the Company's
receipt thereof, and (iii) no Default or Event of
Default has occurred and is continuing or would result
from the release of the Aircraft to be transferred by
the Company (except, that, notwithstanding any
provisions of this Agreement to the contrary, the
Company shall not be required to comply with
Subsection 8.16(b) during the period commencing on the
date the Aircraft to be transferred is released and
ending on the date that the requirements set forth in
Subsection 9.06(b) are satisfied), and the Company
shall have delivered to the Agent an Officers'
Certificate to such effect in the form of Exhibit H to
this Agreement.
(b) For each Aviation Unit that the Company
desires to include in the Security Interest as a
substitute for an Aviation Unit to be released pursuant
to Subsection 9.06(a), the Company shall, upon its
acquisition thereof, grant a first priority security
interest in such Aviation Unit to the Banks to secure
the Company's obligations hereunder and under any other
documents executed in connection herewith or
contemplated hereby, whereupon such Aviation Unit shall
constitute a portion of the Collateral subject to the
Security Interest. Without limitation on the
foregoing, within 60 days after the earlier of the
Company's acquiring the Aviation Unit to be subjected
to the Security Interest or the Agent's release of the
Aircraft pursuant to Subsection 9.06(a), the Company
shall (i) file or cause to be filed a proper bill of
sale or bills of sale covering said Aviation Unit (on
FAA Form 8050-2, "Aircraft Bill of Sale", or on any
other appropriate form) in the Aircraft Registry and in
any other public office necessary for full compliance
by the Company with the terms hereof; (ii) cause said
Aviation Unit to be free and clear of all Liens (other
than Permitted Liens), make the appropriate filings,
registrations and recordings (including the filing of
FAA Form 8050-41 and any appropriate termination
statements or releases) necessary to release any
existing Liens of record and otherwise cause said
Aviation Unit to be in full compliance with all the
terms and provisions of this Agreement with the same
effect as if the same were a portion of the original
Aviation Unit described in this Agreement;
(iii) execute and deliver any registration, recordation
or filing documents and any other appropriate security
documentation as the Agent or any Bank through the
Agent may request for the purpose of describing said
Aviation Unit (including all aircraft engines,
airframes, propellers, rotors, appliances, instruments,
mechanisms, equipment (including communications
equipment), parts, apparatus, appurtenances and
accessories) in reasonable detail, and expressly and
specifically subjecting the same to the Security
Interest; (iv) deliver or cause to be delivered to the
Agent and each Bank an opinion of counsel (dated the
date of the filing for recordation in the Aircraft
Registry of the security documentation referred to in
clause (iii) above) to the effect that the Company has
good and marketable title to said Aviation Unit free of
all Liens (other than Permitted Liens) and that said
Aviation Unit has been duly subjected to the Security
Interest and constitutes a portion of the Collateral;
and (v) deliver to the Agent and each Bank an Officers'
Certificate certifying that the Company is in full
compliance with all provisions of this Agreement with
respect to the same.
(c) The Agent shall be absolutely entitled to
rely on the Officers' Certificates, certificates of
Independent Appraisers and opinions of counsel referred
to in Subsections 9.06(a) and (b) for the veracity of
each of the statements made therein absent actual
knowledge to the contrary on the part of the officer of
the Agent executing the documents relating to such
release or addition. The Agent shall not be required
to investigate or verify any statement made in such
Officers' Certificates, certificates of Independent
Appraisers and opinions of counsel and any
investigation that the Agent shall elect to undertake
shall not affect its ability to rely on such Officers'
Certificates, Certificates of Independent Appraisers
and opinions of counsel.
(d) Each of the Banks hereby authorizes the
Agent, upon the delivery of the Officers' Certificate,
certificates of Independent Appraisers and opinion of
counsel required by Subsections 9.06(a) and (b), to
execute and deliver (and, where appropriate, as
determined by the Agent in its sole and independent
discretion, to authorize others to execute and deliver
on its behalf) on behalf of the Banks, all documents
required to effect the release of the Aviation Unit to
be sold and the addition of one or more substitute
Aviation Unit received by the Company in exchange
therefor to the Security Interest.
(e) At no one time shall there be more than three
(3) Aircraft that are the subject of releases from the
Security Interest unless all requirements set forth in
Subsections 9.06(a) and 9.06(b) with respect thereto
and with respect to the Aviation Units to be subjected
to the Security Interest in place thereof have been
satisfied.
10. Additional Amendment of the Loan Agreement -
Addition of Exhibit H. The Loan Agreement is hereby further
amended by adding Exhibit H thereto in the form of Exhibit A to
this Amendment.
