<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
OFFSHORE LOGISTICS, 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF OFFSHORE LOGISTICS APPEARS HERE]
OFFSHORE LOGISTICS, INC.
POST OFFICE BOX 5-C
LAFAYETTE, LOUISIANA 70505
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Offshore Logistics, Inc. (the
"Company") will be held at The City Energy Club, Energy Centre, 1100 Poydras
Street, New Orleans, Louisiana on Tuesday, September 29, 1998, at 4:00 p.m. for
the following purposes:
1. To elect directors to serve until the next Annual Meeting of the
Stockholders and until their successors are chosen and have qualified;
2. To vote on a proposal to approve an amendment to the Offshore
Logistics, Inc. 1994 Long-Term Management Incentive Plan; and
3. To transact such other business as may properly come before the
meeting and any postponements or adjournments thereof.
The Board of Directors has fixed the close of business on August 6, 1998,
as the record date for determination of stockholders entitled to notice of and
to vote at the meeting.
STOCKHOLDERS WHO DO NOT ELECT TO ATTEND IN PERSON ARE REQUESTED TO FILL IN,
DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD USING THE ENCLOSED SELF-ADDRESSED
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
Drury A. Milke
Secretary
Lafayette, Louisiana
August 21, 1998
<PAGE>
OFFSHORE LOGISTICS, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 29, 1998
SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of Offshore
Logistics, Inc., 224 Rue de Jean, Suite 100, Lafayette, Louisiana 70508 (the
"Company") for use at the Annual Meeting of Stockholders to be held September
29, 1998, and any adjournments thereof.
All Proxies in the enclosed form that are properly executed and returned to
the Company prior to the Annual Meeting will be voted at the Annual Meeting, and
any adjournments thereof, as specified by the stockholders in the Proxy or, if
not specified, as set forth herein.
The stockholder has the power to revoke such Proxy at any time before it is
exercised, either by giving written notice to the Secretary of the Corporation,
by executing and delivering a later-dated proxy or by voting in person at the
Annual Meeting.
This Proxy Statement and the enclosed Proxy are being mailed on
approximately August 21, 1998.
VOTING SECURITIES OUTSTANDING
At the close of business on August 6, 1998, the Company had outstanding
21,856,921 shares of Common Stock. Each such outstanding share is entitled to
one vote. Only holders of record of Common Stock at the close of business on
August 6, 1998, the record date for the Annual Meeting, are entitled to vote at
the meeting and any adjournments thereof.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
HOLDINGS OF PRINCIPAL STOCKHOLDERS
The following table shows as of August 6, 1998, certain information with
respect to beneficial ownership of the Company's Common Stock by any person
known by the Company to be the beneficial owner of more than five percent of any
class of voting securities of the Company.
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY TITLE PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED OF CLASS OF CLASS (1)
- ------------------------------------ ----- -------- ------------
<S> <C> <C> <C>
Caledonia Industrial & Services Limited
Cayzer House, 1 Thomas More Street
London, England E1 9AR 1,628,083(2) Common 7.4%
Neuberger & Berman, LLC
605 Third Avenue
New York, NY 10158-3698 1,920,500(3) Common 8.8%
</TABLE>
1
<PAGE>
_____________________
(1) Percentage of the Common Stock of the Company outstanding as of August 6,
1998.
(2) According to a Schedule 13D dated April 22, 1997, filed by (i) Caledonia
Industrial & Services Limited ("CIS") as the direct beneficial owner of
such shares of Common Stock, (ii) by virtue of its direct holding of all of
the outstanding stock of CIS, by Caledonia Investments plc ("Caledonia"),
and (iii) by virtue of their respective direct holdings of the securities
of Caledonia and their consequent indirect holdings of the stock of CIS, by
The Cayzer Trust Company Ltd. and Sterling Industries PLC, the foregoing
shares of Common Stock include 328,083 shares of Common Stock that may be
acquired upon conversion of $7,500,000 of the Company's Convertible
Subordinated Notes due 2003 at an assumed conversion price of $22.86 per
share.
(3) According to a Schedule 13G dated February 10, 1998, filed with the
Securities and Exchange Commission, Neuberger & Berman, LLC has sole voting
power with respect to 1,141,800 of such shares of Common Stock, shared
dispositive power with respect to 1,920,500 of such shares of Common Stock,
and beneficially owns 1,920,500 of such shares of Common Stock.
HOLDINGS OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table shows as of August 6, 1998, certain information with
respect to beneficial ownership of the Company's Common Stock by (i) each
director or nominee, (ii) each of the executive officers named in the Summary
Compensation Table on page 6 of this Proxy Statement, and (iii) all of the
Company's directors and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY TITLE PERCENT
NAME OF BENEFICIAL OWNER OWNED (1) OF CLASS OF CLASS (2)
- -------------------------------------------- ------------- -------- ------------
<S> <C> <C> <C>
Hans J. Albert......................... 44,111 Common *
Peter N. Buckley....................... 1,630,083(3) Common 7.5%
Jonathan H. Cartwright................. 1,630,083(3) Common 7.5%
Louis F. Crane......................... 16,000 Common *
Gene Graves............................ 48,403 Common *
David M. Johnson....................... 21,000 Common *
Kenneth M. Jones....................... 25,500 Common *
Drury A. Milke......................... 39,163 Common *
Ralph B. Murphy........................ 82,471 Common *
Harry C. Sager......................... 10,000 Common *
George M. Small........................ 126,406 Common *
Howard Wolf............................ 18,990 Common *
All Directors and Executive Officers
as a Group (16 persons) (3) (4)........ 2,106,076 Common 9.6%
</TABLE>
________________
* Less than 1%.
(1) Based on information as of August 6, 1998, supplied by directors and
executive officers. Unless otherwise indicated, all shares are held by the
named individuals with sole voting and investment power. Stock ownership
described in the table includes for each of the following directors or
executive officers options to purchase within 60 days after August 6, 1998,
the number of shares of Common Stock indicated after such director's or
executive officer's name: Hans J. Albert - 35,000 shares; Peter N. Buckley
- 2,000 shares; Jonathan H.
2
<PAGE>
Cartwright - 2,000 shares; Louis F. Crane - 6,000 shares; Gene Graves -
35,000 shares; David M. Johnson - 18,000 shares; Kenneth M. Jones - 23,000
shares; Drury A. Milke - 35,000 shares; Ralph B. Murphy - 80,000 shares;
Harry C. Sager - 8,000 shares; George M. Small - 115,000 shares; and Howard
Wolf - 16,500 shares, and the following number of shares of Common Stock
which were vested at the fiscal year ended March 31, 1998, under the
Company's Employee Savings and Retirement Plan (the "401(k) Plan"), based
on the 401(k) Plan statement dated March 31,1998; Hans J. Albert - 3,470
shares; Gene Graves - 234 shares; Drury A. Milke - 1,748 shares; Ralph B.
Murphy - 2,471 shares; and George M. Small - 4,568 shares. Shares held in
the 40l(k) Plan are voted by the trustee.
(2) Percentages of the Common Stock of the Company outstanding as of August 6,
1998.
(3) Because of the relationship of Messrs. Buckley and Cartwright to CIS,
Messrs. Buckley and Cartwright may be deemed indirect beneficial owners of
the securities of the Company owned by CIS (see "Holdings of Principal
Stockholders"). Pursuant to Rule 16a-1(a)(3), both Mr. Buckley and Mr.
Cartwright are reporting indirect beneficial ownership of the entire amount
of securities of the Company owned by CIS. Messrs. Buckley and Cartwright
disclaim beneficial ownership of the securities owned by CIS.
(4) Including 413,000 shares which may be acquired within 60 days of August 6,
1998, upon exercise of options.
PROPOSALS AND DIRECTOR NOMINATIONS BY
STOCKHOLDERS FOR THE 1999 ANNUAL MEETING
Any proposal by a stockholder intended to be considered for inclusion in
the Company's proxy materials for the Company's 1999 Annual Meeting (the "Annual
Meeting") must be received at the Company's office not less than 120 days prior
to August 23, 1999. Therefore, any such proposal related to the Annual Meeting
should be received by April 26, 1999, for consideration for inclusion in the
Company's Proxy Statement and form of Proxy related to the meeting.
In addition, the Company's By-laws provide that any stockholder wishing to
nominate a candidate for director or propose other business at the Annual
Meeting must give the Company advance written notice. In general, written notice
must be received by the Secretary of the Company not less than 60 days, nor more
than 90 days, prior to the first anniversary of the preceding year's annual
meeting and must contain certain specified information concerning the person to
be nominated or the matters to be brought before the meeting, as well as certain
information concerning the stockholder submitting the nomination or proposal.
All such nominations or proposals must be addressed to the Secretary of the
Company at 224 Rue de Jean, Lafayette, Louisiana 70508. Requests for copies of
the By-laws should also be addressed to the Secretary.
3
<PAGE>
1. ELECTION OF DIRECTORS
Eight directors are to be elected, each to hold office until his successor
is elected and qualified or until his earlier death, resignation or removal.
Unless authority to do so is withheld by the stockholder, each Proxy
executed and returned by a stockholder will be voted for the election of the
nominees hereinafter named. Directors of the Company having beneficial
ownership derived from presently existing voting power, as of August 6, 1998, of
approximately 8.5% of the Company's Common Stock have indicated that they intend
to vote for the election of all nominees. If any nominee withdraws or for any
reason is unable to serve as a director, the persons named in the accompanying
Proxy either will vote for such other person as the management of the Company
may nominate or, if the management does not so nominate such other person, will
not vote for anyone to replace the nominee. The management of the Company knows
of no reason that would cause any nominee to be unable to serve as a director or
to refuse to accept nomination or election.
VOTE REQUIRED FOR ELECTION, QUORUM AND TABULATION OF VOTES
Under the Company's By-laws, a majority of the shares of Common Stock
issued and outstanding and entitled to vote at any meeting of stockholders,
present in person or by proxy, constitutes a quorum for the transaction of
business at the meeting. Brokers holding shares for beneficial owners must vote
those shares according to the specific instructions they receive from the
owners. If specific instructions are not received, brokers may vote the shares
in their discretion only as to routine matters. Brokers have discretionary
authority to vote in the election of directors. Absent specific instructions
from the beneficial owner as to non-routine matters, the New York Stock Exchange
precludes its member brokers from voting. The missing votes of non-routine
matters are known as "broker non-votes." For purposes of determining the
presence or absence of a quorum at the Annual Meeting, abstentions and broker
votes on routine matters are counted; thus, broker non-votes are irrelevant for
quorum purposes.
THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST AT THE ANNUAL MEETING
IS REQUIRED FOR THE ELECTION OF EACH NOMINEE. ABSTENTIONS AND BROKER NON-VOTES
ARE NOT COUNTED AS VOTES CAST EITHER FOR OR AGAINST ANY NOMINEE.
The Board of Directors unanimously recommends that the stockholders vote
"FOR" election of the nominees named below.
4
<PAGE>
INFORMATION CONCERNING NOMINEES
Subject to the foregoing, Proxies will be voted for the election of the
following eight nominees as directors of the Company, each of whom has engaged
in the principal occupation indicated below for at least the past five years:
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED
NOMINEE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE DIRECTOR RESIDENCE AGE
------- -------------------------------------------- ---------- --------- ---
<S> <C> <C> <C> <C>
PETER N. BUCKLEY (1)......... Chairman & Chief Executive Officer of 1997 London, 55
Caledonia Investments plc England
JONATHAN H. CARTWRIGHT (1)... Finance Director of Caledonia Investments plc 1997 London, 44
England
LOUIS F. CRANE (2)........... Chairman of the Board of Directors of the 1987 New Orleans, 57
Company (October 1997 to Present) and Louisiana
President of Orleans Capital Management
(November 1991 to Present).
DAVID M. JOHNSON............. Private Investor, President of Q Services, Inc. 1983 Houston, 60
(October, 1997 to Present); Former Executive Texas
Vice President of Weatherford International,
Inc. (December 1991 to January 1994)
KENNETH M. JONES............. Private Investor. 1969 Flat Rock, 65
North Carolina
HARRY C. SAGER............... Retired. Executive Vice President of 1993 Houston, 68
Conoco, Inc. (1989 - 1992). Texas
GEORGE M. SMALL.............. President of the Company (October 1997 1986 Lafayette, 53
to Present). Prior to October 1997, Vice Louisiana
President, Chief Financial Officer,
Secretary and Treasurer
HOWARD WOLF.................. Attorney at Law. Chairman of the Board 1986 Houston, 63
of Directors of the Company (September 1986 Texas
to June 30, 1995). Partner, Fulbright &
Jaworski.
</TABLE>
____________________
(1) Peter N. Buckley and Jonathan H. Cartwright, directors and executive
officers of Caledonia Industrial & Services Limited ("CIS"), were
designated by CIS and elected to the Board of Directors of the Company in
February 1997 pursuant to a Master Agreement dated December 12, 1996 among
the Company, CIS and certain other persons in connection with the Company's
acquisition of 49% and other substantial interests in Bristow Aviation
Holdings Limited. The Master Agreement provides that so long as CIS owns
(1) at least 1,000,000 shares of Common Stock of the Company or (2) at
least 49% of the total outstanding ordinary shares of Bristow Aviation
Holdings Limited, CIS will have the right to designate two persons for
nomination of the Company's Board of Directors and to replace any
directors so nominated.
