SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
OCEANEERING INTERNATIONAL, INC.
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
(LOGO)
OCEANEERING INTERNATIONAL, INC.
16001 PARK TEN PLACE, SUITE 600, HOUSTON, TEXAS 77084
July 15, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
of Oceaneering International, Inc., which will be held at the Baker & Botts,
L.L.P. Conference Room, One Shell Plaza - Mall Level, 910 Louisiana, Houston,
Texas, on Friday, August 22, 1997, at 10:00 a.m. Houston time.
On the following pages you will find the Notice of Annual Meeting of
Shareholders and Proxy Statement giving information concerning the matters to be
acted upon at the meeting. A copy of the Annual Report to Shareholders
describing the Company's operations during the fiscal year ended March 31, 1997
is enclosed.
I hope you will be able to attend the meeting in person. Whether or not you
plan to attend, please sign and return the enclosed proxy card promptly. Your
shares will be voted at the meeting in accordance with your proxy.
If you have shares in more than one name, or if your stock is registered in
more than one way, you may receive more than one copy of the proxy material. If
so, please sign and return each of the proxy cards you receive so that all of
your shares may be voted. I look forward to seeing you at the 1997 Annual
Meeting of Shareholders.
Sincerely,
John R. Huff
Chairman, President and
Chief Executive Officer
<PAGE>
OCEANEERING INTERNATIONAL, INC.
16001 PARK TEN PLACE, SUITE 600, HOUSTON, TEXAS 77084
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 22, 1997
------------------------
To the Shareholders of Oceaneering International, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Oceaneering International, Inc., a Delaware corporation (the "Company"), will
be held at the Baker & Botts, L.L.P. Conference Room, One Shell Plaza - Mall
Level, 910 Louisiana, Houston, Texas on Friday, August 22, 1997 at 10:00 a.m.
Houston time, for the following purposes:
(1) To elect two Class II directors as members of the Board of
Directors of the Company to serve until the 2000 Annual Meeting of
Shareholders or until their respective successors have been duly elected
and qualified (Proposal 1);
(2) To consider and act upon a proposal to ratify the appointment of
Arthur Andersen LLP as independent auditors of the Company for the fiscal
year ending March 31, 1998 (Proposal 2); and
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on July 9, 1997 is the record date for the
determination of shareholders entitled to notice of, and to vote at, the meeting
or any adjournment thereof.
The Board of Directors welcomes the personal attendance of shareholders at
the meeting. Whether or not you expect to be present at the meeting, please fill
in, date and sign the enclosed proxy and return it to the Company promptly in
the enclosed envelope. If you attend the meeting, you may, if you so desire,
withdraw your proxy and vote in person.
By Order of the Board of Directors,
George R. Haubenreich, Jr.
Vice President, General Counsel
and Secretary
July 15, 1997
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AT THE MEETING, PLEASE
SIGN, DATE AND MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
OCEANEERING INTERNATIONAL, INC.
------------------------
PROXY STATEMENT
------------------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The accompanying proxy is solicited on behalf of the Board of Directors of
Oceaneering International, Inc., a Delaware corporation (the "Company"), for
use at the Company's annual meeting of shareholders to be held at the time and
place set forth in the accompanying notice. The Company will pay all costs of
soliciting proxies. Solicitation of proxies will be primarily by mail. In
addition to solicitation by mail, officers, directors and employees of the
Company may solicit proxies in person or by telephone and facsimile
transmission, for which such persons will receive no additional consideration.
The Company will reimburse brokerage houses, banks and other custodians,
nominees and fiduciaries for their reasonable expenses in forwarding proxy
material to beneficial owners of Common Stock.
The persons named as proxies were designated by the Board of Directors and
are officers or directors of the Company. All properly executed proxies will be
voted (except to the extent that authority to vote has been withheld), and where
a choice has been specified by the shareholder as provided in the proxy, the
proxy will be voted in accordance with the specification so made. Proxies
submitted without specification will be voted FOR Proposal 1 to elect the
nominees for director proposed by the Board of Directors and FOR Proposal 2 to
ratify the appointment of Arthur Andersen LLP as independent auditors of the
Company for the fiscal year ending March 31, 1998.
Any shareholder may revoke his or her proxy at any time before it is voted
at the meeting by duly executing a proxy bearing a later date. A proxy may also
be revoked by any shareholder at any time before it is voted by filing with the
Secretary of the Company a written notice of revocation or by voting in person
at the meeting. The mailing address of the executive offices of the Company is
P.O. Box 218130, Houston, Texas 77218-8130. The requirement for a quorum at the
meeting is the presence in person or by proxy of holders of a majority of the
outstanding shares of Common Stock. There is no provision for cumulative voting.
Only shareholders of record at the close of business on July 9, 1997 will
be entitled to notice of, and to vote at, the meeting. As of such date,
23,175,757 shares of the Company's Common Stock, $.25 par value ("Common
Stock"), were outstanding. Each of such outstanding shares is entitled to one
vote at the meeting. This Proxy Statement and accompanying proxies are initially
being mailed to shareholders of the Company on or about July 15, l997.