11. Amendment odf Financing Statements: The Company,
the Banks and the Agent further agree that (a) the various
financing statements evidencing the Security Interest shall be
amended so that they reflect the change in the address of the
Company's chief executive office, and (b) Exhibit "A" to each of
the Louisiana UCC-1 Financing Statements, and the UCC-1 Financing
Statement the Texas UCC-1 Financing Statement, and the UCC-1
Financing Statement shall be amended as set forth in Exhibit B
hereto in order to more accurately reflect the agreement of the
Company, the Banks and the Agent as to the scope of the Security
Interest in parts, products and proceeds of, and general
intangibles relating to, aircraft.
12. Company's Representations and Warranties. In
order to induce the Agent and the Banks to enter into this
Amendment, the Company hereby represents that:
(a) after giving effect to the amendments
contemplated herein, the representations and warranties
contained in the Loan Agreement, the Notes and the
Security Documents (collectively, the "Loan Documents")
are true and correct on and as of the date hereof as
though made on and as of such date, except to the
extent such representations and warranties specifically
relate to an earlier date, in which case they were true
and correct as of such date;
(b) upon execution of this Amendment, the Company
will not be in default in the due performance of any
covenant on its part in the Loan Documents;
(c) no Default or Event of Default has occurred
and is continuing or is imminent;
(d) the Company has all requisite power and
authority to enter into this Amendment and any and all
documents effecting the Stock Repurchase (the "Stock
Repurchase Documents") and to carry out the
transactions contemplated by, and to perform its
obligations under, the Loan Agreement, as modified by
this Amendment (the "Modified Agreement"), and the
Stock Repurchase Documents; and
(e) the execution and delivery of this Amendment
and the Stock Repurchase Documents and the performance
of the Modified Agreement and the Stock Repurchase
Documents have been duly authorized by all necessary
corporate actions on the part of the Company.
13. Conditions to Effectiveness. This Amendment will
be effective, as of the date first above written, upon (i) the
Company's delivery to the Agent, for the account of the Banks, of
the following items:
(a) a counterpart of this Amendment executed by
the Company;
(b) opinions of counsel to the Company in form
and substance acceptable to the Banks; and
(c) an Officer's Certificate of the Company with
directors' resolutions ratifying this Amendment and the
transactions contemplated by this Amendment attached,
in form and substance acceptable to the Banks; and
(ii) the delivery to the Agent of counterparts of this Amendment
executed by each of the Banks.
14. Further Assurances. The Company agrees to do,
execute, acknowledge, and deliver, all and every such further
acts and instruments as the Agent may request for the better
assuring and confirming unto the Agent and the Banks all and
singular the rights granted or intended to be granted hereby or
hereunder.
15. Reference to and Effect on the Loan Agreement and
the Security Documents; Limitation of Waivers.
(a) On and after the date of this Amendment, each
reference in the Loan Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import
referring to the Loan Agreement, and each reference in the
Security Documents to the "Loan Agreement", "thereunder",
"thereof" or words of like import referring to the Loan
Agreement shall mean and be a reference to the Modified
Agreement.
(b) Except as specifically amended hereby, the
Loan Agreement and the Security Documents shall remain in
full force and effect and are hereby ratified and confirmed,
and the execution, delivery and performance of this
Amendment shall not, except as expressly provided herein,
operate as a modification of any right, power or remedy of
the Agent or any Bank under the Loan Agreement. Without
limiting the generality of the foregoing, nothing in this
Amendment shall be deemed (a) to constitute a waiver of
compliance by the Company with respect to any other
provision or condition of the Loan Agreement or (b) to
prejudice any right or remedy that the Agent or any Bank may
now have (except to the extent such right or remedy was
based upon existing defaults that will not exist after
giving effect to this Amendment) or may have in the future
under or in connection with the Loan Agreement or any other
instrument referred to therein.
16. Fees and Expenses. The Company agrees to pay on
demand all reasonable costs and expenses of the Banks in
connection with the preparation, reproduction, execution, and
delivery of this Amendment and the other instruments and
documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for the Banks, and
with respect to advising each Bank as to its rights and
responsibilities under the Loan Agreement, as hereby amended).
In addition, the Company shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection
with the execution and delivery, filing, or recording of this
Amendment and the other instruments and documents to be delivered
hereunder, and agrees to save each Bank harmless from and against
any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes or fees.
17. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be
given any substantive effect.
18. Counterparts; Effectiveness. This Amendment may
be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same
instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document. Upon satisfaction of the conditions set forth in
Section 5 hereof, this Amendment shall be deemed effective as of
the date hereof.
19. Governing Law; Binding Agreement. THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES, and shall be binding upon the Company, the
Agent, and the Banks and their respective successors and assigns.
20. FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH
THE LOAN AGREEMENT, EACH NOTE, THE COLLATERAL MORTGAGE NOTE
(PARTS), EACH SECURITY DOCUMENT AND ALL OTHER DOCUMENTS EXECUTED
IN CONNECTION HEREWITH AND THEREWITH, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
[Remainder of page intentionally left blank.]