(2) Mr. Crane is a director of Coho Energy, Inc.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash and non-cash compensation
paid by the Company and its subsidiaries for services rendered during the fiscal
year ended March 31, 1998, the nine month transition period from July 1, 1996
through March 31, 1997, and for the fiscal year ended June 30, 1996 to the Chief
Executive Officer of the Company, its four other most highly compensated
executive officers and its former Chief Executive Officer who served for a
period in fiscal 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
AWARDS (3)
----------
SECURITIES
FISCAL OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
YEAR BONUS COMPENSATION STOCK OPTIONS/ COMPENSATION
NAME & PRINCIPAL POSITION ENDED SALARY($) ($) (1) (1) (2) AWARD(S)($) SARS(#) ($)(4)
------------------------- ----- --------- ------- ------------ ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
George M. Small (5)................. 1998 $176,500 $68,434 $0 $ 0 30,000 $ 15,687
President 1997 $112,500 $10,000 $0 $63,315 20,000 $ 10,573
1996 $142,833 $10,713 $0 $ 0 20,000 $ 9,382
Drury A. Milke (5).................. 1998 $114,500 $37,022 $0 $ 0 20,000 $ 6,870
Vice President, Chief Financial 1997 $ 71,750 $35,000 $0 $32,424 12,500 $ 4,305
Officer & Secretary 1996 $ 88,333 $ 5,300 $0 $ 0 10,000 $ 2,650
Ralph B. Murphy..................... 1998 $122,500 $21,969 $0 $ 0 10,000 $ 7,350
Vice President, 1997 $ 90,000 $60,000 $0 $ 0 10,000 $ 5,400
Corporate Sales 1996 $120,000 $ 6,000 $0 $ 0 5,000 $ 3,600
Hans J. Albert (5).................. 1998 $137,500 $26,250 $0 $ 0 20,000 $ 8,250
Vice President, International 1997 $ 93,750 $25,000 $0 $75,750 15,000 $ 5,624
Aviation Services 1996 $113,833 $27,035 $0 $ 0 15,000 $ 3,415
Gene Graves (5)..................... 1998 $155,000 $27,906 $0 $ 0 20,000 $ 8,686
Vice President, Marketing 1997 $109,250 $ 8,000 $0 $88,050 20,000 $ 5,245
1996 $135,833 $ 6,792 $0 $ 0 15,000 $ 4,075
James B. Clement (5)................ 1998 $125,333 $58,500 $0 $ 0 0 $ 123,584(6)
Former Chairman, President 1997 $176,438 $97,065 $0 $74,478 35,000 $ 14,355
& Chief Executive Officer 1996 $223,958 $25,195 $0 $ 0 20,000 $ 11,744
</TABLE>
____________________
(1) Cash bonuses are listed in the fiscal year earned but were paid partially
or entirely in the following fiscal year. Under the terms of the 1994
Long-Term Management Incentive Plan (the "1994 Plan"), certain participants
may elect to receive all or a portion of their awarded bonus in the form of
restricted stock. These amounts (including the 20% additional awards in
restricted stock provided as a deferral incentive) are reflected in the
"Restricted Stock Award(s)" column, although the restricted stock awards
were not made until the following year.
(2) The stated amounts exclude perquisites and other personal benefits because
the aggregate amounts paid to or for any executive officer as determined in
accordance with the rules of the Securities and Exchange Commission
relating to executive compensation did not exceed the lesser of $50,000 or
10% of salary and bonus for fiscal 1998, 1997 and 1996.
6
<PAGE>
(3) The "Restricted Stock Award(s)" column reflects the value, as of the date
of grant, of the restricted stock received by the named individuals. Mr.
Small, Mr. Milke, Mr. Albert, Mr. Graves, and Mr. Clement received,
respectively, 4,715; 2,415; 5,641; 6,557 and 5,546 shares of restricted
stock in lieu of $52,763; $27,020; $63,125; $73,375 and $62,065 in cash for
fiscal 1997. Dividend income, if any, will be paid on the restricted stock
at the same rate as paid to all stockholders. With respect to fiscal 1997,
restrictions will lapse 30 months from the date the restricted stock was
awarded. The number of shares of restricted stock received in lieu of cash
was determined by multiplying the amount of the foregone cash bonus by 1.2
(as a deferral incentive) and dividing that product by the average market
price of the Company's Common Stock for the month of June 1996 ($13.4285).
At the end of the 1998 fiscal year, Mr. Small, Mr. Milke, Mr. Albert and
Mr. Graves, respectively, had an aggregate of 4,715; 2,415; 5,641 and 6,557
shares of restricted stock, having an aggregate value on that date of
$93,711; $47,998; $112,115 and $130,320. The Company awarded no restricted
stock to these individuals for the 1998 fiscal year. During the 1998, 1997,
and 1996 fiscal years, the Company maintained no long term incentive plan,
as defined in applicable Securities and Exchange Commission rules. All
options granted to the named executive officers in fiscal 1998, 1997 and
1996 were awarded pursuant to the 1994 Plan. See footnote (1) on page 6
for a summary of certain of the terms of the options granted under the 1994
Plan. All of the options granted to the named executives became
exercisable one year after the grant date.
(4) The stated amounts consist of the Company's contributions made pursuant to
the Company's Employee Savings and Retirement Plan (the "401(k) Plan"), all
of which are 100% vested, and the cost to the Company for premiums on
Company-owned life insurance policies that the Company maintains for
certain key employees, including Messrs. Small, Milke, Albert, Graves and
Clement. All amounts stated for Messrs. Milke, Murphy and Albert are
comprised exclusively of the Company's contributions pursuant to the 401(k)
Plan. During the fiscal year ended 1998, the expense to the Company for
the life insurance premiums was $5,097, $316 and $5,161 for Messrs. Small,
Graves and Clement, respectively, and the Company's contribution to the
401(k) Plan was $10,590, $8,370 and $3,760 for Messrs. Small, Graves and
Clement, respectively.
(5) See "Severance and Change-of-Control Agreements".
(6) See "Directors Meetings, Fees and Other Matters" for a description of
certain agreements made by the Company and Mr. Clement in connection with
Mr. Clement's resignation in October of 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table shows, as to the named executive officers, information
about option/SAR grants during the 1998 fiscal year:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (2)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------------- ------------ --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
George M. Small... 30,000 15% $19.00 9/29/07 $358,470 $908,433
Drury A. Milke.... 20,000 10% $19.00 9/29/07 $238,980 $605,622
Ralph B. Murphy... 10,000 5% $19.00 9/29/07 $119,490 $302,811
Hans J. Albert.... 20,000 10% $19.00 9/29/07 $238,900 $605,622
Gene Graves....... 20,000 10% $19.00 9/29/07 $238,900 $605,622
</TABLE>
____________________
(1) These awards were made pursuant to the 1994 Plan, have a ten-year term,
have an exercise price equal to the fair market value (as defined in the
1994 Plan) of the Common Stock on the grant date, and include the right of
the Company to purchase all or any part of the shares of Common Stock
issuable upon exercise of the options by paying to the optionee an amount,
in cash or Common Stock, equal to the excess of the fair market value of
7
<PAGE>
the Company's Common Stock on the effective date of such purchase over the
exercise price per share. Options granted under the 1994 Plan may be
exercised for cash and may also be paid for by delivering to the Company
unrestricted Common Stock already owned by the optionee or by the Company
withholding shares otherwise issuable upon exercise of the options (or a
combination thereof), as well as in such other manner as may be
authorized by the committee administering the 1994 Plan (the "Committee").
Options under the 1994 Plan also granted the optionee the right, if the
optionee makes payment of the exercise price by delivering shares of Common
Stock held by the optionee, to purchase the number of shares of Common
Stock delivered by the optionee in payment of the exercise price (a
"Replacement Option"). Replacement Options are exercisable at a price
equal to the fair market value of the Common Stock of the Company as of the
date of the grant of the Replacement Option. The options granted under the
1994 Plan also provide for certain "cashout" rights following a Change In
Control (as defined in the 1994 Plan). The options granted under the 1994
Plan also provide that, subject to certain conditions, the Committee may
permit the optionee to pay all or a portion of any taxes due with respect
to exercise of the options (a) by electing to have the Company withhold
shares of Common Stock due to the optionee upon exercise of the option or
(b) by delivering to the Company previously owned shares of Common Stock.
(2) The dollar amounts shown in these two columns have been derived by
multiplying the exercise price by the annual appreciation rate shown
(compounded for the term of the options), then multiplying this product by
the number of shares covered by the options, and then subtracting the
aggregate exercise price of the options. The dollar amounts set forth
under this heading have not been discounted to present value. Further, the
dollar amounts are the result of calculations at the 5% and 10% rates set
by the Securities and Exchange Commission and therefore are not intended to
forecast possible future appreciation, if any, of the price of the Common
Stock of the Company.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION/SAR VALUES
The following table shows, as to the named executive officers, the
aggregate option exercises during fiscal year 1998 and the values of unexercised
options as of March 31, 1998:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FY END OPTIONS/SARS AT FY END (1)
------------------------- --------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------- --------------- ---------- ------------------------- --------------------------
<S> <C> <C> <C> <C>
George M. Small.... 73,000 $ 769,900 85,000 $611,250
30,000 $ 26,250
Drury A. Milke..... 40,000 $ 305,600 15,000 $104,375
20,000 $ 17,500
Ralph B. Murphy.... 20,000 $ 266,235 70,000 $650,000
10,000 $ 8,750
Hans J. Albert..... 55,500 $ 364,900 15,000 $106,875
20,000 $ 17,500
Gene Graves........ 60,000 $ 430,600 15,000 $103,125
20,000 $ 17,500
James B. Clement... 345,000 $4,371,500 0 $ 0
0 $ 0
- --------------------
</TABLE>
(1) The dollar amounts shown in this column represent the aggregate excess of
the market value of the shares underlying the unexercised in-the-money
options as of March 31, 1998, over the aggregate exercise price of the
options.
8
<PAGE>
SEVERANCE AND CHANGE-OF-CONTROL ARRANGEMENTS
The Company has entered into change of control agreements (the "Change of
Control Agreements") with certain executive officers. The Change of Control
Agreements for each executive officer provide for continued employment for a
three year period following a Change of Control, as defined (the "Employment
Term"). Should the officer's employment be terminated during the Employment Term
for any reason other than death, disability or "Cause", as defined, or should
the officer terminate his employment for "Good Reason", as defined, the officer
will become entitled to certain benefits. The benefits include a lump sum
payment equal to three times the sum of the officer's Annual Base Salary, as
defined, and Highest Annual Bonus, as defined. Also, the officer will be
entitled to continued welfare benefits under various Company plans and programs
for a minimum of thirty-six months following the "Date of Termination", as
defined, as well as outplacement services and other benefits. In addition, those
officers who are parties to the Executive Welfare Benefit Agreements dated March
31, 1986 will, in the event of such termination, be treated as having been
terminated without cause as of the Date of Termination, and the insurance
policies provided under such Executive Welfare Benefit Agreements will be
immediately transferred to the officer, the officer will be credited with three
additional years of service for purposes of the vesting of such policies, and
the Company will continue to pay the premiums on such policies for three years
after such officer's Date of Termination. In the event that any payments by the
Company to or for the benefit of the officer (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code ("Excise
Tax"), then the officer will be entitled to an additional payment ("Gross-Up
Payment") in an amount such that, after payment by such officer of all taxes
imposed on the Gross-Up Payment, the officer retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. The Change of Control
Agreements also provide that no award granted under the 1994 Plan or pursuant to
any other plan or arrangements maintained by the Company will be reduced as a
result of being potentially non-deductible under Section 280G of the Internal
Revenue Code.
Under the terms of the 1994 Plan, if a change in control (as defined in the
1994 Plan) occurs, all outstanding options and SARs held by the employee
participant become immediately exercisable; the restrictions and deferral
limitations (if any) applicable to any then outstanding shares of Restricted
Stock, Deferred Stock or other stock based awards made pursuant to the 1994 Plan
(if any) become free of all restrictions, fully vested and transferable to the
full extent of the award. Also, under the 1994 Plan, for a sixty-day period
following a change in control (as defined in the 1994 Plan), unless the
Committee that administers the 1994 Plan determines otherwise at the time of the
award the participant has the right to elect to surrender to the Company all or
part of the stock options in exchange for a cash payment equal to the spread
between the change in control price (as defined in the 1994 Plan) and the option
exercise price.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Howard Wolf, Director of the Company and member of the Compensation
Committee, is a partner of the law firm of Fulbright & Jaworski, which the
Company retains from time to time to provide legal services. Peter N. Buckley,
a Director of the Company and a member of the Compensation Committee and the
Long-Term Incentive Plan Committee, is the Chairman and Chief Executive Officer
of Caledonia Investments plc ("Cal Investments"), the parent company of
Caledonia Industrial & Services Limited ("CIS") (collectively, "Caledonia").
Caledonia, in turn, is the beneficial owner of 1,628,083 shares of the Company's
Common Stock, which represents approximately 7.4% of the total shares of Common
Stock outstanding and is also the beneficial owner of 49% of the outstanding
shares of Bristow Aviation Holdings Limited, an English corporation, of which
the Company owns 49%. See "Directors Meetings, Fees and Other Matters".
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised exclusively of non-employee
directors and is responsible for formulating and making recommendations of the
Board of Directors with regard to:
-- the Company's executive compensation policies and programs, and
-- specific salary and incentive awards to executive officers.