ELECTION OF DIRECTORS
PROPOSAL 1
The Certificate of Incorporation of the Company divides the Board of
Directors into three classes, each consisting as nearly as possible of one-third
of the members of the whole Board. The members of each class serve for three
years following their election, with one class being elected each year.
The Class II directors are to be elected at the meeting. In accordance with
the Company's Bylaws, the directors will be elected by a plurality of the votes
cast. Accordingly, abstentions and broker "non-votes" marked on proxy cards
will not be counted in the election. The Class II directors will serve until the
2000 Annual Meeting of Shareholders or until their respective successors have
been duly elected and qualified. The directors in Classes III and I, consisting
of two members and one member respectively, will continue to serve their terms
of office, which will expire at the Annual Meetings of Shareholders to be held
in 1998 and 1999, respectively.
The persons named in the accompanying proxy intend to vote such proxy in
favor of the election of the nominees named below, who are currently directors
of the Company, unless authority to vote for the director is withheld in the
proxy. Although the Board of Directors has no reason to believe that the
1
<PAGE>
nominees will be unable to serve as directors, if a nominee withdraws or
otherwise becomes unavailable to serve, the persons named as proxies will vote
for any substitute nominee designated by the Board of Directors.
Set forth below is certain information (ages as of July 1, 1997) with
respect to each nominee for election as a director of the Company.
NOMINEES -- CLASS II DIRECTORS:
NAME AND DIRECTOR
BUSINESS EXPERIENCE AGE SINCE
- ---------------------------------------- ---- --------
Charles B. Evans........................ 72 1980
Mr. Evans has been Chairman of ResTech
Inc., an oilfield service firm
specializing in custom log data
processing, since 1982. He previously
served from 1977 to 1979 as Executive
Vice President of Schlumberger
Limited, an international oilfield
evaluation and services company, until
his retirement in 1979 after 31 years
of service.
John R. Huff............................ 51 1986
Mr. Huff has been Chairman of the
Board of Directors of the Company
since August 1990. He has been a
director and Chief Executive Officer
and President of the Company since
joining the Company in 1986. He served
from 1980 until 1986 as Chairman and
President of Western Oceanic Inc., the
offshore drilling subsidiary of The
Western Company of North America. He
is also a director of BJ Services
Company, Triton Energy Limited and
Homegate Hospitality, Inc.
CONTINUING DIRECTORS
Set forth below is comparable information for those directors whose terms
will expire in 1998 and 1999.
1998 -- CLASS III DIRECTORS:
NAME AND DIRECTOR
BUSINESS EXPERIENCE AGE SINCE
- ---------------------------------------- ---- --------
David S. Hooker......................... 54 1973
Mr. Hooker has been Chairman of
Goshawk Insurance Holdings PLC, a
marine insurance group since January
1996. Previously he served as Chairman
of Bakyrchik Gold PLC, a natural
resources company, from 1993 to 1996.
He was Managing Director of Aberdeen
Petroleum PLC, an oil and gas
exploration and production company,
from 1988 to 1993. He is also a
director of Danka Business Systems
PLC.
Harris J. Pappas........................ 52 1996
Mr. Pappas joined the Board in
November 1996. He has been President
and shareholder of Pappas Restaurants,
Inc., a privately owned and operated
multi-state restaurant group, since
1983. He serves as a trustee of
Hermann Hospital in the Texas Medical
Center in Houston.
1999 -- CLASS I DIRECTOR:
NAME AND DIRECTOR
BUSINESS EXPERIENCE AGE SINCE
- ---------------------------------------- ---- --------
D. Michael Hughes....................... 58 1970
Mr. Hughes is owner of Texas Wild Game
Cooperative and the Broken Arrow
Ranch. Mr. Hughes has been associated
with the Company since its
incorporation, serving as Chairman of
the Board from 1984 to 1990.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the number of shares of Common Stock of the
Company owned as of July 1, 1997 by each director and nominee for director, each
of the current executive officers named in the Summary Compensation Table on
page 5 and all directors and officers as a group. Except as otherwise indicated,
each individual named has sole investment and voting power with respect to the
shares shown.
NUMBER OF PERCENT
NAME SHARES(1) OF CLASS
- ---------------------------------------- --------- --------
T. Jay Collins.......................... 123,825 *
Charles B. Evans........................ 15,900 *
F. Richard Frisbie...................... 90,906 *
George R. Haubenreich, Jr............... 74,952 *
David S. Hooker......................... 14,000 *
John R. Huff............................ 526,499 2.3
D. Michael Hughes....................... 91,363 *
Marvin J. Migura........................ 48,000 *
Harris J. Pappas........................ 0 *
All directors and officers as a group
(16 persons).......................... 1,337,242 5.8
- ------------
* Less than 1%
(1) Includes the following shares subject to stock options exercisable within
60 days of July 1, 1997: Mr. Collins - 42,000, Mr. Evans - 14,000, Mr.
Frisbie - 31,600, Mr. Haubenreich - 29,000, Mr. Hooker - 14,000, Mr.
Huff - 105,000, Mr. Hughes - 14,000, Mr. Migura - 16,000, and all
directors and officers as a group - 322,800. Includes the following shares
granted pursuant to restricted stock award agreements with respect to
which the recipient has sole voting power and no dispositive power: Mr.
Collins - 53,403, Mr. Frisbie - 16,500, Mr. Haubenreich - 30,114, Mr.