DAL02:70954.4
IN WITNESS WHEREOF, the parties hereto have caused this
Sixth Amendment to Amended and Restated Loan Agreement to be
executed by their respective officers thereunto duly authorized
as of the date first above written.
PETROLEUM HELICOPTERS, INC.
By:
Name:
Title:
NATIONSBANK OF TEXAS, N.A.,
individually and as Agent
By:
Name:
Title:
WHITNEY NATIONAL BANK
By:
Name:
Title:
FIRST NATIONAL BANK OF
COMMERCE
By:
Name:
Title:
DAL02:70954.4
EXHIBIT A
TO
SIXTH AMENDMENT TO
AMENDED AND RESTATED
LOAN AGREEMENT
EXHIBIT H
OFFICERS' CERTIFICATE
OF PETROLEUM HELICOPTERS, INC.
AS TO AIRCRAFT EXCHANGE TRANSACTION
The undersigned, Carroll W. Suggs and John H. Untereker, the
Chairman of the Board and the Treasurer, respectively, of
Petroleum Helicopters, Inc., a Louisiana corporation (the
"Company"), on our own behalf and on behalf of the Company,
hereby certify as to the matters set forth in the numbered
paragraphs below. The capitalized terms used and not defined
herein are used with the same meaning assigned thereto in that
certain Loan Agreement among the Company and NationsBank of
Texas, N.A. (formerly known as NCNB Texas National Bank and
successor-in-interest to First RepublicBank Houston N.A.),
Whitney National Bank (formerly known Whitney National Bank of
New Orleans), and First National Bank of Commerce, originally
dated January 31, 1986, as amended and restated in its entirety
as of July 9, 1993 (as amended and restated as aforesaid, and as
thereafter amended, the "Loan Agreement").
(3) The Company is currently and will be, immediately after
giving effect to Amendment No. ______ dated ____________,
199__, to the Louisiana Security Agreement (the
"Amendment"), in full compliance with all of the provisions
of the Loan Agreement (except that, pursuant to Subsection
9.06(a) of the Loan Agreement, the Company need not be in
compliance with Subsection 8.16(b) of the Loan Agreement
during a certain period commencing with the effectiveness of
said Amendment).
(4) The helicopters to be released consist of one or more
complete helicopters or other Aviation Units.
(5) The portion of the Aircraft remaining subject to the
Security Interest consist of complete helicopters or other
Aviation Units in the operating condition required by
Section 7.09 of the Loan Agreement to be maintained by the
Company.
(6) There is currently no Default or Event of Default under the
Loan Agreement, no such Default or Event of Default is
imminent and no such Default or Event of Default will be
precipitated or continued by the transactions contemplated
herein. The Company is currently, and immediately after
giving effect to the Amendment will be, in full compliance
with each of the Security Documents.
(7) Upon satisfaction of the requirements set forth in
Subsection 9.06(b) of the Loan Agreement, the Company will
be in compliance with Subsection 8.16(b) of the Loan
Agreement.
IN TESTIMONY WHEREOF, we hereunto set over our hands and
affix the corporate seal of the Company on this __ day of
___________, 199___.
Carroll W. Suggs
Chairman of the Board
John H. Untereker
Treasurer
DAL02:70954.4
EXHIBIT B
TO
SIXTH AMENDMENT TO
AMENDED AND RESTATED
LOAN AGREEMENT
for Financing Statement Amendments]
[to come from Jones, Walker]
1. The parenthetical in paragraph I of Exhibit A of each
of the Texas UCC-1 Financing Statements and the Louisiana UCC-1
Financing Statement shall be amended by deleting the current
texas t thereof in its entirety and replacing said aparenthetical
with the following parenthetical:
"(excluding, however, (a) any of the
foregoing items incorporated or installed in
or attached or apperteaining to any engine-
powered devidce that is used or intended by
to be used for flight in the air but wichhich
is not covered by paragraph II hereof
(collectively, the "excluded aircraft"); and
(b) any of the foregoing items which have
been incoropratedincorporated or installed in
any excluded aircraft but have been
temporarily removed from the excluded
aircraft for the purpose of maintenance or
repairs):"
2. The parenthetical in paragraph 3 of the UCC-1 Financing
Statement shall be amended by deleting the current text thereof
in its entirety and replacing said parenthetical with the
following parenthetical:
"(excluding, however, (a) any of the foregioing items
incorporated or installed in or attached or appertaining to
any engine-powered device that is used or intended to be
used for lflight in the air but which is not subject to a
lien or security interest in favor of the Secured Party
(collectively, the "excluded aircraft"),; and (b) any of the
foregoing items which have been incorporated or installed in
any excluded aircraft buth have been temporarily removed
from the excluded aircraft for the purpose of maintenance or
repairs)" ; and
DAL02:70954.4
SEVENTH AMENDMENT TO AMENDED AND
RESTATED LOAN AGREEMENT
This SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN
AGREEMENT (this "Amendment") is being entered into as of the 31st
day of October, 1995, by and among PETROLEUM HELICOPTERS, INC., a
Louisiana corporation (successor by merger to Petroleum
Helicopters, Inc., a Delaware corporation) (the "Company"),
NATIONSBANK OF TEXAS, N.A., a national banking association
("NationsBank"), WHITNEY NATIONAL BANK, a national banking
association ("Whitney"), FIRST NATIONAL BANK OF COMMERCE, a
national banking association ("FNBC", and together with
NationsBank and Whitney, being hereinafter referred to
collectively as the "Banks"), and NationsBank as agent for the
Banks (in such capacity, the "Agent").