COMPENSATION POLICY
In designing and implementing its executive compensation program, the
Company follows a long-standing philosophy that management pay should be
directly and substantially tied to the achievement by the Company of its
performance objectives. A corollary principle guiding the Company's
compensation programs is that stock-based compensation should be an integral
part of the program to align management incentives with share price. The Company
also operates under the principle that short-term and long-term elements of
compensation should be balanced. Finally, the Company believes that, to excel,
it must continue to attract and retain highly talented and motivated employees
at all levels, especially the senior executives.
Accordingly, the Company's overall compensation policy is to provide a
competitive compensation package designed to attract, motivate and retain key
executive officers and to tie executive pay to overall Company performance and
return to stockholders. The Company's executive compensation program consists
of base salary, annual incentives and long-term incentives. Executive officers
also participate in a 401(k) plan, a medical plan and other benefit plans
available to employees generally.
The compensation packages provided to the chief executive officer and the
other executive officers for the 1998 fiscal year were based in part on the
recommendations of the outside consulting firm hired by the Company in 1993.
The consulting firm met with Company management to discuss the strategic
direction of the Company and the Company's objectives for its executive
compensation programs. The consulting firm prepared a study based on several
published executive compensation surveys conducted at different times that
reviewed the compensation of executives at companies with revenues similar to
those of the Company (hereafter, the "Compensation Study"). The group of
companies reflected in the Compensation Study includes some of the peer
companies set forth in the Stock Performance Graph on Page 13 of this Proxy
Statement.
1. BASE SALARY
The Committee reviews base salaries annually. Such reviews generally
include comparisons of salaries paid by its most direct competitors, the
Compensation Study and an analysis of expected economic conditions in the oil
and gas service industry to determine whether an employee's base salary will be
modified. Salary increases in the 1998 fiscal year were based on individual
performance and the Company's achievement of its profit goals, as well as
salaries paid by Company competitors (including the companies in the
Compensation Study). In each of the last several years, the chief executive
officer initially has recommended to the Committee salary levels for the
upcoming year for all Company officers other than himself. The Committee has
reviewed the chief executive officer's recommendations and industry comparisons
and made its salary recommendations to the full Board. The Board approved all
of the Committee's recommended salary levels for the 1998 fiscal year.
The Company believes that the salaries of the executives named in the
Summary Compensation Table for the 1998 fiscal year were at or near the median
of the peer group considered by the Committee to constitute the Company's most
direct competitors for executive talent. The Compensation Committee believes
that not all of the companies in a peer group established to compare stockholder
returns are necessarily representative of the companies competing with the
Company for executive talent. Thus, the peer group used by the Company to
compare compensation is a sub-group of the companies included in the peer group
index in the Stock Performance Graph on Page 13 of this Proxy Statement.
10
<PAGE>
2. ANNUAL INCENTIVES
Cash bonuses provide an annual incentive to the Company's executives. Bonus
amounts to executives are determined according to the terms of the Annual
Incentive Plan approved by the stockholders in 1994. This element of the
compensation program is designed to link executive pay to objective measures of
the performance of the Company. The Company performance measures established by
the Committee to determine bonus levels for the 1998 fiscal year were customized
to the results of the division of the Company over which that executive had the
most influence. All executives had consolidated earnings per share as a 25%
portion of the annual incentive goal. The balance of the annual incentives were
specific to corporate or divisional results and included measures such as
revenues, return on revenues, and return on equity. Threshold, target, and
maximum levels of Company performance were established for each performance
measure, based on historical results, budgets and growth goals established by
the Company. For the 1998 fiscal year, executives achieved goals ranging from
47.5% to 82.5% of the aggregate maximum level of performance on their specific
performance measures. Each of the employees designated to participate in the
Annual Incentive Plan, including the executive officers, received a bonus equal
to the appropriate percentage of his or her base salary set by the Committee for
incentive opportunity.
In accordance with the restricted stock payment alternative under the 1994
Plan, also approved by the stockholders in 1994, certain executives may elect to
receive all or any part of their bonuses in shares of Restricted Stock. The
Committee believes that this application of Restricted Stock is an excellent
vehicle for expanding the stock ownership of executives of the Company and will
further deepen the executive officers' commitment to the long-term objectives
and performance of the Company and their identification with stockholder
interests.
3. LONG-TERM INCENTIVES
The Compensation Committee and the Long-Term Incentive Plan Committee
believe that granting stock options is the most appropriate method of motivating
and rewarding executive officers for the creation of long-term shareholder
value. The Company has established a policy of awarding stock options based
upon continuing progress of the Company and on individual performance by its
executives. The Long-Term Incentive Plan Committee uses only subjective and
informal measures of Company and individual performance in deciding whether and,
if so, how many options to award. Typically, stock options are granted annually.
In September 1997, options were awarded to the executive officers, including the
following grants to the executive officers named in the Summary Compensation
Table: George M. Small 30,000; Drury A. Milke 20,000; Ralph B. Murphy 10,000;
Hans J. Albert 20,000; and Gene Graves 20,000. All awards shown in the Summary
Compensation Table were made at fair market value at the time of grant so that
holders will benefit from such grants only when, and to the extent, the stock
price increases after the date of grant.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
George M. Small has been employed by the Company since 1977 and was
elected President in October 1997. The Compensation Committee sought to align
Mr. Small's base salary and annual incentives at a reasonable level in
comparison to the other companies in the Company's self-elected compensation
peer group. Mr. Small's base salary was established at $200,000 per year.
Under the Annual Incentive Plan, Mr. Small's incentive opportunity for
fiscal 1998 was 60% of his base salary. Performance for fiscal 1998 was based
upon the budget approved for the nine months ended March 31, 1998 and was
$68,434 in cash.
11
<PAGE>
Provisions of the Omnibus Budget Reconciliation Act of 1993 limit
deductibility of certain compensation for the Chief Executive Officer and the
additional four executive officers who were highest paid and employed at year
end, effective for tax years beginning on or after January 1994. The policy of
this Committee related to this Act is to establish and maintain a compensation
program that maximizes the creation of long-term value for stockholders. Action
will be taken to qualify compensation approaches to ensure deductibility except
in those areas where the Committee believes that stockholder interests are best
served by retaining flexibility of approach.
COMPENSATION COMMITTEE
Howard Wolf, Chairman
Peter N. Buckley
Kenneth M. Jones
Harry C. Sager
12
<PAGE>
STOCK PERFORMANCE GRAPH
The following performance graph compares the yearly cumulative return on
the Company's Common Stock to the NASDAQ Stock Market (U.S. Companies) Index and
a peer group index of companies selected by the Company, over a five fiscal year
period ending on March 31, 1998. The peer group companies are Oceaneering
International, Inc.; Petroleum Helicopters, Inc.; Tidewater, Inc.; Rowan
Companies, Inc.; McDermott International, Inc.; and GulfMark International, Inc.
The graph assumes (i) the reinvestment of dividend, if any, and (ii) the value
of the investment in the Company's Common Stock and each index to have been $100
at June 30, 1993.
COMPARISON OF CUMULATIVE STOCKHOLDER RETURN 1993 - 1998
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Fiscal Year Ending June 30, MARCH 31,
---------------------------------- -----------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OLOG......... 100 102 105 104 120 149
NASDAQ....... 100 101 135 173 178 270
Peer Group... 100 97 99 145 171 220
</TABLE>
2. PROPOSAL TO APPROVE AMENDMENT TO THE 1994 LONG TERM INCENTIVE PLAN
SUMMARY OF AMENDMENT AND PLAN PROVISIONS
PROPOSED AMENDMENT. At the Annual Meeting, the Company will ask the
stockholders to approve an amendment to the Offshore Logistics, Inc. 1994 Long-
Term Management Incentive Plan, as amended, (the "1994 Plan") increasing the
authorized shares under the 1994 Plan by 1,000,000 shares (the "Amendment").
The Board of Directors has determined that the Amendment is desirable for the
Company at this time inasmuch as only 113,302 shares remain available under the
1994 Plan. The Company believes that stock-based incentive plans need to be an
integral part of a compensation program to provide officers and other key
employees with incentives to endeavor to achieve financial results consistent
with the Company's long-range business plans and to encourage them to identify
closely with stockholder interests. The 1994 Plan is designed to achieve these
objectives and to provide a vehicle to attract and retain key employees who will
be responsible for advancing the business of the Company.
The Amendment will become effective only upon the affirmative vote of the
holders of a majority of the shares of the Common Stock of the Company present
or represented at the Annual Meeting.
13
<PAGE>
The principal features of the 1994 Plan are summarized below. This summary
is qualified by reference to the full text of the 1994 Plan that is annexed as
Appendix "A" to this Proxy Statement.
GENERAL. Awards granted under the 1994 Plan may be in the form of stock
options, stock appreciation rights, restricted stock, deferred stock, other
stock-based awards or any combination thereof within the limitations set forth
in the 1994 Plan. The 1994 Plan provides that Awards may be made under the 1994
Plan until December 9, 2004.
ADMINISTRATION. Under the terms of the 1994 Plan, the 1994 Plan will be
administered by the Long-Term Incentive Plan Committee (the "Committee") of the
Board of Directors, or by such other committee or subcommittee as may be
appointed by the Board of Directors. Until the Board appoints any other
committee or subcommittee, the 1994 Plan will be administered by the Committee.
Under the terms of the 1994 Plan, the Committee can make such rules and
regulations and establish such procedures for the administration of the 1994
Plan as it deems appropriate.
SHARES AVAILABLE. The 1994 Plan, as originally approved by the
stockholders, provided that the aggregate number of shares of the Company's
Common Stock that may be awarded cannot exceed 900,000, subject to adjustment in
certain circumstances to prevent dilution and that not more than 100,000 shares
may be awarded to any participant during a fiscal year. Only 113,302 shares
presently remain available for awards under the 1994 Plan. Hence, the Amendment
would provide that an additional 1,000,000 shares of the Company's Common Stock
be authorized for awards under the 1994 Plan. At the discretion of the
Committee, the Company's Common Stock delivered under the 1994 Plan may be
authorized and unissued shares, or shares issued and held in the treasury of the
Company. Shares underlying awards that are canceled, expired, forfeited or
terminated shall again be available for the grant of additional awards within
the limits provided by the 1994 Plan.
ELIGIBILITY. The 1994 Plan provides for awards to officers and employees
of the Company and its subsidiaries and affiliates. The executive officers of
the Company named in the Summary Compensation Table under the caption "Executive
Compensation" herein have been, and continued to be, among the officers eligible
to receive awards under the 1994 Plan.
STOCK OPTIONS. Subject to the terms and provisions of the 1994 Plan,
options may be granted to officers or employees at any time and from time to
time as determined by the Committee. Options may be granted as incentive stock
options, which are intended to qualify for favorable treatment to the recipient
under Federal tax law, or as non-qualified stock options, which do not qualify
for this favorable tax treatment. Subject to the limits provided in the 1994
Plan, the Committee determines the number of options granted to each recipient.
No more than 800,000 shares cumulatively may be awarded upon exercise of
Incentive Stock Options over the term of the 1994 Plan. Each option grant shall
be evidenced by a stock option agreement that specifies the option exercise
price, whether the options are intended to be incentive stock options or non-
qualified stock options, the duration of the options, the number of shares to
which the options pertain and such additional limitations, terms and conditions
as the Committee may determine.
The Committee determines the exercise price for each option granted,
provided that, in the case of a non-qualified stock option, the option exercise
price may not be less than 50 percent of the fair market value of a share of the
Company's Common Stock and, in the case of an incentive stock option, the option
exercise price may not be less than 100 percent of the fair market value of a
share of the Company's Common Stock.
All options granted under the 1994 Plan shall expire no later than ten
years from the date of grant. Subject to the limitations set forth in the 1994
Plan, any option may be exercised by payment in cash, by surrendering shares of
the Company's Common Stock already owned by the employee, by requesting the
Company to withhold from the shares issuable upon exercise of the option that
number of shares having a fair market value on the date of exercise equal to the
aggregate option exercise price, or a combination of cash and such shares, in
each case in the manner provided in the option agreement.
The 1994 Plan places limitations on the exercise of options under certain
circumstances upon or after termination of employment or in the event of the
death, disability or retirement. At the discretion of the Committee, the
agreement evidencing the award of stock options may contain additional
limitations upon the exercise of options under such circumstances or may provide
certain limited rights to exercise such options under such circumstances. Stock
options are nontransferable except by will or by the laws of descent and
distribution or, in the case of non-qualified stock
14
<PAGE>
options, as otherwise expressly permitted under the option agreement. The
granting of an option does not accord the recipient the rights of a stockholder,
and such rights accrue only after the exercise of an option and the registration
of shares of Common Stock in the recipient's name.
The Committee may provide either at the time of an option grant or
thereafter that, if an employee exercises all or part of the option (an
"Original Option") by surrendering already owned shares of Common Stock in full
or partial payment of the exercise price under such Original Option, the
employee shall be granted another option (the "Replacement Option"), subject to
the availability of shares of Common Stock under the 1994 Plan at the time of
exercise. Each Replacement Option shall cover a number of shares of Common
Stock no greater than the number of shares of Common Stock equal to the fair
market value of the Common Stock on the date of grant of the Replacement Option,
may not be exercised for 6 months from the date it is granted and shall expire
on the expiration date of the Original Option.