Huff - 147,300, Mr. Migura - 27,500, and all directors and officers as a
group - 332,642. Also includes the following shares, which are fully
vested, held in trust pursuant to the Oceaneering Retirement Investment
Plan ("Retirement Plan") for which the individual has no voting rights
until the shares are withdrawn from the Retirement Plan: Mr.
Frisbie - 4,306, Mr. Huff - 1,577, Mr. Hughes - 21,057, and all directors
and officers as a group - 63,105.
The following table sets forth information as of July 1, l997, with respect
to the only persons known by the Company to be beneficial owners of more than 5%
of the outstanding shares of the Company's Common Stock. This information is
based upon statements filed with the Securities and Exchange Commission
("SEC") as furnished to the Company by such persons.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------- -------------------- --------
Cowen & Company...................... 1,668,100(1) 7.2
Financial Square
New York, NY 10005
Neuberger & Berman, LLC.............. 1,454,300(2) 6.3
605 Third Avenue
New York, NY 10158
Public Employees Retirement System of
Ohio............................... 1,300,000(3) 5.6
277 East Town Street
Columbus, OH 43215
- ------------
(1) Sole investment and voting power with respect to 17,000 shares; shared
investment and voting power with respect to 1,651,100 and 1,631,400
shares, respectively.
(2) Sole voting power with respect to 802,700 shares; shared investment and
voting power with respect to 1,454,300 and 361,700 shares, respectively.
(3) Sole investment and voting power with respect to all shares.
3
<PAGE>
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
The Company has standing Audit, Compensation and Nominating Committees of
the Board of Directors. The Audit Committee, which held two meetings during
fiscal 1997, is comprised of Messrs. Hooker (Chairman), Hughes and Pappas. The
functions of the Audit Committee are: (1) to recommend to the full Board the
firm of independent auditors to be employed as the Company's independent
auditors for the ensuing year; (2) to review with the independent auditors,
internal auditors and management the scope and results of annual audits; (3) to
consult with the independent auditors periodically with regard to the adequacy
of internal controls and related matters; and (4) to review actions by
management on recommendations of the independent and internal auditors. To
promote independence, the Audit Committee consults separately and jointly with
management, as well as the independent and internal auditors.
The Compensation Committee is comprised of Messrs. Evans and Pappas. The
Compensation Committee, which held four meetings during fiscal 1997, considers
and recommends to the full Board compensation plans under which officers and
directors are eligible to participate, as well as the salary for the Chief
Executive Officer. The Compensation Committee approves salaries for all other
executive officers of the Company. The Compensation Committee administers the
Company's annual bonus plans, the Company's Long-Term Incentive Plans and the
Company's Executive Retirement Plan (the "Executive Retirement Plan"), and
reviews on a regular basis the Company's compensation program. The Compensation
Committee also recommends to the full Board a successor to the Chief Executive
Officer when a vacancy occurs.
The Nominating Committee is comprised of Messrs. Hughes (Chairman), Evans
and Hooker. The Nominating Committee, which held two meetings during fiscal
1997, considers and recommends to the full Board nominees to fill Board
vacancies and a director to serve as Chairman of the Board. The Nominating
Committee receives and evaluates shareholder proposals for nominees to fill
Board vacancies and recommends to the Board candidates for membership on the
committees of the Board. As to each person whom a shareholder proposes to
nominate for election or re-election as a director, the notice of proposal shall
include the name, age, business address, residence address, principal occupation
or employment, the class and number of shares beneficially owned and any other
information relating to such person that is required by law to be disclosed, and
include the written consent of the person to be named in the proxy statement as
a nominee and to serve as a director if elected. The name and address of the
shareholder making the proposal as they appear on the Company's books and the
class and number of shares of the Company which are beneficially owned by such
shareholder shall be included in the notice. This information should be sent to
the Secretary, Oceaneering International, Inc., P.O. Box 218130, Houston, Texas
77218-8130, not less than 120 days prior to any meeting of shareholders called
for the election of directors.
During fiscal 1997, the Board of Directors held a total of seven meetings.
Each member of the Board of Directors attended 100% of the aggregate of the
total number of Board meetings and meetings of any committee on which he served.
The Company pays its outside directors an $18,000 annual retainer, $1,000
for each meeting attended, $800 for each committee meeting attended (if the
meeting is on a day other than the date of a Board meeting) and a consulting fee
of $100 per hour up to a maximum of $800 per day for any consulting services.
All directors are reimbursed for their travel and other expenses involved in
attendance at Board and committee meetings.
Nonemployee directors are participants in the shareholder-approved 1990
Nonemployee Director Stock Option Plan. Under this plan, each nonemployee
director of the Company is automatically granted an option to purchase 2,000
shares of Common Stock on the date the director becomes a nonemployee director
of the Company, and each year thereafter, at an exercise price per share equal
to 50% of the fair market value of a share of Common Stock on the date the
option is granted. The options granted are not exercisable until the later to
occur of six months from the date of grant or the date the optionee has
completed two years of service as a director of the Company.
There are no family relationships between any director or executive
officer.