PRELIMINARY STATEMENTS
(1) The Company, the Banks, and the Agent have entered
into that certain Amended and Restated Loan Agreement, originally
made as of January 31, 1986, as amended and restated in its
entirety as of July 9, 1993, and as further amended by that
certain First Amendment to Amended and Restated Loan Agreement,
dated as of October 31, 1993, that certain Second Amendment to
Amended and Restated Loan Agreement, dated as of April 15, 1994,
that certain Third Amendment to Amended and Restated Loan
Agreement, dated as of July 31, 1994, that certain Fourth
Amendment and Limited Waiver to Amended and Restated Loan
Agreement, dated as of October 25, 1994, that certain Fifth
Amendment to Amended and Restated Loan Agreement, dated as of
October 31, 1994, and that certain Sixth Amendment to Amended and
Restated Loan Agreement, dated as of February 27, 1995 (such Loan
Agreement, as amended and restated as aforesaid and as the same
may be further amended from time to time, being hereinafter
referred to as the "Loan Agreement"). Terms used herein, unless
otherwise defined herein, shall have the meanings set forth in
the Loan Agreement.
(2) The Company, the Banks, and the Agent now wish to
amend the Loan Agreement to provide, among other things, for the
extension of the Revolving Credit Termination Date, the
Conversion Date and the Capital Loan Termination Date and the
modification of the Applicable Prime Rate and the LIBOR Margin,
all subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company, the
Banks, and the Agent hereby agree as follows:
1. Amendment of Section 1.01 of the Loan Agreement -
"Applicable Prime Rate." Section 1.01 of the Loan Agreement is
hereby amended by deleting the definition of "Applicable Prime
Rate" therein in its entirety and replacing said definition with
the following definition:
"Applicable Prime Rate" shall mean in respect of any
Prime Rate Borrowing a fluctuating rate per annum (based on
a year of 365 or 366 days, as the case may be, and actual
days elapsed) equal to the sum of the Prime Rate plus (i)
0.50% per annum for so long as the Leverage Ratio is greater
than 5.00, (ii) 0.25% per annum for so long as the Leverage
Ratio is greater than 4.50 but less than or equal to 5.00,
or (iii) 0% for so long as the Leverage Ratio is less than
or equal to 4.50.
2. Additional Amendment of Section 1.01 of the Loan
Agreement. Section 1.01 of the Loan Agreement is hereby further
amended by deleting the definition of "Commitment Fee" therein in
its entirety and replacing said definintion with the following
definition.
"Committment Fee" means a fee payable by the Company
pursuant to Subsection 2.07(a) in the amount of (i) 0.50%
per annum for so long as the Leverage Ratio is greater than
5.00, or (ii) 0.375% for so long as the Leverage Ratio is
less than or equal to 5.00 (in each case based on a year of
365 or 366 days, as the case may be, and actual days
elapsed) on the daily average unused amounts of the
Commitments.
3. Additional Amendment of Section 1.01 of the Loan
Agreement - "Conversion Date." Section 1.01 of the Loan
Agreement is hereby further amended by deleting the date
October 31, 1996 in the definition of "Conversion Date" therein
and replacing said date with October 31, 1997.
4. Additional Amendment of Section 1.01 of the Loan
Agreement - "LIBOR Margin." Section 1.01 of the Loan Agreement
is hereby further amended by deleting the definition of "LIBOR
Margin" therein in its entirety and replacing said definition
with the following definition:
"LIBOR Margin" means a rate per annum equal to (i)
2.25% per annum for so long as the Leverage Ratio is greater
than 5.00, (ii) 2.00% per annum for so long as the Leverage
Ratio is greater than 4.50 but less than or equal to 5.00,
(iii) 1.75% per annum for so long as the Leverage Ratio is
greater than 4.00 but less than or equal to 4.50, or (iv)
1.50% per annum for so long as the Leverage Ratio is less
than or equal to 4.00.