STOCK APPRECIATION RIGHTS. The Committee in its discretion may grant stock
appreciation rights under the 1994 Plan. A stock appreciation right entitles
the holder to receive from the Company upon exercise an amount equal to the
excess, if any, of the aggregate fair market value of a specified number of
shares of Common Stock that are the subject of such option or stock appreciation
right over the aggregate exercise price for the underlying shares. The Committee
in its discretion may also grant stock appreciation rights that become
exercisable only upon a Change in Control of the Company (as defined in the 1994
Plan). These limited stock appreciation rights may be settled solely in cash.
The Company may make payment of the amount to which the participant
exercising stock appreciation rights is entitled by delivering shares of the
Company's Common Stock, cash or combination of stock and cash as the Committee
may determine. Stock appreciation rights are not transferable except by will or
the laws of descent and distribution and are transferable only in conjunction
with a permitted transfer of the option (if any) to which the stock appreciation
right relates and then and only then to the transferee of such option. Each
stock appreciation right shall be evidenced by an award agreement that specifies
the date and terms of the award and such additional limitations, terms and
conditions as the Committee may determine.
In the case of a Change of Control of the Company (as defined in the 1994
Plan), options and stock appreciation rights granted pursuant to the 1994 Plan
become fully exercisable.
RESTRICTED STOCK. The 1994 Plan provides for the award of shares of Common
Stock of the Company that are subject to certain restrictions ("Restricted
Stock") provided in the 1994 Plan and as may be otherwise determined by the
Committee. Except for these restrictions and any others imposed by the
Committee, upon the grant of Restricted Stock the recipient will have rights of
a stockholder with respect to the Restricted Stock, including the right to vote
the Restricted Stock and to receive all dividends and other distributions paid
or made with respect to the Restricted Stock. During the restriction period set
by the Committee, the recipient may not sell, transfer, pledge, exchange or
otherwise dispose of the Restricted Stock. Generally if the recipient's
employment is terminated for any reason other than death, disability or
retirement during the restriction period, an employee's Restricted Stock will be
forfeited; provided however, that the Committee may waive such forfeiture in its
discretion subject to the provisions of the 1994 Plan. In the case of a Change
in Control of the Company (as defined in the 1994 Plan), and employee will
receive the Restricted Stock free and clear of all restrictions. The Committee
may provide for the lapse of the restrictions in installments and may accelerate
or waive such restrictions based on the performance of the recipient or the
Company, the recipient's period of service, or on other criteria as the
Committee may determine. Non-compliance with any of the restrictions will
result in a forfeiture of the Restricted Stock. When the conditions of the
Restricted Stock award established by the committee are satisfied, the Company
will deliver at the end of the restriction period stock certificates
representing the shares of Common Stock that are no longer subject to any
restrictions, except those restrictions required by applicable securities laws.
DEFERRED STOCK. The 1994 Plan authorizes the Committee to grant deferred
shares of Common Stock either in connection with other awards under the 1994
Plan or separately. The Committee may in its discretion condition the grant
upon the attainment of specified performance goals or other criteria. The
Committee shall have the sole and complete authority to determine the duration
of the period during which the receipt of Common Stock will be deferred and all
other terms and conditions of the awards, subject to the provisions of the 1994
Plan.
15
<PAGE>
In conjunction with the bonuses payable pursuant to the Annual Incentive
Plan, shares of Restricted Stock may be issued to participants in the Annual
Incentive Plan who have elected to receive all or a portion of their annual
incentive bonuses in the form of Restricted Stock in lieu of cash. The terms
of the Restricted Stock would typically be expected to include a provision that
such shares fully vest at the conclusion of thirty months of continued service,
with certain exceptions permitted in the event of retirement, disability, death
or a change in control of the Company. Until the end of this restriction period,
the shares cannot be transferred or encumbered. In recognition of the
substantial risk assumed by the employee in terms of forfeiture of such
restricted shares, as well as the associated market risk and deferral of
economic benefits of current cash compensation, the Compensation Committee in
the past has provided an incentive to encourage voluntary deferrals into stock
in the form of an incremental amount of Restricted Stock equivalent to 20% of
the cash award earned and similar or different incentives may be provided in the
future.
AWARDS UNDER THE 1994 PLAN. Because it is within the discretion of the
Committee to determine which officers and employees receive awards and the
amount and type of awards received, it is not presently possible to determine
the number of individuals to whom awards will be made in the future under the
1994 Plan or the amount of the awards. See "Executive Compensation" for
certain information on benefits under the 1994 Plan that have been provided to
named executive officers.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain federal income tax aspects of awards
made under the 1994 Plan, based upon the laws in effect on the date hereof. The
discussion is general in nature and does not take into account a number of
considerations which may apply in light of the particular circumstances of a
participant under the 1994 Plan.
NON-QUALIFIED STOCK OPTIONS. With respect to non-qualified stock options:
(i) no income is recognized by the participant at the time the option is
granted, (ii) generally, upon exercise of the option, the participant recognizes
ordinary income in an amount equal to the difference between the option price
and the fair market value of the share on the date of exercise; and (iii) at
disposition, any difference between the sale price and the fair market value of
the shares on the date of exercise will be treated generally as capital gain or
loss.
INCENTIVE STOCK OPTIONS. Generally, no taxable income is recognized by the
participant upon the grant of an incentive stock option ("ISO") or upon the
exercise of an ISO during the period of his employment with the Company or one
of its subsidiaries, or within three months (12 months, in the event of
permanent and total disability, or the term of the option, in the event of
death) after termination. An option exercised more than three months after an
optionee's termination of employment other than upon death cannot qualify for
the tax treatment accorded incentive stock options. Such option would be
treated as a non-qualified stock option instead. However, the exercise of an
ISO may result in an alternative minimum tax liability to the participant. If
the participant continues to hold the shares acquired upon exercise of an ISO
for at least two years from the date of grant and one year from the date of
exercise, upon the sale of the shares any amount realized in excess of the
option price will be taxed as long-term capital gain.
If Common Stock acquired upon the exercise of an ISO is disposed to the
expiration of the one-year and two-year holding periods described above, the
participant will generally recognize ordinary income in an amount equal to the
excess, if any, of the fair market value of the shares on the date of exercise
(or, if less, the amount realized on the disposition of the shares) over the
option price. Any further gain recorded by the participant on such disposition
will be taxed as short-term, mid-term or long-term capital gain depending on the
period that the shares were held by the participant.
STOCK APPRECIATION RIGHTS. No income will be recognized by a participant
in connection with the grant of Stock Appreciation Rights ("SAR"). When an SAR
is exercised, the participant will generally recognize as ordinary income in the
year of exercise an amount equal to the amount of cash received plus the fair
market value on the date of exercise of any shares received. If the participant
receives Common Stock upon exercise of an SAR, rules similar to those described
above under "Non-Qualified Stock Options" will apply with respect to the post-
exercise appreciation.
RESTRICTED STOCK. A participant receiving stock generally will recognize
ordinary income in the amount of the fair market value of the restricted stock
at the time the stock vests, less the consideration paid for the stock.
However, a
16
<PAGE>
participant may elect, under Section 83(b) of the Tax Code, to recognize
ordinary income on the date of grant in an amount equal to the excess of the
fair market of the shares on such date (determined without regard to the
restrictions) over their purchase price. The holding period to determine whether
the participant has long-term, mid-term or short-term capital on a subsequent
disposition of the shares generally begins when the restriction period expires,
and the tax basis for such shares will generally be the fair market value of
such shares on such date. If the participant has made an election under Section
83(b), however, the holding period will commence on the date of grant, and the
tax basis will be equal to the fair market value of the shares on such date
(determined without regard to the restrictions).
Dividends paid on restricted stock prior to the date on which the
forfeiture restrictions lapse generally will be treated as compensation that is
taxable as ordinary income to the participant. If, however, the participant
makes a Section 83(b) election with respect to the restricted stock, the
dividends will be taxable as ordinary dividend income to the participant.
COMPANY DEDUCTION. As general rule, the Company will be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount that an employee recognizes ordinary income from Awards under the 1994
Plan, to the extent such income is considered reasonable compensation under the
Tax Code. Accordingly, no deduction is available to the Company upon the grant
or exercise of an incentive stock option (although a deduction may be available
if the employee sells the shares so purchased before the applicable holding
period expires), whereas upon exercise of a non-qualified stock option, the
Company is entitled to a deduction in an amount equal to the income recognized
by the employee. The Company will not, however, be entitled to a deduction to
the extent compensation in excess of $1 million is paid to an executive officer
who was employed by the Company at year-end, unless the compensation qualifies
as "performance based" under Section 162(m) of the Tax Code or certain other
exceptions apply. In addition the Company will not be entitled to a deduction
with respect to payments to employees which are contingent upon a change in
control if such payments are deemed to constitute "excess parachute payments"
under Section 280G of the Tax Code and do not qualify as reasonable compensation
pursuant to that Section; such payments will subject the recipients to a 20%
excise tax.
LIMIT ON DEDUCTIONS
The Company's deduction may be limited (and employees receiving awards may
be subject to an excise tax) to the extent that benefits under the 1994 Plan
become payable as a result of a Change in Control of the Company. Moreover,
Section 162(m) of the Internal Revenue Code (the "Code") limits of deductibility
of certain compensation of the Chief Executive Officer and the next four most
highly compensated officers of publicly-held corporations. Compensation paid to
these officers during a year in excess of $1 million that is not performance-
based would not be deductible on the Company's income tax return for that year.
The Board of Directors will evaluate from time to time the relative benefits to
the Company of any required changes in the 1994 Plan to qualify awards under it
for deductibility under Section 162(m) of the Code.
APPROVAL OF THE AMENDMENT REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
MAJORITY OF THE OUTSTANDING SHARES OF THE COMMON STOCK, PRESENT OR REPRESENTED
AT THE ANNUAL MEETING. BROKER NON-VOTES ARE NOT COUNTED AS VOTES CAST EITHER
FOR OR AGAINST THE PROPOSAL. ABSTENTIONS ARE COUNTED AS VOTES CAST AGAINST THE
PROPOSAL.
For the reasons stated herein, the Board of Directors recommends that the
stockholders vote FOR Proposal 2.
DIRECTORS MEETINGS, FEES AND OTHER MATTERS
The Company has standing Audit, Compensation, Long-Term Incentive
Plan, Executive and Nominating committees of the Board of Directors. In
addition, in order to comply with the requirements of Section 16 of the
Securities Exchange Act of 1934 (the "Exchange Act"), three members of the
Compensation Committee serve as members of the Long-Term Incentive Plan
Committee, which administers the 1994 Plan. During the fiscal year ended March
31, 1998, each non-employee member of the Board of Directors received $1,000 for
each meeting attended, including committee meetings, and $8,000 per year,
payable quarterly in arrears, except for the Chairman of the Board of Directors
who receives $96,000 per year.
17
<PAGE>
The Board of Directors held six meetings during the past fiscal year.
During this period, no incumbent director attended fewer than 75% of the
aggregate of (i) the total number of meetings of the Board of Directors during
the period in which he was a director and (ii) the total number of meetings held
by all committees on which he served during the period in which he was a
director.
The 1991 Non-qualified Stock Option Plan for Non-employee Directors
(the "1991 Plan") provides for the granting to directors who are not employees
of the Company (the "Non-employee Directors") of non-qualified options to
purchase Common Stock. The 1991 Plan is administered by the Board of Directors.
A total of 161,000 shares of Common Stock have been reserved for issuance at
March 31, 1998, upon the exercise of options under the 1991 Plan, subject to
adjustment in the event of stock splits, stock dividends and similar changes in
the Company's capital stock.
As of September 24, 1991, the date as of which the 1991 Plan was
adopted by the Board of Directors, Non-employee Directors were granted
automatically options to purchase 500 shares of stock for each year of
continuous service plus 2,000 shares. As of the date of the Company's Annual
Meeting of Stockholders in each year that the 1991 Plan is in effect beginning
with the Annual Meeting held on December 1, 1992, each Non-employee Director who
is elected or re-elected, or otherwise continues as a director of the Company
following such Annual Meeting, will be granted an option to purchase 2,000
shares of Common Stock. However, no such options shall be granted to any Non-
employee Director who during the preceding 12 months missed 50% or more of the
meetings of the Board of Directors and committees on which he served.
The option price per share for each option granted under the 1991 Plan
is the fair market value of the Common Stock on the date of grant. Under the
1991 Plan, options are not exercisable until six months after the date of the
grant. The 1991 Plan will terminate on, and no options shall be issued after,
the date of the annual meeting of stockholders in 2000 and any options
outstanding on that date will remain outstanding until they have either expired
or been exercised.
The Audit Committee is composed of Messrs. Crane, Cartwright and
Johnson. The Committee is authorized to engage and discharge independent
auditors; to review the fee, scope and timing of the independent audit and any
other services rendered; to approve professional services rendered by the
auditors; to review with the auditors and management the Company's policies and
procedures with respect to accounting and financial controls; to review audit
results with the auditors; and to direct and supervise special investigations.
The Audit Committee held one meeting during the last fiscal year.
The Compensation Committee is composed of Messrs. Wolf, Buckley,
Jones, and Sager. The functions of the Compensation Committee are to recommend
to the full Board compensation arrangements for senior management and directors;
to recommend compensation plans in which officers and directors are eligible to
participate; and to take such other action as is delegated to it by the Board.
The Compensation Committee met once during the last fiscal year.
The Long-Term Incentive Plan Committee is composed of Messrs. Buckley,
Jones and Sager. The functions of the Long-Term Incentive Plan Committee are to
administer the 1994 Plan and to grant options or other benefits under the 1994
Plan.