4
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Throughout fiscal 1997, the Compensation Committee consisted of nonemployee
directors. Mr. Hughes, a member of the Compensation Committee through August 22,
1996, was formerly an officer of the Company, serving most recently as Chairman
from 1984 to 1990.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers to
file with the SEC and the New York Stock Exchange initial reports of ownership
and reports of changes in ownership of Common Stock. Based solely on a review of
the copies of such reports furnished to the Company and representations that no
other reports were required, the Company believes that all its directors and
executive officers during the fiscal year ended March 31, 1997 complied on a
timely basis with all applicable filing requirements under Section 16(a) of the
Exchange Act.
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years shown, with
respect to the Chief Executive Officer and each of the other four most highly
compensated executive officers of the Company serving as such on March 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------------------
PAYOUTS
AWARDS -------------------
OTHER ------------------------ ALL
ANNUAL SECURITIES OTHER
ANNUAL COMPENSATION COMPEN- RESTRICTED UNDERLYING LTIP COMPEN-
NAME AND -------------------------------- SATION STOCK OPTIONS PAYOUTS SATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(a) ($)(b) AWARDS (#) ($)(d) ($)(e)
- -------------------------- ---- --------- ----------- ------- ---------- ---------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
John R. Huff 1997 400,000 240,000 0 (c) 20,000 1,154,590 127,241
Chairman, President and 1996 375,000 60,000 0 0 0 652,099 76,417
Chief Executive Officer 1995 375,000 0 0 0 50,000 526,463 80,733
T. Jay Collins 1997 195,000 120,000 0 (c) 10,000 134,701 39,170
Executive Vice President 1996 176,500 30,000 0 0 0 52,458 19,810
Oilfield Marine Services 1995 156,250 0 0 0 30,000 39,868 8,479
Marvin J. Migura 1997 175,000 80,000 0 (c) 6,000 44,900 9,301
Senior Vice President 1996 132,152 20,000 0 (c) 40,000 0 216
and Chief Financial
Officer(f)
George R. Haubenreich, Jr. 1997 175,000 90,000 0 (c) 6,000 115,458 37,636
Vice President, General 1996 161,500 25,000 0 0 0 116,460 25,380
Counsel and Secretary 1995 145,000 0 0 0 10,000 105,070 21,293
F. Richard Frisbie 1997 160,000 40,000 0 (c) 3,000 115,458 52,286
Senior Vice President 1996 146,500 20,000 0 0 0 126,460 31,544
Deepwater Technology 1995 145,000 0 0 0 4,000 115,010 26,533
</TABLE>
- ------------
(a) In fiscal 1997, Messrs. Huff, Collins, Migura and Haubenreich elected to
receive all or part of their bonus awards in restricted stock. The bonus
amounts stated for fiscal 1997 include the following restricted stock
grants valued on the basis of the closing market price of $14.625 per
share on the date of the bonus award: Mr. Huff - 16,400 shares, Mr.
Collins - 8,204 shares, Mr. Migura - 4,000 shares and Mr.
Haubenreich - 6,152 shares. The restricted stock awards vest as follows:
25% of the award vests in June 1997, with the remainder vesting thereafter
over three years, conditional upon continued employment. At the time of
each vesting, a tax assistance payment is made to the award recipients.
Those payments must be reimbursed to the Company if the vested stock is
sold within three years after the vesting date.
(b) Excludes the value of perquisites and other personal benefits for each of
the named executive officers because the aggregate amounts thereof did not
exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for any named executive officer.
5
<PAGE>
(c) See Long-Term Incentive Plans - Awards in Last Fiscal Year and
Compensation Committee Report on Executive Compensation, Long-Term
Incentives. At March 31, 1997, the number and value of the restricted
stock holdings which have not vested (based upon the closing market price
on that date of $17.00 per share) under restricted stock awards were as
follows: Mr. Huff - 180,000 shares, $3,060,000; Mr. Collins - 52,500
shares, $892,500; Mr. Migura - 26,250 shares, $446,250; Mr.
Haubenreich - 30,000 shares, $510,000; and Mr. Frisbie - 21,000 shares,
$357,000. Dividends, if any, are paid on the restricted shares. The value
of stock for which restrictions were lifted in fiscal 1997, 1996 and 1995
is reported in the LTIP payouts column in the table.
(d) Amounts represent the aggregate value of stock for which restrictions were
lifted and the associated tax assistance payment. Additionally, in fiscal
1995 and 1996 for Messrs. Huff, Haubenreich and Frisbie, the amounts
include the third and last of four equal cash payments made pursuant to a
previously granted stock performance-based award.
(e) The amounts represent Company contributions under the Company's Executive
Retirement Plan, a nonqualified plan.
(f) Mr. Migura joined the Company in fiscal 1996.
LONG-TERM INCENTIVE PLANS AND RETIREMENT PLANS
Under the shareholder-approved 1990 and 1996 Long-Term Incentive Plan, the
Compensation Committee may grant options, stock appreciation rights, stock and
cash awards to employees and other persons (excluding nonemployee directors)
having an important business relationship with the Company.
The Company has in effect a Retirement Plan and an Executive Retirement
Plan. All employees of the Company and its United States subsidiaries who meet
the eligibility requirements may participate in the Retirement Plan. Certain key
management employees and executives of the Company and any subsidiary that has
adopted the plan, as approved by the Compensation Committee, are eligible to
participate in the Executive Retirement Plan.