5. Amendment of Section 2.01 of the Loan Agreement.
Section 2.01 of the Loan Agreement is hereby amended by deleting
the date October 31, 2001 in subsection (b) thereof and replacing
said date with October 31, 2002.
6. Amendment of Section 2.02 of the Loan Agreement.
Section 2.01 of the Loan Agreement is hereby amended by deleting
the date October 31, 1996 in subsection (a) thereof and replacing
said date with October 31, 1997.
7. Amendment of Exhibit A to the Loan Agreement.
Exhibit A to the Loan Agreement is hereby amended by deleting
said exhibit in its entirety and replacing said exhibit with
Exhibit A attached hereto.
8. Amendment of Exhibit B to the Loan Agreement.
Exhibit B to the Loan Agreement is hereby amended by deleting
said exhibit in its entirety and replacing said exhibit with
Exhibit B attached hereto.
9. Amendment of Exhibit G to the Loan Agreement.
Exhibit G to the Loan Agreement is hereby amended by deleting
said exhibit in its entirety and replacing said exhibit with
Exhibit C attached hereto.
10. Company's Representations and Warranties. In
order to induce the Agent and the Banks to enter into this
Amendment, the Company hereby represents that:
(a) after giving effect to the amendments
contemplated herein, the representations and warranties
contained in the Loan Agreement, the Notes and the
Security Documents (collectively, the "Loan Documents")
are true and correct on and as of the date hereof as
though made on and as of such date, except to the
extent such representations and warranties specifically
relate to an earlier date, in which case they were true
and correct as of such date;
(b) upon execution of this Amendment, the Company
will not be in default in the due performance of any
covenant on its part in the Loan Documents;
(c) no Default or Event of Default has occurred
and is continuing or is imminent;
(d) the Company has all requisite power and
authority to enter into this Amendment and to carry out
the transactions contemplated by, and to perform its
obligations under, the Loan Agreement, as modified by
this Amendment (the "Modified Agreement"); and
(e) the execution and delivery of this Amendment
and the performance of the Modified Agreement have been
duly authorized by all necessary corporate actions on
the part of the Company.
11. Conditions to Effectiveness. This Amendment will
be effective, as of the date first above written, upon (i) the
Company's delivery to the Agent, for the account of the Banks, of
the following items:
(a) a counterpart of this Amendment executed by
the Company;
(b) opinions of counsel to the Company in form
and substance acceptable to the Banks; and
(c) an Officer's Certificate of the Company with
directors' resolutions ratifying this Amendment and the
transactions contemplated by this Amendment attached,
in form and substance acceptable to the Banks; and
(d) three original Capital Loan Notes, each dated
as of the date hereof in substantially the form of
Exhibit A attached hereto with the blanks appropriately
filled, payable to the order of the Banks, and in the
face amount of each Bank's Ratable Share of the Capital
Loan Commitment, respectively, and each executed by the
Company; and
(e) three original Revolving Credit Notes, each
dated as of the date hereof, in substantially the form
of Exhibit B attached hereto with the blanks
appropriately filled, payable to the order of the
Banks, and in the face amount of each Bank's Ratable
Share of the Revolving Credit Commitment, respectively,
and each executed by the Company, and
(ii) the delivery to the Agent of counterparts of this Amendment
executed by each of the Banks.
12. Further Assurances. The Company agrees to do,
execute, acknowledge, and deliver, all and every such further
acts and instruments as the Agent may request for the better
assuring and confirming unto the Agent and the Banks all and
singular the rights granted or intended to be granted hereby or
hereunder.
13. Reference to and Effect on the Loan Agreement and
the Security Documents; Limitation of Waivers.
(a) On and after the date of this Amendment, each
reference in the Loan Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import
referring to the Loan Agreement, and each reference in the
Security Documents to the "Loan Agreement", "thereunder",
"thereof" or words of like import referring to the Loan
Agreement shall mean and be a reference to the Modified
Agreement.
(b) Except as specifically amended hereby, the
Loan Agreement and the Security Documents shall remain in
full force and effect and are hereby ratified and confirmed,
and the execution, delivery and performance of this
Amendment shall not, except as expressly provided herein,
operate as a modification of any right, power or remedy of
the Agent or any Bank under the Loan Agreement. Without
limiting the generality of the foregoing, nothing in this
Amendment shall be deemed (a) to constitute a waiver of
compliance by the Company with respect to any other
provision or condition of the Loan Agreement or (b) to
prejudice any right or remedy that the Agent or any Bank may
now have (except to the extent such right or remedy was
based upon existing defaults that will not exist after
giving effect to this Amendment) or may have in the future
under or in connection with the Loan Agreement or any other
instrument referred to therein.