The Executive Committee was comprised of Messrs. Clement, Johnson and
Wolf until October, 1997, at which time the Committee was reconstituted and
became comprised of Messrs. Wolf, Crane and Johnson. The Executive Committee is
authorized to act on behalf of the full Board on a broad range of issues. The
Executive Committee did not meet during the last fiscal year.
Messrs. Jones, Johnson and Wolf comprise the Nominating Committee. The
function of the Nominating Committee is to recommend nominees to serve on the
Board of Directors and to take such action as is delegated to it by the Board.
The Nominating Committee held one meeting during the last fiscal year.
On December 19, 1996, the Company acquired 49% of the common stock and
other significant economic interest in Bristow Aviation Holdings Limited
("Bristow"), an English corporation, which holds all of the outstanding shares
in Bristow Helicopter Group Limited ("BHGL"). As a result of the transaction,
CIS is the beneficial owner of 1,628,083 shares of the Company's Common Stock
(see "Security Ownership of Certain Beneficial Owners and
18
<PAGE>
Management"). CIS has also designated Peter N. Buckley and Jonathan H.
Cartwright for nomination to the Company's Board of Directors, and they were
duly elected in February 1997. Mr. Buckley is the Chairman and Chief Executive
Officer and Mr. Cartwright is the Financial Director of Caledonia Investments,
plc, the holder of all the outstanding stock of CIS.
The transaction also included certain executory obligations of the
parties that remain in effect between the Company and CIS and its affiliates and
certain of which are described below. All such obligations were the result of
arms' length negotiations between the parties that were concluded before Messrs.
Buckley and Cartwright were nominated or elected to the Company's Board of
Directors and are, in the view of the Company, fair and reasonable to the
Company.
As a result of the Bristow transaction, Caledonia holds $7.5 million
of the Company's 6% Convertible Subordinated Notes. The Company holds
approximately $150 million principal amount of 13.5% subordinated unsecured loan
stock debt of Bristow. Bristow has the right to defer payment of interest on
that debt until January 31, 2002. Any deferred interest would also accrue
interest at an annual rate of 13.5%. In January 1998, the Company advanced
$83.6 million to Bristow to refinance certain indebtedness of Bristow. The
notes are secured and bear interest at 8.335%.
Caledonia and the Company also entered into a Put/Call Agreement
whereunder, upon giving specified prior notice, the Company has the right to buy
all the Bristow shares held by Caledonia, who, in turn, has the right to sell
such shares to the Company. Under current United Kingdom law, the Company would
be required, in order for Bristow to retain its operating license, to find a
qualified European investor to own any Bristow shares it has the right to
acquire under the Put/Call Agreement. Any put or call of the Bristow shares
will be subject to the approval of the Civil Aviation Authority ("CAA").
For as long as Caledonia owns its Bristow shares, Caledonia is
entitled to receive management fees from Bristow. The annual fees range from
(Pounds)500,000 to (Pounds)900,000 and are payable for a maximum of seven years.
In May 1997, the Company acquired, from a third party, for $30 million
four helicopters being operated in the North Sea by Bristow and, at the same
time, leased these aircraft to Bristow on terms that provided for an aggregate
$4.3 million in annual lease payments. In April 1998, the Company acquired an
additional helicopter and leased it to Bristow on terms that provided for an
additional $840,000 in annual lease payments.
In connection with his resignation in October of 1997 as Chairman of
the Board, President and Chief Executive Officer, and as a director of the
Company, James B. Clement entered into contracts with the Company pursuant to
which Mr. Clement agreed to provide consulting services to the Company for two
years in exchange for payments to Mr. Clement by the Company of $20,000 per
month. The Company, in addition to paying Mr. Clement through the date of his
resignation his salary and bonus, also agreed, subject to certain terms and
conditions, (a) to permit stock options previously granted Mr. Clement to remain
exercisable, (b) to terminate certain restrictions with respect to stock of the
Company held by Mr. Clement under Restricted Stock Agreements with the Company,
(c) to transfer to Mr. Clement certain life insurance policies on the life of
Mr. Clement, and (d) to continue certain other insurance benefits. See
"Executive Compensation - Summary Compensation Table" and "Executive
Compensation - Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal
Year End Option/SAR Values."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
officers, and certain beneficial owners (collectively, "Section 16 Persons") to
file with the Securities and Exchange Commission and NASDAQ reports of
beneficial ownership on Form 3 and reports of changes in ownership on Form 4 or
5. Copies of all such reports are required to be furnished to the Company. To
the knowledge of the Company, based solely on a review of the copies of Section
16(a) reports furnished to the Company for the fiscal year ended March 31, 1998,
and other information, all filing requirements for the Section 16 Persons have
been complied with during or with respect to the fiscal year ended March 31,
1998 except that one Form 4 was filed late by Hans J. Albert with respect to the
shares of common stock sold by him upon the exercise of options and the
Company's directors and executive officers were late in reporting the receipt
of the stock options granted by the Company in September 1997.
19
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP conducted the examination of the Company's
financial statements for the fiscal year ended March 31, 1998, and has been
selected to conduct the examination of the Company's financial statements for
the current year. Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting with the opportunity to make a statement is they
desire to do so and will be available to respond to appropriate questions.
VOTING OF THE PROXY
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS
DIRECTED THEREIN. IF NO DIRECTION IS SPECIFIED, SUCH SHARES WILL BE VOTED "FOR"
THE NOMINEES AND "FOR" THE AMENDMENT.
20
<PAGE>
GENERAL
As of the date of the Proxy Statement, the only matters expected to
come before the Annual Meeting are those set forth above. If any other matters
are properly brought before the Annual Meeting or any adjournment thereof and if
the shares for which the Proxy is given are entitled to vote thereon, it is the
intention of the person named in the accompanying form of proxy to vote the
Proxies on such matters in accordance with their best judgment.
The cost of soliciting Proxies will be borne by the Company. The
directors, officers and employees of the Company may, but without compensation
other than regular compensation, solicit Proxies by telephone, telegraph, or
personal interview. The Company has retained ChaseMellon Shareholder Services
to assist in the solicitation of Proxies for a fee of $2,100 plus out-of-pocket
expenses. The Company will also reimburse brokerage firms, banks, trustees,
nominees and other persons for their out-of-pocket expenses in forwarding proxy
materials to the beneficial owners of the securities of the Company.
Upon the written request of any stockholder entitled to vote at the
Annual Meeting, the Company will provide, without charge, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998.
Any such request should be directed to Drury A. Milke, Offshore Logistics, Inc.,
Post Office Box 5-C, Lafayette, Louisiana 70505. Requests from beneficial
owners of shares of the Company must set forth a good faith representation that
as of August 6, 1998, the requester was a beneficial owner of shares of the
Company entitled to vote at the Annual Meeting.
By Order of the Board of Directors
Drury A. Milke
Secretary
Lafayette, Louisiana
August 21, 1998
21
<PAGE>
Appendix A
OFFSHORE LOGISTICS, INC.
1994 LONG-TERM MANAGEMENT INCENTIVE PLAN
(as amended)
ARTICLE I
GENERAL
SECTION 1.1 Purpose. The purpose of the Plan is to enable the Company
to attract, retain and motivate officers and employees and to provide the
Company, its Affiliates and its subsidiaries with the ability to provide
incentives more directly linked to the profitability of the Company, its
businesses and increases in stockholder value.
SECTION 1.2 Definitions. For purposes of the Plan, the following terms
are defined as set forth below:
(a) "Affiliate" means a corporation or other entity controlled
by the Company and designated by the Committee as such.
(b) "Agreement" means the written agreement governing an Award
under the Plan, in a form approved by the Committee, which shall contain terms
and conditions not inconsistent with the Plan and which shall incorporate the
Plan by reference.
(c) "Award" means a Stock Appreciation Right, Stock Option,
Restricted Stock, Deferred Stock, Other Stock-Based Award or a combination of
any of these.
(d) "Board" means the Board of Directors of the Company.
(e) "Cash Plan" means the Offshore Logistics, Inc. Annual
Incentive Compensation Plan, as adopted by the Board effective December 31,
1993, subject to approval of the Stockholders of the Company at the 1994 Annual
Meeting.
(f) "Cause" has the meaning set forth in Section 2.3(f).
(g) "Change in Control" and "Change in Control Price" have the
meanings set forth in Sections 6.2 and 6.3, respectively.
(h) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, including any successor thereto.
(i) "Commission" means the Securities and Exchange Commission or
any successor agency.
(j) "Committee" means the Committee referred to in Section 1.3.
(k) "Company" means Offshore Logistics, Inc., a Delaware
corporation.
(l) "Date of Award" means the date of the Award of the Stock
Option, Stock Appreciation Right, Restricted Stock, Deferred Stock and/or Other
Stock-Based Award as set forth in the applicable Agreement.
A-1
<PAGE>
(m) "Deferred Stock" means an Award granted under Article IV.
(n) "Disability" shall have the same meaning as such term or a similar
term has in the long-term disability policy maintained by the Company, an
Affiliate or a subsidiary thereof, for the Participant and in effect on the date
of the onset of the Participant's Disability, unless the Committee determines
otherwise, in its discretion, and sets forth an alternative definition or other
means of determining when a Disability shall be deemed to occur in the
applicable Agreement.
(o) "Disinterested Person" means a member of the Board who qualifies
as a disinterested person as defined in Rule 16b-3, as promulgated by the
Commission under the Exchange Act, or any successor definition adopted by the
Commission.
(p) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
(q) "Fair Market Value" means, except as provided in Sections 2.3(g)
and (h) and 2.4 (b)(iv)(2), as of any given date, the mean between the highest
and lowest reported sales prices of the Stock on the New York Stock Exchange
Composite Tape or, if not listed on such exchange, on any other national
securities exchange on which the Stock is listed or on NASDAQ, or, in the event
that the Stock is not quoted on any such system, the average of the closing bid
prices per share of the Stock as furnished by a professional marketmaker making
a market in the Stock designated by the Committee. If there is no regular
public trading market for the Stock, the Fair Market Value of the Stock shall be
determined by the Committee in good faith.
(r) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(s) "Non-Employee Director" means a member of the Board who qualifies
as a Non-Employee Director as defined in Rule 16b-3(b)(3), as promulgated by the
Commission under the Exchange Act, or any successor definition adopted by the
Commission.
(t) "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(u) "Other Stock-Based Award" means an Award under Article V that is
valued in whole or in part by reference to, or is otherwise based on, Stock.
(v) "Outstanding Stock Option" means a Stock Option granted to a
Participant which has not yet been exercised and which has not yet expired or
been cancelled or forfeited in accordance with its terms.
(w) "Participant" means any employee who has met the eligibility
requirements set forth in Section 1.4 and to whom an outstanding Award has been
made under the Plan.
(x) "Plan" means the Offshore Logistics, Inc. 1994 Long-Term
Management Incentive Plan, as set forth herein and as hereafter amended from
time to time.
(y) "Restricted Stock" means an Award granted under Article III.
(z) "Retirement" shall mean the resignation or Termination of
Employment after attainment of age 60, unless the Committee determines otherwise
in its discretion and sets forth an alternative definition or other means of
determining when Retirement shall be deemed to occur.
A-2
<PAGE>
(aa) "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission
under Section 16(b) of the Exchange Act, and as amended from time to time.
(bb) "Stock" means common stock, par value $.01 per share, of the
Company.
(cc) "Stock Appreciation Right" means a right awarded under Section
2.4.
(dd) "Stock Option" means an option awarded under Article II.
(ee) "Termination of Employment" means the termination of the
Participant's employment with the Company and any subsidiary or Affiliate. A
Participant employed by a subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the subsidiary or Affiliate ceases to be
such a subsidiary or Affiliate, as the case may be, and the Participant does not
immediately thereafter become an employee of the Company or another subsidiary
or Affiliate.
In addition, certain other terms used in the Plan have definitions
given to them in the first place in which they are used.
SECTION 1.3 Administration of the Plan. The Plan shall be
administered by the Long-Term Incentive Plan Committee of the Board or such
other committee or subcommittee of the Board, composed of not fewer than two
Non-Employee Directors, each of whom shall be appointed by and serve at the
pleasure of the Board.
The Committee shall have plenary authority to make Awards pursuant to
the terms of the Plan to officers and employees of the Company and its
subsidiaries and Affiliates.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan:
(a) to select from among the class of eligible persons specified in
Section 1.4 below the officers and employees to whom Awards may from time to
time be granted;
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Deferred Stock and Other Stock-Based Awards or any combination thereof are to be
granted under the Plan;
(c) to determine the number of shares of Stock to be covered by each
Award;
(d) to determine the terms and conditions of any Award, including, but
not limited to, the Stock Option exercise price (subject to Section 2.2), any
vesting restriction or limitation and any vesting acceleration or forfeiture
waiver regarding any Award and the shares of Stock relating thereto, based on
such factors as the Committee shall determine;
(e) to modify, amend or adjust the terms and conditions of any Award,
at any time or from time to time, including, but not limited to, with respect to
performance goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;
(f) to determine to what extent and under what circumstances Stock and
other amounts payable with respect to an Award shall be deferred; and
(g) to determine under what circumstances a Stock Option may be
settled in cash or Stock under Section 2.3(g).