Under the Retirement Plan, each participant directs the Company to defer
between 1% and 16% of the participant's base pay and contribute the deferred
compensation to the Retirement Plan, with such contributions being invested in
shares of Common Stock, mutual funds and guaranteed investments. A participant's
deferred compensation contributed to the plan is fully vested. The Company's
contributions to this plan become vested to the participant in percentage
increments spaced over a six-year period, commencing with the participant's date
of employment, provided that the participant remains employed by the Company.
The Company is currently contributing an amount equal to the deferred
compensation of each participant who has elected to invest in Common Stock up to
the first 6% of the participant's base pay and 50% of the deferred compensation
of each participant who has elected to invest in the other investments up to the
first 6% of the participant's base pay. During fiscal 1997, none of the
executive officers listed in the Summary Compensation Table made contributions
to the Retirement Plan.
Under the Executive Retirement Plan, each participant directs the Company
to make a contribution of a percentage of the participant's base pay up to a
maximum percentage determined by the Compensation Committee for each participant
into an individually funded account established for each participant pursuant to
the plan. Those percentages range from 10% to 15%. With respect to each
participant, the Compensation Committee determines the appropriate rate, not to
exceed 100%, at which the Company matches employee contributions. Currently the
Company's matching rate is 100% for all participants. Employee and Company
matching contributions in the Executive Retirement Plan are invested among
several offered investment funds as directed by the employee. For the first four
years of an employee's participation in the plan, at the end of each
participation year, the employee becomes entitled to the Company's matching
contribution amount for each such year, at the cumulative rate of 25% per year.
At the end of each plan year for a participant under the Executive Retirement
Plan, the Company makes a cash payment to each participant, which is intended to
assist the employee in meeting the employee's federal income tax liability with
respect to any earnings on the employee's and the Company's matching
contributions in the account (excluding capital gains resulting from any
distribution occasioned by termination of employment) and such cash payment.
6
<PAGE>
The following table provides information concerning grants of stock options
made to the named executive officers during the fiscal year ended March 31,
1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES
INDIVIDUAL GRANTS(a) OF STOCK
------------------------------------------------------ PRICE APPRECIATION
NUMBER OF % OF TOTAL FOR
SECURITIES OPTIONS OPTION TERM(b)
UNDERLYING GRANTED TO EXERCISE --------------------
OPTIONS EMPLOYEES IN PRICE EXPIRATION 5% 10%
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE ($) ($)
- ------------------------------------- ----------- ------------ ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John R. Huff......................... 20,000 6.8 15.81 9/19/02-05 147,202 669,169
T. Jay Collins....................... 10,000 3.4 15.81 9/19/02-05 73,603 334,585
Marvin J. Migura..................... 6,000 2.0 15.81 9/19/02-05 44,161 200,751
George R. Haubenreich, Jr. .......... 6,000 2.0 15.81 9/19/02-05 44,161 200,751
F. Richard Frisbie................... 3,000 1.0 15.81 9/19/02-05 22,080 100,375
</TABLE>
- ------------
(a) Stock options are awarded at the fair market value of Common Stock at the
date of award and become exercisable at the rate of 20% per year for three
years beginning one year after the date of award and fully exercisable
four years after the date of award. Options generally expire at the
earliest of 5 years after the date the award becomes exercisable, one year
after optionee's death, disability or retirement or at the time of
optionee's termination of employment.
(b) The amounts shown as potentially realizable values are based on
arbitrarily assumed rates of stock price appreciations of five percent and
ten percent over the full term of the options, as required by applicable
SEC regulations. The actual value of the option grants is dependent on
future performance of the Common Stock and overall market conditions.
There is no assurance that the values reflected in this table will be
achieved.
The following table provides information concerning each stock option
exercised during the fiscal year ended March 31, 1997 by each of the named
executive officers and the value of unexercised options held by such officers at
the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FY-END (#) FY-END ($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John R. Huff......................... 50,000 631,250 163,000 50,000 1,017,187 108,750
T. Jay Collins....................... 0 0 42,000 48,000 91,625 110,875
Marvin J. Migura..................... 0 0 8,000 38,000 42,500 170,000
George R. Haubenreich, Jr. .......... 800 10,624 29,000 12,000 119,812 21,750
F. Richard Frisbie................... 45,000 487,500 31,600 5,400 142,675 8,700
</TABLE>
7
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The following table shows information concerning long-term incentive awards
made to named executive officers in the fiscal year ended March 31, 1997.