(c) The Company acknowledges, confirms and
warrants that the Security Documents and any other security
instruments executed at any time in connection with the Loan
Agreement continue to secure, among other things, the
payment of all indebtedness at any time created pursuant to
the Loan Agreement, as hereby amended.
14. Fees and Expenses. The Company agrees to pay on
demand all reasonable costs and expenses of the Banks in
connection with the preparation, reproduction, execution, and
delivery of this Amendment and the other instruments and
documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for the Banks, and
with respect to advising each Bank as to its rights and
responsibilities under the Loan Agreement, as hereby amended).
In addition, the Company shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection
with the execution and delivery, filing, or recording of this
Amendment and the other instruments and documents to be delivered
hereunder, and agrees to save each Bank harmless from and against
any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes or fees.
15. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be
given any substantive effect.
16. Counterparts; Effectiveness. This Amendment may
be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same
instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same
document. Upon satisfaction of the conditions set forth in
Section 11 hereof, this Amendment shall be deemed effective as of
the date hereof.
17. Governing Law; Binding Agreement. THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES, and shall be binding upon the Company, the
Agent, and the Banks and their respective successors and assigns.
18. FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH
THE LOAN AGREEMENT, EACH NOTE, THE COLLATERAL MORTGAGE NOTE
(PARTS), EACH SECURITY DOCUMENT AND ALL OTHER DOCUMENTS EXECUTED
IN CONNECTION HEREWITH AND THEREWITH, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this
Seventh Amendment to Amended and Restated Loan Agreement to be
executed by their respective officers thereunto duly authorized
as of the date first above written.
PETROLEUM HELICOPTERS, INC.
By:
Name:
Title:
NATIONSBANK OF TEXAS, N.A.,
individually and as Agent
By:
Name:
Title:
WHITNEY NATIONAL BANK
By:
Name:
Title:
FIRST NATIONAL BANK OF
COMMERCE
By:
Name:
Title:
DAL02:89475.4
EXHIBIT A
TO
SEVENTH AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
EXHIBIT A
PETROLEUM HELICOPTERS, INC.
Capital Loan Note
$ October 31, 1995
FOR VALUE RECEIVED, the undersigned, Petroleum Helicopters,
Inc., a Louisiana corporation (successor by merger to Petroleum
Helicopters, Inc., a Delaware corporation) (herein called the
"Company"), hereby promises to pay to the order of (herein
called the "Bank") in lawful money of the United States of
America on or before the Capital Loan Termination Date (as
defined in the Amended and Restated Loan Agreement (as
hereinafter defined)) unless the maturity is earlier accelerated,
the principal sum of and ___/100 Dollars ($) or, if less, the
aggregate unpaid principal amount of all Capital Loans made by
the Bank to the Company and outstanding on the Capital Loan
Termination Date (as defined in the Amended and Restated Loan
Agreement (as hereinafter defined)), at such times and upon the
terms set forth in that certain Amended and Restated Loan
Agreement dated as of July 9, 1993 (as the same heretofore has
been amended and as the same hereafter from time to time may be
supplemented, amended, restated, extended or otherwise modified,
the "Amended and Restated Loan Agreement") among the Company, the
Bank, the other Banks (as defined therein) and NationsBank of
Texas, N.A., as Agent thereunder. The Company also agrees to pay
interest on the unpaid balance of this note from the date hereof
until maturity, whether by acceleration or otherwise, payable on
each Interest Payment Date (as defined in the Amended and
Restated Loan Agreement) during such period and at maturity, at
the rate or rates per annum provided for in the Amended and
Restated Loan Agreement. Capitalized terms used but not
otherwise defined herein shall have the respective meanings
assigned to them in the Amended and Restated Loan Agreement.
All past due principal and interest on this note shall bear
interest at a rate equal to the lesser of (i) the Prime Rate plus
3% per annum or (ii) the Highest Lawful Rate.
This note is one of the Capital Loan Notes provided for in,
and is entitled to the benefits of, the Amended and Restated Loan
Agreement which Amended and Restated Loan Agreement, among other
things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events, for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified and to the
effect that no provision of the Amended and Restated Loan
Agreement, the Security Documents or this note shall be construed
to require or permit the payment or collection of interest at a
rate that exceeds the Highest Lawful Rate. This note is secured
by and entitled to the benefits of the Security Documents.