A-3
<PAGE>
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any Agreement relating thereto)
and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in
office, except that the members thereof may (i) delegate to any officer of the
Company the authority to make decisions pursuant to Section 2.3(a), (c), (f),
Section 3.3, Section 3.4, Section 4.2 (provided that no such delegation may be
made that would cause Awards or other transactions under the Plan to cease to
comply with the conditions for exemption from Section 16(b) of the Exchange Act
and Rule 16b-3 thereunder) and (ii) authorize any one or more of their number or
any officer of the Company to execute and deliver documents on behalf of the
Committee.
Any determination made by the Committee or pursuant to delegated
authority pursuant to the provisions of the Plan with respect to any Award shall
be made in the sole discretion of the Committee or such delegate at the time of
the Award or, unless in contravention of any express term of the Plan, at any
time thereafter. All decisions made by the Committee or any appropriately
delegated officer pursuant to the provisions of the Plan shall be final and
binding on all persons, including the Company and Plan Participants.
Any authority granted to the Committee may also be exercised by the
full Board, except to the extent that the grant or exercise of such authority
would cause any Award or transaction to become subject to (or lose an exemption
under) the short-swing profit recovery provisions of Section 16 of the Exchange
Act. To the extent that any permitted action taken by the Board conflicts with
action taken by the Committee, the Board action shall control.
SECTION 1.4 Eligible Persons. Officers and employees of the Company, its
subsidiaries and Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Company, its
subsidiaries and Affiliates are eligible for Awards under the Plan; however, no
Award shall be made to a director who is not an officer or a salaried employee
of the Company or one of its subsidiaries or Affiliates.
SECTION 1.5 Stock Subject to the Plan. The total aggregate number of shares
of Stock that may be distributed under the Plan (whether reserved for issuance
upon grant of Stock Options or Stock Appreciation Rights or granted as
Restricted Stock, Deferred Stock or an Other Stock-Based Award) shall be
1,900,000, subject to adjustment pursuant to the terms of Section 6.4 of the
Plan. In addition to the limitation set forth above, no more than 800,000 shares
of Stock shall be cumulatively available for the grant of Incentive Stock
Options over the entire term of the Plan. The shares of Stock shall be made
available from authorized but unissued shares or shares issued and held in the
treasury of the Company. The delivery of shares of Stock upon exercise of a
Stock Option, Stock Appreciation Right or Other Stock-Based Award in any manner
and the vesting of shares of Restricted Stock or Deferred Stock shall result in
a decrease in the number of shares that thereafter may be issued for purposes of
this Plan, by the net number of shares as to which the Stock Option, Stock
Appreciation Right or Other Stock-Based Award is exercised or by the number of
shares of Restricted Stock or Deferred Stock that vest. Shares of Restricted
Stock or Deferred Stock that are forfeited and shares of Stock with respect to
which Stock Options (and related Stock Appreciation Rights, if any) expire, are
cancelled without being exercised or otherwise terminate without being
exercised, or Stock Appreciation Rights exercised for cash, shall not be deemed
awarded for purposes of this Section and shall again be available for
distribution in connection with Awards under the Plan. To the extent not
specified above, the Committee shall have the discretion to determine the manner
in which shares shall be counted for purposes of calculating the number of
shares available for distribution in connection with Awards under the Plan.
SECTION 1.6 Agreements. Each Agreement (a) shall state the Date of Award
and the name of the Participant, (b) shall specify the terms of the Award, (c)
shall be signed by the Participant and a person designated by the Committee, (d)
shall incorporate the Plan by reference and (e) shall be delivered to the
Participant. The Agreement shall contain such other terms and conditions as are
required by the Plan and, in addition, such other terms not inconsistent with
the Plan as the Committee may deem advisable.
A-4
<PAGE>
SECTION 1.7 Limit on Annual Grants to Participants. The maximum
aggregate number of shares of Stock that may be awarded under the Plan to any
Participant (whether reserved for issuance upon grant of Stock Options or Stock
Appreciation Rights or granted as Restricted Stock, Deferred Stock or other
Award) during any fiscal year is 100,000.
ARTICLE II
PROVISIONS APPLICABLE TO STOCK OPTIONS
SECTION 2.1 Grants of Stock Options. Stock Options may be granted
alone or in addition to other Awards under the Plan and may be of two types:
Incentive Stock Options and Non-Qualified Stock Options. Any Stock Option
granted under the Plan shall be in such form as the Committee may from time to
time approve. The Committee shall have the authority to grant Incentive Stock
Options, Non-Qualified Stock Options or both types of Stock Options (in each
case with or without Stock Appreciation Rights). Incentive Stock Options may be
granted only to employees of the Company and its subsidiaries (within the
meaning of Section 424(f) of the Code). To the extent that any Stock Option is
not designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
Each Stock Option shall be evidenced by an Agreement, the terms
and provisions of which may differ. The Agreement shall specify the number of
Stock Options granted, the exercise price of such Stock Options, whether such
Stock Options are intended to be Incentive Stock Options or Non-Qualified Stock
Options and the period during which such Stock Options may be exercised and
shall contain such other provisions as the Committee may determine. The Company
shall notify a Participant of any Award of a Stock Option, and a written option
Agreement or Agreements shall be duly executed and delivered by the Company and
the Participant. Such Agreement or Agreements shall become effective upon
execution by the Participant.
Stock options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions as the Committee shall deem desirable.
SECTION 2.2 Exercise Price. At the time the Stock Option is granted,
the Committee shall establish the per share exercise price for each Stock Option
granted, except that the exercise price with respect to Non-Qualified Stock
Options shall not be less than 50% of the Fair Market Value of a share of Stock
on the Date of Award and except that, with respect to an Incentive Stock Option,
the exercise price shall not be less than 100% of the Fair Market Value of a
share of Stock on the Date of Award. The exercise price will be subject to
adjustment in accordance with the provisions of Section 6 of the Plan.
SECTION 2.3 Exercise of Stock Options.
(a) Exercisability. Except as otherwise provided herein, Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the committee may
at any time, in whole or in part, accelerate the exercisability of any Stock
Option.
(b) Option Period. The term of each Stock Option shall be fixed by
the Committee, but no Stock Option shall be exercisable more than 10 years after
the Date of Award of the Stock Option.
(c) Method of Exercise. Subject to the provisions of this Section,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Company specifying the
number of shares of Stock subject to the Stock Option to be purchased. The
option price of Stock to
A-5
<PAGE>
be purchased upon exercise of any Option shall be paid in full in cash (by
certified or bank check or such other instrument as the Company may accept) or,
if and to the extent set forth in the option Agreement, may also be paid by one
or more of the following: (i) in the form of unrestricted Stock already owned by
the optionee (and, in the case of the exercise of a Non-Qualified Stock Option,
Restricted Stock subject to an Award hereunder) based in any such instance on
the Fair Market Value of the Stock on the date the Stock Option is exercised;
provided, that such stock has been held by the optionee for at least six months,
and provided, further, that, in the case of an Incentive Stock Option, the right
to make a payment in the form of already owned shares of Stock may be authorized
only at the time the Stock Option is granted; (ii) by requesting the Company to
withhold from the number of shares of Stock otherwise issuable upon exercise of
the Stock Option that number of shares having an aggregate fair market value on
the date of exercise equal to the exercise price for all of the shares of Stock
subject to such exercise; or (iii) by a combination thereof, in each case in the
manner provided in the option Agreement. If payment of the option exercise
price of a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock, the number of shares of Stock to be received upon such
exercise shall equal the number of shares of Restricted Stock used for payment
of the option exercise price and shall be subject to the same forfeiture
restrictions to which such Restricted Stock was subject, unless otherwise
determined by the Committee.
In the discretion of the Committee, payment for any shares subject to
a Stock Option may also be made in such other manner as may be authorized from
time to time by the Committee, including without limitation (i) payment in the
form of an installment note or (ii) payment made by delivering a properly
executed exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the purchase price. To facilitate the foregoing, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms.
No shares of Stock shall be issued until full payment therefor has
been made and a Participant shall have no rights as a stockholder of the Company
with respect to Stock subject to such option before the issuance of the shares
of Stock upon the exercise of the option.
(d) Limited Transferability of Stock Options. No Stock Option shall
be transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) in the case of a Non-Qualified Stock Option, as
otherwise expressly permitted under the applicable option agreement including,
if so permitted, pursuant to a gift to such optionee's spouse, children, or
other family members, whether directly or indirectly or by means of a trust or
partnership or otherwise. All Stock Options shall be exercisable, subject to
the terms of this Plan, only by the optionee, the guardian or legal
representative of the optionee, or any person to whom such option is transferred
pursuant to the preceding sentence, it being understood that the term "holder"
and "optionee" include such guardian, legal representative and other transferee.
(e) Forfeiture of Options Upon Termination of Employment for Cause.
If a Participant's employment ends because of a Termination of Employment for
Cause, then unless the Committee, in its discretion, determines otherwise, all
Outstanding Stock Options, whether or not then vested, shall terminate effective
as of the date of such Termination of Employment.
(f) Exercise in the Event of Termination of Employment, Retirement,
Death or Permanent Disability. If (i) there occurs a Termination of Employment
by reason of the voluntary termination by the Participant or the termination by
the Company or any of its Affiliates or subsidiaries (other than for Cause) the
Participant's Outstanding Stock Options may be exercised to the extent then
exercisable or on such accelerated basis as the Committee may determine, until
the earlier of three months after the date of such termination (or such longer
period as may be determined by the Committee in its discretion before the
expiration of such three-month period) or the expiration of such Stock Options,
(ii) a Participant dies during a period during which his Stock Options could
have been exercised by him, his Outstanding Stock Options may be exercised to
the extent exercisable at the date of death or on such accelerated basis as the
Committee may determine, by the person who acquired the right to exercise such
Stock Options by will or the laws of descent and distribution until the earlier
of one year after such death (or such
A-6
<PAGE>
longer period as may be determined by the Committee, in its discretion, before
the expiration of such one-year period) or the expiration of such Stock Options
and (iii) the Disability or Retirement of the Participant occurs, then the
Participant may exercise his Outstanding Stock Options to the extent exercisable
upon date of the onset of such Disability or Retirement or on such accelerated
basis as the Committee may determine, until the earlier of one year after such
date (or such longer period as may be determined by the Committee in its
discretion before the expiration of such one-year period) or the expiration of
such Stock Options. Unless otherwise determined by the Committee, for the
purposes of the Plan "Cause" shall mean cause as such term or a similar term is
defined in any employment agreement applicable to the Participant, or if there
is no such employment agreement or if such employment agreement contains no such
term, (i) a failure or refusal by a Participant to substantially perform a
material duty of such Participant's employment or (ii) the commission by the
Participant of a felony or the perpetration by the Participant of a dishonest
act or common law fraud against the Company or any Affiliate or subsidiary
thereof. Upon the occurrence of an event described in clauses (i), (ii) or
(iii) of this Section 2.3(f), unless the Committee accelerates vesting, all
rights with respect to Stock Options that are not vested as of such event will
be relinquished. Anything in this Section 2.3(f) to the contrary
notwithstanding, no Stock Option shall be exercisable after the earlier to occur
of (i) the expiration of the option period set forth in the applicable Agreement
or (ii) the tenth anniversary of the Date of Award thereof. If the optionee's
employment terminates due to death, Disability or Retirement, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, such Stock Option will thereafter
be treated as a Non-Qualified Stock Option.
(g) Buy Out of Stock Option. On or before receipt of written notice
of exercise, the Committee may elect to buy out all or part of the portion of
the shares of Stock for which a Stock Option is being exercised by paying the
optionee an amount, in cash or Stock, equal to the excess of the Fair Market
Value of the Stock over the option price times the number of shares of Stock for
which to the option is being exercised on the effective date of such buy out.
(h) Change in Control Cash Out. Notwithstanding any other provision
of the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of Award, an optionee shall have the right (whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
shares of Stock being purchased under the Stock Option) by giving notice to the
Company, to elect (within the Exercise Period) to surrender all or part of the
Stock Option to the Company and to receive cash, within 30 days of such notice,
in an amount equal to the amount by which the Change in Control Price per share
of Stock on the date of such election shall exceed the option exercise price
(the "Spread") multiplied by the number of shares of Stock granted under the
Stock Option as to which the right granted under this Section 2.3(h) shall have
been exercised. Notwithstanding the foregoing, if any right granted pursuant to
this Section 2.3(h) would make a Change in Control transaction ineligible for
pooling-of-interests accounting under APB No. 16 that but for the nature of such
grant would otherwise be eligible for such accounting treatment, the Committee
shall have the ability to substitute for the cash payable pursuant to such right
Stock with a Fair Market Value equal to the cash that would otherwise be payable
hereunder.
(i) Replacement Options. The Committee may provide either at the time
of Award or subsequently that a Stock Option includes the right to acquire a
replacement option. A Stock Option which provides for the Award of a
replacement option shall entitle the Participant, upon exercise of the Stock
Option (in whole or in part) before the Termination of Employment of the
Participant and satisfaction of the option exercise price in shares of Stock
held by the Participant, to receive a replacement option. In addition to any
other terms and conditions the Committee deems appropriate, the replacement
option shall be subject to the following terms: the number of shares of Stock
shall not exceed the number of whole shares used to satisfy the exercise price
of the original Stock option and the number of whole shares, if any, withheld by
the Company as payment for withholding taxes, the Date of Award of the
replacement option will be the date of the exercise of the original Stock
Option, the replacement option exercise price per share shall be the Fair Market
Value on the Date of Award of the replacement option, the replacement option
shall be exercisable no earlier than six months after the Date of Award of the
replacement option, the term of the replacement option will terminate on the
same date that the original Stock Option would have
A-7
<PAGE>
terminated had it not been exercised and the replacement option shall be a Non-
Qualified Stock Option and shall otherwise meet all conditions of the Plan.