LONG TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
PERFORMANCE OR
OTHER PERIOD UNTIL
NUMBER OF MATURATION OR
NAME SHARES (#)(1) PAYOUT(1)
- ------------------------------------- ------------- -------------------
John R. Huff......................... 90,000 6/28/96 - 6/25/99
T. Jay Collins....................... 42,000 6/28/96 - 6/25/99
Marvin J. Migura..................... 21,000 6/28/96 - 6/25/99
George R. Haubenreich, Jr............ 21,000 6/28/96 - 6/25/99
F. Richard Frisbie................... 12,000 6/28/96 - 6/25/99
- ------------
(1) This grant of shares of restricted Common Stock is subject to earning
requirements on the basis of a percentage change between the price of the
Common Stock versus the average of the common stock price of a peer group
over a three-year time period. See Board Compensation Committee Report on
Executive Compensation. The grantee of such restricted stock is the record
owner during the restriction period and has all rights of a stockholder,
including the right to vote and receive dividends; provided, however, that
such grantee does not have the right to transfer such restricted stock
until the restrictions relating thereto are removed upon achievement of
the performance goals and vesting requirements.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"). Each
member of the Committee is a nonemployee director. The Committee is dedicated to
the establishment of a strong, positive link between the development and
attainment of strategic goals, which enhance shareholder values, and the
compensation and benefit programs needed to achieve those results.
OVERALL EXECUTIVE COMPENSATION POLICY
The Company's policy is designed to facilitate its mission of increasing
the net wealth of its shareholders by:
o Attracting, rewarding and retaining highly qualified and productive
individuals.
o Setting compensation levels that are externally competitive and
internally equitable.
o Interrelating annual executive compensation with the results of
individual performance, the individual's profit center performance and
overall Company performance.
o Motivating executives and key employees towards achieving long-term
strategic results by aligning employee and shareholder interests
through the increased value of the Company's stock.
There are three major components of the Company's executive compensation
program: Base Salary, Annual Incentives and Long-Term Incentive Awards. The
Committee considers all elements of compensation when determining individual
components.
BASE SALARY
The Committee believes a competitive salary is essential to support
management development and career orientation of executives. The Committee
reviews annually the salary of executive officers. In determining appropriate
salary levels, the Committee considers level and scope of responsibility and
accountability, experience, individual performance contributions, internal
equity and market comparisons. No specific weightings are assigned to these
criteria. However, the Committee manages base salaries for the executive group
in a conservative fashion in order to place more emphasis on incentive
compensation.
8
<PAGE>
ANNUAL INCENTIVES
The Committee administers an annual cash incentive bonus award plan to
reward executive officers and other key employees of the Company based upon
individual performance and the achievement of specific financial and operational
goals determined for the year. The award interrelates individual performance, an
individual's profit center performance and the Company's overall performance.
For fiscal 1997, the maximum annual bonus award established for executive
officers was within a range of 30-100 percent of base salary.
LONG-TERM INCENTIVE AWARDS
Long-term incentive awards under shareholder-approved Long-Term Incentive
Plans are designed to create a mutuality of interest between executive officers
(and other key employees) and shareholders through stock ownership and other
incentive awards.
To achieve these objectives, the Committee granted restricted Common Stock
to executive officers and other key employees of the Company in fiscal 1997.
Those awards are subject to earning requirements during the three-year
performance period and subsequent vesting requirements. Up to one-third of the
total grant may be earned each year, depending upon the Company's cumulative
Common Stock performance from June 28, 1996 as compared with a specified peer
group's cumulative common stock performance from that date, with any amount
earned subject to vesting in four equal installments over three years commencing
one year after earning, conditional upon continued employment. The peer group is
that specified in the performance graph on page 11. If the performance of the
Company's Common Stock is less than 50% of the average of the performance of the
common stock of the peer group, no shares of restricted stock are earned. If the
performance of the Company's Common Stock is 50% - 87.5% or greater than the
average of the performance of the peer group, the amount of restricted stock
earned will range from 16% to 100% of the maximum achievable for this period. At
the time of each vesting, the participant receives a tax assistance payment
which must be reimbursed to the Company if the vested Common Stock is sold
within three years after the vesting date. At the end of fiscal 1997, the
initial performance period had not been completed. The Committee awarded a
similar grant in fiscal 1994 in which all of the restricted stock granted was
earned as a result of the performance of the Company's Common Stock, subject to
vesting requirements.
The Committee awards stock options to a broad group of executives and key
employees. Stock option grants were made to all executive officers in fiscal
1997.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
John R. Huff has been Chief Executive Officer and President of the Company
since August 1986 and Chairman since 1990. His compensation package has been
designed to encourage the enhancement of shareholder value. Mr. Huff's
compensation for fiscal 1997 included the same components and methodology of
salary and variable compensation as apply to other executive officers, with
regard to his highest level of accountability. A substantial portion of his
compensation is at risk in the form of performance bonuses and stock awards. In
fiscal 1997, Mr. Huff's base annual salary was increased by 7% to $400,000 and
he received an annual bonus of $240,000. This bonus is commensurate with the
Company's improved financial performance during the year in which the Company
generated its largest cash flow and net income ever. In fiscal 1997, Mr. Huff
was granted a restricted stock award of 90,000 shares of Common Stock as
described above. These amounts and grants reflect the Committee's assessment of
the Company's financial performance compared to other oilfield service companies
during the relevant periods, Mr. Huff's leadership and significant personal
contribution to the Company's business, and compensation data of competitive
companies.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code generally disallows a deduction
to public companies to the extent of excess annual compensation over one million
dollars paid to the Chief Executive Officer or to any of the four other most
highly compensated executive officers, except for qualified performance-based
compensation. The Company had no non-deductible compensation expense for fiscal
1997. The Committee
9
<PAGE>
plans to review this matter as appropriate and make recommendations to the
Company's Board of Directors of actions as may be necessary to preserve the
deductibility of compensation payments to the extent reasonably practical and
consistent with the Company's compensation objectives.