Furthermore, this note does not effect a novation but
is given, to the fullest extent applicable, in modification,
renewal, extension, rearrangement and replacement of that certain
Capital Loan Note dated as of October 31, 1994, in the principal
face amount of $ , executed by the Company, payable to
the order of the Bank (the "1994 Capital Loan Note"), which 1994
Capital Loan Note modified, renewed, extended, rearranged and
replaced certain indebtedness evidenced by that certain Capital
Loan Note of the Company dated as of July 9, 1993 (the "1993
Capital Loan Note"), which 1993 Capital Loan Note modified,
renewed, extended, rearranged and replaced certain indebtedness
evidenced by that certain Term Note of the Company dated
October 29, 1991 (the "1991 Term Note"), which 1991 Term Note
modified, renewed, extended, rearranged and replaced certain
indebtedness evidenced by certain Term Notes of the Company,
dated as of December 28, 1990 (the "1990 Term Notes"), which 1990
Term Notes modified, renewed, extended, rearranged and replaced
certain indebtedness originally evidenced by certain Term Notes
of the Company, dated as of April 22, 1986 and delivered
pursuant to that certain Loan Agreement originally dated as of
January 31, 1986, as amended and restated in its entirety as of
August 1, 1988, and amended and restated in its entirety as of
December 28, 1990, of which said Loan Agreement the Amended and
Restated Loan Agreement is an amendment and restatement in its
entirety. All liens and security interests securing payment of
the 1994 Capital Loan Note (including, without limitation, those
securing payment of the 1993 Capital Loan Note, the 1991 Term
Note and the 1990 Term Notes) are hereby collectively renewed,
extended, rearranged, ratified and brought forward as security
for the payment and performance of this note. The Company hereby
agrees that this modification, renewal, extension, rearrangement,
and replacement shall in no manner affect, release, cancel,
terminate, extinguish or otherwise impair the liens and security
interests securing payment of the 1994 Capital Loan Note and that
said liens and security interests shall not in any manner be
waived.
The Company and any and all endorsers, guarantors and
sureties severally waive grace, demand, presentment for payment,
notice of dishonor or default, protest, notice of intent to
accelerate, notice of acceleration and notice of protest and
diligence in collecting and bringing of suit against any party
hereto, and agree to all renewals, extensions or partial payments
hereon, in whole or in part, with or without notice, before or
after maturity.
THIS NOTE SHALL BE INTERPRETED AND GOVERNED BY, AND THE
RIGHTS, OBLIGATIONS AND LIABILITIES OF THE PARTIES HERETO SHALL
BE DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED
TO CONFLICT OF LAWS PRINCIPLES) AND JUDICIAL DECISIONS OF THE
STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
PETROLEUM HELICOPTERS, INC.
By:
Name:
Title:
DAL02:89475.4
EXHIBIT B
TO
SEVENTH AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
EXHIBIT B
PETROLEUM HELICOPTERS, INC.
Revolving Credit Note
$ October 31, 1995
FOR VALUE RECEIVED, the undersigned, Petroleum
Helicopters, Inc., a Louisiana corporation (successor by merger
to Petroleum Helicopters, Inc., a Delaware corporation) (herein
called the "Company"), hereby promises to pay to the order of
(herein called the "Bank") on October 31, 1997, unless the
maturity is earlier accelerated, the principal sum of ($) or, if
less, the aggregate unpaid principal amount of all Revolving
Credit Loans made by the Bank to the Company and outstanding on
the Revolving Credit Termination Date. The Company also agrees
to pay interest on the unpaid balance thereof from the date
hereof until maturity, whether by acceleration or otherwise,
payable on each Interest Payment Date during such period and at
maturity, at the rate or rates per annum provided for in that
certain Amended and Restated Loan Agreement dated as of July 9,
1993 (as the same heretofore has been amended and as the same
hereafter from time to time may be further amended, modified or
supplemented, the "Amended and Restated Loan Agreement") among
the Company, the Bank, the other Banks and NationsBank of Texas,
N.A., as Agent thereunder. Capitalized terms used but not
otherwise defined herein shall have the respective meanings
assigned to them in the Amended and Restated Loan Agreement
If any payment or prepayment of principal or interest
on this note shall become due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in
computing interest in connection with such payment.
All past due principal and interest on this note shall
bear interest at a rate equal to the lesser of (i) 3% above the
Prime Rate or (ii) the Highest Lawful Rate.
Payments of both principal and interest are to be made
in immediately available funds at the Office of the Agent or such
other place as the Agent shall designate in writing to the
Company.
This note is one of the Revolving Credit Notes provided
for in, and is entitled to the benefits of, the Amended and
Restated Loan Agreement which Amended and Restated Loan
Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions
therein specified and to the effect that no provision of the
Amended and Restated Loan Agreement, the Security Documents or
this note shall require the payment or permit the collection of
interest in excess of the Highest Lawful Rate. This note is
secured by and entitled to the benefits of the Security
Documents.