SECTION 2.4 Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be awarded in
conjunction with all or part of any Stock Option awarded under the Plan or
separately and without reference to any related Stock Option. In the case of a
Non-Qualified Stock Option, such rights may be awarded either at or after the
award of the Stock Option. In the case of an Incentive Stock Option, such
rights may be awarded only at the time of award of the Stock Option. A Stock
Appreciation Right or applicable portion thereof awarded with respect to a Stock
Option shall terminate and no longer be exercisable upon the termination or
exercise of the related Stock Option, subject to such provisions as the
Committee may specify where a Stock Appreciation Right is awarded with respect
to fewer than the full number of shares covered by a related Stock Option. A
Stock Appreciation Right may be exercised by an optionee in accordance with this
Section by surrendering the applicable portion of the related Stock Option in
accordance with procedures established by the Committee. Upon such exercise and
surrender, the optionee shall be entitled to receive an amount determined in the
manner prescribed in Section 2.4(b). Stock Options relating to exercised Stock
Appreciation Rights shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject
to such terms and conditions, not inconsistent with the Plan, as shall be
determined from time to time by the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable only in
accordance with the provisions of Section 2.3 and this Section 2.4 and, if
awarded in tandem with Stock Options, only at the times and to the extent that
the Stock Options to which they relate are exercisable.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash, shares of Stock or both, equal
in aggregate value to the excess of the Fair Market Value of one share of Stock
over the option exercise price per share specified in the related Stock Option
multiplied by the number of shares in respect of which the Stock Appreciation
Right shall have been exercised, with the Committee having the right to
determine the form of payment. When payment is to be made in shares of Stock,
the number of shares to be paid shall be calculated on the basis of the Fair
Market Value of the shares on the date of exercise.
(iii) Stock Appreciation Rights shall be transferable only if
granted in tandem with Stock Options and then only to permitted transferees of
the underlying Stock Option in accordance with Section 2.3(d).
(c) In its discretion, the Committee may award "Limited" Stock
Appreciation Rights under this Section (i.e., Stock Appreciation Rights that
become exercisable only if a Change in Control occurs), subject to such terms
and conditions as the Committee may specify at the time of the Award. Such
Limited Stock Appreciation Rights shall be settled solely in cash. The
Committee may also, in its discretion, provide that the amount to be paid upon
the exercise of a Stock Appreciation Right or Limited Stock Appreciation Right
shall be based on the Change in Control Price, subject to such terms and
conditions as the Committee may specify at the time of the Award.
ARTICLE III
PROVISIONS APPLICABLE TO RESTRICTED STOCK
SECTION 3.1 Awards of Restricted Stock. The Committee may condition the
Award of Restricted Stock upon the attainment of specified performance goals of
the Participant or of the Company or Affiliate, subsidiary,
A-8
<PAGE>
division or department of the Company for or within which the Participant is
primarily employed or upon such other factors or criteria as the Committee shall
determine. The provisions of Restricted Stock Awards need not be the same with
respect to each recipient.
SECTION 3.2 Awards and Certificates. Shares of Restricted Stock
shall be evidenced in such manner as the Committee may deem appropriate,
including book-entry registration or issuance of one or more stock certificates.
Any certificate issued in respect of shares of Restricted Stock shall be
registered in the name of such Participant and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the 1994 Long-Term Management Incentive
Plan and a Restricted Stock Agreement. Copies of such Plan and
Agreement are on file at the offices of Offshore Logistics, Inc.,
224 Rue de Jean, P.O. Box 56, Lafayette, Louisiana 70505."
The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the Participant shall
have delivered a stock power, endorsed in blank, relating to the Stock covered
by such Award.
SECTION 3.3 Terms, Conditions and Restrictions. Shares of Restricted
Stock shall be subject to the following terms, conditions and restrictions:
(a) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to below in Section 3.3(f), during a period set by the
Committee, commencing with the Date of Award (the "Restriction Period"), the
Participant shall not be permitted to sell, assign, transfer, pledge or
otherwise dispose of or encumber shares of Restricted Stock. The Committee may
provide for the lapse of such restrictions in installments or otherwise and may
accelerate or waive such restrictions, in whole or in part, in each case based
on period of service, performance of the Participant or of the Company or the
Affiliate, subsidiary, division or department for which the Participant is
employed or based on such other factors or criteria as the Committee may
determine, in its discretion.
(b) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement, upon the Participant's Termination of Employment due
to the Participant's death, Disability or Retirement, all remaining restrictions
with respect to all of the Participant's shares of Restricted Stock shall lapse,
and all of the Participant's shares of Restricted Stock shall become free of all
restrictions and become fully vested and freely transferable to the full extent
of the original grant.
(c) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement or Sections 3.3, 3.4 and 6.1, upon a Participant's
Termination of Employment for any reason during the Restriction Period other
than due to the Participant's death, Disability or Retirement, all shares of
Restricted Stock still subject to the Restriction Period shall be forfeited by
the Participant; provided, however, that except to the extent otherwise provided
in Section 6.1, in the event of Termination of Employment of a Participant for
any other reason, the Committee shall have the discretion to waive in whole or
in part any or all of such remaining restrictions with respect to any or all of
such Participant's shares of Restricted Stock.
(d) Except as provided in this Article III or in the Restricted
Stock Agreement, the Participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of the Company holding the
class or series of Stock that is the subject of the Restricted Stock, including,
if applicable, the right to vote the shares and the right to receive any cash
dividends. If so determined by the Committee in the applicable Restricted Stock
Agreement and subject to Section 7.8 of the Plan, (i) cash dividends on the
shares of Stock that are the subject
A-9
<PAGE>
of the Restricted Stock Award shall be automatically deferred and reinvested in
additional shares of Restricted Stock, and (ii) dividends payable in Stock shall
be paid in the form of Restricted Stock.
(e) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period,
unlegended certificates for such shares shall be delivered to the Participant.
(f) Each Award shall be confirmed by, and be subject to the terms of,
a Restricted Stock Agreement.
SECTION 3.4 Restricted Stock Awards to Cash Plan Participants in Lieu of
Annual Incentive Award.
(a) Eligibility. All of the participants in the Cash Plan are
eligible to be granted Restricted Stock Awards under this section of the Plan in
accordance with this Restricted Stock Feature, which is to be used in
conjunction with the Cash Plan.
(b) Petition to Receive Annual Incentive in Restricted Stock in Lieu
of Cash Payment. Except as may be otherwise determined by the Committee in its
discretion from time to time, participants in the Cash Plan may make a request
to the Committee to receive all or any portion of their Annual Incentive Award
(as defined in the Cash Plan) in the form of shares of Restricted Stock. Once
made with respect to a particular fiscal year, the request is irrevocable. The
Committee shall have the absolute authority in its discretion to grant or deny
each such request.
(c) Timing of Request. Except as may be otherwise provided by the
Committee in its discretion, the Request must be made in writing on a form to be
provided by the Committee and must be received by the Company at its offices
before the beginning of the fiscal year with respect to which the Annual
Incentive Award pertains.
(d) Premium. For each request granted by the Committee, the
Participant will receive the applicable portion of the Annual Incentive Award in
the form of shares of Restricted Stock (the "Base Shares of Restricted Stock"),
plus a premium of 20% additional shares of Restricted Stock ("Premium Shares of
Restricted Stock"), calculated as follows:
Amount of Incentive Award To Be
Cancelled and Converted to X 1.20 = Number of Shares
Shares of Restricted Stock Restricted Stock
--------------------------------- (rounded to nearest
30 Day Trailing Average higher even share)
Closing Stock Price At
June 30 of Preceding
Fiscal Year
provided that for the fiscal year ended 1994, the number of shares of
Restricted Stock to be awarded shall be calculated based on the 30 day trailing
average closing stock price at December 31, 1993 (i.e., the 30 day period
preceding the effective date of the Cash Plan).
(e) Except as may be otherwise provided by the Committee and set forth
in the Restricted Stock Agreement and subject to the provisions of the Plan, the
Restriction Period shall be three years from the Date of Award for Awards made
with respect to the fiscal year ended 1994, and 30 months for Awards made with
respect to subsequent fiscal years.
(f) Modified Forfeiture Restrictions. In lieu of the restrictions set
forth above in Section 3.3, except as otherwise set forth in Section 6.1 and
unless otherwise provided in the Restricted Stock Agreement and/or unless waived
by the Committee, (i) upon the Participant's Termination of Employment due to
death, Disability or
A-10
<PAGE>
Retirement, all remaining restrictions with respect to the Participant's Base
Shares of Restricted Stock and the Participant's Premium Shares of Restricted
Stock shall lapse and all of such shares shall become fully vested, free of all
restrictions and freely transferable to the full extent of the original Award,
(ii) if the Participant incurs a Termination of Employment for "Cause" or by
reason of the Participant's voluntary resignation, all Base Shares of Restricted
Stock as well as all Premium Shares of Restricted Stock still subject to the
Restriction Period shall be forfeited by the Participant, and (iii) if the
Participant incurs a Termination of Employment other than by reason of death,
Disability or Retirement and other than for "Cause" or by reason of the
Participant's voluntary resignation, all Base Shares of Restricted Stock shall
be free of all restrictions, fully vested and freely transferable to the full
extent of the original Award, but all Premium Shares of Restricted Stock still
subject to the Restriction Period shall be forfeited by the Participant.
ARTICLE IV
PROVISIONS APPLICABLE TO DEFERRED STOCK
SECTION 4.1 Awards of Deferred Stock. Awards of Deferred Stock may be
made either alone, in addition to or in tandem with other Awards granted under
the Plan and/or cash awards made outside of the Plan. The Committee shall
determine the eligible Participants to whom and the time or times at which
Deferred Stock shall be awarded, the number of shares of Deferred Stock to be
awarded to any person, the duration of the period (the "Deferral Period") during
which, and the conditions under which, receipt of the Stock will be deferred and
the other terms and conditions of the award in addition to those set forth in
Section 4.2. The Committee may condition the grant of Deferred Stock upon the
attainment of specified performance goals or such other factors or criteria as
the Committee shall determine, in its sole discretion. The provisions of
Deferred Stock awards need not be the same with respect to each recipient.
SECTION 4.2 Terms and Conditions. The shares of Deferred Stock awarded
pursuant to this Article IV shall be subject to the following terms and
conditions:
(a) Subject to the provisions of this Plan and except as may be
otherwise provided in the Award Agreement referred to in Section 4.2(e) below,
Deferred Stock Awards may not be sold, assigned, transferred, pledged or
otherwise disposed of or encumbered during the Deferral Period. At the
expiration of the Deferral Period, where applicable), share certificates shall
be delivered to the Participant, or his legal representative, in a number equal
to the shares covered by the Deferred Stock Award.
(b) Unless otherwise determined by the Committee at the time the Award
is made, amounts equal to any dividends declared during the Deferral Period with
respect to the number of shares covered by a Deferred Stock Award will be paid
to the Participant currently, or deferred and deemed to be reinvested in
additional Deferred Stock, or otherwise reinvested, all as determined at or
after the time of the Award by the Committee, in its sole discretion.
(c) Subject to the provisions of the Award Agreement and this Article
IV, if the Participant incurs a Termination of Employment for any reason during
the Deferral Period for a given Award, the Deferred Stock in question will vest,
or be forfeited, in accordance with the terms and conditions established by the
Committee at or after the Award is made.
(d) Based on service, performance and/or such other factors or
criteria as the Committee may determine, the Committee may, at or after making
the Award, accelerate the vesting of all or any part of any Deferred Stock Award
and/or waive the deferral limitations for all or any part of such Award.
A-11
<PAGE>
(e) Each Award shall be confirmed by, and subject to the terms of, a
Deferred Stock Agreement executed by the Company and the Participant.
SECTION 4.3 Minimum Value Provisions. In order to better ensure that
Award payments actually reflect the performance of the Company and service of
the Participant, the Committee may provide, in its sole discretion, for a tandem
performance based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Deferred Stock Award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.
ARTICLE V
OTHER STOCK-BASED AWARDS
SECTION 5.1 Administration. Other Awards of Stock and other awards that
are valued in whole or in part by reference to, or are otherwise based on, Stock
("Other Stock-Based Awards"), including, without limitation, performance shares,
convertible preferred stock, convertible debentures, exchangeable securities and
Stock awards or options valued by reference to book value or Affiliate or
subsidiary performance, may be granted either alone or in addition to or in
tandem with Stock Options, Stock Appreciation Rights, Restricted Stock or
Deferred Stock granted under the Plan and/or cash awards made outside of the
Plan. The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient. Subject to the provisions of the Plan, the Committee
shall have authority to determine the persons to whom and the time or times at
which such Awards shall be made, the number of shares of Stock to be awarded
pursuant to such Awards and all other conditions of the Awards. The Committee
may also provide for the Award of Stock upon the completion of a specified
performance period.
SECTION 5.2 Terms and Conditions. Other Stock-Based Awards made pursuant
to this Article V shall be subject to the following terms and conditions:
(a) Subject to the provisions of this Plan and the Award Agreement
referred to in Section 5.2(e) below, shares of Stock subject to Awards made
under this Article V may not be sold, assigned, transferred, pledged or
otherwise encumbered before the date on which the shares are issued, or, if
later, the date on which any applicable restriction, performance or deferral
period lapses.