Compensation Committee
Charles B. Evans
Harris J. Pappas
PERFORMANCE GRAPH
The following line graph compares the Company's total shareholder return to
the Standard & Poor's 500 Stock Index ("S&P 500") and with that of a peer
group over a five-year period ending on March 31, 1997. The peer group companies
at March 31, 1997 for this performance graph are Dresser Industries, Inc., which
replaced Baroid Corporation after their merger, Global Industries, Ltd.,
Halliburton Company, McDermott International, Inc., Nabors Industries, Inc.,
Offshore Logistics, Inc., J. Ray McDermott, Inc. which replaced Offshore
Pipelines, Inc. after their merger, Stolt Comex Seaway S.A., and Tidewater, Inc.
Hornbeck Offshore Services, Inc. was included in the peer group through March
1996 when it merged into Tidewater, Inc.
It is assumed in the graphs that (i) $100 was invested in the Company's
Common Stock, the S&P 500 and the peer group on March 31, 1992, except that with
respect to Global Industries, Ltd. and Stolt Comex Seaway S.A., it is assumed
the investment was made in February 1993 and May 1993, respectively, the first
month the stock for such companies was publicly available for purchase; and the
investment was made in Baroid Corporation through January 1994, and thereafter
in Dresser Industries, Inc., and in Offshore Pipelines, Inc. through January
1996, and thereafter in J. Ray McDermott, Inc., as a result of their mergers,
and in Hornbeck Offshore Services, Inc. through March 1996, when it merged with
Tidewater, Inc., (ii) the peer group investment is weighted based on the market
capitalization of each individual company within the peer group at the beginning
of each period and (iii) any dividends are reinvested. The Company has not
declared any dividends during the period covered by the graph. The shareholder
return shown on the graph is not necessarily indicative of future performance.
10
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE SHAREHOLDER RETURN
FOR OCEANEERING INTERNATIONAL, INC., S&P 500 AND A SELECTED PEER GROUP
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Oceaneering International, Inc. (OII)... 100.00 123.08 107.96 86.81 119.78 137.36
Peer Group.............................. 100.00 143.08 128.65 148.94 225.64 266.10
Standard & Poor's 500 (S&P 500)......... 100.00 115.23 116.93 135.13 178.51 213.89
</TABLE>
EXECUTIVE EMPLOYMENT AGREEMENTS
Under a Senior Executive Severance Plan (the "Severance Plan") adopted by
the Board of Directors in January 1983, and as amended in March 1989, in the
event of a change in control of the Company (as defined) followed by termination
of employment within one year thereafter for any reason other than termination
as a consequence of death, disability or retirement, voluntary termination prior
to three months after a change of control, or termination for cause due to
commission of a felony related to employment with the Company, certain key
executives, as determined by the Board of Directors, will receive a payment
equal to 50% of one year's base salary, including bonuses, and all fringe
benefits for six months after termination of employment. In such an event, stock
options and other benefits of the executive will become immediately vested, and
the executive may elect to either exercise his outstanding stock options or
surrender them and be compensated for the spread between the exercise price and
the higher fair market value of the outstanding stock options. The executive
will also receive 25% of the amount of the spread between the exercise price and
the fair market value of all stock options exercised or surrendered by the
executive during the three-year period ending with the date of the executive's
termination of employment. The executive officers listed in the Summary
Compensation Table are participants in the Severance Plan.
The Company has entered into an employment agreement with no expiration
date with John R. Huff, which provides that, in the event of his termination
from the Company for any reason except voluntary resignation or cause, he will
receive compensation equivalent to one year's salary, inclusive of any amounts
11
<PAGE>
payable under the Severance Plan. Medical coverage is to be provided to Mr.
Huff, his spouse and children during his employment with the Company and, under
circumstances specified therein, thereafter for life.
In March 1989, the Company also entered into an amended Supplemental Senior
Executive Severance Agreement ("Supplemental Agreement") with Mr. Huff, which
provides that, in the event of a change in control of the Company (as defined)
and termination of his employment for any reason (other than voluntary
resignation for nonpermissible reasons or termination for cause due to
commission of a felony related to employment with the Company), or reduction in
the scope of his position or total annual compensation, or if he is requested to
relocate, Mr. Huff may either elect to receive the benefits under the Severance
Plan, as described above, or the benefits under the Supplemental Agreement. If
he elects to receive the Supplemental Agreement benefits, Mr. Huff will receive
a payment equal to three years' base salary, including bonuses, and all fringe
benefits for six months after termination of employment, and his stock options
and other benefits will become immediately vested. Mr. Huff may elect either to
surrender his outstanding stock options and receive an amount equal to twice the
amount of the spread between the exercise price and the higher fair market value
of the outstanding stock options, or to exercise such stock options and receive
the amount of such spread. He will also receive 100% of the amount of the spread
between the exercise price and the fair market value of all stock options
exercised or surrendered by him during the three-year period ending with the
date of his termination of employment.