Furthermore, this note does not effect a novation but
is given, to the fullest extent applicable, in modification,
renewal, extension, rearrangement, and replacement of that
certain Revolving Credit Note dated as of October 31, 1994 in the
principal face amount of $_______________, executed by the
Company, payable to the order of the Bank (the "October 1994
Note"), which October 1994 Note modified, renewed, extended,
rearranged and replaced certain indebtedness originally evidenced
by that certain Revolving Credit Note dated as of October 31,
1993 executed by the Company, payable to the order of the Bank
(the "October 1993 Note"), which October 1993 Note modified,
renewed, extended, rearranged and replaced certain indebtedness
originally evidenced by that certain Revolving Credit Note dated
as of July 9, 1993 executed by the Company, payable to the order
of the Bank (the "July 1993 Note"), which July 1993 Note
modified, renewed, extended, rearranged and replaced certain
indebtedness originally evidenced by certain Revolving Credit
Notes of the Company, dated as of April 22, 1986 (the "1986
Notes"), and delivered pursuant to that certain Loan Agreement
originally dated as of January 31, 1986, as amended and restated
in its entirety as of August 1, 1988, and as amended and restated
in its entirety as of December 28, 1990, of which said Loan
Agreement the Amended and Restated Loan Agreement is an amendment
and restatement in its entirety. All liens and security
interests securing payment of the October 1994 Note (including,
without limitation, those securing payment of the October 1993
Note, the July 1993 Note and the 1986 Notes) are hereby
collectively renewed, extended, rearranged, ratified and brought
forward as security for the payment and performance of this note.
The Company hereby agrees that this modification, renewal,
extension, rearrangement, and replacement shall in no manner
affect, release, cancel, terminate, extinguish or otherwise
impair the liens and security interests securing payment of the
October 1994 Note and that said liens and security interests
shall not in any manner be waived.
The Company and any and all endorsers, guarantors and
sureties severally waive grace, demand, presentment for payment,
notice of dishonor or default, protest, notice of intent to
accelerate, notice of acceleration and notice of protest and
diligence in collecting and bringing of suit against any party
hereto, and agree to all renewals, extensions or partial payments
hereon, in whole or in part, with or without notice, before or
after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND THE RIGHTS,
OBLIGATIONS AND LIABILITIES OF THE PARTIES HERETO SHALL BE
DETERMINED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO
CONFLICT OF LAWS PRINCIPLES) AND JUDICIAL DECISIONS OF THE STATE
OF TEXAS AND APPLICABLE FEDERAL LAW.
PETROLEUM HELICOPTERS, INC.
By:
Name:
Title:
DAL02:89475.4
EXHIBIT C
TO
SEVENTH AMENDMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
EXHIBIT G
OFFICERS' CERTIFICATE
OF PETROLEUM HELICOPTERS, INC.
AS TO VALUE OF CERTAIN AIRCRAFT
The undersigned, [Carroll W. Suggs or John H. Untereker], the
[Chairman of the Board or the Treasurer, respectively] of
Petroleum Helicopters, Inc., a Delaware corporation (the
"Company"), on my own behalf and on behalf of the Company, hereby
certifuesies as to the matters set forth in the numbered
paragraphs below. The capitalized terms used and not defined
herein are used with the same meaning assigned thereto in that
certain Loan Agreement among the Company and NationsBank of
Texas, N.A. (formerly known as NCNB Texas National Bank and
successor-in-interest to First Republic Bank Houston N.A.),
Whitney National Bank (formerly known as Whitney National Bank of
New Orleans), and First National Bank of Commerce, originally
dated January 31, 1986, as amended and restated in its entirety
as of July 9, 1993 (as amended and restated as aforesaid, and as
thereafter amended, the "Loan Agreement").
1. The Company is currently and will be, immediately after
giving effect to Amendment No. ___________ dated
_________________, 199__, to the Louisiana Security
Agreement (the "Amendment"), in full compliance with all of
the provisions of the Loan Agreement including, without
limitation, Section 8.16 thereof.
2. The helicopters to be released consist of one or more
complete helicopters or other Aviation Units.
3. The portions of the Aircraft remaining subject to the
Security Interest consist of complete helicopters or other
Aviation Units in the operating condition required by
Section 7.09 of the Loan Agreement to be maintained by the
Company.
4. There is currently no Default or Event of Default under the
Loan Agreement, no such Default or Event of Default is
imminent and no such Default or Event of Default will be
precipitated or continued by the transactions contemplated
herein. The Company is currently, and immediately after
giving effect to the Amendment will be, in full compliance
with each of the Security Documents.
DAL02:89475.4
IN TESTIMONY WHEREOF, w eeI hereunto stet over ourmy
hands and affix the corporate seal of the Company on this ___ day
of ______________________, 199___.
[Carroll W. Suggs or John H.
Untereker]
[Chairman of the Board or
Treasurer, respectively]
DAL02:89475.4