(b) Subject to the provisions of this Plan and the Award Agreement and
unless otherwise determined by the Committee at the time it makes the Award, the
recipient of an Award under this Article V shall be entitled to receive,
currently or on a deferred or restricted basis, interest or dividend equivalents
with respect to the number of shares of Stock covered by the Award, as
determined at the time of the Award by the Committee, in its sole discretion,
and the Committee may provide that such amounts (if any) shall be deemed to have
been reinvested in additional Stock or otherwise reinvested.
(c) Any Award under this Article V and any Stock covered by any such
Award shall vest or be forfeited to the extent so provided in the Award
Agreement, as determined by the Committee, in its sole discretion.
(d) In the event of the Participant's Retirement, Disability or death,
or in cases of special circumstances, the Committee may, in its sole discretion,
waive in whole or in part any or all of the remaining limitations and
restrictions imposed hereunder (if any) with respect to any or all of an Award
under this Article V.
(e) Each Award under this Article V shall be confirmed by, and subject
to the terms of, an Agreement by the Company and by the Participant.
A-12
<PAGE>
(f) Stock (including securities convertible into Stock) issued on a
bonus basis under this Article V may be issued for no cash consideration; Stock
(including securities convertible into Stock) to be purchased pursuant to a
purchase right awarded under this Article V shall be priced at least 50% of the
Fair Market Value of the Stock on the Date of Award.
ARTICLE VI
EFFECT OF CERTAIN CORPORATE CHANGES AND CHANGES IN CONTROL
SECTION 6.1 Impact of Event. Notwithstanding any other provision of the
Plan to the contrary but subject to the limitations of Section 7.10 of this
Plan, in the event of a Change in Control:
(a) Any Stock Options and Stock Appreciation Rights outstanding as of
the date such Change in Control is determined to have occurred and not then
exercisable and vested shall become fully exercisable and vested to the full
extent of the original grant.
(b) The restrictions and deferral limitations applicable to any still
outstanding Restricted Stock, Deferred Stock and Other Stock-Based Awards (in
each case to the extent not already vested under the Plan) shall lapse, and such
shares and Awards shall become free of all restrictions and become fully vested
and transferable to the full extent of the original Award.
SECTION 6.2 Definition of Change in Control. For purposes of the Plan, a
"Change in Control" shall mean the happening of any of the following events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in
Control; (i) any acquisition directly from the Company, (ii) any acquisition by
the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 6.2; or
(b) Individuals who, as of the Effective Date of the Plan, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets of another corporation
(a "Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50.1%
of, respectively, the then outstanding shares
A-13
<PAGE>
of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
SECTION 6.3 Change in Control Price. For purposes of the Plan, "Change in
Control Price" means the higher of (a) the highest reported sales price, regular
way, of a share of Stock in any transaction reported on the New York Stock
Exchange Composite Tape or other national securities exchange on which such
shares are listed or on NASDAQ, as applicable, during the 60-day period prior to
and including the date of a Change in Control and (b) if the Change in Control
is the result of a tender or exchange offer or a Corporate Transaction, the
highest price per share of Stock paid in such tender or exchange offer or
Corporate Transaction; provided, however, that in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options, the
Change in Control Price shall be in all cases the Fair Market Value of the Stock
on the date such Incentive Stock Option or Stock Appreciation Right is
exercised. To the extent that the consideration paid in any such transaction
described above consists all or in part of securities or other non-cash
consideration, the value of such securities or other non-cash consideration
shall be determined in the sole discretion of the Board.
SECTION 6.4 Dilution and Other Adjustments. In the event of any merger,
reorganization, consolidation, recapitalization, stock dividend, stock split,
issuance or repurchase of stock or securities convertible into or exchangeable
for shares of Stock, grants of options, warrants or rights to purchase Stock
(other than pursuant to the Plan), extraordinary distribution with respect to
the Stock or other change in corporate structure affecting the Stock, the
Committee may make such substitution or adjustments in the aggregate number and
kind of shares reserved for issuance under the Plan, in the number, kind and
option price of shares subject to outstanding Stock Options and Stock
Appreciation Rights, in the number and kind of shares subject to other
outstanding Awards granted under the Plan and/or such other substitution or
adjustments in the consideration receivable upon exercise, or take such other
action, as it may determine to be appropriate in its sole discretion; provided,
however, that the number of shares subject to any Award shall always be a whole
number. Such adjusted option price shall also be used to determine the amount
payable by the Company upon the exercise of any Stock Appreciation Right
associated with any Stock Option.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 No Rights to Awards or Continued Employment. No employee
shall have any claim or right to receive Awards under the Plan. Neither the
adoption of the Plan nor any action taken pursuant to the Plan shall confer upon
any employee any right to continued employment nor shall it interfere in any way
with the right of the Company or any subsidiary or Affiliate to terminate the
employment of any employee at any time.
A-14
<PAGE>
SECTION 7.2 Restriction on Transfer and Additional Conditions.
(a) All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock transfer orders and other
restrictions as the Committee in its sole discretion may deem advisable,
including without limitation, restrictions under the rules, regulations and
other requirements of the Commission, any stock exchange upon which the Stock is
then listed and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to any such restrictions. Before making any transfer
or disposition of Stock issued pursuant to the Plan, the Committee may require a
Participant to provide written notice to the Company describing the manner of
such proposed disposition or transfer and such other information as shall be
necessary for counsel to the Company to determine whether registration of any
such Stock is required. Such proposed disposition or transfer, in the absence
of an effective registration statement covering such Stock or an opinion of
counsel to the Company that such registration is not required, shall not be
permitted. Each Participant shall agree to indemnify and hold harmless the
Company from and against all liability, cost and expense (including attorneys'
fees) suffered and incurred by the Company as a result of any disposition or
transfer of the shares in violation of any federal or state securities or blue
sky law or any other law, rule or regulation.
(b) Anything in the Plan to the contrary notwithstanding (a) the
Committee may, if it determines it is necessary or desirable for any reason, at
the time of any Award the issuance of any shares of Stock pursuant thereto,
require a Participant as a condition of receipt thereof or receipt of shares of
Stock issued pursuant to the terms of the Award, to deliver to the Company a
written representation of present intention to acquire the Award or the shares
of the Stock issuable pursuant to the Award for the Participant's own account
for investment and not for distribution, (b) the Company shall have no
obligation to issue shares of Stock except in accordance with applicable law and
(c) 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 Award or the shares of 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
grant of any Award or the issuance of shares of Stock pursuant thereto, such
Award shall not be granted or such shares of Stock shall not be issued, as the
case may be, in whole or in part, unless such listing, registration,
qualification, consent or approval is effected or obtained free of any
conditions not acceptable to the Company.
SECTION 7.3 Tax Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the Participant for federal
income tax purposes with respect to any Award under the Plan, the Participant
shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, state, local or foreign taxes of any kind
required by law to be withheld with respect to such amount. Unless otherwise
determined by the Committee, withholding obligations may be settled with Stock,
including Stock that is part of the Award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be conditional
on such payment or arrangements, and the Company, its subsidiaries and its
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the Participant. The Committee may
establish such procedures as it deems appropriate, including the making of
irrevocable elections, for the settlement of withholding obligations with Stock.
SECTION 7.4 Stockholder Rights. No Award under the Plan shall entitle a
Participant or beneficiary to any rights of a holder of shares of Stock, except
as provided in Article III with respect to Restricted Stock or upon the delivery
of share certificates to a Participant upon exercise of a Stock Option or upon
the delivery of share certificates in settlement of a Stock Appreciation Right.
SECTION 7.5 No Restriction on Right of Company to Effect Corporate
Changes. The Plan shall not affect in any way the right or power of the Company
or its stockholders to make or authorize any or all adjustments,
recapitalization, reorganization or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
A-15
<PAGE>
debentures, preferred or prior preference stock whose rights are superior to or
affect the Stock or the rights thereof or which are convertible into or
exchangeable for Stock, or the dissolution or liquidation or the Company, or any
sale or transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
SECTION 7.6 Unfunded Status of Plan. It is presently intended that the
Plan constitute an "unfunded" plan for incentive and deferred compensation. The
Committee may, but shall have no obligation to, authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan to deliver
Stock or make payments; provided, however, that, unless the Committee otherwise
determines, the existence of such trusts or other arrangements is consistent
with the "unfunded" status of the Plan. Nothing contained in this Plan shall
create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Company and a Participant or any other person.
SECTION 7.7 First Refusal Right. At the time of grant, the Committee may
provide in connection with any grant made under the Plan that the shares of
Stock received as a result of such grant shall be subject to a right of first
refusal pursuant to which the Participant shall be required to offer to the
Company any shares that the Participant wishes to sell at the then Fair Market
Value of the Stock, subject to such other terms and conditions as the Committee
may specify at the time of grant.
SECTION 7.8 Dividend Reinvestment. The reinvestment of dividends in
additional Restricted Stock at the time of any dividend payment shall only be
permissible if sufficient shares of Stock are available under Section 1.5 for
such reinvestment (taking into account then outstanding Stock Options and other
Awards).
SECTION 7.9 Beneficiaries. The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid. If no
beneficiary is designated by the Participant or if no beneficiary designated by
the Participant is living at the time such a payment is due, payments shall be
made to the Participant's estate.
ARTICLE VIII
TERM, AMENDMENT AND TERMINATION
Unless previously terminated pursuant to this Article VIII, the Plan
shall terminate on December 9, 2004, and no further Awards may be made hereunder
after such date. The Board may at any time and from time to time alter, amend,
suspend or terminate the Plan in whole or in part. No amendment, alteration or
discontinuation shall be made that would without the recipient's consent, impair
the rights of any recipient of an Award theretofore granted, except such an
amendment made to cause the Plan to qualify for the exemption provided by Rule
16b-3. Also, the Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any recipient without the recipient's consent except such an amendment made to
cause the Plan or Award to qualify for the exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
A-16
<PAGE>
ARTICLE IX
INTERPRETATION
SECTION 9.1 Compliance with Governmental Regulations. The Plan, and
all Awards hereunder, shall be subject to and shall be administered and
interpreted in order to comply with, all applicable rules and regulations of
governmental or other authorities as amended from time to time, including
without limitation Section 16(b) of the Exchange Act and the rules and
regulations promulgated thereunder, with respect to persons subject to Section
16 of the Exchange Act.
SECTION 9.2 Headings. The headings of sections and subsections
herein are included solely for convenience of reference and shall not affect the
meaning of any of the provisions of the Plan.
SECTION 9.3 Governing Law. The Plan and all Awards made and actions
taken hereunder shall be construed in accordance with and governed by the laws
of the State of Delaware.
ARTICLE X
EFFECTIVE DATE AND STOCKHOLDER APPROVAL
The Plan shall be effective as of the date it is approved by the
stockholders (the "Effective Date"), and stockholder approval shall be sought at
the first annual meeting of stockholders following the adoption of the Plan by
the Board. If stockholder approval is not obtained on or before the date of
such annual meeting, the Plan and all Awards thereunder shall be void ab initio
and of no effect. No Stock Option or Stock Appreciation Right shall be
exercisable and no Restricted Stock, Deferred Stock or other Award shall vest
until the date of such stockholder approval.
A-17
<PAGE>
OFFSHORE LOGISTICS, INC.
PROXY
This Proxy is Solicited on Behalf of
the Board of Directors
The undersigned stockholder of Offshore Logistics, Inc., a Delaware
corporation, hereby appoints George M. Small and Drury A. Milke, and each of
them, proxies with power of substitution to vote and act for the undersigned, as
designated on the reverse side, with respect to the number of shares of the
Common Stock the undersigned would be entitled to vote if personally present at
the Annual Meeting of Stockholders to be held at The City Energy Club, Entergy
Centre, 1100 Poydras Street, New Orleans, Louisiana, on Tuesday, September 29,
1998, at 4:00 p.m., and at any adjournments thereof, and, at their discretion,
the proxies are authorized to vote upon such other business as may properly come
before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED HEREIN BY THE
STOCKHOLDER. IF NO DIRECTION IS SPECIFIED WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
BOARD OF DIRECTORS OF THE COMPANY.
The Board of Directors of the Company recommends that you vote FOR each of the
nominees listed on the reverse side for election as Directors of the Company and
FOR the Amendment of the Offshore Logistics, Inc. 1994 Long-Term Management
Incentive Plan (the "1994 Plan").
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your
votes as indicated in [X]
this example
Item 1--Election of the following nominees as Directors:
For all Withhold for Withheld for the following only:
nominees all nominees (Write the name(s) of the nominee(s)
[ ] [ ] below)
Peter N. Buckley, Jonathan H. Cartwright, Louis F. Crane,
David M. Johnson, Kenneth M. Jones, Harry C. Sager,
George M. Small and Howard Wolf.
_________________________________________
_________________________________________
_________________________________________
Item 2--Amendment of the 1994 Plan:
For Against Abstain
[ ] [ ] [ ]
The undersigned hereby acknowledges
receipt of a copy of the accompanying
Notice of Annual Meeting of Stockholders
and Proxy Statement and hereby revokes
any proxy or proxies heretofore given.
Date:__________________________________
_______________________________________
Signature
_______________________________________
Signature
Please mark, date and sign as your
account name appears and return in the
enclosed envelope. If acting as
executor, administrator, trustee or
guardian, etc., you should indicate same
when signing. If the signer is a
corporation or partnership, please sign
the full corporate name or partnership
name by duly authorized officer or person.
If the shares are held jointly, each
stockholder named should sign.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