CERTAIN TRANSACTIONS
Except as set forth in this report, no director or executive officer of the
Company or nominee for election as a director of the Company, or holder of more
than 5% of its shares of Common Stock, and no member of the immediate family of
any such director, nominee, officer or security holder, to the knowledge of the
Company, had any material interest in any transaction since April 1, 1996 or has
any interest in any proposed transaction to which the Company or its
subsidiaries were or are a party in which the amount involved exceeds $60,000.
No director or executive officer of the Company who served in such capacity
since April 1, 1996 or any associate of any such director or officer, to the
knowledge of the executive officers of the Company, has any material interest in
any matter proposed to be acted upon at the 1997 Annual Meeting of Shareholders
other than as described in this Proxy Statement.
APPOINTMENT OF AUDITORS
PROPOSAL 2
Subject to ratification by the shareholders, the Board of Directors has
appointed Arthur Andersen LLP, independent certified public accountants, as
independent auditors of the Company for the fiscal year ending March 31, 1998,
pursuant to the recommendation of the Audit Committee of the Board. Arthur
Andersen LLP has served as the Company's independent auditors for 26 years.
Representatives of Arthur Andersen LLP will be present at the meeting, will be
given the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions of any shareholders.
In accordance with the Company's Bylaws, the approval of the proposal to
ratify the appointment of Arthur Andersen LLP as independent auditors of the
Company for the fiscal year ending March 31, 1998 requires the affirmative vote
of a majority of the shares of Common Stock present in person or by proxy at the
meeting. Accordingly, abstentions and broker "non-votes" marked on proxy cards
will count as votes "against" this proposal.
The persons named in the accompanying proxy intend to vote such proxy in
favor of the ratification of the appointment of Arthur Andersen LLP as
independent auditors of the Company for the fiscal year ending March 31, 1998,
unless a contrary choice is set forth thereon or unless an abstention or broker
"non-vote" is indicated thereon.
THE BOARD OF DIRECTORS URGES THE SHAREHOLDERS TO VOTE FOR THE APPOINTMENT
OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL
YEAR ENDING MARCH 31, 1998.
12
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1998 Annual Meeting of Shareholders of the
Company must be received at the Company's principal executive offices, 16001
Park Ten Place, Suite 600, Houston, Texas 77084, addressed to the Chairman of
the Board, no later than March 20, 1998.
TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not aware
of any matters other than those set forth herein and in the Notice of Annual
Meeting of Shareholders that will come before the meeting. Should any other
matter requiring the vote of shareholders arise at the meeting, it is intended
that proxies will be voted in respect thereto in accordance with the judgment of
the person or persons voting the proxies.
Please return your proxy as soon as possible. Unless a quorum consisting of
a majority of the outstanding shares entitled to vote is represented at the
Annual Meeting, no business can be transacted. Therefore, please be sure to date
and sign your proxy exactly as your name appears on your stock certificate and
return it in the enclosed postage prepaid return envelope. Please act promptly
to ensure that you will be represented at this important meeting.
THE COMPANY WILL PROVIDE WITHOUT CHARGE ON THE WRITTEN REQUEST OF ANY
PERSON SOLICITED HEREBY A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE COMPANY'S FISCAL YEAR
ENDED MARCH 31, 1997. WRITTEN REQUESTS SHOULD BE MAILED TO GEORGE R.
HAUBENREICH, JR., SECRETARY, OCEANEERING INTERNATIONAL, INC., P.O. BOX 218130,
HOUSTON, TEXAS 77218-8130.
By Order of the Board of Directors,
/s/ GEORGE R. HAUBENREICH, JR.
George R. Haubenreich, Jr.
Vice President, General Counsel
and Secretary
July 15, 1997
13
<PAGE>
OCEANEERING INTERNATIONAL, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
John R. Huff and D. Michael Hughes, and each or any of them, with full
P power of substitution, are hereby appointed proxies to vote the stock of
the undersigned in Oceaneering International, Inc., held of record by the
R undersigned on July 9, 1997, at the Annual Meeting of Shareholders on
August 22, 1997, to be held at the Baker & Botts, L.L.P. Conference Room,
O One Shell Plaza-Mall Level, 910 Louisiana Street, Houston, Texas 77002, and
at any adjournment thereof.
X
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
Y BOXES ON THE REVERSE SIDE. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU
SIGN AND RETURN THIS CARD.
<PAGE>
PLEASE MARK YOUR
[X] VOTES AS IN THIS 1616
EXAMPLE
This Proxy when properly executed will be voted as directed. If no
direction is made, this Proxy will be voted FOR the election of the two director
nominees and FOR Proposal 2.
MANAGEMENT RECOMMENDS THAT YOU VOTE FOR AUTHORITY ON PROPOSAL 1 AND
FOR THE BOARD'S PROPOSAL 2.
1. Election of Directors FOR [ ] WITHHELD [ ] NOMINEES: CHARLES B. EVANS
JOHN R. HUFF
For, except vote witheld from the following nominee:
____________________________________________________
2. Proposal to approve the appointment of FOR AGAINST ABSTAIN
Arthur Andersen LLP as independent auditors [ ] [ ] [ ]
for the fiscal year ended March 31, 1998.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof,
including procedural and other matters relating to the conduct of the
meeting.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administra-
tor, trustee or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by authorized person.
______________________________________
______________________________________
SIGNATURE(S) DATE
